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Stock Code : 3355
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners
深圳市飛速創新技術股份有限公司
FS.COM Limited
GLOBAL OFFERING


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
FS.COM Limited
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
: 40,000,000 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 4,000,000 H Shares (subject to
reallocation)
Number of International Offer Shares : 36,000,000 H Shares (subject to
reallocation and the Over-allotment
Option)
Maximum Offer Price : HK$41.60 per H Share, plus brokerage
of 1%, SFC transaction levy of
0.0027%, Hong Kong Stock Exchange
trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable
in full on application in Hong Kong
dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 3355
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Bookrunners
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 h owsoever arising from or in
reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Appendix VI — Documents Delivered to the Registrar of Companies in Hong Kong and Available
on Display” in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up a nd 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 K ong take no
responsibility as to the contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (on behalf of the Underwriters) and our Company on the Price Determination Date.
The Price Determination Date is expected to be on or around Thursday, March 19, 2026 (Hong Kong time) and, in any event, not later than 12:00 noon on Thurs day, March 19,
2026 (Hong Kong time). The Offer Price will not be more than HK$41.60 per Offer Share and is currently expected to be not less than HK$35.20 per Offer Shar e unless otherwise
announced. If, for any reason, the Offer Price is not agreed by 12:00 noon on Thursday, March 19, 2026 (Hong Kong time) between the Overall Coordinators (on behalf of the
Underwriters) and our 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 consent of our Company, reduce the number of H ong Kong Offer Shares
and/or the indicative Offer Price range below that is stated in this prospectus (being HK$35.20 per Offer Share to HK$41.60 per Offer Share) at any time prior to the morning of
the last day for lodging applications under the Hong Kong Public Offering. In such case, notices of the reduction in the number of Hong Kong Offer Shares and/or the indicative
Offer Price range will be published on the website of our Company at https://www.fs.com and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk 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. For further details, see “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 (on b ehalf of the Underwriters)
if certain events occur prior to 8:00 a.m. on the Listing Date. For details, see “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 registrati on requirements 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 outs ide the United States
in offshore 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 prospectus to the p ublic in relation to the
Hong Kong Public Offering.
This prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at https://www.fs.com . If you require a printed copy of
this prospectus, you may download and print from the website addresses above.
IMPORTANT
March 13, 2026


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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 any printed copies of this prospectus to the public in
relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Hong Kong Stock Exchange at
http://www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at https://www.fs.com . If you require a printed
copy of this prospectus, you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.hkeipo.hk Investors who would
like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Friday, March 13,
2026 to 11:30 a.m.
on Wednesday
March 18, 2026,
Hong Kong time.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Wednesday
March 18, 2026,
Hong Kong time.
IMPORTANT
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Application Channel Platform Target Investors Application Time
HKSCC EIPO channel /H1118/H1118/H1118Y 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 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
account.
Contact your broker or
custodian for the
earliest and latest
time for giving such
instructions, as this
may vary by broker
or custodian.
Our Company will not provide any physical channels to accept any application for
the Hong Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the prospectus as registered with the 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” for
further details of the procedures through which you can apply for the Hong Kong Offer
Shares.
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 maximum 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 prefund 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 4,201.96 2,500 105,048.85 30,000 1,260,586.08 600,000 25,211,721.60
200 8,403.90 3,000 126,058.61 40,000 1,680,781.45 700,000 29,413,675.20
300 12,605.87 3,500 147,068.38 50,000 2,100,976.80 800,000 33,615,628.80
400 16,807.81 4,000 168,078.14 60,000 2,521,172.15 900,000 37,817,582.40
500 21,009.77 4,500 189,087.91 70,000 2,941,367.52 1,000,000 42,019,536.00
600 25,211.72 5,000 210,097.68 80,000 3,361,562.88 2,000,000
(1) 84,039,072.00
700 29,413.68 6,000 252,117.21 90,000 3,781,758.25
800 33,615.63 7,000 294,136.75 100,000 4,201,953.60
900 37,817.59 8,000 336,156.29 200,000 8,403,907.20
1,000 42,019.53 9,000 378,175.82 300,000 12,605,860.80
1,500 63,029.30 10,000 420,195.35 400,000 16,807,814.40
2,000 84,039.07 20,000 840,390.72 500,000 21,009,768.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 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 to the expected timetable of the Hong Kong Public Offering,
we will issue an announcement on the respective websites of the Company at
https://www.fs.com and the Stock Exchange at www.hkexnews.hk .
Hong Kong Public Offering commences ....................... .9:00 a.m. on Friday,
March 13, 2026
Latest time for completing electronic applications under the
HK eIPO White Form service through
the designated website at www.hkeipo.hk (2) ............... 1 1:30 a.m. on Wednesday,
March 18, 2026
Application lists of the Hong Kong Public Offering open (3) ..... 1 1:45 a.m. on Wednesday,
March 18, 2026
Latest time to (a) complete payment of HK eIPO White Form
applications by effecting Internet banking transfer(s) or
PPS payment transfer(s) and (b) give electronic
Application instructions to HKSCC
(4) ................. .12:00 noon on Wednesday,
March 18, 2026
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, you are advised to contact your broker or custodian for the
latest time for giving such instructions which may be different from the latest time as stated
above.
Application lists of the Hong Kong Public Offering close
(3) . . . .12:00 noon on Wednesday,
March 18, 2026
Expected Price Determination Date (5) ................................a to r before
12:00 noon on Thursday,
March 19, 2026
Announcement of the Offer Price, an indication of the level
of interest in the International Offering, the level of
applications in the Hong Kong Public Offering and the
basis of allocation of the Hong Kong Offer Shares to be
published on the website of the Stock Exchange at
www.hkexnews.hk and our Company’s website at
https://www.fs.com (6) on or before .........................1 1:00 p.m. on Friday,
March 20, 2026
EXPECTED TIMETABLE
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 In the announcement to be published on
the website of the Stock Exchange at
www.hkexnews.hk and our Company’s
website at https://www.fs.com (6) from ................1 1:00 p.m. on Friday,
March 20, 2026
 From the “Allotment Results” page at
www.tricor.com.hk/ipo/result
(or www.hkeipo.hk/IPOResult ) with
a “Search by ID” function on a 24-hour basis from ......1 1:00 p.m. on Friday,
March 20, 2026
to 12:00 midnight
on Thursday,
March 26, 2026
 From the allocation results telephone enquiry
line by calling +852 3691 8488 between 9:00 a.m.
and 6:00 p.m. from ........................................ Monday,
March 23, 2026
to Thursday,
March 26, 2026
(excluding on a Saturday, a Sunday and
public holidays in Hong Kong)
Dispatch of H Share certificates in respect of wholly or
partially successful applications pursuant to the Hong Kong
Public Offering or deposited into CCASS on or before
(7)(9) ................. .Friday,
March 20, 2026
HK eIPO White Form e-Auto Refund payment
instructions/refund checks in respect of wholly or partially
successful applications if the final Offer Price is less than
the maximum Offer Price per Hong Kong Offer Share
initially paid on application (if applicable) or wholly or
partially unsuccessful applications to be dispatched
on or before
(8)(9) ................................................ .Monday,
March 23, 2026
Dealings in the H Shares on the Stock Exchange to commence at . . . .9:00 a.m. on Monday,
March 23, 2026
EXPECTED TIMETABLE
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Notes:
(1) All times and dates refer to Hong Kong local time and date, 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
at or before 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is a tropical cyclone warning signal number 8 or above, “Extreme Conditions” and/or a “black”
rainstorm warning at any time between 9:00 a.m. and 12:00 noon on Wednesday, March 18, 2026, the
application lists will not open or close on that day. See “How to Apply for Hong Kong Offer Shares — E.
Severe Weather Arrangements” of this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to “How to Apply for Hong Kong Offer Shares — A. Application for
Hong Kong Offer Shares” of this prospectus.
(5) The Price Determination Date is expected to be on or around Thursday, March 19, 2026 and, in any event, not
later than 12:00 noon on Thursday, March 19, 2026. If, for any reason, we do not agree with the Overall
Coordinators (for themselves and on behalf of the Underwriters) on the pricing of the Offer Shares by 12:00
noon on Thursday, March 19, 2026, the Global Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the website forms part of this prospectus.
(7) No temporary document of title will be issued in respect of the Offer Shares. H Share certificates are expected
to be issued on or before Friday, March 20, 2026 but will only become valid provided that the Global Offering
has become unconditional in all respects and neither of the Underwriting Agreements has been terminated in
accordance with its terms. Investors who trade H Shares on the basis of publicly available allocation details
before the receipt of H Share certificates and before they become valid do so entirely of their own risk.
(8) e-Auto Refund payment instructions/refund checks (if applicable) will be issued in respect of wholly or
partially unsuccessful applications.
(9) Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to
the section headed “How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of H Share
Certificates and Refund of Application Monies” of this prospectus for details.
(10) 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) dispatched to the bank account in the form of
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) dispatched
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.
(11) Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of H Share Certificates and Refund of Application Monies” of this prospectus.
The above expected timetable is a summary only. Y ou should read carefully the
sections headed “Underwriting”, “Structure of the Global Offering” and “How to Apply
for Hong Kong Offer Shares” of this prospectus for details relating to the structure of the
Global Offering, procedures on the applications for Hong Kong Offer Shares and the
expected timetable, including conditions, effect of bad weather and the dispatch of refund
cheques and H Share certificates.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE
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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, any of
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 ................................................. v
Contents .......................................................... viii
Summary ......................................................... 1
Definitions ........................................................ 2 2
Glossary of Technical Terms .......................................... 3 3
Forward-Looking Statements ......................................... 3 5
CONTENTS
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Risk Factors ....................................................... 3 6
Waivers and Exemption from Strict Compliance with the Listing Rules and the
Companies (Winding Up and Miscellaneous Provisions) Ordinance ......... 6 8
Information about this Prospectus and the Global Offering ................. 7 9
Directors, Supervisors and Parties Involved in the Global Offering ........... 8 4
Corporate Information .............................................. 9 1
Industry Overview .................................................. 9 3
Regulatory Overview ................................................ 1 0 5
History, Development and Corporate Structure ........................... 1 4 5
Business .......................................................... 1 6 9
Relationship with the Controlling Shareholders ........................... 2 2 8
Financial Information ............................................... 2 3 3
Connected Transactions .............................................. 2 8 3
Directors, Supervisors and Senior Management ........................... 2 8 7
Substantial Shareholders ............................................. 3 0 1
Share Capital ...................................................... 3 0 3
Cornerstone Investors ............................................... 3 0 8
Future Plans and Use of Proceeds ...................................... 3 2 2
Underwriting ...................................................... 3 2 9
Structure of the Global Offering ....................................... 3 4 3
How to Apply for Hong Kong Offer Shares .............................. 3 5 4
Appendix I Accountants’ Report .................................... I - 1
Appendix II Unaudited Pro Forma Financial Information ................ II-1
Appendix IIB Unaudited Preliminary Financial Information for the year
ended December 31, 2025 ............................. IIB-1
CONTENTS
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Appendix III Property Valuation Report ............................... III-1
Appendix IV Summary of Articles of Association of the Company .......... I V - 1
Appendix V Statutory and General Information ........................ V - 1
Appendix VI Documents Delivered to the Registrar of Companies in
Hong Kong and Available on Display .................... VI-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read the entire prospectus before you decide to invest in the
Offer Shares.
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.” You should
read that section carefully before you decide to invest in the Offer Shares.
OVERVIEW
We were the world’s second largest online DTC networking solution provider in terms of
revenue in 2024 with a 6.9% market share, according to Frost & Sullivan. Our networking
solutions empower businesses globally to achieve efficient digital transformations. Through
our online sales platform, FS.com , we deliver scalable, cost-effective and one-stop networking
solutions. Our solutions range includes high-performance networking equipment, scalable
networking equipment operating system and cloud-based network management platform. Our
solutions support scenarios include high-performance computing, data centers, enterprise
networks and telecommunications, meeting the demand for both enterprise-grade high-
performance networking solutions and general networking solutions for worldwide customers
through our platform-centric and online-enabled approach.
Our customer-centric approach has fostered a global customer base spanning across
various industries. As of the Latest Practicable Date, we had served more than 500,000
customers in over 200 countries and regions worldwide, covering approximately 60% of
Fortune 500 companies from a wide spectrum of sectors including, among others, information
technology, financial services, healthcare, education, automotive and electronics. In 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, approximately 74,000,
76,600, 82,500, 69,100 and 69,300 customers placed orders on our online sales platform, with
an average revenue per customer of approximately RMB26,900, RMB28,900, RMB31,700,
RMB28,300 and RMB31,400 in the same respective periods. We witnessed improving
customer loyalty, with our net dollar retention rate reaching 94.4%, 102.3% and 93.0% in 2023,
2024 and the nine months ended September 30, 2025, respectively.
The diagram below illustrates our key operating metrics and financial performance:
Leadership Customers
EarningsRevenue
500,000+/200+(1)
Number of customers we had served/
number of countries and regions where
our served customers are from
Online DTC networking solution
provider in terms of revenue in 2024
World’s Second Largest
RMB2.6 billion;
RMB2.2 billion
Revenue in 2024 and the nine months
ended September 30, 2025, respectively
14.6%
CAGR of revenue 2022-2024
50.0%; 52.6%
Gross profit margin in 2024 and the
nine months ended September 30, 2025,
respectively
;
;
Net profit in 2024 and the nine months
ended September 30, 2025, respectively
RMB397.3 million;
RMB423.2 million
(1) As of the Latest Practicable Date
SUMMARY
–1–


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We have established a fully integrated DTC model that enables efficient global delivery
of scenario-based solutions. Our DTC model integrates these functions into a unified,
platform-based system, providing global customers with a fully integrated experience that
combines solution design, product validation and one-stop procurement. See “Business — Our
DTC Business Model” for details.
OUR NETWORKING SOLUTIONS
We offer enterprise-grade networking solutions designed to meet the demands of
high-performance computing, data centers, enterprise networks and telecommunications,
empowering global customers to design, operate and optimize networks with enhanced
efficiency, agility and cost-effectiveness. Our solutions encompass pre-sales activities
including sales consulting, technology support and solutions design as well as testing and
validation, which together support and enable the delivery of fully integrated networking
products to customers. Our solutions are built on a decoupled architecture that combines
standardized networking hardware with scalable, cloud-based software capabilities. This
enables advanced remote orchestration, intelligent resource provisioning and streamlined
operational management, allowing customers to dynamically adapt network resources to
evolving operational demands while maintaining enterprise-grade reliability.
As part of our networking solutions, we offer high-performance networking solutions and
general networking solutions. Our high-performance networking products cater to bandwidth-
intensive environments, delivering high throughput, low latency and scalable architectures.
Our general networking products feature secure and reliable connectivity as well as simplified
deployment and maintenance for everyday needs. In addition to our high-performance and
general networking products, we also offer other networking products such as fiber optic
cassettes, chassis, wavelength division multiplexers and other ancillary products.
The following table sets forth a breakdown of our revenue by product category for the
periods indicated.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
High-performance
networking
solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118472,910 23.8 577,368 26.0 831,107 31.9 618,512 31.7 788,004 36.2
General networking
solutions /H1118/H1118/H1118/H1118/H1118/H1118/H11181,290,865 64.9 1,388,641 62.8 1,497,508 57.3 1,125,942 57.6 1,139,408 52.4
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,469 11.3 246,842 11.2 283,178 10.8 209,247 10.7 247,306 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 100.0 2,212,851 100.0 2,611,793 100.0 1,953,701 100.0 2,174,718 100.0
(1) Others mainly include fiber optic cassettes, chassis, wavelength division multiplexers and other ancillary
products.
SUMMARY
–2–


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The following table sets forth a breakdown of our revenue by geographical region for the
periods indicated.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
United States /H1118/H1118/H1118/H1118/H1118919,625 46.3 1,027,025 46.4 1,223,166 46.8 920,822 47.1 1,178,357 54.2
Europe (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,707 33.4 767,381 34.7 898,048 34.4 674,979 34.5 617,744 28.4
Asia (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,019 8.9 183,221 8.3 228,118 8.7 167,288 8.6 200,329 9.2
– China (3) /H1118/H1118/H1118/H1118/H1118/H1118/H111828,456 1.4 40,405 1.8 47,062 1.8 34,252 1.8 45,216 2.1
Americas (excluding
the United States) (4) 124,640 6.3 123,219 5.6 143,927 5.5 105,088 5.4 97,882 4.5
Oceania (5) /H1118/H1118/H1118/H1118/H1118/H1118/H111881,939 4.1 91,658 4.1 95,845 3.7 68,516 3.5 67,629 3.1
Africa (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,314 1.0 20,347 0.9 22,689 0.9 17,008 0.9 12,777 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 100.0 2,212,851 100.0 2,611,793 100.0 1,953,701 100.0 2,174,718 100.0
Notes:
(1) Our revenue from Europe was derived from Germany, the U.K., France, Netherlands, Italy, Iceland,
Switzerland, Spain, Austria, Sweden and 43 other countries and regions in Europe.
(2) Our revenue from Asia was derived from Japan, Singapore, India, China, Republic of Korea, United Arab
Emirates, Malaysia, Thailand and 35 other countries and regions in Asia.
(3) Our revenue from China was derived from Mainland China, Hong Kong, Macau Special Administrative Region
and Taiwan, China.
(4) Our revenue from Americas (excluding the United States) mainly derived from Canada, Mexico and Puerto
Rico.
(5) Our revenue from Oceania mainly derived from Australia and New Zealand.
(6) Our revenue from Africa mainly derived from South Africa, Kenya and Nigeria.
OUR STRENGTHS
We believe the following competitive advantages have contributed to our success and will
help drive our growth in the future.
 Dynamic platform ecosystem and robust networking effect make us a leading
provider of networking solutions.
 A go-to platform for networking solutions with glocalization strategy.
 Diverse products and solutions with flexibility to meet the differentiated needs of
global customers.
 Platform-based full-stack technologies.
SUMMARY
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 Visionary management team and deep-rooted corporate culture for innovation.
See “Business — Our Strengths.”
OUR STRATEGIES
We will continue to pursue the following strategies that will drive further growth.
 Driving technological upgrades and platform iterations.
 Enriching product portfolio.
 Expanding a diversified ecosystem.
 Strengthening global talents acquisition and team building.
See “Business — Our Strategies.”
CUSTOMERS AND SUPPLIERS
Our Customers
As of the Latest Practicable Date, we had served more than 500,000 customers in over 200
countries and regions worldwide, covering approximately 60% of Fortune 500 companies from
a wide spectrum of sectors including, among others, information technology, financial services,
healthcare, education, automotive and electronics.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, our revenue from
the five largest customers in each year or period was RMB95.2 million, RMB82.5 million,
RMB164.5 million and RMB149.8 million, respectively, accounting for 4.8%, 3.8%, 6.3% and
6.9% of our total revenue in the same respective periods. In the same years or periods, our
revenue from the single largest customer in each year or period during the Track Record Period
amounted to RMB41.2 million, RMB26.0 million, RMB66.5 million and RMB46.0 million,
accounting for 2.1%, 1.2%, 2.5% and 2.1% of our total revenue in the same respective periods.
See “Business — Our Customers.”
Our Suppliers
We have established deep collaborative partnerships with networking equipment
manufacturers worldwide. As of the Latest Practicable Date, we had collaborated with over 200
telecommunication product suppliers and networking equipment manufacturers across the
globe. Our robust supply chain integration capabilities have enabled us to rapidly respond to
customer demands, shorten delivery cycles, and enhance customers’ efficiency in technical
validation and order placement. During the Track Record Period, we primarily sourced
SUMMARY
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networking products from suppliers based or headquartered in China with overseas factories in
countries that enjoy relatively lower tariff rates such as Vietnam and Malaysia. This established
procurement strategy secured generally lower tariff rates compared to sourcing directly from
China. For example, pursuant to the latest policies in effect during this period, optical modules
and high-speed cables and switches exported from Vietnam and Malaysia to the U.S. were
subject to nil tariff rates, while copper systems were subject to rates ranging from 10% to
approximately 50% when exported from Vietnam as of the Latest Practicable Date.
Furthermore, most of the fiber optic cables we sold that were exported from Vietnam were
subject to a tariff rate of 10%. Since early 2025, we have gradually adjusted our procurement
mix by reducing the proportion of China-based sourcing and increasing procurement from
suppliers in other regions, such as Southeast Asia in response to the recent development of
tariff policies. This shift has resulted in lower or nil tariff rates for affected items, effectively
optimizing our cost of sales.
The purchases from our top five suppliers in each year or period during the Track Record
Period was RMB625.0 million, RMB450.2 million, RMB507.9 million and RMB246.9 million,
respectively, representing 50.3%, 50.7%, 47.3% and 36.3% of our total purchase in 2022, 2023,
2024 and the nine months ended September 30, 2025, respectively. The purchases from our
largest supplier in each year or period during the Track Record Period was RMB190.1 million,
RMB141.9 million, RMB146.4 million and RMB61.4 million, respectively, representing
15.3%, 16.0%, 13.6% and 9.0% of our total purchase in the same respective periods.
See “Business — Our Suppliers.”
COMPETITION
The networking solution industry is highly competitive, with established players and new
entrants vying for market share in a rapidly evolving landscape. Our ability to maintain and
grow our market position depends on competing effectively against other networking solution
providers. The competitive landscape is shaped by multiple factors, including the performance
of networking products, technology and customization capability applicable in new scenarios,
products and service delivery efficiency and prompt after-sales services, brand awareness and
recognition and end-to-end digital operation capability. See “Business — Competition.”
SUMMARY OF KEY FINANCIAL INFORMATION
The following tables summarize our consolidated financial results during the Track
Record Period and should be read in conjunction with “Financial Information” of this
prospectus and the Accountants’ Report set out in Appendix I to this prospectus, together with
the respective accompanying notes.
SUMMARY
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Summary of Consolidated Statements of Profit or Loss
The following table sets forth a summary of our consolidated statements of profit or loss
for the periods indicated:
Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 2,212,851 2,611,793 1,953,701 2,174,718
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,085,386) (1,120,379) (1,305,484) (958,042) (1,031,899)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902,858 1,092,472 1,306,309 995,659 1,142,819
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,241 12,989 12,811 9,984 6,375
Impairment losses under
expected credit loss model,
net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272 (1,659) (1,008) (485) (1,638)
Other gains and losses /H1118/H1118/H1118/H111842,704 38,682 (948) 8,746 49,761
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(270,490) (338,941) (487,665) (353,373) (390,154)
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(170,373) (175,156) (209,777) (140,110) (161,835)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(99,824) (110,482) (143,710) (99,824) (124,273)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,511) (4,655) (18,544) (12,823) (19,997)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (893) – (18,110)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418,877 513,250 456,575 407,774 482,948
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118(54,370) (56,503) (59,318) (56,967) (59,774)
Profit for the year/period /H1118/H1118364,507 456,747 397,257 350,807 423,174
Item that may be reclassified
subsequently to profit or
loss:
Exchange differences arising
on translation of foreign
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,606 2,446 (247) (1,507) 5,595
Total comprehensive
income for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,113 459,193 397,010 349,300 428,769
See “Financial Information — Consolidated Statements of Profit or Loss.”
SUMMARY
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Non-IFRS Measures
We define adjusted net profit (non-IFRS measure) as profit for the year/period adjusted
by adding back (i) share-based payment expenses, (ii) professional fees, (iii) listing expenses;
and (iv) finance cost of interest on redemption liabilities. See “Financial Information —
Non-IFRS Financial Measure.” The following table reconciles our adjusted net profit
(non-IFRS measure) and presented in accordance with IFRS, which is profit for the
year/period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Profit for the year/period /H1118/H1118/H1118364,507 456,747 397,257 350,807 423,174
Add:
– Share-based payment
expenses
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,595 6,373 5,745 4,291 14,401
– Professional fees (2) /H1118/H1118/H1118/H1118/H1118/H111812,983 6,615 4,292 4,206 –
– Listing expenses (3) /H1118/H1118/H1118/H1118/H1118/H1118– – 893 – 18,110
– Finance cost of interest on
redemption liabilities (4) /H1118/H1118/H1118 –––– 4,848
Adjusted net profit
(non-IFRS measure) /H1118/H1118/H1118/H1118388,085 469,735 408,187 359,304 460,533
Notes:
(1) Share-based payment expenses are non-cash in nature, and mainly represent the employee benefit
expenses incurred in connection with our award to key employees.
(2) Professional fees represent professional service fees incurred in connection with the A Share Listing
Application.
(3) Listing expenses represent professional service fees incurred in connection with the Global Offering.
(4) Finance cost of interest on redemption liabilities represents the non-cash interest expense recorded to
reflect interest incurred on our conditional obligation to redeem equity securities issued in our pre-IPO
investors. This redemption obligation was initially measured at fair value (representing the present value
of the cash flows for settling the related obligations if these rights are exercised by the investors), and
are subsequently measured at amortized costs. We will not incur such finance cost of interest on
redemption liabilities upon Listing as the redemption liabilities will be reclassified to equity when the
redemption rights lapse upon Listing.
Our adjusted net profit (non-IFRS measure) increased by 21.0% from RMB388.1 million
in 2022 to RMB469.7 million in 2023, primarily due to an increase in gross profit, partially
offset by an increase in selling and distribution expenses. Our adjusted net profit (non-IFRS
measure) decreased by 13.1% from RMB469.7 million in 2023 to RMB408.2 million in 2024,
primarily due to a significant increase in research and development expenses and selling and
distribution expenses which mainly attributable to an increase in employee compensation
expenses of R&D personnel and sales staffs, partially offset by an increase in gross profit. Our
adjusted net profit (non-IFRS measure) increased by 28.2% from RMB359.3 million in the nine
months ended September 30, 2024 to RMB460.5 million in the nine months ended September
30, 2025, primarily due to an increase in gross profit, partially offset by an increase in research
and development expenses and selling and distribution expenses.
SUMMARY
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We recorded profit for the year/period of RMB364.5 million, RMB456.7 million,
RMB397.3 million, RMB350.8 million and RMB423.2 million in 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, respectively, primarily as a result of (i) the
increase in our revenue and gross profit generated from the sales of our products and solutions,
(ii) the increase in our operating expenses and (iii) the fluctuation of other gains and losses.
See “Financial Information — Consolidated Statements of Profit or Loss.”
Summary of Consolidated Statements of Financial Position
The following table sets forth selected information from our consolidated statements of
financial position included in Appendix I to this prospectus.
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11181,712,283 1,888,923 2,015,571 2,213,269
Total non-current assets /H1118/H1118/H1118441,532 830,493 1,534,828 1,508,351
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,815 2,719,416 3,550,399 3,721,620
Total current liabilities /H1118/H1118/H1118/H1118529,887 563,065 539,309 625,985
Total non-current liabilities /H1118 91,512 158,369 610,353 1,111,123
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118621,399 721,434 1,149,662 1,737,108
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11181,182,396 1,325,858 1,476,262 1,587,284
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
Capital and reserves
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000 360,000 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,416 1,637,982 2,040,737 1,624,512
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
Our net current assets increased by 12.1% from RMB1,182.4 million as of December 31,
2022 to RMB1,325.9 million as of December 31, 2023, primarily due to an increase in bank
balance and cash of RMB462.6 million, primarily offset by (i) a decrease in financial assets at
FVTPL of RMB209.7 million and (ii) an increase in contract liabilities of RMB64.9 million.
Our net current assets increased by 11.3% from RMB1,325.9 million as of December 31, 2023
to RMB1,476.3 million as of December 31, 2024, primarily due to (i) an increase in financial
assets at FVTPL of RMB326.1 million and (ii) a decrease in contract liabilities of RMB68.8
million, partially offset by a decrease in bank balance and cash of RMB295.7 million. Our net
current assets increased from RMB1,476.3 million as of December 31, 2024 to RMB1,587.3
million as of September 30, 2025, primarily due to (i) an increase in financial assets at FVTPL
of RMB187.6 million; and (ii) an increase in bank balances and cash of RMB81.8 million,
partially offset by (i) an increase in borrowings of RMB112.5 million; and (ii) a decrease in
inventories of RMB87.4 million.
SUMMARY
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Our net assets increased by 30.4% from RMB1,532.1 million as of December 31, 2022 to
RMB1,998.0 million as of December 31, 2023, primarily due to (i) the total comprehensive
income of RMB459.2 million; and (ii) the recognition of share-based payment expenses of
RMB6.4 million in 2023. Our net assets increased by 20.2% from RMB1,998.0 million as of
December 31, 2023 to RMB2,400.7 million as of December 31, 2024, primarily due to (i) the
total comprehensive income of RMB397.0 million; and (ii) the recognition of share-based
payment expenses of RMB5.7 million in 2024. Our net assets decreased by 17.3% from
RMB2,400.7 million as of December 31, 2024 to RMB1,984.5 million as of September 30,
2025, primarily due to (i) the recognition of redemption liabilities of RMB659.4 million; and
(ii) dividends recognized as distribution of RMB200.0 million, partially offset by an increase
in total comprehensive income of RMB428.8 million in the nine months ended September 30,
2025. For further details of our consolidated statements of changes in equity, see Accountants’
Report in Appendix I to this prospectus.
Summary of Consolidated Statements of Cash Flow
The following table sets forth a summary of our cash flows for the periods indicated:
Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Net cash generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118170,832 586,010 408,841 249,515 542,647
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(274,323) (119,436) (1,140,761) (996,128) (179,236)
Net cash (used in)/generated
from financing activities /H1118/H1118(27,041) (7,284) 437,161 461,950 (289,126)
Cash and cash equivalents at
the beginning of
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,939 367,576 829,082 829,082 533,026
Effect of foreign exchange
rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169 2,216 (1,297) (1,975) 6,042
Cash and cash equivalents at
the end of year/period /H1118/H1118/H1118367,576 829,082 533,026 542,444 613,353
See “Financial Information — Liquidity and Capital Resources — Cash Flow.”
SUMMARY
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KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods indicated:
As of/For the Y ear ended December 31,
As of/For the
nine months
ended
September 30,
2022 2023 2024 2025
Gross profit margin (%) (1) /H1118/H1118 45.4 49.4 50.0 52.6
Net profit margin (%) (2) /H1118/H1118/H111818.3 20.6 15.2 19.5
Adjusted net profit margin
(non-IFRS
measure)(%)
(4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.5 21.2 15.6 21.2
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.2 3.4 3.7 3.5
Debt ratio (%) (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17.1) (32.6) 6.7 35.0
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin equals profit for the year/period divided by revenue and multiplied by 100%.
(3) Current ratio equals current assets divided by current liabilities as of the same date.
(4) Adjusted net profit margin (non-IFRS measure) equals adjusted net profit (non-IFRS measure) divided
by revenue multiplied by 100%. See “— Non-IFRS Financial Measure.”
(5) Debt ratio equals net debt divided by total equity and multiplied by 100%. Net debt equals bank
borrowing plus lease liabilities plus redemption liabilities minus bank balances and cash.
See “Financial Information — Key Financial Ratios.”
FUTURE PLANS AND USE OF PROCEEDS
Assuming an Offer Price of HK$38.40 per Offer Share (being the mid-point of the stated
range of the Offer Price between HK$35.20 and HK$41.60 per Offer Share), we estimate that
we will receive net proceeds of approximately HK$1,433.6 million from the Global Offering
after deducting the underwriting commissions, fees and other estimated expenses in connection
with the Global Offering and assuming that the Over-allotment Option is not exercised or
HK$1,655.7 million if the Over-allotment Option is exercised in full. In line with our
strategies, we intend to use our proceeds from the Global Offering for the following purposes:
 Approximately 40.0% of the net proceeds, or approximately HK$573.5 million, will
be used for research and development of digital intelligence enhancement of our
technology platform over the next five years through laboratory renovation,
recruitment of specialist talents and procurement of hardware and software.
 Approximately 30.0% of the net proceeds, or approximately HK$430.1 million, will
be used over the next five years to enhance our delivery capabilities in major
overseas markets through establishing a regional headquarter in Singapore,
enhancing our multi-tier warehousing system, upgrading the level of automation of
the workflow, expanding service network and recruiting international management
team members.
SUMMARY
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 Approximately 20.0% of the net proceeds, or approximately HK$286.7 million, will
be used for digitalizing our business platform for networking solutions and services
over the next five years.
 Approximately 10.0% of the net proceeds, or approximately HK$143.4 million, will
be used for working capital and general corporate purposes.
See “Future Plans and Use of Proceeds.”
IMPACT OF COVID-19 ON OUR OPERATIONS
During the Track Record Period, the COVID-19 pandemic presented various operational
challenges to the Group. For example, certain front-line personnel were subject to regional
quarantine restrictions, preventing on-site work. In response, we implemented a series of
mitigation measures, including remote working arrangements and the distribution of personal
protective equipment to employees, which resulted in additional operating costs.
Despite these challenges, our financial performance remained resilient. COVID-19 did
not have any material disruption to our operations, nor did it have a material adverse impact
on the Group’s overall operations or financial results during the Track Record Period. In 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, we recorded revenue of
RMB1,988.2 million, RMB2,212.9 million, RMB2,611.8 million, RMB1,953.7 million and
RMB2,174.7 million, respectively.
DIVIDEND
Any declaration and payment, as well as the amount of dividends, will be subject to our
Articles of Association and the relevant PRC laws. We will give priority to distribute dividends
in the form of cash and may conduct interim dividends. Any proposed distribution of dividends
is subject to the discretion of our Board and the approval of our Shareholders. Our Board may
propose a distribution of dividends in the future after taking into account our financial
performance, working capital requirements, capital expenditure requirements, future expansion
plans, liquidity position and any other conditions that our Board may deem relevant. We do not
have any pre-determined dividend payout ratio. No dividend shall be declared or payable
except out of our profits and reserves lawfully available for distribution. We currently do not
have a formal dividend policy.
Our cash dividend distribution plan for 2024 was reviewed and approved at the general
meeting held on May 22, 2025, declaring a cash dividend of RMB5.56 (tax inclusive) per 10
Unlisted Shares to be paid to existing Shareholders. In 2022, 2023, 2024 and the nine months
ended September 30, 2025, we paid dividends of RMB60.0 million, nil, nil and RMB200.0
million, respectively, which were derived from our self-owned funds.
SUMMARY
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UNAUDITED PRELIMINARY FINANCIAL INFORMATION FOR THE YEAR ENDED
DECEMBER 31, 2025
Based on our unaudited financial information for the year ended December 31, 2025
(“2025 Preliminary Financial Information ”) as set out in Appendix IIB to this Prospectus,
our Directors expect that there will be an increase in our net profit in 2025 as compared to that
in 2024, primarily attributable to an increase in gross profit. See “Unaudited Preliminary
Financial Information for the year ended December 31, 2025” in Appendix IIB to this
Prospectus for details.
The 2025 Preliminary Financial Information of our Group is prepared in compliance with
the content requirements as for preliminary results announcements under Rule 13.49 of the
Listing Rules, have been agreed by the Reporting Accountants, to the amounts set out in the
draft consolidated financial statements of the Group for the year ended December 31, 2025,
following with their work under Practice Note 730 (Revised) “Guidance for Auditors
Regarding Preliminary Announcements of Annual Results” issued by the Hong Kong Institute
of Certified Public Accountants.
RISK FACTORS
There are certain risks and uncertainties involved in our operations as set out in “Risk
Factors.” These risks can be categorized into (i) risks relating to our business and industry, (ii)
risks relating to operations in the principal places of our business, and (iii) risks relating to the
Global Offering. Some of the major risks that we face include: (i) The industry in which we
participate is increasingly competitive, and if we do not compete effectively, our business and
results of operations could be adversely affected; (ii) Our business growth and prospects are
affected by our ability to continuously innovate and iterate our networking solutions and
technology platform; (iii) Our international presence exposes us to various risks and
uncertainties; (iv) We have experienced significant growth during the Track Record Period.
Our historical performance is not necessarily indicative of our future performance. We may not
be able to implement our growth strategies or manage our growth effectively; and (v) Rising
international political tensions, including changes in international trade policies and trade
barriers, or the escalation of trade tensions, particularly between the U.S. and China, may have
an adverse effect on our business operations.
REGULATORY UPDATE ON CHINA-U.S. TARIFFS
As of April 10, 2025, the additional tariff rate on imports from China introduced by the
U.S. government had increased to 145%. In response to the additional tariffs imposed by the
U.S., China implemented a series of measures, including raising tariffs on imported goods of
U.S. origin to as high as 125%. On May 12, 2025, the U.S. and China announced a mutual
90-day suspension and removal agreement. Specifically, the U.S. agreed to: (i) suspend for 90
days 24% of the tariffs on Chinese goods under its executive order of April 2, 2025, while
retaining the remaining rate of 10%; and (ii) remove the additional tariffs introduced under the
Executive Orders of April 8, 2025 and April 9, 2025. This resulted in a temporarily effective
rate of 30% (including the 20% tariff imposed under the International Emergency Economic
Powers Act (“ IEEPA”) in relation to the fentanyl emergency declared by the U.S.
SUMMARY
–1 2–


--- page 24 ---
administration) on Chinese imports, and in addition to any preexisting tariffs (for example,
sector-specific tariffs and tariffs under Section 301 of the Trade Act of 1974). Similarly, China
agreed to: (i) suspend for 90 days 24% of the tariffs on U.S. goods announced on April 4, 2025,
while retaining the remaining 10%; (ii) remove the additional tariffs imposed subsequently;
and (iii) adopt necessary administrative measures to suspend or remove the non-tariff
countermeasures taken against the U.S. since April 2, 2025. This left a temporary additional
tariff rate of 10% on U.S. imports. On August 11, 2025, the abovementioned 90-day suspension
was formally extended for an additional 90 days. On October 30, 2025, the United States and
China reached a new agreement to further suspend and reduce tariffs imposed under IEEPA,
along with various other trade-related measures. Pursuant to two separate Executive Orders
issued on November 4, 2025, the United States extended application of the reciprocal tariff rate
of 10% through November 10, 2026, and announced that tariffs related to fentanyl would be
reduced from 20% to 10% until further modified. In addition to tariffs imposed under IEEPA,
the U.S. has imposed other sector-specific tariffs (for example, on automobiles and parts, steel,
aluminum and certain semiconductors) under Section 232 of the Trade Expansion Act of 1962.
Effective August 1, 2025, the U.S. imposed a 50% Section 232 tariff on imports of
semi-finished copper products and intensive copper derivative products. More recently, on
February 20, 2026, the U.S. Supreme Court ruled that the IEEPA does not authorize the U.S.
President to impose ad valorem tariffs, thereby invalidating the IEEPA-based tariffs including
the fentanyl-related tariffs, and the reciprocal tariffs, including the rates applied to China as
modified pursuant to the October 30, 2025 agreement. Following the invalidation of the IEEPA
tariffs, the U.S. Administration issued an executive order formally terminating the IEEPA
tariffs and imposed a replacement 10% baseline tariff under Section 122 of the Trade Act of
1974. The Section 122 tariff is set to take effect on February 24, 2026, with exemptions for
certain categories of products, including certain critical minerals, metals and electronics, and
is scheduled to remain in force for a period of 150 days, expiring on July 24, 2026, unless
earlier modified or extended. The Section 122 authorizes the U.S. President to impose a
temporary import surcharge up to 15% for a period not exceeding 150 days unless otherwise
extended. The U.S. President has indicated in public statements that the Section 122 tariff will
be increased to 15% for the effective period. However, as of the Latest Practicable Date, the
official proclamation provides for the Section 122 tariff at a rate of 10%. As of the Latest
Practicable Date, save as disclosed above, there have been no other material updates to
China–U.S. tariff policies that are relevant to our Company. Given the ongoing uncertainty
surrounding U.S. tariff policies and their potential impacts, we are closely monitoring relevant
developments, strengthening communication with customers to gauge their sentiment, and
proactively adjusting our strategies to mitigate any potential effects.
During the Track Record Period, the U.S. import tariffs are borne by FS U.S., our U.S.
subsidiary responsible for sales and delivery of our networking solutions in the U.S. These
items that are subject to the 50% tariff are classified as ancillary products which only
accounted for a minimal amount of our total revenue during the Track Record Period. In 2022,
2023, 2024 and the nine months ended September 30, 2025, the amount of U.S. import tariffs
borne by FS U.S. accounted for RMB44.0 million, RMB43.2 million, RMB58.6 million and
RMB102.4 million, respectively. We have adopted flexible pricing strategies and gradually
adjusted our procurement mix by reducing the proportion of China-based sourcing and
increasing procurement from suppliers in other regions, such as Southeast Asia. This shift has
reduced the tariff burden for certain affected items, effectively optimizing our cost of sales. As
SUMMARY
–1 3–


--- page 25 ---
previously noted, on October 30, 2025, the United States government announced a reduction
in the tariff rate on fentanyl-related products from 20% to 10%, which took effect immediately,
and further announced an additional temporary duty in February 2026. We have assessed the
impact of the above tariff adjustments on our business operations and financial position, and
based on such assessment, our Directors are of the view that the newly implemented tariffs
adjustments have not resulted in any adverse material impact on our business operation and
financial position during the Track Record Period and up to the Latest Practicable Date.
The table below sets forth the range of applicable ad valorem U.S. tariff rates by major
products during the Track Record Period and as of the Latest Practicable Date.
From
January 2022 to
December 2024
January to
March 2025 (1)
April to June
2025 (1)
July to
September,
2025 (1)
As of the Latest
Practicable
Date (1)
%
Optical modules and
high-speed cables /H1118/H1118/H1118 7.5-31.2 7.5-51.2 27.5-176.2 27.5-61.2 7.5-41.2
Switches /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180-27.9 0-47.9 20-172.9 20-97.9 0-77.9
Fiber optic cables /H1118/H1118/H1118/H1118/H11187.5-30.5 7.5-50.5 27.5-175.5 27.5-77.5 7.5-57.5
Optical transmission
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.5-28.5 7.5-48.5 27.5-173.5 27.5-97.9 7.5-77.9
Optical fiber cabling
management products /H1118 7.5-30.8 7.5-50.8 27.5-175.8 27.5-97.9 7.5-77.9
Copper system products /H1118 12.8-28.5 12.8-48.5 157.8-173.5 42.8-97.9 22.8-77.9
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180-42.6 0-62.6 20-187.6 20-100.3 0-80.3
(1) U.S. tariff policies and other trade policy measures had been rapidly evolving in the nine months ended
September 30, 2025. See “Risk Factors — Risks relating to Our Business and Industry — Rising
international political tensions, including changes in international trade policies and trade barriers, or
the escalation of trade tensions, particularly between the U.S. and China, may have an adverse effect on
our business operations.”
(2) The range of U.S. tariff rates applicable to our major products during the Track Record Period and as
of the Latest Practicable Date is primarily reflects differences in the inherent nature and technical
characteristics of the products, which also contribute to the differentiated impact of U.S. tariff policy
changes across our product portfolio. There has been no material change of the U.S. tariff rates
applicable to our major products since the Latest Practicable Date.
Despite the rapidly evolving U.S. tariff policies, our sales in the U.S. have remained
stable in the nine months ended September 30, 2025. The U.S. import tariffs are borne by FS
U.S., our U.S. subsidiary responsible for sales and delivery of the networking solutions in the
U.S. In light of the U.S. tariffs policies, we have adopted flexible pricing strategies. While a
small number of U.S. customers inquired about our price adjustments and tariff response
strategy, there was no material decline in our sales in U.S. as a result of the imposition of the
U.S. tariffs. There was no order cancellation request, suspension of delivery or re-negotiation
of material contractual terms from any customers that was material to our business operations
because of the imposition of tariffs. In light of our adoption of flexible pricing strategies and
gradual adjustment of our procurement mix by reducing the proportion of China-based
SUMMARY
–1 4–


--- page 26 ---
sourcing and increasing procurement of supplies in other region, our Directors are of the view
that the tariff development did not result in any material adverse impact on our business
operation or financial conditions. Our monthly revenue generated from the U.S. was RMB67.1
million, RMB120.7 million, RMB142.0 million, RMB155.5 million, RMB119.8 million,
RMB147.2 million, RMB139.8 million, RMB143.2 million, RMB143.1 million, RMB130.9
million, RMB146.7 million and RMB134.0 million in January, February, March, April, May,
June, July, August, September, October, November and December 2025, respectively.
The table below sets forth the revenue generated from the U.S. for the major products of
(i) optical modules and high-speed cables, (ii) switches, and (iii) fiber optic cables, that are
subject to applicable ad valorem U.S. tariff rates for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Optical modules and high-
speed cables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118417,934 485,605 591,475 443,562 587,559
Switches /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206,306 196,307 242,676 180,787 202,210
Fiber optic cables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118167,407 198,890 224,034 171,601 234,223
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,978 146,223 164,981 124,872 154,365
(1) Others include products of optical transmission equipment, optical fiber cabling management products,
copper system products and others, which collectively accounted for a small extent of total revenue
generated from the U.S. for the periods indicated.
Based on a comprehensive assessment of our business operations — including
manufacturing, sales, delivery, research and development, and future planning — our Directors
are of the view that the imposition of trade tariffs and recent developments in global trade
relations have not had a material adverse impact on our financial position or results of
operations. In addition, we have gradually adjusted our procurement mix by reducing the
proportion of China-based sourcing and increasing procurement from suppliers in other
regions, such as Southeast Asia with a view to diversifying our supply chain and managing
tariff-related exposure. This shift has resulted in lower or nil tariff rates for certain affected
items, effectively optimizing our cost of sales. Furthermore, we did not receive any material
order cancellations, delivery suspensions, or requests for renegotiation of key contractual terms
from our customers as a result of the newly imposed tariffs.
The Joint Sponsors have (a) interviewed the Company to understand that the financial
impact of trade tariffs imposed by the U.S. on the Company is minimal and the Company has
implemented certain measures to mitigate the impact; and (b) reviewed the advanced draft of
Company’s board memorandum of the profit forecast for the year ending December 31, 2026
and working capital forecast for the period from January 1, 2025 to December 31, 2027, in
SUMMARY
–1 5–


--- page 27 ---
particular section 5 regarding the “Impact of Tariffs”, as well as the management accounts for
2025 Q3 and Q4. The Joint Sponsors submit that nothing has come to their attention in the
course of conducting the due diligence work that would lead them to cast doubts on the
Company’s view above.
Further, our overall operational and financial performance for the nine months ended
September 30, 2025 remained broadly in line with that in 2022, 2023, 2024 and the nine months
ended September 30, 2024. There were no material fluctuations in cost of sales, revenue or
profitability attributable to the imposition of the tariffs. Our cost of sales increased by 7.7%
from RMB958.0 million in the nine months ended September 30, 2024 to RMB1,031.9 million
in the nine months ended September 30, 2025. Our revenue increased by 11.3% from
RMB1,953.7 million in the nine months ended September 30, 2024, to RMB2,174.7 million in
the nine months ended September 30, 2025. We maintained a stable gross profit margin, being
52.6% for the nine months ended September 30, 2025, as compared to 45.4%, 49.4%, 50.0%
and 51.0% for the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2024, respectively. Further, we maintained a robust net profit margin, being
19.5% for the nine months ended September 30, 2025, as compared to 18.3%, 20.6%, 15.2%
and 18.0% for the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2024, respectively.
While we have been and will continue actively monitoring and assessing tariff policies
and coordinating internal departments to formulate responsive strategies and mitigate
associated risks, we have adopted the following key measures to mitigate the geopolitical risks
and minimize relevant costs.
 We have strategically restructured our supply chain for our sales in the U.S. and will
continue to optimize it for efficiency and resilience. This includes relocating
sourcing to regions with favorable trade conditions and dynamically adjusting our
approach in response to evolving circumstances. We have also been actively
contacting and assessing potential alternative overseas suppliers. As part of our
continuing efforts to diversify our supply chain, for our sales in the U.S., our
procurement from supply chain in China accounted for 33.4% of total procurement
for our U.S. sales in the nine months ended September 30, 2025 (as compared to
75.3% in the year ended December 31, 2024). Such diversification enhances supply
chain resilience and reduces exposure to tariff-related costs. While nearly all
imports to the U.S. are subject to a baseline tariff of 10%, some products sourced
from these alternative regions may benefit from preferential tariff conditions. While
our existing contractual arrangements with suppliers remain unchanged, we have
implemented enhanced compliance protocols for overseas suppliers. These include
requiring origin commitments regarding product provenance, which support
accurate tariff classification and facilitate eligibility for preferential treatment under
applicable U.S. customs and trade regulations. Domestic suppliers generally offer a
cost advantage. For example, in the nine months ended September 30, 2025, the
average procurement cost from domestic suppliers was generally lower by a low
double-digit percentage than that from overseas suppliers. There are no material
SUMMARY
–1 6–


--- page 28 ---
differences in product quality between domestic and overseas suppliers, based on
our ongoing quality assessments. Differences in gross profit margin between
products sourced from domestic and overseas suppliers primarily reflect the
combined effects of procurement costs and tariff arrangements. While domestic
procurement prices are generally lower, certain overseas suppliers can achieve more
favorable gross profit margins for exports to the U.S. market as a result of
preferential tariff treatment based on country of origin. In comparing suppliers, we
have found that while unit costs and lead times from some new regions may be
slightly higher, these are offset by lower tariff exposure and improved supply chain
resilience. There are no material differences in the key terms offered by domestic
and overseas suppliers, including payment, delivery, and after-sales support. We
have maintained strict quality control standards and implemented enhanced
compliance protocols, including origin commitments for accurate tariff
classification. The restructuring has required adjustments to our logistics
arrangements, such as establishing new shipping routes and warehousing solutions,
but our digital supply chain management system has enabled us to maintain timely
delivery. Overall, these measures have allowed us to effectively manage our
procurement and logistics costs, and as a result, we have been able to preserve stable
profit margins. Importantly, there has been no material impact on product quality,
and our ability to deliver to customers in a timely manner has been maintained.
 We have implemented a flexible pricing adjustment strategy by which we determine
our product prices based on a range of commercial considerations, including
tariff-related policies. We may adjust the product prices to reasonably allocate
incremental tariff costs between us and our customers, enabling us to remain
competitive, retain and attract customers, while continuing to enhance overall
commercial performance. Since March 2025, in response to U.S. tariff increases,
and following our flexible pricing adjustment strategy, we have made certain
adjustments to our product prices with an aim to reasonably allocating incremental
costs between us and our customers. Pricing decisions are based on a comprehensive
assessment of tariff cost recovery and market acceptance, rather than a direct
one-to-one pass-through of tariff rates. Tariffs are treated as variable costs, and
adjustments are made to ensure product-level gross margins remain above
predefined thresholds. We also evaluate price elasticity and competitive dynamics to
balance profitability with customer retention. In practice, this strategy involves
making tiered price adjustments in response to changes in U.S. tariff rates, with
selective rollbacks where exemptions apply, in order to maintain competitiveness
and customer retention. In response to escalating U.S. tariffs on China-origin
products in early 2025, we implemented tiered price adjustments on our U.S.
website, with partial rollbacks following updates to exemption lists. These measures
have not resulted in any material decline in U.S. sales orders. This strategy is
supported by a structured internal process: we actively monitor tariff developments
and issue alerts, while our finance and operations teams assess cost impacts, price
elasticity, and competitive benchmarks. A cross-functional task force then
formulates pricing scenarios, which are reviewed and approved by senior
SUMMARY
–1 7–


--- page 29 ---
management. Approved adjustments are implemented through our business systems
and monitored for performance. The effectiveness of this flexible pricing adjustment
strategy is reflected in our gross profit margin, which has remained relatively stable
despite significant tariff increases. For the nine months ended September 30, 2025,
our gross profit margin was 52.6%, as compared to 51.0% for the same period in
2024. Pricing decisions are made on the basis of a holistic assessment of tariff cost
recovery and market response. We generally set minimum gross margin thresholds
for each product category and treat tariffs as variable costs to ensure profitability.
At the same time, demand elasticity and competitive dynamics are carefully
analysed to balance cost recovery with customer retention and optimize overall
performance.
 To proactively address potential exposure to geopolitical tensions and mitigate
associated risks, in July 2025, we have engaged with experienced external customs
professionals to monitor and interpret tariff and export policies. Specific candidates
have been identified and retained to assist with timely policy tracking and
compliance advisory. With their support, our internal teams actively monitor
relevant tariff developments, issue timely alerts, and stay abreast of regulatory
changes. In parallel, our internal control and legal departments will continue to
collaborate and establish robust compliance frameworks and conduct ongoing
assessments to ensure the effectiveness of policy implementation.
Based on the above, and in light of our timely implementation of flexible pricing
adjustments in response to recent changes in tariff policies, as well as the absence of material
fluctuations in our sales orders during the relevant period, it is our Directors’ opinion that the
imposition of trade tariffs and changes in global trade relations have not resulted in material
and adverse impact on our results of operations and financial position.
There is still significant uncertainty about future trade policy changes and political
tensions between the U.S. and China. The international tariff policies are rapidly involving. It
is possible that additional trade policy measures, including new tariffs and import/export
restrictions, may be implemented. We will closely monitor the relevant situation. See also
“Risk Factors — Risks Relating to Our Business and Industry — Rising international political
tensions, including changes in international trade policies and trade barriers, or the escalation
of trade tensions, particularly between the U.S. and China, may have an adverse effect on our
business operations.”
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Key Operational Data Update
We have maintained stable business operations and development since September 30,
2025. In 2025, approximately 82,300 customers placed orders on our online sales platform,
with an average revenue per customer of approximately RMB36,100. We witnessed improving
customer loyalty, with our net dollar retention rate reaching 97.5% in 2025.
SUMMARY
–1 8–


--- page 30 ---
No Material Adverse Change
Our Directors confirm that, up to the date of this prospectus, there had been no material
adverse change in our business, financial condition and results of operations since September
30, 2025, which is the end date of the periods reported on in the Accountants’ Report as set out
in Appendix I to this prospectus, and there is no event since September 30, 2025 which would
materially affect the information in the Accountants’ Report as set out in Appendix I to this
prospectus.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Xiang directly and indirectly controlled 61.16%
voting rights of the Company, among which, (i) he was directly interested in 56.65% of the
total issued share capital of our Company; and (ii) he controlled voting rights attached to the
3.19%, 0.74% and 0.58% issued share capital of our Company held by Y uxuan Prudence,
Y uxuan Progress and Y uxuan Growth, respectively, through acting as their respective general
partner. Immediately following the completion of the Global Offering (assuming the
Over-allotment Option is not exercised), Mr. Xiang will, directly and indirectly through
Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth, continue to control 55.04% voting
rights of our Company. Therefore, Mr. Xiang, Y uxuan Prudence, Y uxuan Progress and Y uxuan
Growth will remain as our Controlling Shareholders upon the Listing.
PRE-IPO INVESTMENT
As of the Latest Practicable Date, the Pre-IPO Investors hold approximately 38.84% of
our total issued share capital. Immediately following the completion of the Global Offering, the
Pre-IPO Investors will hold 34.96% of our total issued share capital (assuming the
Over-allotment Option is not exercised) or approximately 34.44% of our total issued share
capital (assuming the Over-allotment Option is exercised in full). All the special rights
including information right, right of first refusal and tag-along rights, and divestment right etc.
granted to Pre-IPO Investors were terminated as of the date of our first submission of the
Listing application to the Stock Exchange. The divestment right granted to Pre-IPO Investors
shall resume to be exerciseable if the Listing does not take place under circumstances including
the withdrawal of the Listing application, the rejection or return of the Listing application by
the Stock Exchange, and the lapse of the Listing application without resubmission of the
Listing application within a prescribed time. Our Shares held by the Pre-IPO Investors are
subject to a statutory lock-up period of 12 months after the date of Listing. For details
regarding the background of the Pre-IPO Investors, see “History, Development and Corporate
Structure — Pre-IPO Investments.”
SUMMARY
–1 9–


--- page 31 ---
PREVIOUS A SHARE LISTING ATTEMPT
The Company submitted an A share listing application (the “ A Share Listing
Application ”) to CSRC on June 21, 2022 and withdrew the A Share Listing Application
according to a Board resolution dated March 22, 2024. Accordingly, the Shenzhen Stock
Exchange terminated its vetting process on May 11, 2024.
On January 10, 2025, Shenzhen Stock Exchange issued a regulatory letter (the
“Regulatory Letter ”) to our Company and Mr. Xiang, which was mainly regarding certain
deficiencies in our Company’s internal control system, including accuracy of certain
information displayed in the front-end sales platform, system operation logs retaining
deficiency, and lack of internal management systems for reverse settlement and reverse audit.
The Company had rectified these issues identified in the Regulatory Letter and enhanced its
internal control mechanisms. Our Board is of the view that the Regulatory Letter does not
impact the suitability of Mr. Xiang to act as a Director under Rules 3.08 and 3.09 of the Listing
Rules, and they are not aware of any material matters or findings relating to the A Share Listing
Application or the Regulatory Letter which have been brought to their attention that might
materially and adversely affect our suitability for the Listing or should be brought to the
attention of the Stock Exchange and/or the prospective investors in the Global Offering. See
“History, Development and Corporate Structure — Previous A Share Listing Attempt” and
“Directors, Supervisors and Senior Management — Directors’ and Supervisors’ Interest and
Confirmation.”
OFFERING STATISTICS
All statistics in the following table are based on the assumption that (i) the Global
Offering has been completed and 40,000,000 new H Shares are issued pursuant to the Global
Offering; and (ii) the Over-allotment Option is not exercised and our Company will have
400,000,000 issued Shares upon completion of the Global Offering.
Based on an
Offer Price of
HK$35.20 per H
Share
Based on an
Offer Price of
HK$41.60 per H
Share
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$14,080
million
HK$16,640
million
Unaudited pro forma adjusted net tangible assets
of the Group attributable to the owners of the
Company as of September 30, 2025
per Share
(2)(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$9.26 HK$9.91
Note:
(1) The calculation of market capitalization is based on 400,000,000 Shares expected to be in issue immediately
after completion of the Global Offering.
SUMMARY
–2 0–


--- page 32 ---
(2) The unaudited pro forma adjusted consolidated net tangible assets of the Group as at September 30, 2025 per
Share has been arrived on the basis of a total of 383,768,627 Shares, comprising 360,000,000 Shares in issue
as at September 30, 2025, excluding 16,231,373 shares held by Y uxuan Growth, Y uxuan Progress and Y uxuan
Prudence for Employee Incentive Scheme of the Group, which represent treasury shares as detailed in Note
35 to the Accountants’ Report, and 40,000,000 H Shares to be issued, assuming that the Global Offering has
been completed on September 30, 2025. It does not take into account (i) any shares which may be issued upon
the exercise of the Over-allotment Option, (ii) any shares which may be vested upon Global Offering under
the Employee Incentive Scheme of the Group or (iii) any shares which may be issued or repurchased by the
Company pursuant to the Company’s general mandates.
(3) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of our
Group attributable to owners of our Company as at September 30, 2025 to reflect any trading result or other
transaction of our Group entered into subsequent to September 30, 2025. In particular, the unaudited pro forma
adjusted consolidated net tangible assets of our Group attributable to owners of our Company have not been
adjusted to illustrate the effect of the following:
Upon completion of the Global Offering, all redemption rights entitled to our investors will be terminated and
the redemption liabilities recognized due to these redemption rights will be reclassified to equity. Accordingly,
for the purpose of the unaudited pro forma financial information, the unaudited pro forma adjusted
consolidated net tangible assets of our Group attributable to the owners of our Company will be increased by
RMB664,243,000, being the carrying amount of the redemption liabilities as at September 30, 2025.
The above effect would have adjusted the unaudited pro forma adjusted consolidated net tangible assets of our
Group attributable to the owners of our Company as at September 30, 2025 per Share to RMB9.94 (equivalent
to HK$11.22, based on an exchange rate of RMB1.00 to HK$1.1290) based on an Offer Price of HK$35.20
per Offer Share and RMB10.50 (equivalent to HK$11.85, based on an exchange rate of RMB1.00 to
HK$1.1290) based on an Offer Price of HK$41.60 per Offer Share, respectively. The above illustration does
not take into account (i) any shares which may be issued upon the exercise of the Over-allotment Option, (ii)
any shares which may be vested upon Global Offering under the Employee Incentive Scheme of our Group or
(iii) any shares which may be issued or repurchased by us pursuant to our general mandates.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our listing expenses will be
approximately RMB90.7 million (assuming an Offer Price of HK$38.40 per Offer Share (being
the mid-point of the indicative Offer Price range) and no exercise of the Over-Allotment
Option), representing 6.7% of the gross proceeds (based on the mid-point of our indicative
price range for the Global Offering and assuming that the Over-Allotment Option is not
exercised) of the Global Offering. During the Track Record Period, we incurred listing
expenses of RMB23.6 million, of which approximately RMB19.0 million was charged to the
consolidated statements of profit or loss. We expect to incur additional listing expenses of
approximately RMB67.1 million, of which approximately RMB19.8 million is expected to be
recognized in the consolidated statements of profit or loss and approximately RMB47.3 million
is expected to be recognized as a deduction in equity directly upon the Listing. Our Directors
do not expect such expenses to materially impact our results of operations in 2025. By nature,
our listing expenses are composed of (i) underwriting commission of approximately RMB47.6
million, and (ii) non-underwriting related expenses of approximately RMB43.1 million, which
consist of fees and expenses of legal advisors and Reporting Accountant of approximately
RMB24.9 million and other fees and expenses of approximately RMB18.2 million.
SUMMARY
–2 1–


--- page 33 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions have the meanings set forth below. Certain other terms are explained in the
section headed “Glossary of Technical Terms” in this prospectus.
“Accountants’ Report” the accountants’ report of our Company, the text of which
is set out in Appendix I to this prospectus
“affiliate” 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
“Articles of Association” or
“Articles”
the articles of association of our Company, conditionally
adopted on May 23, 2025 with effect from the Listing
Date, and as amended from time to time, a summary of
which is set out in Appendix IV to this prospectus
“Board” or “Board of Directors” the Board of directors of our Company
“business day(s)” a day on which banks in Hong Kong are generally open
for normal banking business to the public and which is
not a Saturday, Sunday or public holiday in Hong Kong
“Capital Market Intermediaries” the capital market intermediaries named in the section
headed “Directors, Supervisors and Parties Involved in
the Global Offering” of this prospectus
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“China”, “Mainland China” or
“PRC”
the People’s Republic of China, but for the purpose of
this prospectus and for geographical reference only and
except where the context requires, references in this
prospectus to “China” and the “PRC” do not apply to
Hong Kong, Macau Special Administrative Region and
Taiwan, China
“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
DEFINITIONS
–2 2–


--- page 34 ---
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company”, “our Company” or
“the Company”
FS.COM Limited (ʮ̡),
established under the name of Shenzhen Y uxuan Network
Technology Co., Ltd. (ʮ̡)i n
the PRC on April 9, 2009
“Company Law” or “PRC
Company Law”
Company Law of the People’s Republic of China ( ʕശɛ
جas amended, supplemented or
otherwise modified from time to time
“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing Rules
and unless the context requires otherwise, refers to Mr.
Xiang, Y uxuan Prudence, Y uxuan Progress and Y uxuan
Growth
“Conversion of Unlisted Shares
into H shares”
the conversion of 360,000,000 Unlisted Shares into H
Shares on one-for-one basis upon the completion of
Global Offering, as described in further detail in “Share
Capital”
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Latest Practicable Date” March 4, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in
this prospectus prior to its publication
“Director(s)” director(s) of our Company
“EIT” enterprise income tax
“EIT Law” Enterprise Income Tax Law of the People’s Republic of
China (جas amended,
supplemented or otherwise modified from time to time
“Exchange Participant(s)” a person: (a) who, in accordance with the Hong Kong
Listing Rules, may trade on or through the Hong Kong
Stock Exchange; and (b) whose name is entered in a list,
register or roll kept by the Hong Kong Stock Exchange as
a person who may trade on or through the Hong Kong
Stock Exchange
DEFINITIONS
–2 3–


--- page 35 ---
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong due to a super
typhoon or other natural disaster of a substantial scale
seriously affecting the working public’s ability to resume
work or bringing safety concern for a prolonged period
“FINI” “Fast Interface for New Issuance”, an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all new listings
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent market research and consulting company
“Frost & Sullivan Report” the report prepared by Frost & Sullivan
“FS Germany” FS.COM GmbH, a company incorporated under the laws
of the Germany on May 11, 2017, one of our subsidiaries
“FS HK” FS.COM HK LIMITED, a company incorporated under
the laws of Hong Kong on November 8, 2016, one of our
subsidiaries
“FS International Trade” Shenzhen Feisu Innovation International Trade Co., Ltd. ( ଉ
ʮ̡), a company incorporated
under the laws of the PRC on July 17, 2024, one of our
subsidiaries
“FS Singapore” FS TECH PTE. LTD., a company incorporated under the
laws of Singapore on June 4, 2018, one of our
subsidiaries
“FS U.S.” FS.COM INC, a company incorporated under the laws of
the U.S. on April 30, 2018, one of our subsidiaries
“FS Wuhan” Wuhan FS.COM Technology Co., Ltd. (஺ஷ
ʮ̡), a limited liability company
incorporated under the laws of the PRC on October 15,
2018, one of our subsidiaries
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group,” “our Group,” “we” or
“us”
our Company and our subsidiaries from time to time
DEFINITIONS
–2 4–


--- page 36 ---
“H Share(s)” ordinary shares in the share capital of our Company with
nominal value of RMB1.00 each, which are to be
subscribed for and traded in HK dollars and are to be
listed on the Hong Kong Stock Exchange
“H Share Registrar” Tricor Investor Services Limited
“HK$” or “HK dollars” 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, submitted online through
the designated website at www.hkeipo.hk
“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 Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Listing Rules” or
“Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (as amended
from time to time)
“Hong Kong Offer Shares” the 4,000,000 H Shares initially offered by our Company
for subscription at the Offer Price pursuant to the Hong
Kong Public Offering (subject to reallocation as
described in “Structure of the Global Offering” in this
prospectus)
DEFINITIONS
–2 5–


--- page 37 ---
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong (subject to adjustment as
described in “Structure of the Global Offering” in this
prospectus) at the Offer Price (plus brokerage, SFC
transaction levy, AFRC transaction levy and Hong Kong
Stock Exchange trading fees), on and subject to the terms
and conditions described in this prospectus as further
described in “Structure of the Global Offering — Hong
Kong Public Offering” in this prospectus
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in “Underwriting — Hong Kong Underwriters” in this
prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement, dated March 11, 2026,
relating to the Hong Kong Public Offering and entered
into by, our Company, Mr. XIANG WEI ( Σਃ), the Joint
Sponsors, the Overall Coordinators and the Hong Kong
Underwriters, as further described in the section headed
“Underwriting — Underwriting Arrangements and
Expenses — The Hong Kong Public Offering — Hong
Kong Underwriting Agreement” in this prospectus
“IFRS” IFRS Accounting Standards, which include standards,
amendments and interpretations promulgated by the
International Accounting Standards Board and the IFRIC
Interpretations issued by the IFRS Interpretations
Committee
“Independent Third Party(ies)” any entity or person who is not a connected person of our
Company within the meaning ascribed thereto under the
Listing Rules
“International Offer Shares” the 36,000,000 H Shares initially offered by our
Company for subscription pursuant to the International
Offering together with, where relevant, any additional
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option (subject to
reallocation as described in “Structure of the Global
Offering” in this prospectus)
DEFINITIONS
–2 6–


--- page 38 ---
“International Offering” the offer of the International Offer Shares by the
International Underwriters at the Offer Price outside the
United States in offshore transactions in accordance with
Regulation S, as further described in “Structure of the
Global Offering” in this prospectus
“International Underwriters” the group of international underwriters, led by the
Overall Coordinators, that is expected to enter into the
International Underwriting Agreement to underwrite the
International Offering
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into
by, among others, our Company, the Joint Sponsors, the
Overall Coordinators and the International Underwriters
in respect of the International Offering, as further
described in “Underwriting — International Offering” in
this prospectus
“Joint Bookrunners” the joint bookrunners named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” of this prospectus
“Joint Global Coordinators” the joint global coordinators named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” of this prospectus
“Joint Lead Managers” the joint lead managers named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” of this prospectus
“Joint Sponsors” the joint sponsors named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” of this prospectus
“Listing” listing of the H Shares on the Main Board of the Hong
Kong Stock Exchange
“Listing Committee” the Listing Committee of the Hong Kong Stock Exchange
“Listing Date” the date, expected to be on or around March 23, 2026, on
which our H Shares are listed and from which dealings
therein are first permitted to take place on the Hong Kong
Stock Exchange
DEFINITIONS
–2 7–


--- page 39 ---
“Macau” the Macau Special Administrative Region of the PRC
“Main Board” the stock market (excluding the option market) operated
by the Stock Exchange which is independent from and
operated in parallel with the Growth Enterprise Market of
the Stock Exchange
“Ministry of Finance” or “MOF” the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅)
“Mr. Xiang” Mr. Xiang Wei ( Σਃ), our founder, executive Director,
chairperson of the Board, general manager and one of our
Controlling Shareholders
“NDRC” the National Development and Reform Commission of
the PRC (ึ)
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
“Offer Price” the final price per Offer Share in Hong Kong dollars
(exclusive of brokerage fee of 1%, SFC transaction levy
of 0.0027%, AFRC transaction levy of 0.00015% and
Hong Kong Stock Exchange trading fee of 0.00565%) of
not more than HK$41.60 and expected to be not less than
HK$35.20, at which Hong Kong Offer Shares are to be
subscribed, to be determined in the manner further
described in “Structure of the Global Offering — Pricing
and Allocation” in this prospectus
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional
H Shares which may be issued by our Company pursuant
to the exercise of the Over-allotment Option
“Overall Coordinators” the overall coordinators named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” of this prospectus
DEFINITIONS
–2 8–


--- page 40 ---
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (on behalf of the International
Underwriters) pursuant to the International Underwriting
Agreement, pursuant to which our Company may be
required to allot and issue up to an aggregate of
6,000,000 additional H Shares at the Offer Price to,
among other things, cover over-allocations in the
International Offering, if any, further details of which are
described in “Structure of the Global Offering” in this
prospectus
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC GAAP” generally accepted accounting principles of PRC
“PRC Legal Advisor” Zhong Lun Law Firm, the PRC legal advisors of our
Company
“Pre-IPO Investments” the investments made by the Pre-IPO Investors, the
principal terms of which are summarized in “History,
Development and Corporate Structure — Pre-IPO
Investments” in this prospectus
“Pre-IPO Investors” the investor(s) who participated in our Pre-IPO
Investments, details of which are set out in “History,
Development and Corporate Structure — Pre-IPO
Investments” in this prospectus
“Price Determination Agreement” the agreement to be entered into by the Overall
Coordinators (for themselves and on behalf of the
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 March 19, 2026
(Hong Kong time) and in any event no later than 12:00
noon on March 19, 2026, on which the Offer Price is to
be fixed by the Overall Coordinators (for themselves and
on behalf of the Underwriters) and our Company
“province” a province or, where the context requires, a provincial
level autonomous region or municipality, under the direct
supervision of the central government of the PRC
DEFINITIONS
–2 9–


--- page 41 ---
“Regulation S” Regulation S under the US Securities Act
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAC” the Securities Association of China ( ʕ਷ᗇՎุ՘ึ)
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SASAC” State-owned Assets Supervision and Administration
Commission of the State Council ( ਷ਕ৫਷Ϟ༟ପ္ຖ
ึ)
“SA T” the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅)
“Securities and Futures
Ordinance” or “SFO”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Securities Law” the Securities Law of the People’s Republic of China ( ʕ
جas amended, supplemented or
otherwise modified from time to time
“SFC” the Securities and Futures Commission of Hong Kong
“Share(s)” ordinary shares in the share capital of our Company with
a nominal value of RMB1.00 each, comprising Unlisted
Shares prior to the Listing and H Shares upon the Listing
“Shareholders(s)” holder(s) of the Share(s)
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“State Council” the State Council of the People’s Republic of China ( ʕ
ശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“Supervisor(s)” member(s) of our Supervisory Committee
“Supervisory Committee” the supervisory committee of our Company
DEFINITIONS
–3 0–


--- page 42 ---
“Takeovers Code” the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Track Record Period” the three years ended December 31, 2022, 2023, 2024 and
the nine months ended September 30, 2025
“Transfer Pricing Advisor” KPMG Advisory (China) Limited Beijing Branch, the
transfer pricing advisor of our Company
“UK”, “U.K.” or “United
Kingdom”
the United Kingdom of Great Britain and Northern
Ireland
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“Unlisted Share(s)“ ordinary shares in the share capital of our Company, with
a nominal value of RMB1.00 each, which are subscribed
for and paid up in Renminbi
“US Securities Act” the United States Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder
“US”, “U.S.” or “United States” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“US$” or “US dollars” United States dollars, the lawful currency of the United
States
“Y uxuan Growth” Shenzhen Y uxuan Growth Technology Partnership
(Limited Partnership) (ҦΥྫΆุ(ࠢ
Υྫ)), one of our employee incentive platforms and
Controlling Shareholders
“Y uxuan Progress” Shenzhen Y uxuan Progress Technology Partnership
(Limited Partnership) (ҦΥྫΆุ(ࠢ
Υྫ)), one of our employee incentive platforms and
Controlling Shareholders
DEFINITIONS
–3 1–


--- page 43 ---
“Y uxuan Prudence” Shenzhen Y uxuan Prudence Technology Partnership
(Limited Partnership) (ҦΥྫΆุ(ࠢ
Υྫ)), one of our employee incentive platforms and
Controlling Shareholders
“%” per cent
In this prospectus, the terms “associate”, “close associate”, “connected person”, “core
connected person”, “connected transaction” and “substantial shareholder” shall have the
meanings given to such terms in the Hong Kong Listing Rules, unless the context otherwise
requires.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations 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.
DEFINITIONS
–3 2–


--- page 44 ---
This glossary of technical terms contains explanations of certain technical terms
used in this prospectus in connection with our Company and our business. Such
terminology and meanings may not correspond to standard industry meanings or usages
of those terms.
“AI” artificial intelligence, simulation of human intelligence
by machines
“average revenue per customer” equals the revenue derived from certain customers of a
certain period divided by the number of those certain
customers in that period
“CAGR” compound annual growth rate, representing the year-
over-year growth rate of a value over a specified period
of time taking into account the effects of compounding
and calculated by subtracting one from the result of
dividing the ending value by its beginning value raised to
the power of one divided by the period length
“customer relationship
management” or “CRM”
a strategy for managing an organization’s relationships
and interactions with customers and potential customers,
including automatic analysis of sales and marketing
strategies, and customer services, as well as
implementation procedures
“DTC” direct-to-customer
“G” Gigabits
“general networking solutions” networking solutions supporting data transfer rates below
100G
“high-performance networking
solutions”
networking solutions supporting data transfer rates of
100G and above
“large language model” without formal definition and normally referring to a
language model trained on large quantities of text data
with billion-level or above parameters for general
purposes, as opposed to models trained for accomplishing
specific tasks
“M” Megabits
GLOSSARY OF TECHNICAL TERMS
–3 3–


--- page 45 ---
“net dollar retention rate” equals the revenue of a certain period from certain
customers that contributed to our revenue for both the
certain and the previous period divided by the revenue
from those customers in the previous period and
multiplied by 100%
“networking solutions” an industry-standard term, as advised by Frost &
Sullivan, which broadly refers to a networking
company’s integrated offerings tailored to meet
customers’ specific networking needs across diverse
scenarios, and avoids strict distinguishments between
products/services or hardware/software
“R&D” research and development
“RDMA” remote direct memory access
“RoCE” RDMA over converged ethernet, a network protocol
which allows RDMA over an Ethernet network
“SKU(s)” stock keeping units, being the smallest unit of inventory
available for sale
“SDN” software-defined networking
“T” Terabits
“WLAN” Wireless Local Area Network
GLOSSARY OF TECHNICAL TERMS
–3 4–


--- page 46 ---
We have included in this prospectus forward-looking statements. Statements that are
not historical facts, including statements about our intentions, beliefs, expectations or
predictions for the future, are forward-looking statements.
This prospectus includes forward-looking statements. All statements other than
statements of historical facts contained in this prospectus, including, without limitation, those
regarding our future financial position, our strategy, plans, objectives, goals, targets and future
developments in the markets where we participate or are seeking to participate, and any
statements preceded by, followed by or that include the words “believe,” “expect,” “estimate,”
“predict,” “aim,” “intend,” “will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,”
“could,” “would,” “continue,” or similar expressions or the negative thereof, are forward-
looking statements. These forward-looking statements involve known and unknown risks,
uncertainties and other factors, some of which are beyond our control, which 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. These forward-looking statements are based on numerous assumptions regarding
our present and future business strategies and the environment in which we will operate in the
future. Important factors that could cause our actual performance or achievements to differ
materially from those in the forward-looking statements include, among other things, the
following:
 our ability to successfully implement our business plans and strategies;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 general political and economic conditions of jurisdictions in which we operate;
 our business operations and prospects;
 our capital expenditure plans;
 weather, natural disasters and climate change;
 the actions and developments of our competitors;
 our financial condition and performance;
 capital market developments;
 our dividend policy;
 any changes in the laws, rules and regulations of the central and local governments
in the PRC and other relevant jurisdictions and the rules, regulations and policies of
the relevant governmental authorities relating to all aspects of our business and
business plans; and
 various business opportunities that we may pursue.
FORW ARD-LOOKING STATEMENTS
–3 5–


--- page 47 ---
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, as well as our financial statements and the related notes, and the
“Financial Information” section, before deciding to invest in our H Shares. The following
is a description of what we consider to be our material risks. Any of the following risks
could have a material adverse effect on our business, financial condition, results of
operations and growth prospects. In any such an event, the market price of our H Shares
could decline, and you may lose all or part of your investment. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial also may
impair our business operations.
These factors are contingencies that may or may not occur , and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in
“Forward-Looking Statements” in this prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categorized these risks and uncertainties into: (i) risks
relating to our business and industry; (ii) risks relating to operations in the principal places of
our business; and (iii) risks relating to the Global Offering. Additional risks and uncertainties
that are presently not known to us or that we currently deem immaterial could also have a
material adverse effect on our business, financial condition and results of operations. Y ou
should consider our business and prospects in light of the challenges we face, including the
ones discussed in this section.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
The industry in which we participate is increasingly competitive, and if we do not compete
effectively, our business and results of operations could be adversely affected.
The industry in which we operate is rapidly evolving and increasingly competitive, driven
by technological innovations and shifting customer needs. We primarily compete with other
domestic and international companies offering networking solutions. If we fail to compete
effectively with players who have longer operating history than us, or if we do not have or in
the future gain more financial resources, better operation management capabilities, more
sophisticated technological capabilities, broader customer base and stronger customer
relationships than our competitors, we may not be able to respond more quickly and effectively
to new or changing opportunities, technologies, regulatory requirements or customer demand
than our competitors. We may also face competition from new entrants from time to time who
may offer lower prices or new technologies, products and/or solutions, which could further
intensify the level of competition in the future. Such increases in competition could lead to
lower sales, price reductions, reduced margins or loss of market share. To address these
RISK FACTORS
–3 6–


--- page 48 ---
competitive pressures, we may be required to incur more expenses in R&D, sales and
marketing, recruiting and retaining top R&D talents to maintain our competitiveness. We
cannot assure you that we will always succeed in competing with other market players. If we
fail to compete effectively, we may not be able to retain or expand our market share, which
would have a material adverse effect on our business, results of operations and financial
condition.
Our business growth and prospects are affected by our ability to continuously innovate
and iterate our networking solutions and technology platform.
The industry in which we operate is characterized by constant changes and innovations
and we expect it to continue to evolve rapidly. Our success depends significantly on our ability
to innovate and adapt to the rapidly changing technology landscape and market dynamics. If
we fail to anticipate or respond to these changes, our networking equipment and solutions may
become obsolete or less competitive, leading to a loss of customers and market share. In
addition, our business growth relies on our ability to retain existing customers, attract new
customers and increase sales to both new and existing customers. However, we may experience
difficulties in these efforts due to their costly and time-consuming nature, which in turn could
delay or prevent the development, enhancement, introduction or implementation of any new
networking solutions.
We may not always be able to identify such resources at acceptable prices and in a timely
manner, or at all. If we are unable to do so, our technological development plans could be
impeded, which would negatively impact our business operations and prospects.
Moreover, our ability to innovate is closely tied to our R&D efforts. In 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, our research and development
expenses amounted to RMB99.8 million, RMB110.5 million, RMB143.7 million, RMB99.8
million and RMB124.3 million, respectively, accounting for 5.0%, 5.0%, 5.5%, 5.1% and 5.7%
of our total revenue in the same respective periods. However, there is no assurance that our
R&D efforts will yield successful outcomes or that we will be able to commercialize new
technologies effectively. Any failure in our R&D initiatives could result in wasted resources
and missed market opportunities, adversely affecting our business and financial performance.
Even if we achieve our goals for R&D investment, our short-term cash flow and liquidity may
be adversely affected. While we intend to explore alternative arrangements to reduce the
capital intensity of any future expansion, there is no assurance this will be successful.
Our international presence exposes us to various risks and uncertainties.
We derive almost all of our revenue overseas. In 2022, 2023, 2024 and the nine months
ended September 30, 2024 and 2025, revenue generated outside China (including Mainland
China, Hong Kong, Macau Special Administrative Region and Taiwan, China) amounted to
RMB1,959.8 million, RMB2,172.4 million, RMB2,564.7 million, RMB1,919.4 million and
RMB2,129.5 million, respectively, representing 98.6%, 98.2%, 98.2%, 98.2% and 97.9% of our
total revenue in the same respective periods. Accordingly, we have faced and will continue to
face numerous risks, including legal, regulatory, political, economic, commercial and other
RISK FACTORS
–3 7–


--- page 49 ---
risks associated with conducting operations in various jurisdictions, any of which could
negatively affect our financial performance. The various risks and uncertainties that we may
face include but are not limited to: (i) challenges in localizing, adapting and complying with
the varying and evolving standards for networking equipment and solutions in the countries
and regions where we operate and may seek to enter in the future; (ii) general economic
conditions and political instability in international markets and the unexpected changes
thereof; (iii) compliance challenges related to the complexity of conflicting and changing
territorial and trans-jurisdictional laws and regulations, including those on privacy and data
protection, employment, tax and telecommunications, and obtaining the necessary licenses,
permits and approvals; (iv) changes in foreign tax rules, regulations and other requirements,
such as changes in tax rates and statutory and judicial interpretations of tax laws; (v) changes
in international trade policies and regulations including those in relation to economic
sanctions, export controls and import restrictions, as well in trade barriers such as imposition
of tariffs; (vi) changes in geopolitical situations especially those in jurisdictions where we do
business; (vii) fluctuations in between the value of RMB and foreign currencies, which may
make our solutions more expensive in other countries or may impact our results of operations
when our revenue are translated into RMB; and (viii) difficulties in staffing and managing
foreign operations, particularly in hiring and training qualified sales and service personnel.
If we fail to efficiently avoid or mitigate these risks, our ability to expand in international
markets will be impaired, or our international business may not be able to achieve or sustain
profitability, which could have a material adverse effect on our business, financial condition
and prospects.
Rising international political tensions, including changes in international trade policies
and trade barriers, or the escalation of trade tensions, particularly between the U.S. and
China, may have an adverse effect on our business operations.
Relationships between countries and regions could affect levels of trade, investments,
technological exchanges and other cross-border economic activities, which would have a
material adverse effect on global economic conditions and the stability of global markets.
Significant political, trade or regulatory developments in the jurisdictions in which we operate
are difficult to predict and may have a material adverse effect on us. Should tensions escalate
further between the U.S. or other countries and China and if we were unable to conduct our
business as it is currently conducted as a result of such regulatory changes, our business, results
of operations and financial condition would be materially and adversely affected.
Furthermore, our business may also be significantly impacted by the imposition of tariffs
by the U.S. and any resulting retaliatory tariffs in the countries in which we operate. During
the course of February and April 2025, President Trump implemented tariffs on several major
trading partners, including Canada, China, the European Union and Mexico, with a baseline of
10% tariffs on almost all countries and an additional individualized reciprocal higher tariff on
the countries with which the United States has the largest trade deficits. On April 2, 2025,
President Trump signed an Executive Order imposing reciprocal tariffs of 34% on Chinese
imports, with further increases of said reciprocal tariffs under Executive Orders of April 8,
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2025 and April 9, 2025 to 125%, effective April 10, 2025. In response, China announced
reciprocal tariffs of 34% on U.S. goods on April 4, 2025, which subsequently increased to
125%, effective April 12, 2025. On May 12, 2025, the U.S. and China announced a mutual
90-day suspension and removal agreement, which removed or suspended part of the tariffs
imposed by both countries, leaving a U.S. effective rate of 30% and a China rate of 10% (in
addition to any pre-existing tariffs). On August 11, 2025, the suspension was formally extended
for an additional 90 days.
There is significant uncertainty around whether the evolution of tariffs and trade
restrictions may have adverse effect on our business operations. There is no assurance that our
efforts to mitigate the geopolitical risks and minimize relevant costs will yield to success.
Evolution of tariffs may lead to increased cost of sales including procurement costs and custom
duties, reduced pricing flexibility and pressure on profit margins. Depending on the scope,
duration and geographic coverage of any potential new tariff measures, any significant changes
in global trade policies may pose challenges to our long-term planning and international
growth initiatives. There is also significant uncertainty around whether the evolution of tariffs
and trade restrictions, U.S.-China political tensions, and changes to other U.S.-China trade
policies may have a significant impact on our customers’ businesses which may in turn
adversely affect demands for our products and business.
Historically, tariffs have led to increased trade and political tensions, between not only
the U.S. and China, but also between the U.S. and other countries in the international
community. There is a risk that other countries may implement retaliatory tariffs on U.S. goods
and that the U.S. may respond with additional tariffs or other trade measures including
import/export controls. There is also uncertainty as to whether more countries will be able to
successfully reach trade deals with the U.S. that would reduce tariffs. These developments, or
the perception that any of them could occur, may have a material adverse effect on global
economic conditions and the stability of global markets, which in turn could adversely impact
our business and results of operations.
In addition, the U.S. may impose further import/export controls, sanctions, trade
embargoes and other heightened regulatory requirements on China and Chinese companies for
alleged activities both inside and outside of China. If we, our business partners or other parties
that have collaborative relationships with us or our affiliates become targeted or are currently
being targeted under sanctions or import/export control restrictions, this may result in
significant interruption in our business, regulatory investigations and reputational harm to us.
We have experienced significant growth during the Track Record Period. Our historical
performance is not necessarily indicative of our future performance. We may not be able
to implement our growth strategies or manage our growth effectively.
We have experienced significant growth during the Track Record Period. In 2022, 2023
and 2024, we recorded revenue of RMB1,988.2 million, RMB2,212.9 million and RMB2,611.8
million, respectively, representing a CAGR of 14.6% from 2022 to 2024. In the nine months
ended September 30, 2024 and 2025, we recorded revenue of RMB1,953.7 million and
RMB2,174.7 million, respectively. Despite the rapid evolvement and growth of our business
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during the Track Record Period, our historical growth rate is not necessarily indicative of our
future performance. We cannot assure you that we will be able to achieve similar results or
grow at the same rate as we did in the past. Our ability to grow and implement our future plans
are subject to a wide range of factors, including, among others, appropriate allocation of capital
investments in implementing various plans and adequate human resources. We may also be
unable to realize our future plans in accordance with the expected timetable, or at all, due to
other risks and uncertainties which include, among others, intensifying competition, our ability
to retain key employees, our financial stability, and our business relationships with customers,
suppliers and partners. The implementation of our future plans may also be hindered by other
factors beyond our control, such as general market conditions and the domestic and
international economic and political environment. If we fail to implement our growth strategies
or manage our growth effectively, our ability to capture new business opportunities and
maintain our competitive edge may be hindered, and hence our business, financial conditions,
results of operations and prospects may be materially and adversely affected.
Fluctuations in foreign exchange rates may adversely affect our business, financial
condition and results of operations.
Since we operate in overseas countries and regions and certain bank balances and trade
and other receivables are denominated in currencies other than the reporting currency of our
Group, being RMB, we may be exposed to foreign exchange risks. During the Track Record
Period, the major types of foreign currency transacted in our purchases are RMB and U.S.
dollar, and the major types of foreign currency transacted in our sales are U.S. dollar, Canadian
dollar and Euro. Any significant fluctuations in the exchange rates between foreign currencies
and RMB may materially and adversely affect our results of operations. In addition, potential
changes in U.S. monetary policy, may lead to a stronger U.S. dollar. This could further amplify
exchange rate volatility, create capital outflow pressures in other markets including China, and
affect investor sentiment or funding costs for Chinese companies operating internationally.
We had net foreign exchange gains of RMB28.4 million and RMB25.8 million in 2022
and 2023, respectively, and net foreign exchange losses of RMB9.6 million in 2024. We had
net foreign exchange gains of RMB2.3 million in the nine months ended September 30, 2024
and incurred net foreign exchange gains of RMB40.3 million in the nine months ended
September 30, 2025. Fluctuations in exchange rates between the RMB and other currencies
may be affected by, among other things, changes in political and economic conditions and
developments. Although we seek to manage our currency risks to minimize any negative effects
caused by exchange rate fluctuations, there can be no assurance that we will be able to do so
successfully and we currently do not undertake foreign exchange hedging. We cannot predict
the impact of future exchange rate fluctuations on our results of operations, and we cannot
assure you that we will not incur any net exchange loss in the future. For further details on
foreign currency risk exposures and related sensitivity test, see Note 41(b) to the Accountants’
Report in Appendix I to this prospectus.
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We rely on third parties to manufacture our networking equipment. Such arrangements
may reduce our control over the quality, development and deployment of our networking
solutions, which could in turn harm our reputation.
We rely on contract manufacturers for our manufacturing needs. For the years ended
December 31, 2022, 2023, 2024 and the nine months ended September 30, 2025, we had
engaged approximately 155, 151, 163 and 182 contract manufacturers, respectively. We may
either conduct independent research and development for certain products such as structured
cabling products or collaborate with contract manufacturers for the entire research and
development process. While these arrangements may lower our operating costs, they also
reduce our direct control over production and distribution. We may experience operational
difficulties with our contract manufacturers, including insufficient production capacity, failure
to meet production deadlines and quality control standards as well as delays in delivery of
products. During the Track Record Period, there have been isolated instances of order delays
or cancellations attributable to the contract manufacturers. Although such incidents have been
infrequent, limited and immaterial during the Track Record Period, there is no assurance that
similar issues will not arise in the future. Furthermore, we cannot guarantee that we will always
be able to renew contracts with our contract manufacturers on favorable terms, or at all. It may
take significant time and resources to identify substitute contract manufacturers that can meet
our production capacity and quality standards.
Our contract manufacturers may also experience disruptions in their operations due to
various factors beyond their control, including equipment breakdowns, labor strikes or
shortages, raw material shortages, natural disasters, health epidemics or other similar
problems. Any failure of our contract manufacturers to perform their responsibilities or to be
in compliance with all applicable laws and regulations may have a material negative impact on
our business operations. If we fail to timely replace the contract manufacturers with qualified
substitutes, we may incur additional costs or experience substantial delays in delivering our
networking solutions to our customers.
If our networking solutions contain serious errors, defects, security vulnerabilities or
bugs, or if there is any significant failure in our networking solutions, our business,
financial condition and results of operations could be adversely affected.
Quality control is critical to our business. Our reputation and capability to attract and
retain customers, to a large extent, depend on the quality of our product and service offerings.
Our customers have high expectations towards the quality, stability, reliability and performance
of our networking solutions, which are directly related to the successful construction and stable
operation of their networking infrastructure. The quality of our networking solutions depends
on the effectiveness of our quality control measures. Although we have established strict
internal quality control standards which we implement through quality assurance measures at
different stages of our operational processes, we may not be able to completely eliminate the
possibility of errors, defects, security vulnerabilities or bugs resulting from internal and/or
third-party incidents beyond our control that are difficult to detect and correct. Any significant
quality control issues could result in customer dissatisfaction, loss of business and damage to
our reputation. Moreover, we may incur significant costs to rectify these issues, including
debugging, system restoration and providing customer support.
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In addition, any significant failure in our networking solutions may disrupt our
customers’ operations, leading to potential claims for damages and financial losses. If we are
unable to maintain the quality and reliability of our networking solutions, our business,
financial condition and results of operations could be materially and adversely affected.
We may be subject to product liability claims or negative publicity if our networking
solutions contain or are perceived to contain defects, which may damage our reputation
and adversely affect our business, financial condition and results of operations.
Although we have not been subject to product liability claims during the Track Record
Period, we may be subject to such claims in the future if our networking solutions contain or
are perceived to contain significant defects. Our networking equipment and solutions may
contain errors, defects, security vulnerabilities or software issues that are difficult to detect and
correct in a timely and cost-effective manner or at all, particularly when first introduced or
when new versions or enhancements are released. Given that customers use our networking
solutions in processes that are critical to their businesses, any error, defect, security
vulnerability or software issue in our networking solutions could result in their losses. As a
result, these issues could expose us to claims against us by our customers or other parties and
we may incur costs relating to product recall, repair or replacement. Any material product
liability claim, or litigation could have a material and adverse effect on our business, financial
condition and results of operations. Any of the foregoing could result in revenue loss,
significant expenditures of capital and delay or loss in market acceptance, leading to an adverse
effect on our business, financial condition and results of operations. Although there has been
no material customer complaint during the Track Record Period, there is no assurance as to
whether such incidents would arise in the future.
Any failure to offer quality after-sales services and technical support may harm
relationships with our customers and thus materially and adversely affect our business
and results of operations.
Our business depends on our ability to satisfy our customers, not only with respect to our
networking solutions but also the after-sales support provided to them. As we continue to
expand our operations with a growing customer base, we need to be able to continue to provide
efficient after-sales services and technical support to our customers at scale. In view of the
increased demand for such after-sales services, we may face increased costs and we cannot
guarantee that we will be able to recruit or retain sufficient qualified personnel with relevant
background, expertise and experience. As a result, we may be unable to respond quickly
enough to accommodate the increases in demand for after-sales services and technical support
from customers. If our customers are not satisfied with the deployment and ongoing after-sales
services performed by us, we could lose our customers, miss opportunities to expand our
business, and suffer reduced margins on our revenue. In addition, negative publicity related to
our after-sales services, regardless of its accuracy, may damage our business and results of
operations.
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Failure to manage our inventory effectively may have a material and adverse effect on our
business, financial condition and results of operations.
Our inventories primarily consisted of finished goods, goods in transit and consumables
for our networking solutions. As of December 31, 2022, 2023, 2024 and September 30, 2025,
we had inventories net of provision of RMB659.1 million, RMB606.1 million, RMB572.3
million and RMB484.8 million, respectively. Our inventory turnover days were 159.7 days,
206.1 days, 164.7 days and 138.3 days in 2022, 2023, 2024 and the nine months ended
September 30, 2025, respectively. See “Financial Information — Discussion of Key Items of
Consolidated Statements of Financial Position — Inventories.” Our inventory level is subject
to various factors which are beyond our control. Any failure to forecast consumer demand or
any unexpected event affecting our sales could result in heightened risk of inventory
obsolescence, decline in inventory value or inventory write-downs. There can be no assurance
that we will be able to maintain optimal inventory level, and any such failure may have a
material adverse effect on our business, financial condition and results of operations.
Our financial assets at FVTPL are subject to uncertainties in accounting estimates.
Fluctuations in the changes in fair value of these financial assets would affect our
financial results.
We have invested in, and intend to invest in structured deposits and other financial
investments. We recorded financial assets at FVTPL of RMB390.0 million, RMB180.3 million,
RMB506.4 million and RMB694.0 million as of December 31, 2022, 2023, 2024 and
September 30, 2025, respectively. These financial assets at FVTPL mainly included structured
deposits issued by commercial banks. The fair value changes in our financial assets at FVTPL
may negatively affect our financial performance. The fair value of financial instruments that
are not traded in an active market is determined by using valuation techniques. These valuation
techniques maximize the use of observable market data where it is available and rely as little
as possible on entity specific estimates. Any change in the estimates and assumptions may lead
to a change in the fair value of the financial assets, which in turn could negatively affect our
financial conditions and results.
The changes in the carrying amount of redemption liabilities may adversely affect our
financial condition and results of operations.
Our financial instruments issued to investors were primarily related to redemption rights
granted to certain investor of our Series Angel, Series pre-A, Series A, Series B and Series C
financing. The redemption right previously held by certain investor became non-exercisable
upon the first submission of the Listing Application, but may resume under certain conditions.
The redemption obligation by the Company became effective on May 27, 2025, and will be
terminated upon Listing. The redemption liability is initially measured at the present value of
the redemption amount and subsequently measured at amortized cost with interest charged in
finance costs. We had redemption liabilities of nil, nil, nil and RMB664.2 million as of
December 31, 2022, 2023, 2024 and September 30, 2025, respectively. Any significant
fluctuations in the changes in the carrying amount of financial instruments issued to investors
due to changes in the amortized cost may materially affect our financial condition and results
of operations.
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We are subject to risks relating to warehouse and logistics management.
As of the Latest Practicable Date, apart from the delivery center in China, we have six
localized overseas delivery centers in the U.S., Germany, Australia, Singapore, the U.K. and
Japan. See “Business — Logistics, Inventory Management and Manufacturing — Logistics and
Inventory Management.” In the event of the occurrence of any accidents in our delivery centers
which are beyond our control, causing damages to our products or our delivery centers, our
ability to supply products to our customers could be adversely affected. The occurrence of any
of such accidents could also require us to make significant capital expenditures. Lost sales or
increased costs that we may incur due to such disruption of operations and delay in delivery
may not be recoverable under our existing insurance policies, and prolonged business
disruptions could result in a loss of our customers.
We engage third-party logistics service providers for the delivery of our products from
our nearest delivery centers to locations specified by our customers. Since we do not have
direct control over these logistics service providers, we cannot guarantee their quality of
services or ensure that our products will always be delivered within the required time limit. If
there is any delay in delivery, damage to products or any other issue due to transportation
shortages, natural disasters, labor strikes or other factors, we may lose customers and orders,
and our reputation may be tarnished.
In addition, disputes with or terminations of our contractual relationships with third-party
logistics service providers could result in delayed delivery of products or increased costs. We
may not be able to continue or extend relationships with our current logistics service providers
on terms acceptable to us or establish relationships with new logistics service providers to
ensure accurate, timely and cost-efficient delivery services. If we are unable to maintain or
develop good relationships with logistics service providers, it may inhibit our ability to offer
products in sufficient quantities, on a timely basis, or at prices acceptable to our customers. In
the event of any breakdown in our relationships with our preferred logistics service providers,
we may suffer business interruptions that could materially and adversely affect our business,
financial condition and results of operations.
We are exposed to credit risk for trade receivables.
Our trade receivables are amounts due for goods sold in our ordinary course of business.
Our trade receivables amounted to RMB103.0 million, RMB122.6 million, RMB154.6 million
and RMB218.4 million as of December 31, 2022, 2023, 2024 and September 30, 2025,
respectively. Our trade receivables turnover days in 2022, 2023, 2024 and the nine months
ended September 30, 2025 were 17.8 days, 18.6 days, 19.4 days and 23.2 days, respectively.
V arious factors beyond our control, such as economic downturns, adverse operating conditions
or financial situations of our customers, long payment cycles of customers, may hinder or
prevent us from collecting our trade receivables in a timely manner or at all. Failure to
effectively manage the credit risk associated with our trade receivables and collect payments
in a timely manner would have material and adverse effects on our business, financial
condition, results of operations, prospects and cash flows.
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We are subject to various risks relating to third-party payments.
During the Track Record Period, certain of our customers (individual or collectively, the
“Relevant Customer(s) ”) settled their payments with us through the accounts of third parties
designated by these Relevant Customers (the “ Third-party Payment Arrangements ”). In
2022, 2023, 2024 and the nine months ended September 30, 2025, the number of Relevant
Customers (originating from over 100 countries and regions) amounted to 2,157, 1,307, 1,231
and 895, respectively, and the aggregate amount of payment from designated third parties to
our Group was RMB32.0 million, RMB79.7 million, RMB91.7 million and RMB42.0 million,
respectively, representing approximately 1.6%, 3.6%, 3.5% and 1.9% of the total payments
received from all customers in the same respective periods. In 2022, 2023, 2024 and the nine
months ended September 30, 2025, the average transaction amount under the Third-Party
Payment Arrangements was RMB5,512.6, RMB20,053.1, RMB19,776.8 and RMB12,334.5,
respectively.
We were subject to various risks relating to such Third-party Payment Arrangements
during the Track Record Period, including: (i) possible claims from third-party payors for
return of funds as they were not contractually indebted to us; (ii) potential money laundering
risks as we have limited knowledge about the source and purpose of the funds utilized by the
third-party payors; and (iii) possible claims from liquidators of third-party payors. In the event
of any claims from third-party payors or their liquidators, or legal proceedings (whether civil
or criminal) instituted or brought against us to demand return of the relevant payment or for
violation or non-compliance of laws and regulations, we may have to spend significant
financial and managerial resources to defend against such claims and legal proceedings, and
our financial condition and results of operations may be adversely affected as a result.
Our failure to protect our intellectual property rights may undermine our competitive
position, and litigation to protect our intellectual property rights or defend against
third-party allegations of infringement may be costly and ineffective.
We consider our patents, copyrights, trademarks, domain names, trade secrets and other
intellectual properties critical to our success. We rely on a combination of patent, trademark
and copyright laws, trade secrets protection, restrictions on disclosure and other agreements
that restrict the unauthorized use of our intellectual properties to protect our intellectual
property rights. However, these legal protections and agreements may not effectively prevent
disclosure of confidential intellectual property and we cannot assure you that our efforts to
protect our intellectual property rights will be adequate. Intellectual property protection may
not be sufficient in the countries and regions we operate, and we cannot guarantee that we have
entered into necessary agreements with all parties that have access to our proprietary
information. Breach of such agreements may also result in lengthy and costly litigation with
inadequate remedies available. In addition, third parties may independently discover trade
secrets and proprietary information, limiting our ability to assert any trade secret rights against
such parties.
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We may not be able to obtain all necessary patent and trademark applications from all of
the jurisdictions that we operate our business in. Failure to do so may subject us to litigation,
and there is no guarantee that we will prevail, and we may be forced to discard our proprietary
information and technology that we have dedicated time and effort into. Because of the rapid
pace of technological change, we cannot assure you that all of our proprietary technologies and
similar intellectual property rights can be patented in a timely or cost-effective manner, or at
all. Any failure to adequately protect our intellectual property may lead to disclosure of our
trade secrets, claims of ownership of our proprietary information by third parties and costly
litigation. It could harm our competitive position and could have a material adverse effect on
our business, financial condition and results of operations.
Policing unauthorized use of our intellectual properties is difficult and costly. Litigation
may be necessary in the future to enforce our intellectual property rights, determine the validity
and scope of our proprietary rights or those of others, or defend against claims of infringement
or invalidity. Such litigations could be costly, time-consuming and distracting to our
management, and could result in a diversion of significant resources and narrowing or
invalidation of portions of our intellectual property. We can provide no assurance that we will
prevail in such litigations.
There can be no assurance that our ways and means of protecting our intellectual property
rights, including business decisions about when to file patent applications and trademark
applications, will be adequate to protect our business or that our competitors will not
independently develop similar technology. If we fail to protect and enforce our intellectual
property rights adequately, our competitors might gain access to our technology and our
business, operating results and financial condition could be adversely affected.
We may be involved in legal and other disputes from time to time arising from allegations
relating to our infringement of intellectual property rights of third parties, which, if
determined adversely to us, could cause us to pay significant damages.
It is critical that we operate our business without infringing upon the intellectual property
rights of third parties, including patents, copyrights, trade secrets and trademarks. However, we
cannot be certain that our operations or any aspects of our business do not, or will not, infringe
upon or otherwise violate patents, copyrights, trademarks, know-how, trade secrets or other
intellectual property rights held by other parties, whether such claims are valid or otherwise.
Any claims against us, with or without merit, could be time-consuming and costly to defend
or litigate, divert our management’s attention and resources or result in the loss of goodwill
associated with our brand. The validity and scope of intellectual property claims involve
complex legal and factual questions and analysis and, therefore, entail significant risks and
uncertainties. If we are found to have violated the intellectual property rights of any third party,
we may be subject to liabilities for our infringement activities, which could result in a
judgment, fine or settlement involving a payment of a material sum of money, prohibitions
from using such intellectual property, or requirements for incurring licensing fees or
developing alternatives of our own. Such significant monetary liabilities and/or restrictions or
prohibitions from using the intellectual property at question may materially disrupt our
business, financial condition and results of operations. See “Business — Legal Proceedings and
Compliance” for details of the legal proceedings between FS U.S. and Corning, Inc.
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Protracted litigation could also result in our customers or potential customers deferring or
limiting their purchase or use of our networking solutions until resolution of such litigation, or
could require us to indemnify them against infringement claims in certain instances. In the
event that we have to indemnify our customers or other third parties for their losses suffered
or incurred as a result of intellectual property infringement claims against us, large indemnity
payments could be imposed on us that may harm our business, results of operations and
financial condition. In addition, any dispute with customers with respect to such
indemnification obligations could adversely affect our relationships with them and our
prospective customers, and harm our business and results of operations.
We may be involved in disputes arising from our operations, and the resulting claims,
litigations, regulatory actions and administrative proceedings against us may harm our
reputation and have a material and adverse effect on our business, financial condition and
results of operations.
While we are currently not a party to any material legal or administrative proceedings, we
may become a party to various litigations, legal disputes or claims arising in the performance
of our contractual obligations and in the ordinary course of our business from time to time. Any
ongoing litigations, legal disputes or claims, regardless of merit, may distract our
management’s attention and consume our time and other resources. Furthermore, any
litigations, legal disputes or claims which are initially not of material importance may escalate
due to a variety of factors, such as the facts and circumstances of the cases, the likelihood of
loss, the monetary amount at stake and the parties involved. In the event that any verdict or
award is rendered against us, we could be required to pay significant monetary damages,
assume other liabilities and even to suspend or terminate the related business. In addition,
negative publicity arising from litigations, legal disputes or claims may damage our reputation
and adversely affect our brand image. Consequently, our business, financial condition and
results of operations may be materially and adversely affected.
Failure to detect or prevent fraudulent or illegal activities or other misconduct by our
employees, customers, suppliers or other third parties may materially and adversely
affect our business.
We are exposed to risks of fraudulent or illegal activities or other misconduct by our
employees, customers, suppliers or other business partners in the course of our business
operations. Such misconduct could include fraud, corruption, bribery, collusion or other
violations of applicable laws, including anti-corruption and anti-bribery laws, which could
subject us to liabilities, fines and other penalties imposed by government authorities, as well
as significant reputational damage. There can be no assurance that our controls and policies in
place to monitor and prevent such misconduct would be effective at all times in identifying or
mitigating all potential risks. Instances of misconduct may still occur, and any undetected or
unresolved incidents could lead to adverse consequences, such as financial losses, legal
liabilities or disruptions to our operations.
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Furthermore, any publicized instances of fraudulent or illegal activities associated with
our employees or business partners could harm our reputation, reducing customer and partner
trust in our business. If such misconduct involves our employees, we could also face liabilities
to third parties and penalties imposed by authorities. As such, any failure to detect and prevent
fraudulent or illegal activities or other misconduct by our employees, customers, suppliers or
other business partners could materially and adversely affect our business, results of operations
and financial condition.
If we fail to obtain or maintain the requisite licenses, permits or approvals applicable to
our business in any jurisdictions where we operate, we may become subject to significant
penalties and other regulatory proceedings or actions.
We are required to obtain and maintain various approvals, licenses and permits for our
business in China and other jurisdictions where we operate our business. If the PRC
government or any government of any other jurisdictions in which we operate (i) considers that
we historically operated, or are operating without proper or adequate approvals, licenses or
permits, (ii) promulgates new laws and regulations that require additional approvals or licenses
or impose additional restrictions on the operation of any part of our business, or (iii) considers
that we have not duly renewed these licenses in a timely manner, it has the power, among other
things, to levy fines, confiscate our income, revoke our business licenses, and require us to
discontinue our relevant business or impose restrictions on the affected portion of our business.
Any of these actions by the PRC government or any government of any other jurisdictions in
which we operate may have a material adverse effect on our business and results of operations.
Our growth is reliant on our sales and marketing strategies. Ineffective marketing may
harm our ability to increase our customer base, and spending on ineffective marketing
may adversely affect our financial results.
Our ability to expand our customer base and gain wider market exposure partially depend
on the effectiveness of our marketing efforts. We have conducted various branding and
marketing activities, but these activities may not be successful or yield increased revenue. To
the extent that these marketing activities lead to increased revenue, the additional revenue
generated could nevertheless be insufficient to offset the increased expenses we incur. There
is also no assurance that any increase in our marketing expenditures will lead to our anticipated
results, which, if unsuccessful, may even result in financial loss and our business may be
significantly harmed. We cannot assure you that our efforts in sales and marketing activities
will always be effective, or that we are able to cost-effectively manage our marketing and
advertising expenses. If we fail to maintain and enhance our market share, our pricing power
may decline as compared to that of our competitors and we may lose existing or prospective
customers, which could materially and adversely affect our business, financial condition and
results of operations.
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Our success largely depends on senior management, as well as our experienced and
capable employees.
Our future success depends upon the continued service of our senior management and
other experienced and capable employees. We depend upon the ability and experience of a
number of our senior management who have significant experience with our operations, the
rapidly changing networking solutions industry and the selected markets in which we offer our
solutions. The loss of the services of one or a combination of our senior management or key
employees could have a material adverse effect on our results of operations.
To maintain and grow our business, we will need to identify, hire, develop, motivate and
retain highly skilled employees, which requires significant time, expense, and attention. In
addition, from time to time, there may be changes in our management team that may be
disruptive to our business. If our management team members, including any new hires that we
make, fail to work together effectively and to execute our plans and strategies on a timely basis,
our business could be harmed. Further, competition for highly skilled personnel is intense. We
may need to invest significant amounts of expense and other efforts to attract and retain new
employees. If we are not able to recruit and retain employees effectively, our ability to achieve
our strategic objectives will be adversely affected, and our business and growth prospects will
be harmed.
Our business is subject to complex and evolving laws and regulations regarding data
privacy and cybersecurity. Actual or alleged failure to comply with privacy and data
protection laws and regulations could damage our reputation, deter current and potential
customers from using our solutions and could subject us to significant legal, financial and
operational consequences.
A significant challenge to online business is the secure storage of confidential information
and its secure transmission over public networks. We have adopted security policies and
measures to protect our proprietary data and customer information. However, advances in
technology, the expertise of hackers, improper use or sharing of data, new discoveries in the
field of cryptography or other events or developments could result in a compromise or breach
of the technology that we use to protect confidential information. We may not be able to
prevent third parties, especially hackers or other individuals or entities engaging in similar
activities, from illegally obtaining such confidential or private information we hold as a result
of our customers’ visits to and use of our online sales platform. In addition, we have limited
control or influence over the security policies or measures adopted by business partners,
including strategic partners or third-party providers of online payment services through which
some of our customers may choose to make payment for purchases. The third-party couriers we
use may also violate their confidentiality obligations and disclose or use information about our
customers illegally.
Significant capital and other resources may be required to protect against information
security breaches or to alleviate problems caused by such breaches or to comply with our
privacy policies or privacy-related legal obligations. The resources required may increase over
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time as the methods used by hackers and others engaged in online criminal activities are
increasingly sophisticated and constantly evolving. Any failure or perceived failure by us to
prevent information security breaches or to comply with privacy policies or privacy-related
legal obligations, or any compromise of security that results in the unauthorized release or
transfer of personally identifiable information or other customer data, could cause our
customers to lose trust in us and could expose us to legal claims. Any perception by the public
that online transactions or the privacy of user information are becoming increasingly unsafe or
vulnerable to attacks could inhibit our growth.
As the regulations regarding data privacy and cybersecurity in China have developed
substantially recently and may be subject to change, we may become subject to new laws and
regulations applying to data security and privacy. On September 24, 2024, the State Council
released the Cyber Data Security Administration Regulations ( ၣഖᅰኽτΌ၍ଣૢԷ)
(the “ Cyber Data Regulations ”), which requires data processors who carry out cyber data
processing activities that affect or may affect national security to conduct cybersecurity
reviews. However, there had been no clarifications from the authorities as of the Latest
Practicable Date as to the standards for determining such activities that “affect or may affect
national security.” As of the Latest Practicable Date, we had not been involved in any formal
investigations on cybersecurity review initiated by the Cyberspace Administration of China
(the “ CAC”) on such basis and are not required to go through cybersecurity review by the
CAC. However, if we are not able to comply with the cybersecurity and network data security
requirements in a timely manner, or at all, we may be subject to government enforcement
actions and investigations, fines, penalties, suspension of our non-compliant operations, among
other sanctions. These enforcement measures could materially and adversely affect our
business and results of operations.
In addition, we may also become subject to laws and regulations affecting data protection,
data privacy or information security in other jurisdictions where we operate. In the U.S.,
privacy and data security are regulated by federal and state laws, regulations and common law
principles. These laws address both the protection of consumer data and broader privacy
interests in personal communications and activities. Organizations must navigate both data
protection regulations and invasion of privacy requirements to maintain compliance in the
evolving U.S. privacy landscape. See “Regulatory Overview — Laws and Regulations of the
U.S. — Data Privacy, Data Protection and Use of Information.” In Germany and other
applicable EU countries, the General Data Protection Regulation must be observed. If relevant
principles are not met, data subjects can assert their rights and sue for damages. There may also
be a threat of proceedings by the supervisory authorities. See “Regulatory Overview — Laws
and Regulations of Germany — GDPR principles.” In Singapore, the Personal Data Protection
Act 2012 of Singapore establishes the regime for the protection of personal data and seeks to
ensure that organizations comply with a baseline standard of protection for personal data of
individuals. See “Regulatory Overview — Laws and Regulations of Singapore — Personal
Data Protection Act 2012 of Singapore.”
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The interpretation and application of data security and privacy laws are subject to change
from time to time as they are generally complex and evolving. Existing or newly introduced
laws and regulations, or their interpretation, application or enforcement, could have the
potential to significantly affect the value of our data and require us to change our data security
and privacy practices and other business activities. Complying with new data laws and
regulations could cause us to incur substantial costs or require us to change our business
practices in a manner materially adverse to our business. Any failure to closely monitor the
relevant regulatory development could subject us to potential liabilities, further materially and
adversely affecting our business, financial condition and results of operations.
Failure to comply with the PRC Social Insurance Law and the Regulation on the
Administration of Housing Provident Funds or other PRC labor-related regulations may
subject us to fines and other legal or administrative sanctions.
Companies operating in the PRC have to participate in various employee benefit plans
required by the government, including certain social insurance, housing provident funds and
other welfare-oriented payment obligations. The requirement and implementation of employee
benefit plans may vary considering the different levels of economic development in different
locations in the PRC, and the relevant government authorities may examine whether an
employer has made adequate payments of the requisite employee benefit payments, employers
who fail to make adequate payments as required may be subject to late payment fees, fines
and/or other penalties.
According to the relevant PRC laws and regulations, we are required to make full
contributions to social insurance and housing provident funds for our employees. During the
Track Record Period, we made social insurance and housing provident funds contributions for
all employees at no less than the statutory minimum thresholds as stipulated under applicable
PRC laws and regulations. During the Track Record Period, certain PRC operating entities in
our Group did not make full contributions to the social insurance and housing provident funds
for our employees. According to applicable PRC laws and regulations and as advised by our
PRC Legal Advisor, if we fail to make full contributions of social insurance within the
prescribed period, we may be required by the relevant regulatory authorities to make up the
shortfall prior to a stipulated deadline and may be liable to a late payment penalty computed
from the due date at the daily rate of 0.05% of the shortfall. Moreover, we may be liable to a
fine of one to three times the shortfall in the event that we fail to make such payments within
the prescribed period. Pursuant to relevant PRC laws and regulations, if we fail to pay the full
amount of housing provident funds as required, the housing provident fund management center
may require payment of the outstanding amount within a prescribed period. If the payment is
not made within such time limits, an application may be made to the PRC courts for
compulsory enforcement. During the Track Record Period and up to the Latest Practicable
Date, we had not received any material complaint, reports or class actions from our employees.
As of the Latest Practicable Date, we had not received any notices or penalties from the social
insurance authorities and the housing provident fund authorities requiring us to make any
additional social insurance and housing provident fund contributions. As advised by our PRC
Legal Advisor, based on their interview with the competent authorities, assuming that there is
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no material change to current PRC laws and regulations and the practice in policy
implementation and inspection of local governments, the likelihood that we will be required to
make additional contributions, overdue payments or be fined in relation to the aforementioned
issues is remote.
Moreover, labor regulations are subject to change, and new laws or amendments to
existing laws can impose additional compliance requirements on our business. Adapting to
these changes may require significant resources and could impact our operational efficiency.
Ensuring fair and compliant labor practices is crucial to maintaining employee satisfaction and
avoiding labor disputes. The Interpretation (II) of the Supreme People’s Court on Issues
Concerning the Application of Law in the Trial of Labor Dispute Cases (׵
༆ᙑ(ɚ)) came into force as of September 1, 2025. It
further clarifies the considerations to confirm the existence of a labor relationship, renewal of
the labor contract, the non-competition clause, the invalidity of the promise that there is no
need to pay social insurance premiums, among other issues. The relevant provision emphasizes
that the agreement to avoid paying social insurance premiums is invalid. As advised by our
PRC Legal Advisor, we do not have such promise or agreement to or with our employees. We
cannot assure you that our employment practices do not and will not violate labor-related laws
and regulations, which may subject us to labor disputes or government investigations. If we are
deemed to have violated relevant labor laws and regulations, we could be required to provide
additional compensation to our employees and our business, financial condition and results of
operations will be adversely affected.
Our rights to use our leased properties may be defective and could be challenged by
property owners or other third parties, which may negatively affect our ability to operate
our business and incur relocation costs.
As of the Latest Practicable Date, we leased five properties in China relating to our
business operations in total with an aggregate gross floor area of approximately 3,415.4 square
meters and eight properties in the U.S., Germany, Australia, Singapore, Japan and the U.K.
relating to our business operations in total with an aggregate gross floor area of approximately
20,186.6 square meters, which have been mainly used as offices and warehouses. Any dispute
or claim in relation to the titles of the properties that we occupy or any litigation involving
allegations of illegal or unauthorized use of these properties could expose us to potential fines
or render us unable to continue to use such properties.
Pursuant to the applicable laws and regulations in China, property lease agreements for
leased properties shall be filed with the relevant real estate administration bureaus in China.
As of the Latest Practicable Date, one lease agreement for our leased property in China had yet
to be registered. As advised by our PRC Legal Advisor, the lack of registration does not affect
the validity and enforceability of such lease agreement under PRC law, or result in us being
required to vacate the relevant leased property. However, we may be ordered by relevant
competent authorities to complete the filing within a designated time limit, and a fine of up to
RMB10,000 may be imposed for failure to do so within the time limit. During the Track Record
Period and up to the Latest Practicable Date, we had not been subject to any penalties arising
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from the non-registration of our lease agreement. Based on the foregoing, our PRC Legal
Advisor is of the view that the non-registration of such lease agreement would not have any
material adverse impact on our business operations. However, we cannot assure you that we
would not be subject to any penalties and/or requests from local authorities to fulfill the
registration requirements, which may increase our costs in the future.
Although our leased properties are primarily used as offices and warehouses purposes and
we consider that they are highly replaceable, any forced relocation due to lease disputes can
result in significant costs, including moving expenses, lease termination fees and potential
business interruptions. Handling related disputes and relocation matters may divert the
attention of our management, leading to project delivery delays or impacting our critical
research and development work. If we are unable to manage the risks associated with our
leased properties effectively, our business and financial performance could be materially and
adversely affected.
If we are unable to develop, maintain and enhance our brand and reputation in a
cost-effective manner, our growth strategies may be hindered and our business may be
adversely affected.
We believe that maintaining and enhancing our brand is of significant importance to the
success of our business. Developing, maintaining and enhancing our brand and reputation in
a cost-effective manner is essential to attracting and retaining customers, building trust and
differentiating ourselves from competitors. However, we cannot assure you that these activities
are and will be successful or that we can achieve the brand promotion effect we expect. Our
brand and reputation may be harmed and will be susceptible to factors, for instance, (i) issues
that arise with our services and networking solutions; (ii) negative statements made by former
and existing customers, competitors, service providers and others; (iii) involvement in disputes
and legal proceedings; (iv) regulatory enquiries or enforcement actions taken against us or our
employees; and (v) negative publicity about our brand, Directors, Supervisors or employees.
We cannot guarantee that such negative events will not happen in the future. If these events
happen and we fail to recover from destruction to our brand and reputation successfully, we
may experience a significant decline in demand for our solutions, decrease in investor
confidence and reduction of the value of our brand, each of which may ultimately result in a
material adverse effect on our business and prospects.
Any failure to maintain the satisfactory performance of our technology systems and
resulting interruptions in the availability of our services could adversely affect our
business, results of operations and prospects.
The satisfactory performance, reliability and availability of our online sales platform are
critical to our success. We have developed a platform that enables us to deliver services with
simplicity, convenience, speed and reliability. However, our platform or infrastructure may not
function properly at all times. We may be unable to monitor and ensure high-quality
maintenance and upgrade of our platform and technology infrastructure, and our customers
may experience service outages and delays in accessing and using our online sales platform as
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we seek to source additional capacity. In addition, we may experience surges in online traffic
and orders as we scale, which can put additional demand on our platform. Any disruption to
our platform could adversely affect our business and results of operations.
In addition, our technology infrastructure may encounter disruptions or other outages
caused by problems or defects in our own technologies and systems, such as malfunctions in
software or network overload. Our technology infrastructure may also be vulnerable to
damages or interruptions caused by telecommunication failures, power losses, human errors,
fires, floods, earthquakes and other natural disasters, or other accidents. Despite any
precautionary measures we will take, the occurrence of unanticipated problems that affect our
technology infrastructure could result in interruptions in the availability or performance of our
service. As we cannot be certain that we will be able to address or respond to any
vulnerabilities in our technology infrastructure in a timely manner, or at all, any of the
aforementioned risks may cause interruptions to our operations, affect the ability of customers
to use our platform and reduce their satisfaction, harm our revenue and profitability, and
require us to allocate significant capital and other resources to alleviate problems caused
thereby.
The unavailability of any preferential tax treatment and government subsidies, as well as
unfavorable changes in application tax policy, could adversely affect our business, results
of operations, financial condition and prospects.
During the Track Record Period, we received government grants of RMB11.9 million,
RMB7.5 million, RMB5.6 million, RMB4.5 million and RMB1.5 million in 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, respectively. In addition, the
Company and a number of its subsidiaries enjoy various types of preferential tax treatment
according to the prevailing tax-related laws and regulations in the relevant jurisdictions. We
cannot assure you that we will continue to receive government grants, which are non-recurring
in nature, at the same level or at all, or that we will continue to enjoy the current preferential
tax treatments. The PRC governmental authorities may decide to reduce or cancel such
government grants or preferential tax treatments, or require us to repay part or all of the
government grants we previously received at any time, which could adversely affect our
business, results of operations, financial condition and prospects. As these government grants
are provided typically on a one-off basis, there is no guarantee that we will continue receiving
or benefiting from them in the future. In addition, we may not be able to successfully or timely
obtain the government grants or preferential tax treatment that may become available to us in
the future, and such failure could adversely affect our business, results of operations, financial
condition and prospects. Moreover, changes in tax policies, such as increased tax rates, new tax
regulations or the elimination of tax incentives, can impact our profitability and cash flow. If
we are unable to manage the impact of tax policy changes and the unavailability of preferential
treatments effectively, our business, financial condition and results of operations could be
materially and adversely affected.
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The successful operation of our business depends upon the performance, reliability and
security of the internet infrastructure in China and other countries and regions in which
we operate.
Our business depends on the performance and reliability of the internet infrastructure in
China. Instability or disruption of the internet infrastructure may directly impair our ability to
deliver customer services, respond to customer needs and maintain operational continuity.
Almost all access to the internet in China is maintained through state-owned
telecommunication operators under the regulatory supervision of the Ministry of Industry and
Information Technology. In addition, the national networks in China are connected to the
internet through state-owned international gateways, which are the only channels through
which a domestic user can connect to the internet outside of China. As such, we may not have
access to alternative networks in the event of disruptions, failures or other problems with
China’s internet infrastructure, which may not always support the demand associated with
continued growth in internet usage.
Moreover, we rely on major telecommunications companies in China to provide us with
data communications capacity through their local telecommunications networks. We exercise
little control over them, which increases our vulnerability to problems with the services they
provide. We may have limited access to alternative networks or services in the event of
disruptions, failures or other problems with China’s internet infrastructure or the fixed
telecommunications networks provided by telecommunication service providers. Web traffic in
China and the rest of the world has experienced significant growth during the past few years.
In particular, we have deployed a combination sales mode including customer self-service
online ordering through our self-operated online sales platform. With the expansion of our
business, we may be required to upgrade our technology and infrastructure to keep up with the
increasing traffic on our platform. We cannot assure you that the internet infrastructure and the
fixed telecommunications networks in China or other countries we operate in can support the
demands associated with the continued growth in internet usage. If we cannot maintain and
increase our capacity to deliver our services and solutions, we may not be able to continue to
provide reliable services and solutions to our customers and adapt to the increasing demand
from our customers, which could adversely impact our business and profitability.
In addition, our telecommunications service providers possess significant bargaining
power and may change their service terms or other policies during the course of our
cooperation. If the prices we pay for telecommunications and internet services rise
significantly, our results of operations may be materially and adversely affected. Furthermore,
if internet access fees or other charges to internet users increase, some users may be prevented
from accessing the internet and thus cause the growth of internet users to decelerate. Such
deceleration may in turn adversely affect our ability to continue to expand our customer base.
Furthermore, the quality of internet infrastructure varies across different regions, and any
deficiencies can impact our service delivery and operational efficiency. Ensuring robust and
reliable Internet connectivity is essential to maintaining high standards of service and meeting
customer expectations. If we cannot rely on a reliable and secure internet infrastructure for our
day-to-day operations, our business and results of operations could be materially and adversely
affected.
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Increasing focus with respect to environmental, social and corporate governance matters
may impose additional costs on us or expose us to additional risks.
Relevant regulatory authorities and public advocacy groups have been increasingly
focused on environmental, social and corporate governance (“ ESG”) related issues in recent
years, making our business more sensitive to ESG-related issues and changes in governmental
policies and laws and regulations associated with environmental protection and other
ESG-related matters. Regardless of the industry, increased focus from investors and relevant
regulatory authorities on ESG and similar matters may hinder access to capital, as investors
may decide to reallocate capital or to not commit capital as a result of their assessment of the
ESG practices of the target companies. Any ESG concern or issue could also increase our
regulatory compliance costs.
If we do not adapt to or comply with the evolving expectations and standards on ESG
matters from investors and relevant regulatory authorities or are perceived to have not
responded appropriately to the growing concern for ESG-related issues, regardless of whether
there is a legal requirement to do so, we may suffer from reputational damage and the business,
financial condition and the price of our H Shares could be materially and adversely affected.
Our risk management and internal control systems may not be adequate or effective.
Our risk management and internal controls depend on effective implementation by our
employees. Despite our efforts in providing internal training in this regard, there can be no
assurance that such implementation by our employees will always function as intended or such
implementation will not involve any human errors, mistakes or intentional misconduct. If we
fail to implement our policies and procedures in a timely manner, or fail to identify risks that
affect our business with sufficient time to plan for contingencies for such events, our business,
financial condition and results of operations could be materially and adversely affected.
We are exposed to risks and uncertainties associated with strategic transactions or
acquisitions.
As we continue to scale our operations around the globe, we may enter into strategic
transactions, including joint ventures or equity or debt investments, with various third parties
to further our business purpose from time to time. Strategic transactions could subject us to a
number of risks, including risks associated with sharing proprietary information, non-
performance by the counterparty, and an increase in expenses incurred in establishing new
strategic alliances, any of which may materially and adversely affect our business. We may
have little ability to control or monitor their actions. To the extent strategic third parties suffer
negative publicity or harm to their reputation from events relating to their business, we may
also suffer negative publicity or harm to our reputation by virtue of our association with such
third parties.
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In addition, we may acquire additional assets, technologies or businesses that are
complementary to our existing businesses. Future acquisitions and the subsequent integration
of new assets, technologies and businesses into our own would require significant attention
from our management and could result in a diversion of resources from our existing businesses,
which in turn could adversely affect our business. Acquired assets, technologies or businesses
may not generate the financial or operating results we expect. In addition, acquisitions could
result in the use of substantial amounts of cash, dilutive issuances of equity securities,
incurrence of debt, incurrence of significant goodwill impairment charges, amortization
expenses for other intangible assets and exposure to potential unknown liabilities of the
acquired business.
Our insurance coverage is limited and may not be sufficient to cover all of our potential
losses.
We face various risks in connection with our business and we maintain various insurance
policies to safeguard against risks and unexpected events. See “Business — Insurance.”
However, we do not maintain business interruption insurance or key-man insurance or any
insurance covering liabilities resulting from misconducts or illegal activities committed by our
employees, platform users or business partners. There can be no assurance that our insurance
coverage is sufficient to cover all potential risks that may arise from our business operations,
or to compensate us for all our actual losses that may incur from business activities on a timely
basis, or at all. If we incur losses that are not covered by our insurance policies, or the
compensated amount is significantly less than our actual loss, our business, financial condition
and results of operations could be materially and adversely affected. Furthermore, we may not
be able to obtain coverage at current levels, and the premium on our insurance coverage may
increase significantly in the future, which may also adversely affect our business, financial
condition and results of operations.
Any occurrence of force majeure events, such as natural disasters, public health, adverse
weather conditions or public security hazards may severely disrupt our business and
operation.
Our business is subject to general economic and social conditions in countries and regions
where we operate. Natural and man-made disasters and other force majeure events which are
beyond our control may adversely affect the economy, infrastructure and livelihood of the
people there. For instance, typhoons, sandstorms, snowstorms, fires and droughts pose
significant risks to the regions, including the cities where we conduct our operations. The
potential occurrence or recurrence of any of these events could result in a slowdown of global
economy or cause substantial disruptions to our operations, which could materially and
adversely affect our business, financial condition, results of operations and prospects.
Additionally, acts of war and terrorism may also injure our employees, cause loss of lives,
damage our facilities, disrupt our distribution channels and destroy our markets. The potential
for war or terrorist attacks may also harm or cause uncertainty to our business in ways that we
cannot predict.
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RISKS RELATING TO DOING BUSINESS IN THE COUNTRIES AND REGIONS
WHERE WE OPERATE
Changes in global or regional political and economic policies could have an adverse effect
on our business, financial condition, results of operations and subsequently challenge our
competitive position.
Our business, financial condition, results of operations and prospects could be affected by
economic, political and legal developments in the market where we operate. The growth of the
regional and global economy has slowed in recent years. It remains uncertain whether, and for
how long, the regional and global economic downturn will persist. There are considerable
uncertainties over the long-term effects of the monetary and fiscal policies adopted by the
central banks and financial authorities of some of the world’s leading economies. There have
been concerns over the Russia-Ukraine war, as well as unrest and terrorist threats in certain
countries and regions, which have resulted in volatility in oil and other markets. In addition,
the Red Sea crisis, which began on October 19, 2023, disrupted international maritime trade
and the global supply chain. With the Suez Canal of the Red Sea being a critical conduit for
approximately 30% of the world’s container traffic, the crisis has since been causing surges in
shipping costs. The Red Sea crisis has largely eased as of the Latest Practicable Date. However,
it is unclear whether these challenges and uncertainties will be effectively managed or resolved
and what effects they may have on the global political and economic conditions in the long
term. In particular, factors such as consumer, corporate and government spending, business
investment, volatility of the capital markets and inflation could affect the business and
economic environment, the growth of the new energy equipment industry and ultimately, the
profitability of our business. Governmental regulations and policies in relation to resource
allocation, monetary policies, regulations of financial services and institutions, foreign
exchange and other aspects of the economy, as well as government’s measures or policies in
regulating particular industries or companies may affect our business and results of operations.
For example, the government may implement various measures to encourage economic growth
and guide the allocation of resources, including the utilization of market forces for economic
reform, the reduction of state ownership of productive assets and the establishment of
improved corporate governance in business enterprises. We cannot guarantee the extent to
which our business operations will be able to benefit from such measures or whether such
measures may have negative effect on us. Furthermore, the speed of global or regional
economic growth may vary from year to year, and such growth may be uneven, both
geographically and among various industry sectors. If the business environment in the markets
where we operate changes, our business may be materially and adversely affected.
Y ou may have limited recourse in effecting services of legal process or enforcing overseas
judgments against us, our Directors, our Supervisors and our senior management.
We are a company incorporated under the laws of the PRC and many of our assets are
located in China. Most of our Directors, Supervisors and senior management reside within
China. As a result, it may be difficult and time-consuming to effect service of process upon us,
or our Directors, Supervisors or senior management who reside in China. In addition, China has
not entered into treaties or arrangements providing for the recognition and enforcement of
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judgments made by courts of most other jurisdictions. Y ou may experience difficulties in
enforcing judgments due to lack of reciprocal recognition and enforcement of judicial rulings
and awards of other jurisdictions.
In July 2008, the Supreme People’s Court of the PRC and Hong Kong entered into the
Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned
(τ
ર) (the “ 2008 Arrangement ”). Under the 2008 Arrangement, where any designated PRC
court or any designated Hong Kong court has made an enforceable final judgment requiring
payment of money in a civil or commercial case under a choice of court agreement in writing,
any party concerned may apply to the relevant PRC court or Hong Kong court for recognition
and enforcement of the judgment. In January 2019, the Supreme People’s Court of the PRC and
Hong Kong entered into the Arrangement on Reciprocal Recognition and Enforcement of
Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong
Kong Special Administrative Region (ʝႩ̙ ձੂБ͏ਠ
τર) (the “ New Arrangement ”). Effective as of January 29, 2024, this
mechanism seeks to establish a mechanism with greater clarity and certainty for the recognition
and enforcement of judgments in a wider range of civil and commercial matters between the
PRC court and Hong Kong court. However, the 2008 Arrangement will remain applicable to a
“choice of court agreement in writing” within the meaning of the 2008 Arrangement, which
was made before the effective date of the New Arrangement.
Any uncertainties embedded in the legal systems of certain geographic markets where we
operate could affect our business, financial condition and results of operations.
Legal systems of the geographic markets where we operate vary significantly from
jurisdiction to jurisdiction. Some jurisdictions have a civil law system based on written statutes
and others are based on common law. Unlike the common law system, prior court decisions
under the civil law system may be cited for reference but have limited precedential value.
We are subject to certain uncertainties embedded in the legal systems of some geographic
markets where we operate. Laws and regulations that are recently enacted may not sufficiently
cover all aspects of economic activities in such markets. In particular, the interpretation and
enforcement of these laws and regulations are subject to future implementations, and the
application of some of these laws and regulations to our businesses is not settled. Since local
administrative and court authorities are authorized to interpret and implement statutory
provisions and contractual terms, it may be difficult to evaluate the outcome of administrative
and court proceedings and the level of legal protection we have in many of the geographic
markets where we operate. Local courts may have discretion to reject the enforcement of
foreign awards or arbitration awards. These uncertainties may affect our judgment on the
relevance of legal requirements and our ability to enforce our contractual rights or claims. In
addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal
actions, claims concerning the conduct of third parties, or threats in attempt to extract
payments or benefits from us.
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Furthermore, many of the legal systems in the geographic markets where we operate are
based in part on their respective government policies and internal rules, some of which are not
published on a timely basis or at all and may have retroactive effects. There are other
circumstances where key regulatory definitions are unclear, imprecise or missing, or where
interpretations that are adopted by regulators are inconsistent with interpretations adopted by
a court in analogous cases. As a result, we may not be aware of our violation of certain policies
or rules until sometime after the violation. In addition, administrative and court proceedings in
some of our geographic markets may be protracted, resulting in substantial costs and diversion
of resources and management attention.
It is possible that a number of laws and regulations may be adopted or construed to be
applicable to us in our geographic markets and elsewhere that could affect our businesses and
operations. Scrutiny and regulations of the industries in which we operate may further increase,
and we may be required to devote additional legal and other resources to addressing these
regulations. Changes in current laws or regulations or the imposition of new laws and
regulations in our geographic markets may slow the growth of the intelligent equipment and
affect our business, financial condition and results of operations.
Our foreign exchange transactions, our ability to pay dividends and other obligations are
subject to regulatory requirements over foreign currency conversion.
Currently, the conversion of RMB into foreign currency needs to comply with the relevant
laws and regulations, and exchange and remittance of foreign currencies are subject to relevant
foreign exchange regulations. It cannot be guaranteed that, under a certain exchange rate, we
will have sufficient foreign currency to meet our demand for foreign currency. Under the
current PRC foreign exchange regulatory system, foreign exchange transactions under the
current account conducted by us do not require advance approval from the SAFE, but we are
required to present documentary evidence of such transactions and conduct such transactions
at financial institutions within the PRC that have the license to carry out foreign exchange
business. Foreign exchange transactions under the capital account conducted by us, however,
must be approved in advance by the SAFE or its local branch except for foreign exchange
capital, foreign debts and repatriated funds raised through overseas listing. If we fail to obtain
approval from the SAFE to exchange the RMB into any foreign currencies for any purposes,
our capital expenditure plans, businesses, results of operations and financial condition may be
adversely affected. The PRC government may also at its discretion restrict access to foreign
currencies for current account transactions under certain circumstances in the future. If there
are changes in the policies regarding the payment of dividends in foreign currencies or other
changes in foreign exchange policies resulting in insufficient foreign exchange, we may not be
able to pay dividends in foreign currencies to the holders of the H Shares and even our business
may be materially and adversely affected.
RISK FACTORS
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Our offshore subsidiaries may be treated as a resident enterprise for PRC tax purposes.
Under EIT Law and the Implementation Rules of the Enterprise Income Tax Law of the
PRC (ૢԷ), enterprises established under the laws of
jurisdictions outside of China with “de facto management bodies” located in China may be
considered PRC tax resident enterprises for tax purposes and may be subject to the PRC
enterprise income tax (“ EIT”) at the rate of 25% on their global income. In addition, the Notice
Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC
Tax Resident Enterprises on the Basis of De Facto Management Bodies (׵
)( “ Circular
82”) specifies that certain Chinese-controlled offshore incorporated enterprises, defined as
enterprises incorporated under the laws of foreign countries or territories and that have PRC
enterprises or enterprise groups as their primary controlling shareholders, will be classified as
resident enterprises if all of the following conditions are met: (i) senior management personnel
and departments that are responsible for daily production, operation and management are
located mainly within China; (ii) financial and personnel decisions are subject to determination
or approval by bodies or persons in China; (iii) key properties, accounting books, company seal
and minutes of board meetings and shareholders’ meetings are located or kept within China;
and (iv) at least half of the directors with voting rights or senior management reside within
China. The State Administration of Taxation of the PRC, or SA T, has subsequently provided
further guidance on the implementation of Circular 82.
Although our offshore subsidiaries have substantive business operations in the countries
or regions where they located, as our Company is a PRC enterprise, our offshore subsidiaries
may be questioned by the competent regulatory authorities, and if our offshore subsidiaries are
deemed PRC resident enterprises, they could be subject to the EIT at 25% on their global
income, except that the dividends they receive from our PRC subsidiaries, if any, may be
exempt from the EIT to the extent such dividend income constitutes “dividends received by a
PRC resident enterprise from its directly invested entity that is also a PRC resident enterprise.”
Nonetheless, it remains subject to future interpretation as to what type of enterprise would be
deemed a “PRC resident enterprise” for such purposes. The EIT on our subsidiaries’ global
income could significantly increase our tax burden and affect our cash flows and profitability.
We could be subject to changes in our tax rates, the adoption of new tax legislation or
exposure to additional tax liabilities.
The EIT Law imposes a tax rate of 25% on business enterprises. Our Company and some
of our subsidiaries are entitled to preferential tax treatment. For example, our Company and
one of our subsidiaries in the PRC have been qualified as high-tech enterprises or engaged in
policy-encouraged businesses. Accordingly, they were entitled to a preferential income tax rate
of 15% during the Track Record Period. See Note 10 to the Accountants’ Report in Appendix
I to this prospectus. To the extent there are any changes in the laws and regulations governing
preferential tax treatment or increases in our effective tax rate due to any other reasons, our tax
liability would increase correspondingly. In addition, the PRC government may amend or
restate regulations on income, withholding, value-added, and other taxes. Non-compliance with
RISK FACTORS
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the tax laws and regulations in the PRC may also result in penalties or fines imposed by
relevant tax authorities. Adjustments or changes to tax laws and regulations in the PRC and tax
penalties or fines could affect our businesses, financial condition and results of operations.
In addition, some of the jurisdictions in which we operate have rules on transfer pricing
that require intra-group transactions to be conducted on arm’s length terms. See “Business –
Intra-Group Transactions.” While we believe that we have complied with these rules, there can
be no assurance that tax authorities in these jurisdictions will not challenge our transfer pricing
arrangements, which could result in additional taxes, interests or penalties imposed on us. Such
challenges could have a material adverse effect on our financial condition, results of operations
and prospects.
We also operate in countries and regions overseas and are subject to various taxes. As
such, our Group’s tax position may be subject to review by the relevant government authorities
and changes in law. Due to the fact that the tax environment varies across different jurisdictions
and that the regulations regarding various taxes, including but not limited to corporate income
tax, are complex, our overseas operations may expose us to risks associated with the overseas
tax policy changes. Due to economic and political conditions, tax rates in various jurisdictions
may be subject to significant change. Our effective tax rates could be affected by changes in
the mix of earnings in countries with differing statutory tax rates, changes in the valuation of
deferred tax assets and liabilities, or changes in tax laws or their interpretation. Dealing with
such regulatory complexities and changes may require us to invest more managerial and
financial resources, which in turn could affect our results of operations.
We are also subject to the examination of our tax returns and other tax matters by local
and overseas tax authorities and governmental authorities. We regularly assess the likelihood
of an adverse outcome resulting from these examinations to determine the adequacy of our
provision for taxes. There can be no assurance as to the outcome of these examinations. If our
effective tax rates were to increase, or if the ultimate determination of our taxes payable is for
an amount in excess of amounts previously accrued, our financial condition, operating results
and cash flows could be adversely affected.
Non-PRC Holders of our H Shares may be subject to PRC income tax obligations.
Under the EIT Law and its implementation rules, subject to any applicable tax treaty or
similar arrangement between the PRC and a non-PRC investor’s jurisdiction of residence that
provides for a different income tax arrangement, PRC withholding tax at the rate of 10% is
normally applicable to dividends from PRC sources payable to investors that are non-PRC
resident enterprises, which do not have an establishment or place of business in the PRC, or
which have an establishment or place of business in the PRC if the relevant income is not
effectively connected with such establishment or place of business. Any gains realized on the
transfer of shares by such investors are subject to a 10% PRC income tax rate if such gains are
regarded as income from sources within the PRC unless a treaty or similar arrangement
provides otherwise.
RISK FACTORS
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Under the PRC Individual Income Tax Law () and its
implementation rules, dividends from sources within the PRC paid to foreign individual
investors who are not PRC residents are generally subject to a PRC withholding tax at a rate
of 20% and gains from PRC sources realized by such investors on the transfer of shares are
generally subject to a 20% PRC income tax rate, in each case, subject to any reduction or
exemption set forth in applicable tax treaties and PRC laws. Pursuant to the Circular on
Questions Concerning the Collection of Individual Income Tax Following the Repeal of Guo
Shui Fa [1993] No. 045 (਷೼೯[1993]045ஷ
) (Guo Shui Han [2011] No. 348) dated June 28, 2011, issued by the SA T, dividends paid
to non-PRC resident individual holders of H Shares are generally subject to individual income
tax of the PRC at the withholding tax rate of 10%, depending on whether there is any applicable
tax treaty between the PRC and the jurisdiction in which the non-PRC resident individual
holder of H Shares resides as well as the tax arrangement between the PRC and Hong Kong.
Non-PRC resident individual holders who reside in jurisdictions that have not entered into tax
treaties with the PRC are subject to a 20% withholding tax on dividends received from us.
However, pursuant to the Circular Declaring that Individual Income Tax Continues to be
Exempted over Income of Individuals from Transfer of Shares (੻ᘱᚃ
) (Cai Shui Zi [1998] No. 61) issued by the MOF of the PRC and
the SA T on March 30, 1998, gains of individuals derived from the transfer of listed shares of
enterprises may be exempt from individual income tax. In addition, on December 31, 2009, the
MOF, the SA T and the CSRC jointly issued the Circular on Relevant Issues Concerning the
Collection of Individual Income Tax over the Income Received by Individuals from Transfer
of Listed Shares Subject to Sales Limitation (ה
) (Cai Shui [2009] No. 167) which states that individuals’ income from
the transfer of listed shares on certain domestic exchanges shall continue to be exempted from
individual income tax, except for the relevant shares which are subject to sales restrictions as
defined in the Supplementary Circular on Relevant Issues Concerning the Collection of
Individual Income Tax over the Income Received by Individuals from Transfer of the Listed
Shares Subject to Sales Limitations (੻೼Ϟ
) (Cai Shui [2010] No. 70). As of the Latest Practicable Date, the
aforesaid provision has not expressly provided that individual income tax shall be collected
from non-PRC resident individuals on the sale of shares of PRC resident enterprises listed on
overseas stock exchanges. To our knowledge, in practice, the PRC tax authorities have not
sought to collect individual income tax from non-PRC resident individuals on gains from the
transfer of listed shares of PRC resident enterprises on overseas stock exchanges. However,
there is no assurance as to whether further implemented laws, regulations, or practices in the
future would result in levying income tax on non-PRC resident individuals on gains from the
sale of H shares.
If the PRC income tax is imposed on gains realized from the transfer of our H Shares or
on dividends paid to our non-PRC resident investors, the value of your investment in our H
Shares may be affected. Furthermore, our Shareholders whose jurisdictions of residence have
tax treaties or arrangements with the PRC may not qualify for benefits under such tax treaties
or arrangements.
RISK FACTORS
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RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares and there can be no assurance
that an active market would develop, and the price and trading volume of our H Shares
may be volatile.
Prior to this Global Offering, there has been no public market for our H Shares. The Offer
Price for our Offer Shares was the result of negotiations among us and Overall Coordinators
(for themselves and on behalf of the Underwriters) and the Offer Price may differ significantly
from the market price for our H Shares following this Global Offering.
Listing on the Stock Exchange, however, does not guarantee that an active and liquid
trading market for the H Shares will develop, or if it does develop, that it will be sustained
following the Global Offering, or that the market price of the H Shares will not decline
following the Global Offering. In addition, the trading price and trading volume of the H
Shares may be subject to significant volatility in response to various factors beyond our
control, including the general market conditions of the securities in Hong Kong and elsewhere
in the world. In particular, the business and performance and the market price of the shares of
other companies engaging in similar business may affect the price and trading volume of our
H Shares. In addition to market and industry factors, the price and trading volume of our H
Shares may be highly volatile for specific business reasons, such as regulatory developments
affecting the relevant markets, industries and other related matters, fluctuations in our revenue,
earnings, cash flows, investments and expenditures, relationships with our suppliers,
movements or activities of key personnel, or actions taken by competitors.
The price and trading volume of our H Shares may be volatile, which could materially and
adversely affect the market price of our H Shares.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of the
securities in Hong Kong and elsewhere in the world. The Stock Exchange and other securities
markets have, from time to time, experienced significant price and trading volume volatility
that are not related to the operating performance of any particular company. The business and
performance and the market price of the shares of other companies engaging in similar business
may also affect the price and trading volume of our Shares. In addition to market and industry
factors, the price and trading volume of our Shares may be highly volatile for specific business
reasons, such as fluctuations in our revenue, earnings, cash flows, investments, expenditures,
regulatory developments, relationships with our suppliers, movements or activities of key
personnel, or actions taken by competitors. Moreover, shares of other companies listed on the
Stock Exchange with significant operations and assets in the PRC have experienced price
volatility in the past, and it is possible that our H Shares may be subject to changes in price
not directly related to our performance.
RISK FACTORS
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Future sales or perceived sales of a substantial number of our H Shares in the public
market following the Global Offering could materially and adversely affect the price of
our H Shares and our ability to raise additional capital in the future.
Prior to the Global Offering, there has not been a public market for our H Shares. Future
sales or perceived sales by our existing Shareholders of our H Shares after the Global Offering
could result in a significant decrease in the prevailing market price of our H Shares. Only a
limited number of the Shares currently outstanding will be available for sale or issuance
immediately after the Global Offering due to contractual and regulatory restrictions on disposal
and new issuance. Nevertheless, after these restrictions lapse or if they are waived, future sales
of significant amounts of our H Shares in the public market or the perception that these sales
may occur could significantly decrease the prevailing market price of our H Shares and our
ability to raise equity capital in the future.
We cannot assure you that we will declare and distribute any dividend in the future.
There can be no assurance that we will declare and pay dividends because the declaration,
payment and amount of dividends are subject to the discretion of our Directors, depending on,
among other considerations, our operations, earnings, cash flows and financial position,
operating and capital expenditure requirements, our strategic plans and prospects for business
development, our constitutional documents and applicable law. For more details on our
dividend policy, see “Financial Information — Dividends and Dividend Policy.”
Y ou will incur immediate and substantial dilution and may experience further dilution if
we issue additional Shares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per H Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to our Shareholders after the creditors’ claims. If we
raise additional capital through the sale of equity or convertible debt securities, your ownership
interest will be diluted, and the terms of these securities may include liquidation or other
preferences that adversely affect your rights as a shareholder. Debt financing and preferred
equity financing, if available, may involve agreements that include covenants limiting or
restricting our ability to take specific actions, such as incurring additional debt, making capital
expenditures, limitations on our ability to acquire or license intellectual property rights or
declaring dividends, or other operating restrictions.
Our Controlling Shareholders have substantial influence over our Company, and their
interests may not be aligned with the interests of our other Shareholders.
Our Controlling Shareholders have substantial influence over our business, including
matters relating to our management, policies and decisions regarding mergers, expansion plans,
consolidations and sales of all or substantially all of our assets, election of Directors and other
RISK FACTORS
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significant corporate actions. Our Controlling Shareholders may not act in the best interests of
our minority Shareholders. In addition, without the consent of our Controlling Shareholders,
we could be prevented from entering into transactions that could be beneficial to us. This
concentration of ownership may also discourage, delay or prevent a change in control of our
Company, which could deprive our Shareholders of an opportunity to receive a premium for the
Shares as part of a sale of our Company and may significantly reduce the price of our Shares.
Information and statistics from official government sources in this prospectus have not
been independently verified.
This prospectus includes industry data and forecasts extracted from various official
governmental publications. We have no reason to believe that the information and statistics
from official government sources is false or misleading or that any fact has been omitted that
would render the information and statistics from official government sources false or
misleading. The information from official government sources has not been independently
verified by us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective directors
and advisers, or any other persons or parties involved in the Global Offering, and no
representation is given as to its accuracy or completeness. Y ou should therefore not place
undue reliance on the information and statistics from official government sources as a basis for
making your investment in our H Shares.
Y ou should read the entire prospectus carefully, and we strongly caution you not to rely
on any information contained in press articles or other media coverage relating to us or
the Global Offering.
Y ou should rely solely upon the information contained in this prospectus, the Global
Offering and any formal announcements made by us in Hong Kong when making your
investment decision regarding our H Shares. Subsequent to the date of this prospectus but prior
to the completion of the Global Offering, there may be press and media coverage regarding us
and the Global Offering, which may contain, among other things, certain financial information,
projections, valuations and other forward-looking information about us and the Global
Offering. We have not authorized the disclosure of any such information in the press or media
and do not accept any responsibility for the accuracy or completeness of any such press articles
or other media coverage, nor the fairness or appropriateness of any forecasts, views or opinions
expressed by the press or other media regarding our H Shares, the Global Offering or us. We
make no representation as to the appropriateness, accuracy, completeness or reliability of any
of the projections, valuations or other forward-looking information about us in any such press
articles or media coverage. Accordingly, prospective investors are cautioned to make their
investment decisions on the basis of the information contained in this prospectus only and
should not rely on any other information. 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.
RISK FACTORS
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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 “believe,” “expect,” “estimate,” “predict,” “aim,”
“intend,” “will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,” “could,” “would,”
“continue” and other 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 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.
RISK FACTORS
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In preparation for the Listing, we have applied to the Stock Exchange for the following
waivers from strict compliance with the relevant provisions of the Listing Rules:
NON-EXEMPT CONTINUING CONNECTED TRANSACTION
We have entered into and are expected to continue with one transaction after the Listing,
which will constitute our non-exempt continuing connected transaction under Chapter 14A of
Listing Rules upon Listing. Accordingly, we have applied to the Stock Exchange for, and the
Stock Exchange has granted us, a waiver under Rule 14A.105 of the Listing Rules from strict
compliance with the announcement in respect of the transactions under Chapter 14A of the
Listing Rules. See “Connected Transaction.”
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, our Company must have
sufficient management presence in Hong Kong, which normally means that at least two
executive directors must be ordinarily resident in Hong Kong. Given that (i) our core business
operations are principally located, managed and conducted out of Hong Kong; (ii) our
Company’s head office is situated in the PRC, our executive Directors and senior management
team principally reside in the PRC and will continue to be based in the PRC after the Listing;
and (iii) the management and operation of our Company have mainly been under the
supervision of the executive Directors and senior management of our Company, who are
principally responsible for the overall management, corporate strategy, planning, business
development and control of our Company’s business, we consider that it would be more
practical for our executive Directors and senior management to remain ordinarily resident out
of Hong Kong. For the above reasons, we do not have, and do not contemplate in the
foreseeable future that we will have sufficient management presence in Hong Kong for the
purpose of satisfying the requirement under Rules 8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rules 8.12 and 19A.15 of the Listing Rules.
We will ensure that there are adequate and efficient arrangements to achieve regular and
effective communication between us and the Stock Exchange as well as compliance with the
Listing Rules by way of the following arrangements:
1. Authorized representatives : we have appointed Mr. Xiang Wei ( Σਃ) and Mr.
Zeng Di ( ಀፍ)( “ Mr. Zeng ”) as the authorized representatives (“ Authorized
Representatives ”) for the purpose of Rule 3.05 of the Listing Rules. The Authorized
Representatives will act as our principal channel of communication with the Stock
Exchange and would be readily contactable by phone and email to deal promptly
with enquiries from the Stock Exchange. Although Mr. Xiang Wei and Mr. Zeng
reside in the PRC, they possess valid travel documents and are able to renew such
travel documents when they expire in order to visit Hong Kong. Accordingly, the
Authorized Representatives will be able to meet with the relevant members of the
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 8–


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Stock Exchange to discuss any matters in relation to our Company within a
reasonable period of time. See “Directors, Supervisors and Senior Management” for
more information about Mr. Xiang Wei and Mr. Zeng.
2. Directors : to facilitate communication with the Stock Exchange, we have provided
the Authorized Representatives and the Stock Exchange with the contact details
(such as mobile phone numbers, office phone numbers and email addresses) of each
of our Directors. In the event that any Director expects to travel or otherwise be out
of the office, he or she will provide the phone number, and fax numbers (where
applicable) of the place of his/her accommodation to the Authorized
Representatives. Accordingly, the Authorized Representatives have means for
contacting all directors promptly at all times as and when the Stock Exchange
wishes to contact the Directors on any matters. To the best of our knowledge and
information, each Director who is not ordinarily resident in Hong Kong possesses or
can apply for valid travel documents to visit Hong Kong and can meet with the Stock
Exchange within a reasonable period after being requested to do so by the Stock
Exchange.
3. Compliance advisor : we have appointed Rainbow Capital (HK) Limited as our
compliance advisor (“ Compliance Advisor ”) in compliance with Rule 3A.19 of the
Listing Rules. The Compliance Advisor will, among other things and in addition to
the Authorized Representatives, provide us with professional advice on continuing
obligations under the Listing Rules and act as an additional channel of
communication of our Company with the Stock Exchange during the period from the
Listing Date to the date on which our Company complies with Rule 13.46 of the
Listing Rules in respect of its financial results for the first full financial year
immediately after the Listing. The Compliance Advisor will be available to answer
enquiries from the Stock Exchange and will act as the principal channel of
communication with the Stock Exchange when the Authorized Representatives are
not available.
4. Joint company secretary : we have appointed Ms. Sham Ying Man ( Ҋᅂ˖)
(“Ms. Sham ”), who is a Hong Kong resident, as one of our joint company
secretaries. Ms. Sham will maintain constant contact with our Directors and senior
management team members through various means.
W AIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Rule 8.17 of the Listing Rules provides that our Company must appoint a company
secretary who satisfies the requirements under Rule 3.28 of the Listing Rules.
According to Rule 3.28 of the Listing Rules, our Company must appoint an individual,
who, by virtue of his academic or professional qualifications or relevant experience, is, in the
opinion of the Stock Exchange, capable of discharging the functions of company secretary.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Institute of Chartered Secretaries;
(b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
(c) a certified public accountant (as defined in the Professional Accountants
Ordinance).
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience,” the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles they played;
(b) familiarity with the Listing Rules and other relevant law and regulations including
the Securities and Futures Ordinance, Companies Ordinance, Companies (Winding
Up and Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Mr. Zeng as one of the joint company secretaries of our Company. Mr.
Zeng has been responsible for financial management of our Group since December 2019 and
has served as our executive Director and the Board secretary since October 2020, through
which Mr. Zeng has gained a thorough understanding of the management and business
operation of our Group. Mr. Zeng has been actively involved in the proposed Listing since its
inception. As Mr. Zeng has substantial experience in handling financial management matters
relating to our Company, and is familiar with our Company’s business operations, the Board
believes that the appointment of Mr. Zeng as our company secretary would be beneficial for
our Company. See “Directors, Supervisors and Senior Management” for further biographical
details of Mr. Zeng. However, Mr. Zeng personally 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, our Company has appointed Ms. Sham, a
Chartered Secretary, a Chartered Governance Professional and an associate of both The Hong
Kong Chartered Governance Institute and The Chartered Governance Institute in the U.K., who
fully meets the requirements stipulated under Rules 3.28 and 8.17 of the Listing Rules to act
as one of our joint company secretaries and to provide assistance to Mr. Zeng for an initial
period of three years from the Listing Date to enable Mr. Zeng 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. See “Directors,
Supervisors and Senior Management” for further biographical details of Ms. Sham which
satisfy the requirements under Note 1(a) to Rule 3.28 of the Listing Rules.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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The following arrangements have been, or will be, put in place to assist Mr. Zeng in
acquiring the qualifications and experience as the company secretary of our Company required
under Rule 3.28 of the Listing Rules:
(a) Mr. Zeng will endeavor to attend relevant training courses, including briefings on
the latest changes to the relevant applicable Hong Kong laws and regulations and the
Listing Rules, which will be organized by our Company’s Hong Kong legal advisers
on an invitation basis and seminars organized by the Stock Exchange for listed
issuers from time to time;
(b) Ms. Sham will assist Mr. Zeng to enable him to acquire the relevant experience (as
required under Rule 3.28 of the Listing Rules) to discharge the duties and
responsibilities as the company secretary of our Company;
(c) Ms. Sham will communicate regularly with Mr. Zeng on matters relating to
corporate governance, the Listing Rules and any other laws and regulations which
are relevant to our Company and its affairs. Ms. Sham will work closely with and
provide assistance for Mr. Zeng in the discharge of his duties as a company
secretary, including organizing our Company’s Board meetings and general
meetings; and
(d) Upon expiry of Mr. Zeng’s initial term of appointment as the joint company
secretary of our Company, we will evaluate his experience in order to determine if
he has acquired the qualifications required under Rule 3.28 of the Listing Rules, and
whether on-going assistance should be arranged so that Mr. Zeng’s appointment as
the company secretary of our Company continues to satisfy the requirements under
Rules 3.28 and 8.17 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rule 3.28 and 8.17 of the Listing Rules. Such
waiver will be revoked immediately if and when Ms. Sham ceases to provide assistance to Mr.
Zeng or there are material breaches of the Listing Rules by our Company. Before the expiry
of the initial three-year period, the qualification of Mr. Zeng will be re-evaluated to determine
whether the requirements as stipulated in Note 2 to Rule 3.28 of the Listing Rules can be
satisfied.
W AIVER IN RELATION TO RULE 4.04(1) OF THE LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH PARAGRAPH 27 OF PART I AND
PARAGRAPH 31 OF PART II OF THE THIRD SCHEDULE TO THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
Pursuant to Rule 4.04(1) of the Listing Rules, the accountant’s report contained in this
prospectus must include, inter alia, the results of our Company in respect of each of the three
financial years immediately preceding the issue of this prospectus or such shorter period as
may be acceptable to the Stock Exchange.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Pursuant to Rule 13.49(1) of the Listing Rules, a issuer must publish its preliminary
financial results not later than three months after the end of the financial year.
Pursuant to section 342(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, a prospectus shall include the matters specified in Part I of the Third Schedule to
the Companies (Winding Up and Miscellaneous Provisions) Ordinance and set out the reports
specified in Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
Pursuant to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, our Company is required to include in this
prospectus a statement as to the gross trading income or sales turnover (as the case may be)
of our Company during each of the three financial years immediately preceding the issue of this
prospectus as well as an explanation of the method used for the computation of such income
or turnover and a reasonable breakdown of the more important trading activities.
Pursuant to paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, our Company is required to include in this
prospectus a report by the auditor of our Company with respect to profits and losses in respect
of each of the three financial years immediately preceding the issue of this prospectus and
assets and liabilities of our Company at the last date to which the financial statements of our
Company were prepared.
Pursuant to section 342A(1) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the SFC may issue, subject to such conditions (if any) as the SFC thinks
fit, a certificate of exemption from compliance with the relevant requirements under the
Companies (Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the
circumstances, the SFC considers that the exemption will not prejudice the interests of the
investing public and compliance with any or all of such requirements would be irrelevant or
unduly burdensome, or is otherwise unnecessary or inappropriate.
The Accountants’ Report for each of the three years ended December 31, 2024 and the
nine months ended September 30, 2025 has been prepared and is set out in Appendix I to this
prospectus.
Pursuant to the relevant requirements set out above, our Company is required to produce
three full years of audited accounts for the three years ended December 31, 2025. As such, an
application has been made to the Stock Exchange for a waiver from strict compliance with Rule
4.04(1) of the Listing Rules, and such waiver has been granted by the Stock Exchange on the
conditions that:
(a) this prospectus will be issued on or before March 13, 2026 and the Company’s H
Shares will be listed on or before March 31, 2026, i.e. three months after the latest
financial year end;
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–7 2–


--- page 84 ---
(b) in accordance with Chapter 1.1A of the Guide for New Listing Applicants, the
preliminary unaudited financial information for the financial year ended December
31, 2025 and a commentary on the results for that financial year have been included
in this prospectus, which (i) follows the same content requirements as for a
preliminary results announcement under Rule 13.49 of the Listing Rules; and (ii) has
been agreed with the reporting accountants following their review under Practice
Note 730 “Guidance for Auditors Regarding Preliminary Announcements of Annual
Results” issued by the Hong Kong Institute of Certified Public Accountants;
(c) our Company will not be in breach of our constitutional documents or laws and
regulations of the PRC or other regulatory requirements regarding our obligation to
publish preliminary results announcements; and
(d) our Company obtains a certificate of exemption from the SFC on strict compliance
with paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
An application has also been made to the SFC for a certificate of exemption from strict
compliance with the requirements under paragraph 27 of Part I and paragraph 31 of Part II of
the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance
and a certificate of exemption has been granted by the SFC under section 342A of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance on the conditions that (i)
the particulars of the exemption are set out in this prospectus; (ii) this prospectus will be issued
on or before March 13, 2026 and the Company’s H Shares will be listed on the Stock Exchange
on or before March 31, 2026, i.e. three months after the latest financial year end of the
Company.
The applications to Stock Exchange for a waiver from strict compliance with Rule 4.04(1)
of the Listing Rules and to the SFC for a certificate of exemption from strict compliance with
the requirements under paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance have been made on
the grounds, among others, that strict compliance with the above requirements would be unduly
burdensome and the waiver and exemption would not prejudice the interests of the investing
public as:
(a) there would not be sufficient time for our Company and the reporting accountants
of our Company to finalise the audited financial statements for the year ended
December 31, 2025 for inclusion in this prospectus. If the financial information for
the year ended December 31, 2025 is required to be audited, our Company and the
reporting accountants would have to carry out substantial volume of work to
prepare, update and finalise the Accountants’ Report and this prospectus, and the
relevant sections of this prospectus will need to be updated to cover such additional
period. This would involve additional time and costs since substantial work is
required to be carried out for audit purposes. It would be unduly burdensome for the
audited results for the year ended December 31, 2025 to be finalised in a short
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–7 3–


--- page 85 ---
period of time. Our Directors consider that the benefits of such work to the existing
and prospective Shareholders of our Company may not justify the additional work
and expenses involved and the delay of the Listing timetable;
(b) our Directors and the Joint Sponsors herein confirm that after performing all
reasonable due diligence work which they consider appropriate, up to the date of this
prospectus, there has been no material adverse change to the financial and trading
positions or prospects of our Group since October 1, 2025 (immediately following
the date of the latest audited statement of financial position in the Accountants’
Report set out in Appendix I to this prospectus) and up to the date of this prospectus,
and since October 1, 2025 and up to the date of this prospectus there has been no
event which would materially affect the information shown in the Accountants’
Report as set out in Appendix I to this prospectus, the financial information section,
the unaudited preliminary financial information of the Group for the year ended
December 31, 2025 and a commentary on the results for the year as set out in
Appendix IIB to this prospectus and information regarding the Company’s recent
development subsequent to the Track Record Period and up to the date of this
prospectus, since October 1, 2025;
(c) our Company is of the view that the Accountants’ Report covering the three years
ended December 31, 2024 and the nine months ended September 30, 2025, together
with the unaudited preliminary financial information of the Group for the year ended
December 31, 2025 and a commentary on the results for the year included in this
prospectus have already provided the potential investors with adequate and
reasonably up-to-date information in the circumstances to form a view on the track
record of our Company; and our Directors and the Joint Sponsors confirm that all
information which is necessary for the investing public to make an informed
assessment of the activities, assets and liabilities, financial position, trading
position, management and prospects has been included in this prospectus. Therefore,
the waiver and exemption would not prejudice the interests of the investing public;
(d) our Company will not be in breach of our constitutional documents or laws and
regulations of the PRC or other regulatory requirements as a result of not publishing
our preliminary results announcement for the year ended December 31, 2025 in
accordance with Rule 13.49(1) of the Listing Rules. Pursuant to the Note to Rule
13.49(1) of the Listing Rules, our Company will publish an announcement after
Listing and no later than March 31, 2026 stating that the relevant financial
information has been included in this prospectus; and
(e) our Company will comply with the requirements under Rule 13.46(2) of the Listing
Rules in respect of the publication of our annual report. Our Company currently
expects to issue our annual report for the financial year ended December 31, 2025
on or before April 30, 2026. In this regard, our Directors consider that the
Shareholders, the investing public as well as potential investors of our Company will
be kept informed of the financial results of our Group for the financial year ended
December 31, 2025.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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CONSENT IN RESPECT OF THE PROPOSED SUBSCRIPTION OF OFFER SHARES
BY A CORNERSTONE INVESTOR WHO IS A 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)), 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.
Chapter 4.15 of the Guide for New Listing Applicants provides that the Stock Exchange
will ordinarily give its consent for allocation to connected clients if it is satisfied that: (i) the
allocation to a connected client represents genuine demand for securities of an applicant; and
(ii) the connected client has not taken and will not take advantage of its position to receive an
allocation for its own benefit at the expense of other placees or the public (i.e. no actual or
perceived preferential treatment has been given to such connected client).
CICC Financial Trading Limited (“ CICC FT ”) has entered into cornerstone investment
agreements with the Company, the Joint Sponsors and the Overall Coordinators. CICC FT and
China International Capital Corporation Limited (“ CICC ”) will enter into a series of cross
border over-the-counter swap transactions (collectively, the “ Kaifeng OTC Swaps ”) with each
other, and with (i) Shenzhen Kaifeng Investment Management Co., Ltd. ( ଉέ̹௱ᔮҳ༟၍ଣ
ʮ̡)( “ Shenzhen Kaifeng ”) acting in its capacity as investment manager for and on
behalf of Kaifeng Xingrui Equity Strategy No. 1 Securities Investment Private Fund (݋
ୃഄଫ1ږ“() Kaifeng Xingrui No. 1 ”) and Kaifeng Macro Strategy
No. 10 Securities Investment Private Fund ( ௱ᔮ҃ᝈഄଫ10ږ“() Kaifeng
Strategy No. 10 ”) and (ii) Changdu Kaifeng Investment Management Co., Ltd. (ே̹௱ᔮ
ʮ̡)( “Changdu Kaifeng ”) acting in its capacity as investment manager for and
on behalf of Kaifeng Macro Hedge No. 11 Private Fund ( ௱ᔮ҃ᝈ࿁ә11ږ)
“(Kaifeng Hedge No. 11 ”, collectively with Kaifeng Xingrui No. 1 and Kaifeng Strategy No.
10, the “ Kaifeng Ultimate Clients ”). CICC FT and CICC will also enter into a series of cross
border over-the-counter swap transactions (collectively, the “ Intewise OTC Swaps ”) with
each other, and with Shanghai Intewise Capital Investment Limited (ʮ
̡)( “ Shanghai Intewise ”) acting in its capacity as investment manager for and on behalf of
Intewise Jinghong Electronic Technology Private Securities Investment Fund (߅
ږ“() Intewise Jinghong ”), Intewise Jiangchuan No. 3 Private Securities
Investment Fund ( ၳჼΘෂ3ږ“() Intewise Jiangchuan No. 3 ”) and
Intewise Jiangchuan No. 6 Private Securities Investment Fund ( ၳჼΘෂ6໮ӷ෍ᗇՎҳ༟ਿ
ږ“() Intewise Jiangchuan No. 6 ”, collectively with Intewise Jinghong and Interwise
Jiangchuan No. 3, the “ Intewise Ultimate Clients ”). CICC FT will hold the Offer Shares on
a non-discretionary basis to hedge the Kaifeng OTC Swaps and Intewise OTC Swapswhile the
economic risks and returns of the underlying Offer Shares are passed to the Kaifeng Ultimate
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Clients and Intewise Ultimate Clients, subject to customary fees and commissions. CICC FT
and China International Capital Corporation Hong Kong Securities Limited, one of the Joint
Sponsors and Overall Coordinators of the Global Offering, are members of the same group of
companies. Accordingly, CICC FT is a connected client of China International Capital
Corporation Hong Kong Securities Limited.
We have applied for, and the Stock Exchange has granted, consent under paragraph 1C(1)
of Appendix F1 to the Listing Rules to permit CICC FT 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 CICC FT will be held on behalf of independent
third parties;
(b) each of the cornerstone investment agreements of CICC FT does not contain any
material term which is more favorable to it than those in other cornerstone
investment agreements;
(c) other than the preferential treatment of assured entitlement under the relevant
cornerstone investment agreements, no preferential treatment has been, nor will be,
given to CICC FT by virtue of its relationship with China International Capital
Corporation Hong Kong Securities Limited in any allocation of Offer Shares in the
International Offering;
(d) CICC FT confirms that to the best of its knowledge and belief, other than the
preferential treatment of assured entitlement under the relevant cornerstone
investment agreements, 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 China International Capital Corporation
Hong Kong Securities Limited;
(e) each of the Company, the Overall Coordinators and CICC FT 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.
For further information about the proposed cornerstone investments by CICC FT, please
refer to the section headed “Cornerstone Investors” in this prospectus.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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W AIVER UNDER RULE 10.04 AND CONSENT UNDER PARAGRAPH 1C(2) OF
APPENDIX F1 TO THE LISTING RULES IN RESPECT OF SUBSCRIPTIONS OF
OFFER SHARES BY CLOSE ASSOCIATES OF EXISTING SHAREHOLDERS AS
CORNERSTONE INVESTORS
Rule 10.04 of the Listing Rules provides 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 a new applicant either in his or its own name or through
nominees if the conditions set out in Rules 10.03(1) and (2) of the Listing Rules are fulfilled.
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that without the prior
written consent of the Stock Exchange, no allocations will be permitted to directors or existing
shareholders of the applicant or their close associates, whether in their own names or through
nominees unless the conditions set out in Rules 10.03 and 10.04 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.
Paragraph 14 of Chapter 4.15 of the Guide for New Listing Applicants sets out the
conditions required to be fulfilled when the Stock Exchange considers granting a waiver and
consent from Rule 10.04 of the Listing Rules to placing to existing shareholders or their close
associates (the “ Existing Shareholder Conditions ”).
Aether Wave Fund L.P . (“ Aether ”) and SCGC Capital Holding Company Limited
(“SCGC Capital ”) has each entered into a cornerstone investment agreement with the
Company, the Joint Sponsors and the Overall Coordinators. Aether is a close associate of the
Company’s existing shareholder, Hainan Orcas Private Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ). SCGC Capital is a
close associate of the Company’s existing shareholder, Shenzhen Capital Group Co., Ltd. ( ଉ
ʮ̡)( “ SCGC ”). For further information about the proposed
cornerstone investments by Aether and SCGC Capital, please refer to the section headed
“Cornerstone Investors” in this prospectus.
We have applied to the Stock Exchange for, and the Stock Exchange has granted to us,
a waiver from strict compliance with the requirements under Rule 10.04 and consent under
Paragraph 1C(2) of Appendix F1 to the Listing Rules to permit Aether and SCGC Capital to
participate in the Global Offering as cornerstone investors on the following basis and
conditions as set out in Paragraph 14 of Chapter 4.15 of the Guide for New Listing Applicants:
(a) Aether and SCGC Capital (together with their close associates) each holds less than
5% of the voting rights of our Company prior to the completion of the Global
Offering;
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–7 7–


--- page 89 ---
(b) Aether and SCGC Capital are not core connected persons of our Company or their
close associates;
(c) Aether and SCGC Capital do not have the power to appoint a Director and/or any
other special rights in our Company;
(d) allocation to Aether and SCGC Capital will not affect our ability to satisfy the public
float requirement under Rule 8.08 (as amended and replaced by Rule 19A.13A) of
the Listing Rules;
(e) each of the cornerstone investment agreement of Aether and SCGC Capital does not
contain any material term which is more favorable to Aether and SCGC Capital (as
the case may be) than those in other cornerstone investment agreements;
(f) other than the preferential treatment of assured entitlement under the relevant
cornerstone investment agreements, no preferential treatment has been, nor will be,
given to Aether and SCGC Capital by virtue of their relationship with our Company
in any allocation of Offer Shares in the International Offering;
(g) each of the Company and the Overall Coordinators has provided the Stock Exchange
with written confirmations in accordance with Chapter 4.15 of the Guide for New
Listing Applicants; and
(h) details of the cornerstone investments and details of the allocations will be disclosed
in this prospectus and the allotment results announcement.
W AIVERS AND EXEMPTION FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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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, as well as our financial statements and the related notes, and the
“Financial Information” section, before deciding to invest in our H Shares. The following
is a description of what we consider to be our material risks. Any of the following risks
could have a material adverse effect on our business, financial condition, results of
operations and growth prospects. In any such an event, the market price of our H Shares
could decline, and you may lose all or part of your investment. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial also may
impair our business operations.
These factors are contingencies that may or may not occur , and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in
“Forward-Looking Statements” in this prospectus.
DIRECTORS’ RESPONSIBILITY STATEMENT
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules
(Chapter 571V of the Laws of Hong Kong) and the Listing Rules for the purpose of giving
information with regard to our Group. Our Directors, having made all reasonable enquiries,
confirm that to the best of their knowledge and belief the information contained in this
prospectus is accurate and complete in all material respects and not misleading or deceptive,
and that there are no other matters the omission of which would make any statement herein or
this prospectus misleading.
UNDERWRITING AND INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this prospectus contain the terms and conditions of the Hong Kong Public Offering. The Global
Offering comprises the Hong Kong Public Offering of initially 4,000,000 H Shares and the
International Offering of initially 36,000,000 H Shares (subject, in each case, to reallocation
on the basis described in the section headed “Structure of the Global Offering” in this
prospectus and, in case of the International Offering, to any exercise of the Over-allotment
Option).
The listing of the Offer Shares on the 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
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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being that the Offer Price is agreed between the Overall Coordinators and us. The International
Offering is managed by the Overall Coordinators and is underwritten by the International
Underwriters. The International Underwriting Agreement is expected to be entered into on or
about the Price Determination Date, subject to agreement on the Offer Price between our
Company and the Overall Coordinators. If, for any reason, the Offer Price is not agreed
between our Company and the Overall Coordinators on or before 12:00 noon on Thursday,
March 19, 2026, the Global Offering will not proceed. Further details about the Underwriters
and the underwriting arrangements are contained in the section headed “Underwriting” in this
prospectus.
CSRC FILING
On January 23, 2026, the CSRC has issued a notification on our Company’ completion of
the PRC filing procedures for the listing of our Shares on the Stock Exchange and the Global
Offering. As advised by our PRC Legal Advisor, our Company has completed all necessary
filings with the CSRC in the PRC in relation to the Global Offering and the Listing.
RESTRICTIONS ON OFFER AND SALE OF THE H SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to confirm, or be deemed by his or her acquisition of Hong Kong Offer Shares
to confirm, that he or she is aware of the restrictions on offers and sales of the Offer Shares
described in this prospectus. In particular, the Offer Shares have not been offered or sold, and
will not be offered or sold, directly or indirectly, in the PRC.
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.
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the granting of the
listing of, and permission to deal in, our H Shares to be issued pursuant to the Global Offering
and the H Shares to be converted from Unlisted Shares.
No part of the H Shares is listed on or dealt in on any other stock exchange, and no such
listing or permission to list is being or proposed to be sought in the near future.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotments made in respect of any applications will be invalid if the listing of,
and permission to deal in, the H Shares on the Stock Exchange is refused before the expiration
of three weeks from the date of the closing of the application lists, or such longer period (not
exceeding six weeks) as may, within the said three weeks, be notified to our Company by the
Stock Exchange.
COMMENCEMENT OF DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional in Hong Kong at
or before 8:00 a.m. on Monday, March 23, 2026, it is expected that dealings in the Shares on
the Stock Exchange are expected to commence on Monday, March 23, 2026. The H Shares will
be traded in board lots of 100 H Shares each. The stock code of the H Shares will be 3355.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock
Exchange and our 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 any other date as determined by HKSCC.
Settlement of transactions between participants of the Stock Exchange is required to take place
in CCASS on the second settlement day after any trading day. All activities under CCASS are
subject to the General Rules of HKSCC and the HKSCC Operational Procedures in effect from
time to time. All necessary arrangements have been made for the H Shares to be admitted to
CCASS. Investors should seek the advice of their stockbrokers or other professional advisors
for the details of the settlement arrangements as such arrangements may affect their rights and
interests.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers if they are in any doubt as to the taxation implications of subscribing to, purchasing,
holding or disposing of, and/or dealing in the H Shares (or exercising rights attached thereto).
None of us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market
Intermediaries, any of our or their respective directors, agents, employees or advisers or any
other person or party involved in the Global Offering accepts responsibility for any tax effects
on, or liabilities of, any person resulting from the subscription to, purchase, holding or disposal
of, dealing in, or the exercise of any rights in relation to, the H Shares or exercising any rights
attached to them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed the H Share Registrar, and the H Share Registrar has agreed, not to
register the subscription, purchase or transfer of any H Shares in the name of any particular
holder unless the holder delivers a signed form to the H Share Registrar in respect of those H
Shares bearing statements to the effect that the holder:
(a) agrees with us and each of the Shareholders, and we agree with each Shareholder,
to observe and comply with the PRC Company Law and our Articles of Association;
(b) agrees with us, each of our Shareholders, Directors, Supervisors, managers and
officers, and we, acting for ourselves and for each of our Directors, Supervisors,
managers and officers agree with each Shareholder, to refer all differences and
claims arising from our Articles of Association or any rights or obligations conferred
or imposed by the PRC Company Law or other relevant laws and administrative
regulations concerning our affairs to arbitration, and where applicable, in
accordance with our Articles of Association, and any reference to arbitration shall
be deemed to authorize the arbitration tribunal to conduct hearings in open session
and to publish its award, which shall be final and conclusive;
(c) agrees with us and each of our Shareholders that our H Shares are freely transferable
by the holders of our H Shares; and
(d) authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers
and officers undertake to observe and comply with their obligations to our
Shareholders as stipulated in our Articles of Association.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Hong Kong Public
Offering will be registered on our H Share register to be maintained in Hong Kong by our H
Share Registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt
Road, Hong Kong. Our principal register of members will be maintained by us at our head
office in the PRC.
Dealings in the H Shares registered in our H Share register will be subject to the Hong
Kong stamp duty. See “Statutory and General Information — 6. Other Information — I.
Taxation of Holders of H Shares” in Appendix V to this prospectus. Investors should seek
professional tax advice for further details of Hong Kong stamp duty.
Unless otherwise determined by our Board, dividends will be paid to Shareholders whose
names are listed on our H Share register in Hong Kong, by ordinary post, at the Shareholders’
risk in Hong Kong dollars.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 94 ---
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars. No representation is made that
the amounts denominated in one currency could actually be converted into the amounts
denominated in another currency at the rates indicated or at all. Unless indicated otherwise,
(1) the translations between Renminbi and U.S. dollars were made at the rate of RMB6.9124
to US$1, being the PBOC rate prevailing on the Latest Practicable Date, (2) the translations
between Hong Kong dollars and Renminbi were made at the rate of RMB0.8857 to HK$1.00,
being the PBOC rate prevailing on the Latest Practicable Date, and (3) the translation between
U.S. dollars and Hong Kong dollars were made at a rate of US$1 to HK$7.8041, calculated
based on the PBOC rate prevailing on the Latest Practicable Date.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. However, the translated English names of the PRC
and foreign national, entities, departments, facilities, certificates, titles, laws, regulations
(including certain of our subsidiaries) and the like included in this prospectus and for which
no official English translation exists are unofficial translations for your reference only. If there
is any inconsistency, the names in their original languages shall prevail.
ROUNDING
Any discrepancies in any table in this prospectus between total and sum of amounts listed
therein are due to rounding. Certain amounts and percentage figures included in this prospectus
have been subject to rounding adjustments or have been rounded to one or two decimal places.
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
–8 3–


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DIRECTORS
Name Address Nationality
Executive Directors
Mr. Xiang Wei ( Σਃ) Room 604, Building 23
Jindi Haijing Garden
Xinzhou Road
Futian District
Shenzhen
Guandong Province
PRC
Chinese
Mr. Zeng Di ( ಀፍ) Room 03, 9/F, Unit 19
Contemporary International Garden
112 Guanggu Avenue
East Lake Hi-Tech Development Zone
Wuhan
Hubei Province
PRC
Chinese
Non-Executive Directors
Mr. Peng Chao ( ు൴) Room 11C, Building 2
Rongchao Qiaoxiang Noyuan
10 Xiangshan West Street
Nanshan District
Shenzhen
Guangdong Province
PRC
Chinese
Mr. Zhao Pan ( Ⴛᆙ) No. 9, Baifuting Group
Baifu Village
Huochangping Town
Shaodong
Hunan Province
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Independent non-executive Directors
Mr. Ran Long ( ̄Ꮂ) 12-16-4, Sixth Block
Luneng Xingcheng
778 Shangpin Road
Longta Street
Y ubei District
Chongqing
PRC
Chinese
Dr. Guo Fei (࠭1-243-7, Zhengyuan Road
Hongshan District
Wuhan
Hubei Province
PRC
Chinese
Ms. Wang Jing ( ˮẙ) 18A, 49 Conduit Road
Mid-levels
Central and Western
Hong Kong
Chinese
SUPERVISORS
Name Address Nationality
Mr. Zhang Denghui ( ੵ೮ሾ) Room 101, Unit 1, Building 1
Zonggang Xi’an
No. 97 Fangcao Road
Hanyang District
Wuhan
Hubei Province
PRC
Chinese
Ms. Duan Ting (ణ) Room 02, 4/F, Building 2
Aoyuan Lingyu
3 Jinshan Avenue
Huicheng District
Huizhou City
Guangdong Province
PRC
Chinese
Ms. Zhu Y ue (ٔRoom 1902, Building 73
No. 519 Guanshan Avenue
Hongshan District
Wuhan
Hubei Province
PRC
Chinese
For more information on our Directors and Supervisors, see “Directors, Supervisors and
Senior Management” of this prospectus.
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors, Overall Coordinators
and 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 Securities (International)
Corporate Finance Company Limited
18/F, Two Exchange Square
Central
Hong Kong
China Merchants Securities (HK)
Co., Limited
48/F, One Exchange Square
Central
Hong Kong
Joint Bookrunners China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Securities (International)
Corporate Finance Company Limited
18/F, Two Exchange Square
Central
Hong Kong
China Merchants Securities (HK)
Co., Limited
48/F, One Exchange Square
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty, Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux 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 Securities (International)
Corporate Finance Company Limited
18/F, Two Exchange Square
Central
Hong Kong
China Merchants Securities (HK)
Co., Limited
48/F, One Exchange Square
Central
Hong Kong
Capital Market Intermediaries China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Securities (International)
Corporate Finance Company Limited
18/F, Two Exchange Square
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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China Merchants Securities (HK)
Co., Limited
48/F, One Exchange Square
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty, Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Reporting Accountants and Independent
Auditor
Deloitte Touche Tohmatsu
Certified Public Accountants
Registered Public Interest Entity Auditors
35/F, One Pacific Place
88 Queensway
Hong Kong
Legal Advisors to our Company As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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As to PRC law:
Zhong Lun Law Firm
57/58/59/F, Tower A
Ping An Finance Centre
5033 Yitian Road
Futian District
Shenzhen
PRC
As to U.S. law:
K&L Gates LLP
One SW Columbia Street
Suite 1900, Portland
Oregon, U.S.
Legal Advisors to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Slaughter and May
47/F Jardine House
One Connaught Place
Central, Hong Kong
As to PRC law:
Jingtian & Gongcheng
34/F Tower 3, China Central Place
77 Jianguo Road
Chaoyang District
Beijing
PRC
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai
Branch Co.
Suite 2504, Wheelock Square
1717 Nanjing West Road
Shanghai
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Transfer Pricing Advisor KPMG Advisory (China) Limited
Beijing Branch
KPMG Tower, 8th Floor
Oriental Plaza, E2
1 East Chang An Avenue
Dongcheng District, Beijing
PRC
Independent Property Valuer Jones Lang LaSalle Corporate Appraisal
and Advisory Limited
7/F One Taikoo Place
979 King’s Road
Hong Kong
Compliance Advisor Rainbow Capital (HK) Limited
Office No. 710, 7/F
Wing On House
No. 71 Des V oeux Road Central
Central
Hong Kong
Receiving Bank CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Head Office and Principal Place of
Business in the PRC
1903-1904, Block C
China Resources Land Building
Da Chong Community, Y uehai Street
Nanshan District
Shenzhen
Guangdong Province
PRC
Principal Place of Business in Hong Kong Room 1910, 19/F
Lee Garden One
33 Hysan Avenue Causeway Bay
Hong Kong
Company’s Website https://www.fs.com/
(Information on this website does not form
part of this prospectus)
Joint Company Secretaries Mr. Zeng Di
1903-1904, Block C
China Resources Land Building
Da Chong Community, Y uehai Street
Nanshan District
Shenzhen
Guangdong Province
PRC
Ms. Sham Ying Man
(Associate of The Hong Kong Chartered
Governance Institute and The Chartered
Governance Institute in the U.K.)
Room 1910, 19/F
Lee Garden One
33 Hysan Avenue Causeway Bay
Hong Kong
Authorized Representatives Mr. Xiang Wei
1903-1904, Block C
China Resources Land Building
Da Chong Community, Y uehai Street
Nanshan District
Shenzhen
Guangdong Province
PRC
CORPORATE INFORMATION
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--- page 103 ---
Mr. Zeng Di
1903-1904, Block C
China Resources Land Building
Da Chong Community, Y uehai Street
Nanshan District
Shenzhen
Guangdong Province
PRC
Audit Committee Dr. Guo Fei (Chairperson)
Mr. Zhao Pan
Ms. Wang Jing
Remuneration Committee Ms. Wang Jing (Chairperson)
Dr. Guo Fei
Mr. Zeng Di
Nomination Committee Mr. Ran Long (Chairperson)
Mr. Xiang Wei
Ms. Wang Jing
Strategy Committee Mr. Xiang Wei (Chairperson)
Dr. Guo Fei
Mr. Ran Long
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Bank(s) China Merchants Bank Co., Ltd.
Shenzhen Binhe Shidai Branch
106/204, Commercial Podium
Jingji Binhe Shidai Building
Binhe Avenue
Futian District
Shenzhen
Guangdong Province
PRC
Bank of China Limited
University Town of Shenzhen Branch
No. 105, 106, SUSTech Y ayuan
Xueyuan Avenue, Taoyuan Street
Nanshan District
Shenzhen
Guangdong Province
PRC
CORPORATE INFORMATION
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The information and statistics set out in this section and other sections of this
prospectus were extracted from the Frost & Sullivan Report, which was commissioned by
the Company, and from various official government publications and available resources
from public market research. The Company engaged Frost & Sullivan to prepare the
Frost & Sullivan Report in connection with the Global Offering. The information from
official government sources has not been independently verified by any of the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
any of their respective directors and advisers, or any other persons or parties involved
in the Global Offering (other than Frost & Sullivan), and no representation is given as
to its accuracy. For discussion of risks related to the Group’ s industry, see “Risk Factors
— Risks Relating to Our Business and Industry” in this prospectus.
GLOBAL NETWORKING SOLUTIONS MARKET
Introduction of Networking Solutions Market
Network infrastructure is one of the three core infrastructures that build the digital world,
alongside computing power infrastructure and storage infrastructure. The core function of
network infrastructure is to establish stable, efficient, and secure connectivity channels to
enable interconnection among various devices, systems, and users. It encompasses high-speed
data transmission, reliable network coverage, flexible bandwidth management, and
comprehensive security protection mechanisms. A robust network infrastructure is a key
enabler for digital transformation and intelligent upgrading, supporting the application and
development of emerging technologies such as artificial intelligence, cloud computing, big
data, and the Internet of Things.
Networking solutions refer to a suite of hardware and software that designed to meet the
needs of enterprises in building, using, and managing network infrastructure. These solutions
aim to help businesses achieve efficient, secure, and reliable network connectivity and
communication. Networking hardware refers to various hardware devices and supporting
services used for building, maintaining, and expanding computer networks, enabling
interconnection and data exchange between devices within the network. Hardware forms the
foundation of network communication. Networking software refers to programs that support
network communication and management, including operating systems, protocol stacks, and
application software.
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Total Revenue of Global Networking Solution Market
The global networking solution market size grew from USD119.2 billion in 2020 to
USD162.8 billion in 2024, with a compound annual growth rate of 8.1% between 2020 and
2024. It is projected that the global networking solution market size will continue to expand,
and the total market revenue will reach USD245.3 billion by 2029, with a compound annual
growth rate of 8.5% between 2024 and 2029.
Total revenue of global networking solution market,
USD Billion, 2020-2029E
2020 2021 2022 2023 2024 2026E 2027E 2028E 2029E2025E
119.2 130.6
145.9
160.4 162.8
180.3
197.4
213.1
229.3
245.3
107.8 117.9 131.6 144.5 146.5 161.9 176.9 190.5 204.5 218.6
12.7 14.3 15.9 16.3 18.4 20.5 22.6 24.8 26.711.4
Total
CAGR 2020-2024 2024-2029E
Hardware 8.0% 8.3%
Software 9.4% 10.4%
8.1% 8.5%
Software
Hardware
Source: IDC, Frost & Sullivan
Networking hardware products can be categorized into switches, routers, WLAN
(wireless local area networks), optical transceiver and high-speed cables, cabling and others.
Switches, routers and WLAN are the main types of network equipment. Benefiting from the
increased spending on enterprise network infrastructure, the global markets for switches,
routers and WLAN are all expected to achieve stable growth within the forecast period, with
CAGRs (compound annual growth rates) from 2024 to 2029 reaching 7.0%, 5.8% and 7.6%,
respectively. Optical transceiver and high-speed cables will be the fastest-growing product
segment in terms of market size during the forecast period, with a projected CAGR of 18.4%.
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Total revenue of global networking hardware market, by Product
USD Billion, 2020-2029E
2020 2021 2022 2023 2024 2026E 2027E 2028E 2029E2025E
CAGR 2020-2024 2024-2029E
Total 8.0% 8.3%
Switch
Router
WLAN
Optical transceiver and
high-speed cable
Others*
Cabling
12.5% 7.0%
-2.7% 5.8%
11.1% 7.6%
13.9% 18.4%
7.6% 7.4%
5.3% 4.7%
4.7% 4.5%
Security device
Others
Cabling
Security device
Optical transceiver and high-speed cable
WLAN
Router
Switch
21.8 22.620.819.918.8 23.7 24.9 26.0 27.2 28.111.4 11.9 12.5 13.2 14.0 14.8 15.6 16.3 17.0 17.615.0 16.5 17.8 19.0 20.1 21.5 23.4 25.3 27.1 28.712.1 13.2 14.8 14.3 20.4 26.7 32.1 36.5 41.3 47.4
10.5 11.2
11.0 12.0 12.8 13.6 14.3
15.5 16.4 17.2 17.0 13.9 14.5 15.3 16.2 17.3 18.4
28.5 32.0 38.0 48.0 45.6
49.7
53.6 57.4 61.0 64.1
107.8 117.9
131.6
144.5 146.5
161.9
176.9
190.5
204.5
218.6
6.5 8.0
9.9
*Note: Others include network testing and maintenance tools, power management equipment, server cabinets and
other accessories
Source: IDC, Yole, Dell’Oro Group, Frost & Sullivan
As demands for faster network transmission grow, enterprise customers increasingly need
high-performance networking solution supporting transmission speeds above 100G. The global
high-performance networking hardware market (speeds of 100G and above) rose from
USD14.0 billion in 2020 to USD33.7 billion in 2024, a CAGR of 24.6% from 2020 to 2024.
Future growth is projected to push the market’s total revenue to USD83.1 billion by 2029, with
a CAGR of 19.8% from 2024 to 2029.
Total revenue of global networking hardware solution market, by Performance
USD Billion, 2020-2029E
2020 2021 2022 2023 2024 2026E 2027E 2028E 2029E2025E
2020-2024 2024-2029E
8.0% 8.3%
24.6% 19.8%
CAGR
Total
High-performance networking solutions
General networking solutions 4.7% 3.7%
High-performance networking solutions
General networking solutions
93.8 99.6 107.9 117.0 112.8 119.0 125.6 129.5 132.9 135.5
14.0 18.3 23.7 27.5 33.7 42.9 51.3 61.0 71.6 83.1
107.8 117.9
131.6
144.5 146.5
161.9
176.9
190.5
204.5
218.6
Source: IDC, Frost & Sullivan
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GLOBAL ONLINE NETWORKING SOLUTIONS MARKET
Challenges Faced by Traditional Networking Solution Business Models
In the traditional networking solution business model, networking solution providers
primarily serve large key customers directly through customized projects, such as
telecommunications operators and major cloud service providers. They also serve a broader
range of other customer types, like small and medium-sized enterprises (SMEs) in vertical
industries, through an offline distribution model. Currently, the traditional business model is
adopted by the global giants in the networking solution market to achieve a balance between
ensuring service quality and maintaining market coverage. However, despite its long-standing
existence, the traditional business model is facing a series of challenges due to the rapid
evolution of global enterprise digital transformation and the dynamic changes in market
demand. These challenges mainly include: (i) the geographical coverage of offline distribution
networks is still limited, making it difficult to fully cover customers globally; (ii) local
distributors often offer relatively limited types of products, making it difficult for customers
to purchase products that best match their needs; (iii) customers have relatively limited
channels to obtain product information, making it difficult for them to fully understand key
product information such as performance, parameters, and user reviews; (iv) the traditional
offline model involves multiple intermediary parties (such as distributors, agents, and
retailers), leading to high costs along the value chain and higher final sales prices; and (v) long
procurement and delivery cycles.
Development Opportunities for Online Networking Solutions
To address the challenges faced by traditional offline business models, the business model
of providing networking solution through online platforms has emerged. Online networking
solutions refer to the sale of network products and the provision of related services via online
platforms. Leveraging its advantages of convenience, efficiency, cost-effectiveness, and
information transparency, the online business model effectively overcomes the shortcomings of
the traditional offline model in terms of product variety richness, decision-making difficulty in
product selection, procurement cost, and procurement and delivery efficiency, better meeting
enterprise customers’ purchasing needs for networking solution.
The advantages of online networking solution include:
– Wider market coverage and higher accessibility: The online model breaks
geographical limitations, enabling network products to reach a broader customer
base.
– Richer product selection and more convenient product selection process: Online
platforms can showcase a more comprehensive product range and more detailed
product information.
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– Faster response and more efficient transaction process: Online platforms can
provide 24/7 service, allowing customers to place orders at any time. In addition,
online payment and logistics systems has significantly shortened the transaction and
delivery cycles.
– Lower procurement costs and higher price transparency: Online sales typically
reduce intermediary links and operating costs, making product prices more
competitive. Meanwhile, online platforms usually clearly display product prices and
configurations, facilitating customer comparison and selection and enhancing price
transparency.
– More convenient after-sales service and technical support: Online platforms can
offer various after-sales service methods, such as online consultation, technical
document download, and remote technical support.
Total revenue of global online networking solution market
The global online networking solution market size grew from USD21.5 billion in 2020 to
USD31.7 billion in 2024, with a CAGR of 10.2% during 2020-2024. It is expected that the
global online networking solution market size will continue to expand, and the total market
revenue will reach USD52.7 billion by 2029, with a CAGR of 10.7% from 2024 to 2029. The
global online networking solution market penetration rate (global online networking solution
market revenue divided by global networking solution market revenue) increased from 18.0%
in 2020 to 19.5% in 2024 and is projected to further rise to 21.5% by 2029 during the forecast
period.
Total revenue of global online networking solution market
USD Billion, 2020-2029E
2020 2021 2022 2023 2024 2026E 2027E 2028E 2029E2025E
21.5 24.2 27.4 30.3 31.7 35.9 39.9 43.9 48.2 52.7
18.0% 18.5% 18.8% 18.9% 19.5% 19.9% 20.2% 20.6% 21.0% 21.5%
CAGR 2020-2024 2024-2029E
Total 10.2% 10.7%
0
10
20
30
40
50
60
70
80
90
100
0
5
10
15
20
25
30
USD billion %
total revenue of online networking solutions
as % of total networking solutions
Source: IDC, Frost & Sullivan
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Competitive Landscape of Global Online Networking Solutions Market
The global online networking solution market has two main types of participants: online
DTC networking solution providers and third-party online platforms. Online DTC networking
solution providers focus on selling and delivering their own-branded network products and
services. Third-party online platforms aggregate diverse networking products, mainly selling
those from different vendors, and sometimes deliver product related professional services.
GLOBAL ONLINE DTC NETWORKING SOLUTIONS MARKET
Development Opportunities of Online DTC Networking Solutions Market
Although online networking solution have addressed several challenges of traditional
offline models, during the digital and intelligent transformation of enterprise network
infrastructure, enterprise customers still face significant pain points:
– Difficulty in obtaining in-depth expertise and customized products/solutions for
specific needs: When transforming to integration with AI, enterprises need highly
customized network infrastructure that precisely accommodates AI workloads —
such as model training, inference, and data analysis — in terms of bandwidth,
latency, and security. However, third-party online platforms, despite offering diverse
products and competitive prices, often lack the expertise for customization and
consultation.
– Difficulty in achieving end-to-end deep integration and unified management:
Third-party online platforms, selling multi-vendor products, struggle with deep
integration and unified management. Different vendors use different management
interfaces, protocols, and APIs, increasing operational complexity and costs. Also,
compatibility among components is crucial. Although platforms test compatibility,
they can’t cover all combinations and scenarios, risking performance bottlenecks
and system failures.
– Difficulty in ensuring high-quality service delivery: Digital and AI transformation
require professional consulting, designing, deployment, optimization, and after-
sales services closely tied to specific products and technologies. Some third-party
online platforms do not have professional service teams for all products and ensure
consistent service quality.
– Difficulty in timely access to emerging network technology products: Third-
party online platforms rely on brand vendors’ R&D and product launch timelines
and lack R&D capabilities, making it hard to quickly meet enterprises’ demand for
new AI-related technologies.
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An online DTC networking solution refers to the direct reach of end customers and the
realization of product sales and service delivery through the online platform operated by the
networking solution provider itself. Compared with third-party online platforms, online DTC
networking solutions have the following unique advantages:
– In-depth product expertise & high customization: Focusing on the sales and
delivery of their own brand products, online DTC networking solution providers
have a deep understanding and expertise in their own products, including technical
architecture, functionality, best practices, etc. They can offer customized solutions
based on the specific needs and scenarios of enterprise customers in their AI
transformation, including hardware selection, software configuration, and network
architecture design, to ensure that the network infrastructure can optimally support
AI workloads.
– End-to-end solutions & unified management: Typically, online DTC networking
solution providers offer comprehensive solutions that cover network equipment,
software, and related services. Since all components come from the same provider,
it is easier to achieve deep integration and coordinated operation. Enterprises can
centrally monitor, configure, and manage the entire network infrastructure through
a unified management platform, thereby reducing operational complexity and
improving efficiency. Moreover, DTC networking solution providers conduct
comprehensive compatibility testing of their own branded products to ensure
seamless collaboration among different components.
– Direct and comprehensive service support: Online DTC networking solution
providers offer services that are closely integrated with specific products and
technologies directly to customers, including pre-sales consultation, solution design,
deployment implementation, after-sales support, and technical training.
– Faster innovation & new-tech integration: Usually equipped with their own R&D
teams, online DTC networking solution providers can more rapidly integrate the
latest network technologies into their products. They can flexibly adjust their
product roadmaps in accordance with the business development trends and customer
needs, and more quickly launch new products and solutions that meet the
requirements of business and networking transformation.
Industry Value Chain of Global Online DTC Networking Solutions Market
The upstream of the online DTC networking solutions market consists of raw material and
core component suppliers and manufacturers. The former offers key materials and components,
such as network chips, optical fiber base materials, resistors, capacitors, and PCB boards. The
latter produces network hardware like switches, routers, and optical modules. Online DTC
networking solution providers are located in the midstream. They upgrade hardware products
to solutions by independently developing hardware, integrating software design, and handling
product design, software development, brand management, sales, marketing, and service
support. The downstream features a diverse group of end customers, covering industry
enterprises (e.g., finance and internet technology) and infrastructure service providers like
telecoms and data centers.
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Industry Value Chain of Global Online DTC Networking Solutions Market
Upstream Midstream Downstream
Raw material and core component
suppliers and manufacturers Networking solutions providers End customers
 Raw material and core component
providers: These providers supply
network chips, optical fiber base
materials, resistors, capacitors, PCB
boards, image processing modules,
audio processing modules, and more.
 Online DTC (Direct-to-Consumer)
networking solution providers (who
both develop their own products and
offer comprehensive solutions): These
providers are engaged in product design,
hardware and software R&D, brand
operation, sales and marketing, and
service provision. Manufacturers (OEM): Manufacturers
produce network hardware products,
such as switches, routers, and optical
modules.
Industry
enterprise
customers
Telecommunications/
data center
operators
Others
Total Revenue of Global Online DTC Networking Solution Market
The global online DTC networking solution market size grew from USD3.3 billion in
2020 to USD5.7 billion in 2024, with a CAGR of 15.0% during 2020-2024. It is expected that
the global online DTC networking solution market size will continue to expand, and the total
market revenue will reach USD10.8 billion by 2029, with a CAGR of 14.0% from 2024 to
2029. The global online DTC networking solution market penetration rate (the global online
DTC networking solution market revenue divided by the global online networking solution
market revenue) grew from 14.9% in 2020 to 17.8% in 2024, and is projected to further
increase to 20.5% by 2029.
Total revenue of global online DTC networking solution market, by Region
USD Billion, 2020-2029E
2020 2021 2022 2023 2024 2026E 2027E 2028E 2029E2025E
3.3 4.0 4.7 5.2 5.7 6.5 7.3 8.2
9.5
10.8
14.9% 16.1% 17.0% 17.2% 17.8% 17.9%
18.2%
19.0%
19.8% 20.5%
Asia Pacific 18.9% 17.8%
RoW 18.2% 16.3%
North America 14.6% 13.6%
Europe 14.0% 13.1%
CAGR 2020-2024 2024-2029E
Total 15.0% 14.0%
0
5
10
15
20
25
0
5
10
15
20
25
30
USD billion
%North America
as % of online DTC networking solutions
Europe
Asia Pacific
Rest of the world
0.2
0.31.6 0.3 0.3 0.70.4 0.4 0.5 1.31.1 0.8
0.4
1.2 1.4 1.7 1.8 2.0
2.3 2.5 2.7 3.1 3.5 3.9 4.5
3.6
2.2 2.5 2.8 3.2
5.1
1.9 0.4 0.5 0.6
0.50.8 0.60.9 0.7
Source: IDC, Frost & Sullivan
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Key Drivers of Global Online DTC Networking Solutions Market
Global digital transformation: The global industrial digital transformation is an
inevitable trend that is accelerating. Global digital spending is projected to grow from USD1.4
trillion in 2020 to USD2.4 trillion in 2024, with a compound annual growth rate (CAGR) of
14.4%. This growth is expected to further accelerate at a CAGR of 15.8%, reaching USD5.0
trillion by 2029. Digital transformation relies on the construction of digital infrastructure, and
the ongoing global digital transformation will continue to drive capital expenditures on digital
infrastructure, thereby fueling the rapid growth of global online DTC networking solution
market.
Growing AI-related networking demands from data centers and enterprise on-
premise digital infrastructure: Benefiting from advancements in large-language model
technology and the rapid adoption of generative AI applications, the global AI market is
experiencing accelerated growth. AI workloads involve massive data transmission and
processing, leading to a sharp increase in demand for high-bandwidth networks. Additionally,
AI applications place higher demands on low latency, intelligent network traffic management,
network scalability, and intelligent network operations, pushing data centers and enterprise
on-premise digital infrastructure to adopt faster, lower-latency, and more intelligent network
devices and architectures. In data centers, data center network architectures are undergoing
rapid transformations. Innovations such as Spine-Leaf architecture, software defined network
(SDN), network function virtualization (NFV), and data center interconnect (DCI) are driving
the demand for more innovative, higher-performance, and more intelligent networking
solutions. By 2030, global data center capacity is expected to grow to 299 gigawatts, a net
increase of 244 gigawatts from 2023, with a CAGR of 28.6%. The growth in data center capital
expenditures will be a key factor driving the expansion of global online DTC networking
solution market. Meanwhile, in the enterprise sector, integrating AI large language model
capabilities into business processes and leveraging AI large language models to empower
business development has become an inevitable trend for enterprises. Considering factors such
as reasoning accuracy in vertical knowledge domains, model performance and response speed,
customization and flexibility, and data security and privacy protection, more and more
enterprises choose to deploy AI large language models on their on-premise digital
infrastructure. This drives the evolution of enterprises’ on-premise network infrastructure
toward higher network bandwidth, more intelligent network management, and stronger
network security, thereby increasing enterprise spending on AI-related network solutions.
Key Trends of Global Online DTC Networking Solutions Market
High-performance networking products are emerging as new growth driver: With the
widespread adoption of artificial intelligence applications and the explosive growth of data
volumes, demands for network bandwidth, speed, and stability are continuously increasing. As
a result, high-performance networking products, such as high-speed Ethernet switches and
optical modules, are becoming significant new growth points in the online DTC networking
solutions market.
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The significance of a platform-based product portfolio is growing: Leading market
participants are focusing on building platform-based product matrices, offering customers a
range of networking products and services that can be integrated and work together seamlessly.
A platform-based product matrix can provide customers with more comprehensive and flexible
networking solutions, simplify procurement and management processes, and make it easier for
customers to develop usage habits and dependencies on specific brands, thereby further
enhancing customer loyalty.
Product and service delivery capabilities are a key decisive factor with the increasing
prevalence of enterprise Al applications: The increasing prevalence of enterprise AI
applications has further complicated network infrastructure. By offering real-time cloud
network management and optimization, full lifecycle service support, and ecosystem platform-
driven innovation, online DTC networking solution providers not only address the pain points
of traditional network architectures but also build future-ready network infrastructures for
enterprises through the flexibility of software-defined solutions and the stability of ecosystem
integration.
Competitive Landscape of Global Online DTC Networking Solutions Market
The global online DTC networking solutions market is relatively fragmented. By vendor
type, it includes platform-centric and mixed-business-model participants. The former sells
products only via online DTC platforms, while the latter uses online DTC platforms, offline
channels, and/or online dealer channels. In 2024, the top three participants held a combined
22.0% market share. In 2024, the Company ranked second in the global online DTC networking
solutions market with a 6.9% share. It’s the largest platform-based company in this market.
Also, the Company ranked first in the high-performance networking solutions (100G and
above) market.
Ranking of Top Online DTC Networking Solution Providers/Platforms,
in terms of revenue
Ranking Company
Revenue
(USD Million,
2024)
Market Share
(%, 2024) Product Focus Business Model
1 /H1118/H1118/H1118/H1118/H1118Company A 650 12.1% Focusing on general
solutions
Mix (distribution +
direct sales)
2 /H1118/H1118/H1118/H1118/H1118The Company 370 6.9% Combination of
high-performance
and general
solutions, with
increasing revenue
contribution from
high-performance
solutions
Direct sales only
(platform-based)
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Ranking Company
Revenue
(USD Million,
2024)
Market Share
(%, 2024) Product Focus Business Model
3 /H1118/H1118/H1118/H1118/H1118Company B 160 3.0% Combination of
high-performance
and general
solutions, with
increasing revenue
contribution from
high-performance
solutions
Mix (distribution +
direct sales)
Notes: Company A: A U.S. company founded in 2003, headquartered in New Y ork and listed on the New Y ork
Stock Exchange, which mainly focuses on providing network devices and solutions.
Company B: A U.S. company founded in 2015, headquartered in Texas and listed on the New Y ork Stock
Exchange, whose core business is to integrate enterprise hardware solutions (servers, switches, routers)
with software-defined platforms and end-to-end IT services.
Key Success Factors and Entry Barriers of Global Online DTC Networking Solutions
Market
Technology and customized product solutions: To meet customers’ ever-growing
network needs, vendors must invest in R&D to launch innovative and differentiated products.
Additionally, the need for integrated and customized solutions is becoming more prominent.
For example, in networking solution design, rail transit systems prioritize security and
compliance, data centers focus on energy efficiency optimization, and high-performance
computing (HPC) demands high bandwidth and ultra-low latency. This demonstrates that
customized networking solutions are essential across diverse scenarios. However, new market
entrants often lack the ability to provide customized solutions for specific scenarios.
End-to-end digital operation capability: End-to-end digital operation capabilities
involve delivering a smooth online shopping experience, precise order management and
delivery, personalized customer interactions, and robust online support. These capabilities are
data-driven and continuously optimized. Leading vendors have already built these capabilities
and enjoy a first-mover advantage, while market newcomers often struggle to establish them
quickly.
Brand awareness and recognition: High-profile brands with good reputations can
quickly gain customer trust and simplify purchase decisions. For technical networking
solutions, customers prefer familiar/trusted brands. Strong brand awareness also brings higher
natural traffic, conversion rates, less advertising dependency, and easier word-of-mouth
promotion, attracting new customers.
Supply chain management efficiency: Efficient supply chain management can greatly
cut operational costs like procurement, warehousing, and logistics, enabling online DTC
vendors to offer more competitive product prices. In the networking solutions market, fast
response to customer needs and timely product delivery are crucial for maintaining customer
relationships and seizing market chances.
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Localized service teams: Though the DTC model mainly uses online channels for sales
and services, for complex networking solutions, localized delivery teams are still key. For
solutions needing on-site installation/configuration, local teams can provide final-mile delivery
and initial setup, ensuring smooth equipment operation and improving customers’ overall
purchase experience and satisfaction.
SOURCE AND RELIABILITY OF INFORMATION
We engaged an independent market research consultant, Frost & Sullivan, to conduct an
analysis of, and to prepare an industry report on, the industries where we operate with a
commission fee of RMB650,000. Founded in 1961, Frost & Sullivan is an independent global
consulting firm that conducts industry research and prepares industry reports on a wide range
of industries, among other services. The information from Frost & Sullivan disclosed in this
document is extracted from the Frost & Sullivan Report with its consent.
In compiling and preparing the Frost & Sullivan Report, Frost & Sullivan used the
following key methodologies to collect multiple sources, validate the collected data and
information, and cross-check each respondent’s information and expressions against those of
others: (i) detailed primary research, which involved discussing the status of the industry with
leading industry participants and industry experts; and (ii) secondary research, which involved
reviewing published sources including reports of market participants, independent research
reports and data based on Frost & Sullivan’s own research database.
Frost & Sullivan adopted the following primary assumptions while making projections for
preparing the Frost & Sullivan Report: (i) global economy is likely to maintain steady growth
in the next decade; (ii) global social, economic and political environment is likely to remain
stable in the forecast period; and (iii) market drivers like surging demand for air conditioners,
accelerated urbanization and rising living standards, favorable policies and growing
requirements for product performance, among others.
Except as otherwise noted, all of the data and forecasts contained in this section are
derived from the Frost & Sullivan Report. Our Directors confirm that after taking reasonable
care, there is no material adverse change in the overall market information since the date of the
Frost & Sullivan Report that would materially qualify, contradict or have an impact on such
information.
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LA WS AND REGULATIONS OF THE PRC
Our business has been and will continue to be governed by the relevant PRC laws and
regulations. The PRC government authorities promulgate and enforce the relevant PRC laws
and regulations, including national and regional laws and regulations. This section contains a
summary of the major regulatory and legal requirements that are currently relevant to the
Company’s business. As the relevant PRC laws and regulations are still evolving, it is difficult
for us to predict the impact of such changes on our business and the additional compliance
costs.
Laws and Regulations Related to Overseas Listing
Trial Administrative Measures for Overseas Securities Offering and Listing by Domestic
Enterprises
On February 17, 2023, upon the approval of the State Council, the China Securities
Regulatory Commission (the “ CSRC ”) issued the Trial Administrative Measures for Overseas
Securities Offering and Listing by Domestic Enterprises ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ
) (the “ Trial Administrative Measures ”) and five supporting guidelines, which
came into effect on March 31, 2023. The Trial Administrative Measures comprehensively
reforms the regulatory system for overseas offering and listing of PRC domestic enterprises’
securities, either directly or indirectly, into a filing-based system.
In addition, overseas offering and listing of domestic companies must comply with the
PRC laws, administrative regulations and relevant provisions on foreign investment, state-
owned assets management, industry supervision and overseas investment. Overseas listing and
offering activities shall not disrupt the domestic market order, harm national interests and
social public interests, or harm the legitimate rights and interests of domestic investors. A
domestic company that intends to offer and list its securities in overseas markets shall (i)
formulate its articles of association, improve its internal control system and standardize its
corporate governance, financial affairs and accounting activities in accordance with the PRC
Company Law (), the PRC Accounting Law ( ʕശɛ͏ ΍ձ਷ึ
) and other applicable laws, administrative regulations and relevant provisions of the
PRC; (ii) abide by national confidentiality laws and regulations and take necessary measures
to implement the confidentiality responsibility. It is strictly forbidden to divulge any state
secret or the work secrets of state authorities. The overseas offering and listing of the domestic
enterprise shall comply with applicable laws, administrative regulations and the relevant
provisions of the PRC where involved in the overseas provision of personal information and
important data. In addition, the Trial Administrative Measures also provide that no overseas
offering and listing shall be made under any of the following circumstances, among others: (i)
such securities offering and listing is explicitly prohibited by provisions in laws, administrative
regulations and relevant state rules; (ii) the intended securities offering and listing may
endanger national security as reviewed and determined by competent authorities under the
State Council in accordance with law; (iii) the domestic enterprise intending to make the
securities offering and listing, or its controlling shareholders and actual controllers, have
REGULATORY OVERVIEW
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committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of
property or undermining the order of the socialist market economy during the latest three years;
(iv) the domestic enterprise intending to make the securities offering and listing is currently
under investigations for suspicion of criminal offenses or major violations of laws and
regulations, and no conclusion has yet been made thereof; or (v) there are material ownership
disputes over equity held by the domestic company’s controlling shareholders or by other
shareholders that are controlled by the controlling shareholders or actual controllers.
To enhance confidentiality and archive management for domestic enterprises’
overseas offerings and listings, the CSRC, the Ministry of Finance of the People’s Republic of
China (the “ MOF”), the National Administration of State Secrets Protection, and the
National Archives Administration revised relevant regulations. The updated Provisions on
Strengthening Confidentiality and Archives Administration Concerning Overseas
Securities Offerings and Listings (CSRC, National Administration of State Secrets
Protection, National Archives Administration Announcement [2009] No. 29) (̋੶ίྤ
(҅ ʮ
ѓ[2009]29 ໮)) were replaced with the Provisions on Strengthening Confidentiality and
Archives Administration Concerning Overseas Securities Offerings and Listings by Domestic
Enterprises (CSRC, National Administration of State Secrets Protection, National Archives
Administration Announcement [2023] No. 44) (ᗫ
(҅ʮѓ[2023]44 ໮)) (the
“Provisions on Confidentiality ”) on March 31, 2023. The Provisions on Confidentiality now
cover domestic joint stock companies directly offering and listing overseas and domestic
operating entities of entities indirectly offering and listing overseas. They outline procedural
requirements and specify enterprises’ confidentiality responsibilities and accounting archives
administration, in alignment with the Overseas Listing Trial Measures.
Regulations Related to H-share Full Circulation
“Full circulation” means listing and circulating on the Stock Exchange of the domestic
unlisted shares of a domestic H-share company, including unlisted domestic shares held by
domestic shareholders prior to overseas listing, unlisted domestic shares additionally issued
after overseas listing, and unlisted shares held by foreign shareholders. On November 14, 2019,
the CSRC issued the Guidelines for the “Full Circulation” Program for Domestic Unlisted
Shares of H-share Listed Companies ( H΅͡ሗ“ஷ”ˏ)
(the “ Guidelines for the Full Circulation ”), which was amended on August 10, 2023. The
Guidelines for the Full Circulation allow certain qualified H-share listed companies and
H-share companies to be listed for the application of full circulation to CSRC.
According to the Guidelines for the Full Circulation, shareholders of domestic unlisted
shares may determine by themselves through consultation the amount and proportion of shares,
for which an application will be filed for circulation, provided that the requirements laid down
in the relevant laws and regulations and set out in the policies for state-owned asset
administration, foreign investment and industry regulation are met, and the corresponding
H-share listed company may be entrusted to file with the CSRC. Domestic companies limited
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by shares that have not been listed may file with the CSRC for the full circulation at the time
of their initial public offering and listing overseas. Besides, according to the Trial
Administrative Measures, where the shareholders of unlisted shares in China apply for the
conversion of the domestic unlisted shares held by them into overseas listed shares and have
such shares listed and traded on an overseas exchange, they shall entrust the domestic
enterprise to file with the CSRC, subject to the relevant regulations of the CSRC.
On December 31, 2019, China Securities Depository and Clearing Corporation Limited
(CSDC) and the Shenzhen Stock Exchange jointly announced the Measures for Implementation
of H-share “Full Circulation” Business ( Hٰ“ஷ”) (the “ Measures for
Implementation ”). The H-share “full circulation” businesses, such as cross-border transfer
registration, maintenance of deposit and holding details, transaction entrustment and
instruction transmission, settlement, management of settlement participants, services of
nominal holders, are subject to the Measures for Implementation.
In September 2024, the Shenzhen Branch of China Securities Depository and Clearing
Corporation Limited also promulgated the Guide of the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited to the Program for “Full Circulation” of
H-shares (ப΂ʮ̡ଉέʱʮ̡Hٰ“ஷ”) (the “ Guide
to the Program ”) to specify the relevant escrow, custody, agent service, arrangement for
settlement and delivery, risk management measures and other relevant matters.
According to the Measures for Implementation of H-share “Full Circulation” Business
and the Guide to the Program, shareholders who apply for H Share Full Circulation
(“Participating Shareholders ”) shall complete the cross-border transfer registration for
conversion of relevant domestic unlisted shares into H Shares before dealing in the shares, i.e.,
CSDC as the nominal holder, deposits the relevant securities held by Participating
Shareholders at China Securities Depository and Clearing (Hong Kong) Limited (“ CSDC
(Hong Kong) ”), and CSDC (Hong Kong) will then deposit the securities at HKSCC in its own
name, and exercise the rights to the securities issuer through HKSCC, while HKSCC Nominees
as the ultimate nominal shareholder is listed on the register of shareholders of H-share listed
companies. According to the Guide to the Program for “Full Circulation” of H-shares, H-share
listed companies shall be authorized by Participating Shareholders to designate the only
domestic securities company (“ Domestic Securities Company ”) to participate in the
transaction of converted H shares. The specific procedure is as follows:
Participating Shareholders submit trading orders of the converted H Shares through the
Domestic Securities Company, which transmits the orders to the Hong Kong Securities
Company designated by the Domestic Securities Company through Shenzhen Securities
Communications Co., Ltd.; and the Hong Kong Securities Company conducts corresponding
securities transactions in the Hong Kong market in accordance with the aforementioned trading
orders and the rules of the Hong Kong Stock Exchange.
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According to the Guide to the Program for “Full Circulation” of H-shares, upon the
completion of the transaction, settlements between each of the Hong Kong Securities Company
and CSDC (Hong Kong), CSDC (Hong Kong) and CSDC, CSDC and the Domestic Securities
Company, and the Domestic Securities Company and the Participating Shareholders, will all be
conducted separately.
Regulations and Policies Related to the Network Communication Equipment and
E-Commerce Industries
Regulations on E-commerce
On August 31, 2018, the Standing Committee of the National People’s Congress (the
“SCNPC ”) issued the E-Commerce Law of the People’s Republic of China ( ʕശɛ͏΍ձ
), pursuant to which, the State encourages the development of new forms of
e-commerce and the creation of new models of commerce, promotes the R&D and application
of e-commerce technology, facilitates e-commerce credibility building, and fosters a market
environment favorable for e-commerce innovation and development, ensuring that e-commerce
plays an important role in promoting high-quality development, meeting the people’s
ever-growing needs for a better life, and developing an open economy. The law came into effect
on January 1, 2019, requiring that e-commerce operators engaging in cross-border e-commerce
shall comply with the laws, administrative regulations, and other relevant state provisions on
the supervision and administration of import and export.
Regulations Related to Overseas Investment
The Measures for the Administration of Overseas Investment ()
was promulgated by the MOFCOM on September 6, 2014 and came into effect on October 6,
2014. As defined by the Measures for the Administration of Overseas Investment, “overseas
investment” refers to the acts of an enterprise legally incorporated in the PRC to own a
non-financial enterprise or obtain the ownership, control, or right of business management in
an existing non-financial enterprise outside of China by formation, mergers and acquisitions,
or other means. Overseas investment involving any sensitive country or region or any sensitive
industry shall be subject to the approval of competent authorities. Overseas investment under
other circumstances shall be subject to filing administration. Local enterprises shall be filed
with the provincial commercial administration authorities where they are located. The qualified
enterprises will be put into record and granted with Overseas Investment Certificate for
Enterprises by the relevant provincial commercial administration authorities.
The Administrative Measures for Overseas Investments by Enterprises ( Άุྤ̮ҳ༟
) (the “ Measures ”) were promulgated by the NDRC on December 26, 2017 and
came into effect on March 1, 2018. As defined by the Measures, “overseas investment” refers
to the acts of a Chinese domestic enterprise to directly or through its controlled overseas
enterprise obtain overseas ownership, control, business management rights, and other related
rights and interests by means of investing in assets, interests or providing financing or
guarantees. Overseas investment is subject to certain procedures, including approval and filing
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of overseas investment projects, reporting of relevant materials, and cooperation in supervision
and inspection. In January 31, 2018, the NDRC promulgated the Catalog of Sensitive Industries
for Overseas Investments (2018 Edition) ( ྤ̮ҳ༟ઽชБุͦ፽(2018وwhich came
into effect on March 1, 2018, setting out the existing sensitive industries in detail.
Laws and Regulations Related to Import and Export Control
Foreign Trade
Pursuant to the Foreign Trade Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) (the “ Foreign Trade Law ”), which was promulgated by the SCNPC on May
12, 1994, and last amended on December 30, 2022, commencing on December 30, 2022, it is
no longer necessary to go through the formalities of filing and registration as foreign trade
operators. The PRC government allows the free import and export of goods and technology,
except as otherwise provided by laws and administrative regulations. Before December 30,
2022, according to the Foreign Trade Law before revision, any foreign trade operator that is
engaged in the import and export of goods or technology shall apply to the foreign trade
department of the State Council or its entrusted institution for filing and registration, unless it
is otherwise provided for by any law, administrative regulation or the requirement of the
foreign trade department of the State Council. Where any foreign trade operator fails to go
through the filing and registration procedures as required, the Customs shall not go through the
formalities of declaration, inspection and release of the imported or exported goods.
According to the Regulations of the PRC on Administration of Import and Export of
Goods (ආ̈ɹ၍ଣૢԷ) (the “ Regulations on Administration of
Import and Export of Goods ”) (promulgated by the State Council on December 10, 2001 and
became effective on January 1, 2002 and amended on 10 March, 2024 and came into effect on
May 1, 2024), any trade activity involving the import of goods into, or export of goods out of,
the customs territory of the People’s Republic of China must comply with the Regulations on
Administration of Import and Export of Goods. The PRC implements a unified system for the
administration of goods import and export, and permits the free import and export of goods,
while safeguarding fair and orderly trade in accordance with the law. No entity or individual
may impose or maintain prohibitive or restrictive measures against import and export of goods,
except for goods of which the import or export is explicitly prohibited or restricted by laws or
administrative regulations.
Customs Laws
Pursuant to the Customs Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ऎᗫ
), promulgated by the SCNPC on January 22, 1987 and last amended on April 29, 2021,
which took effect on the same date, the Customs of the PRC is the state’s entry and exit
customs supervision and administration authority. In accordance with relevant laws and
administrative regulations, the Customs is responsible for supervision of inbound and outbound
means of transport, goods, luggage, postal items and other articles, collection of duties and
other taxes and fees, investigation of smuggling, preparation of customs statistics and handling
other customs operations.
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According to the Provisions on the Administration of Recordation of Customs Declaration
Entities of the PRC (), which was
promulgated by the General Administration of Customs of the PRC on November 19, 2021 and
effective as of January 1, 2022, customs declaration entities refer to the consignees,
consignors, and customs declaration enterprises of imported and exported goods that are filed
with the Customs. Consignees, consignors of imported or exported goods and customs
declaration enterprises that apply for filing shall obtain the qualification of market players.
Laws and Regulations Related to Product Quality and Tort Liability
Product Quality
According to the Product Quality Law of the PRC (),
which was promulgated by the SCNPC on February 22, 1993 and revised and taking effect
respectively on July 8, 2000, August 27, 2009, and December 29, 2018, the department for
supervision over product quality under the State Council shall be responsible for supervision
over product quality throughout the country. Manufacturers and sellers shall establish their
internal systems for product quality control, and strictly implement the quality control
standards in each job. The relevant departments under the State Council shall be responsible
for supervision over product quality within the scope of their respective functions and
responsibilities. Local departments for market supervision at or above the county level shall be
in charge of supervision over product quality within their respective administrative regions.
The relevant departments in the local people’s governments at or above the county level shall
be responsible for supervision over product quality within the scope of their respective
functions and responsibilities.
Tort Liability
According to the Civil Code of the PRC (Պ) (the “ Civil Code ”)
promulgated by the National People’s Congress on May 28, 2020, which came into effect on
January 1, 2021, if a defect is found in a product after it has been put into circulation, the
manufacturer and the seller shall take remedial measures in a timely manner including, inter
alia, withdrawal from sale, alerts and recalls. Where damage is caused due to product defects
or the manufacturer or seller fails to take timely remedial measures, the infringed party may
claim compensation from the manufacturer or the seller. If the product is defective due to the
fault of the seller, the manufacturer has the right to claim compensation from the seller after
making compensation. Where a manufacturer or seller, with knowledge of a product’s defect,
continues to manufacture or distribute the said product, or fails to take timely remedial
measures, thereby causing death or severe health damage to others, the infringed party shall
have the right to claim compensatory damages and may additionally seek corresponding
punitive damages.
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Laws and Regulations Related to Cybersecurity, Personal Information Protection and
Data Security
Regulations Related to Cybersecurity
The PRC government has enacted laws and regulations related to internet information
security and protection of personal information from any misuse or unauthorized disclosure.
From the perspective of national security, the Decision on Maintaining Internet Security ( ᗫ
) promulgated by the SCNPC on December 28, 2000, and revised
on August 27, 2009, provides that the following activities, among others will be subject to
criminal liabilities in accordance with the laws if constituting a crime : (i) gaining improper
entry into any of the computer information networks relating to state affairs, national defensive
affairs, or cutting-edge science and technology; (ii) spreading rumor, slander or publishing or
disseminating other harmful information via the internet for the purpose of inciting subversion
of the state political power or overthrowing the socialist system, or inciting secession of the
country or undermining the unity of the country; (iii) stealing or divulging state secrets,
intelligence or military secrets via the internet; (iv) making false advertising of goods and
services via the internet; or (v) infringing the intellectual property rights of others via the
internet. The Ministry of Public Security of the PRC (the “ MPS”) promulgated the
Administration Measures on the Security Protection of Computer Information Network with
International Connections () on December 16,
1997, as amended by the State Council on January 8, 2011, which prohibits using the internet
in ways which, among others, result in a leakage of state secrets or a spread of socially
destabilizing content. If internet information service providers violate these measures, the
competent authorities can revoke their operating licenses and shut down their websites.
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC ( ʕ
) (the “ Cybersecurity Law ”), which became effective on June 1,
2017, pursuant to which, network operators, including internet information service providers,
shall take technical measures and other necessary measures in accordance with applicable laws,
regulations and compulsory national requirements to safeguard the safe and stable operation of
the networks, effectively respond to cybersecurity incidents, prevent illegal and criminal
activities, and maintain the integrity, confidentiality and usability of network data. The
Cybersecurity Law emphasizes that any individual and organization must not endanger
network security or use networks to engage in unlawful activities such as those endangering
national security, economic order and the social order or infringing the reputation, privacy,
intellectual property rights and other lawful rights and interests of others. The Cybersecurity
Law has also specified the liabilities related to personal information protection. Any violation
of the provisions and requirements under the Cybersecurity Law may subject an internet
service provider to warnings, confiscation of illegal gains, fines, revocation of business
licenses, closedown of websites or even criminal liabilities.
On December 28, 2021, the Cyberspace Administration of China (the “ CAC”) and 13
other ministries published the Revised Measures for Cybersecurity Review (፬
) (the “ Revised Measures for Cybersecurity Review ”), which became effective on
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February 15, 2022, and superseded the Measures for Cybersecurity Review promulgated on
April 13, 2020. The Revised Measures for Cybersecurity Review, which stipulates that
operators of critical information infrastructure purchasing network products and services, and
network platform operators carrying out data processing activities that affect or may affect
national security, shall conduct cybersecurity review. In addition, pursuant to Article 7 of the
Revised Measures for Cybersecurity Review, any network platform operator with data on more
than 1 million users must go through a cybersecurity review by the cybersecurity review office
before listing in a foreign country.
On September 24, 2024, the State Council promulgated the Cyber Data Security
Administration Regulations ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Cyber Data Regulations ”),
which will come into effect on January 1, 2025. The Cyber Data Regulations further clarifies
the cybersecurity responsibilities of cyber data processors, requiring that data processing
activities be conducted on the basis of the classified cybersecurity protection system. At the
same time, the Cyber Data Regulations stipulates that data processing activities by cyber data
processors that affect or may affect national security shall be subject to a national security
review. While the Cyber Data Regulations does not further specify the detailed contents of
cybersecurity reviews, it clearly provides that data processing activities which have or may
have an impact on national security must undergo national security review in accordance with
relevant laws and regulations — namely, a cybersecurity review should be conducted pursuant
to the Revised Cybersecurity Review Measures (). As for the impacts on
national security, Article 10 of the Revised Cybersecurity Review Measures provides that these
include: (1) the risk of critical information infrastructure being illegally controlled, interfered
with, or damaged as a result of the use of the products or services; (2) the harm caused by the
disruption of the supply of the product or service to the business continuity of critical
information infrastructure; (3) the security, openness, transparency and diversity of sources of
the product or service, the reliability of supply channels, and risks of supply disruption due to
political, diplomatic, trade and other factors; (4) compliance with PRC laws, administrative
regulations and departmental rules by the provider of the product or service; (5) the risk of core
data, important data or a large amount of personal information being stolen, leaked, damaged,
illegally used, or illegally transmitted overseas; (6) the risk that critical information
infrastructure, core data, important data or a large amount of personal information being
affected, controlled, and maliciously used by foreign governments for a listing, as well as
network information security risks; and (7) other factors that may endanger the security of
critical information infrastructure, cybersecurity and data security.
According to the requirements under the Revised Cybersecurity Review Measures and the
Cyber Data Regulations, the Company is not required to proactively file for a cybersecurity
review in connection with this listing in Hong Kong. The relevant basis is: (i) Article 7 of the
Revised Cybersecurity Review Measures provides that a network platform operator holding
personal information of more than one million users must file for a cybersecurity review with
the Cybersecurity Review Office before listing abroad. The Company’s listing in Hong Kong
does not fall within the scope of a “foreign listing” and therefore does not require a proactive
filing for a cybersecurity review.
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Regulations Related to Personal Information Protection and Data Security
On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC ( ʕശ
) (the “ Data Security Law ”), which came into effect on September
1, 2021. The Data Security Law provides for the establishment of a data classification and
hierarchical protection system. A classified and graded data protection has been implemented
in accordance with the extent to which data plays an important role in economic and social
development, as well as the degree of harm to national security, public interests, or the
legitimate rights and interests of individuals and organizations once data is tampered with,
destroyed, leaked, or illegally obtained or used. The protection of “important data” determined
by competent government departments shall be strengthened, and the state shall implement
export control over data of controlled items that are relevant to safeguarding national security
and interests and fulfilling international obligations. In addition, the Data Security Law
stipulates that the processor of important data shall specify the person in charge of data security
and the management institution and specify the responsibility for data security protection, and
the relevant processor shall regularly carry out risk assessment of its data processing activities
and report to the relevant competent authorities. Submit an assessment report. Violation of the
Data Security Law may result in relevant units or individuals being subject to corrections,
warnings, fines, business suspension, revocation of relevant business permits or business
licenses, or even criminal prosecution.
The Civil Code stipulates that the personal information of natural persons is protected by
law. Any organization or individual seeking to obtain another person’s personal information
must do so lawfully and ensure the security of such information. It is prohibited to illegally
collect, use, process or transmit personal information, or to unlawfully trade, provide or
disclose it. Personal information of natural persons refers to any information, recorded
electronically or otherwise, that can identify a specific natural person either alone or in
combination with other data. This includes, among others, the individual’s name, date of birth,
identification number and biometric information. The processing of personal information must
follow the principles of lawfulness, legitimacy and necessity. It must not be excessive and must
meet the following conditions: (i) consent has been obtained from the individual or their
guardian, unless otherwise provided by laws or administrative regulations; (ii) the rules
governing such processing have been made public; (iii) the purpose, method and scope of the
processing have been clearly stated; and (iv) the processing does not contravene laws,
administrative regulations or the terms agreed upon by both parties.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law
of the PRC () (the “ Personal Information Protection
Law”), which came into effect on November 1, 2021. The Personal Information Protection Law
stipulates that personal information processors must have a legitimate basis when processing
personal information, including: (i) the individual’s consent has been obtained; (ii) it is
necessary for the conclusion or performance of a contract to which the individual is a party,
or necessary for the implementation of human resources management in accordance with
lawfully formulated labor rules and regulations and legally concluded collective contracts; (iii)
the processing is necessary to fulfill statutory duties and statutory obligations; (iv) the
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processing is necessary to respond to public health emergencies or protect a natural person’s
life, health and property safety under emergency circumstances; (v) the personal information
that has been made public is processed within a reasonable scope in accordance with this law;
(vi) processing personal information that the individual has voluntarily made public or that has
otherwise been lawfully disclosed, within a reasonable scope, in accordance with the
provisions of the Personal Information Protection Law; or (vii) other circumstances as
provided by laws and administrative regulations. No organization or individual may illegally
collect, use, process or transmit others’ personal information, nor illegally trade, provide or
disclose others’ personal information. Personal information processing activities that endanger
national security or public interests are strictly prohibited. Any personal information processor
that violates the provisions and requirements of the Personal Information Protection Law may
be subject to penalties including orders to rectify, warnings, fines, suspension of relevant
business or revocation of business licenses, and in serious cases, may bear criminal liability.
The Cyber Data Regulations reiterate and further clarify the requirements for the
protection of personal information and important data. They require data processors to handle
personal information lawfully and in compliance with regulations, conduct regular risk
assessments on the processing of important data and submit assessment reports to the relevant
departments, thereby ensuring the security of personal information and important data. The
Cyber Data Regulations also set forth corresponding requirements for cross-border transfers of
personal information and important data, as well as data processing activities conducted by
network platform service providers.
On July 7, 2022, the CAC promulgated the Measures for Security Assessment for
Cross-border Data Transfer (), which became effective on
September 1, 2022. These measures specify the provisions and procedures for conducting
cross-border data security assessments for the export of important data and personal
information that are collected and generated within the territory of China. On 22 February
2023, the CAC promulgated the Measures on Standard Contracts for the Cross-border Transfer
of Personal Information (), which came into effect on 1 June
2023. These measures specify that personal information processors may conduct cross-border
transfers of personal information through the signing of standard contracts, provided certain
conditions are met, and require that the signed standard contracts be filed with the
provincial-level CAC where the data processor is located. On 22 March 2024, the CAC
promulgated the Regulations on Promoting and Regulating Cross-border Data Flows
(“Promotion Regulations ”), which further adjusted the applicable scope, exemption
conditions and procedures for data cross-broader security assessments and the standard
contract filing mechanism of personal information. At this point, China’s regulatory regime for
cross-border data transfers has largely taken shape. According to the aforementioned measures
and regulations, data processors providing data to overseas must apply for a security
assessment of cross-border data transfers with the national cyberspace department via the
provincial-level CAC where they are located, if any of the following conditions are met: (1)
CIIOs provide personal information or important data to overseas; (2) data processors other
than CIIOs provide important data to overseas, or have cumulatively provided personal
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information of over one million individuals (excluding sensitive personal information) or
sensitive personal information of over 10,000 individuals since January 1 of that year, unless
they fall within one of the exemption scenarios set out in Articles 3 to 6 of the Promotion
Regulations.
Laws and Regulations Related to Intellectual Property
Trademark
According to the Trademark Law of the PRC () (promulgated
by the SCNPC on August 23, 1982 and amended respectively on February 22, 1993, October
27, 2001, August 30, 2013 and April 23, 2019, and came into effect on November 1, 2019) and
the Implementation Regulations of the Trademark Law of the PRC (ج
ૢԷ) (promulgated by the State Council on August 3, 2002, amended on April 29, 2014
and came into effect on May 1, 2014), the Trademark Office of the administrative authority for
industry and commerce under the State Council shall be responsible for the registration and
administration of trademarks throughout the country. A registered trademark is valid for 10
years from the date of approval of registration. If a registered trademark needs extended usage
upon the expiration of the validity period, the trademark registrant shall go through the renewal
formalities as required within 12 months before the expiration of the period; if it is unable to
complete the renewal within this period, a grace period of six months may be granted. Each
renewal of registration shall be valid for ten years. Where an applicant for trademark
registration files an application for trademark registration in China within six months of filing
the first application for registering the same trademark for the same goods in a foreign country,
the applicant may have priority in accordance with any agreement concluded by and between
the PRC and the foreign country concerned, or with the international treaty to which both
countries are parties, or on the basis of the principle of reciprocity. In the event that an
applicant uses a trademark for the first time on goods displayed at an international exhibition
organized or reorganized by the Chinese Government, the applicant may be entitled to priority
provided that it files an application to register the trademark within six months from the date
of the exhibition. The trademark registrant may, by concluding a trademark licensing contract,
authorize other persons to use the registered trademark. The licensor shall supervise the quality
of the goods on which the licensee uses the licensor’s registered trademark, and the licensee
shall guarantee the quality of the goods on which the registered trademark is used. The party
authorized to use others’ registered trademark shall indicate the name of the licensee and the
place of origin on the goods that bear the registered trademark. When granting others to use
the registered trademarks, the licensor shall file the licence of the trademarks with the
Trademark Office for record, which shall announce the same. Without putting the licensing of
the trademark on record, the trademark shall not be effective against bona fide third party.
Patent
According to the Patent Law of the PRC () (promulgated by
the SCNPC on March 12, 1984 and amended respectively on September 4, 1992, August 25,
2000, December 27, 2008 and October 17, 2020 and came into effect on June 1, 2021) and the
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Implementation Rules of the Patent Law of the PRC ()
(promulgated by the State Council on June 15, 2001, amended respectively on December 28,
2002, January 9, 2010, and December 11, 2023 and came into effect on January 20, 2024), the
patent administration department under the State Council is responsible for the patent work
throughout the country. It receives and examines patent applications and grants patent rights
in accordance with law. The Patent Law of the PRC and its Implementation Rules stipulate
three types of patents, namely “invention”, “utility model” and “design.” Any invention or
utility model for which patent right may be granted must possess novelty, inventiveness and
practical applicability. Any design for which patent right may be granted shall not be a prior
design, nor has any entity or individual filed before the date of filing with the patent
administration department under the State Council an application relating to the identical
design disclosed in patent documents announced after the date of filing. The duration of patent
right for inventions shall be twenty years, the duration of patent right for utility models shall
be ten years, the duration of patent right for design shall be fifteen years, from the date of
filing.
Copyright and Software Registration
According to the Copyright Law of the PRC ()
(promulgated by the SCNPC on September 7, 1990, as amended respectively on October 27,
2001, February 26, 2010 and November 11, 2020, and came into effect on June 1, 2021),
Chinese citizens, legal entities or unincorporated organizations shall, in accordance with this
law, enjoy the copyright in their works, whether published or not. The term “works” includes
written works; oral works; musical, dramatic, Chinese folk art, dance and acrobatic artistic
works; fine art and architectural works; photographic works; audio-visual works; graphic
works such as engineering designs, product designs, maps and schematic diagrams, and model
works; computer software; and other intellectual outputs that characterize works.
Pursuant to the Implementation Regulations of the Copyright Law of the PRC ( ʕശɛ
ૢԷ), as promulgated by the State Council on August 2, 2002,
implemented on September 15, 2002, and most recently amended on January 30, 2013 and
implemented on March 1, 2013, the copyright holder shall enjoy various personal and property
rights, including the right of publication, authorship, reproduction and information network
dissemination.
The Computer Software Protection Regulations (ᚐૢԷ), which was
promulgated by the State Council on June 4, 1991 and respectively amended in 2001, 2011 and
2013, was formulated for the purposes of protecting the rights and interests of copyright
owners of computer software, regulating the relationship of interests generated in the
development, dissemination and use of computer software, encouraging the development and
application of computer software, and promoting the development of software industry and the
informatization of national economy. According to the Computer Software Protection
Regulations, Chinese citizens, legal entities or other organizations are entitled to the copyright
in the software which they have developed, whether published or not. A software copyright
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owner may register with the software registration institution recognized by the copyright
administration department of the State Council. A registration certificate issued by the software
registration institution is a preliminary proof of the registered items.
The Measures for the Registration of Computer Software Copyrights (ၑዚழ΁ഹЪ
) promulgated by the National Copyright Administration on February 20, 2002
was incorporated in and amended by the Computer Software Protection Regulations, which
was amended by the State Council on January 30, 2013 and became effective on March 1, 2013.
The National Copyright Administration is mainly responsible for the registration and
management of national software copyright, and the China Copyright Protection Center is
recognized as the software registration agency.
Domain Name
Pursuant to the Measures for the Administration of Internet Domain Names promulgated
() promulgated by the MIIT on 24 August 2017 and became effective
on 1 November 2017, the MIIT supervises and administers domain name services across the
country. Domain name registration shall be handled by domain name service agencies
established in accordance with relevant regulations. After successful registration, the applicant
becomes the domain name holder.
Trade Secrets
According to the Anti-Unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅
), promulgated by the SCNPC in September 1993, as amended on November 4, 2017
and April 23, 2019 respectively, the term “trade secrets” refers to business information
including technical and business information that is unknown to the public, has business value,
and is maintained as a secret by its legal owners or holders.
Under the Anti-Unfair Competition Law of the PRC, business persons are prohibited from
infringing others’ trade secrets by: (i) obtaining the trade secrets from the legal owners or
holders by any unfair methods such as theft, bribery, fraud, coercion, electronic intrusion, or
any other illicit means; (ii) disclosing, using or permitting others to use the trade secrets
obtained illegally under item above; (iii) disclosing, using or permitting others to use the trade
secrets, in violation of any contractual agreements or any requirements of the legal owners or
holders to keep such trade secrets in confidence; or (iv) instigate, induce or assist others to
violate confidentiality obligation or to violate a rights holder’s requirements on keeping
confidentiality of commercial secrets, so as to disclose, use or allow others to use the
commercial secrets of the rights holder. If a third party knows or should have known of the
above-mentioned illegal conduct but nevertheless obtains, uses or discloses trade secrets of
others, the third party may be deemed to have committed a misappropriation of the others’ trade
secrets. The parties whose trade secrets are being misappropriated may petition for
administrative corrections, and regulatory authorities may stop any illegal activities and
impose a fine on the infringing parties.
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Laws and Regulations Related to Property Leasing
Pursuant to the Law of the People’s Republic of China on the Administration of the Urban
Real Estate (), promulgated by the SCNPC on July 5,
1994 and last amended on August 26, 2019 and effective on January 1, 2020, in the lease of
a house, the leaser and the lessee shall conclude a written lease contract defining such matters
as the term, purpose and price of the lease, liability for repair, as well as other rights and
obligations of both parties, and shall register the lease contract with the department of housing
administration for the record. Pursuant to the Administrative Measures on Commodity Housing
Leasing (), issued by Ministry of Housing and Urban-Rural
Development of the PRC (ண௅) on December 1, 2010 and
became effective on February 1, 2011, the leaser and the lessee that failed to register shall be
ordered to rectify within a stipulated period limit by the construction (real estate) department
and may be imposed a fine where rectification is not made within the stipulated period. In
accordance with the Civil Code, the lessee may, with consent of the lessor, sub-let the leased
item to a third party. The leasing contract between the lessee and the lessor shall continue to
be valid if the lessee sub-lets the leased item. In the event that the lessee sub-lets the leased
item without consent of the lessor, the lessor may terminate the lease contract. In addition, any
change of ownership to the lease item does not affect the validity of the lease contract.
Laws and Regulations Related to Environmental Protection
The Environmental Protection Law of the PRC (), last
amended on April 24, 2014 and became effective on January 1, 2015, outlines the authorities
and duties of various environmental protection regulatory agencies. The Ministry of
Environmental Protection is authorized to issue national standards for environmental quality
and emissions, and to monitor the environmental protection scheme of the PRC. Meanwhile,
local environment protection authorities may formulate local standards which are more
rigorous than the national standards, in which case, the concerned enterprises must comply
with both the national standards and the local standards.
Pursuant to the Administrative Regulations on the Environmental Protection of
Construction Project (ᚐ၍ଣૢԷ) (the “ Construction Environmental
Protection Rules ”), promulgated by the State Council on November 29, 1998 and amended on
July 16, 2017, and other relevant environmental laws and regulations, construction entities
shall prepare or fill in assessment report, assessment form, or registration form on the
environmental impact of projects to relevant environmental protection administrative authority
before the commencement of any construction project for approval or recording. Construction
entities may entrust a technical institution to conduct an environmental impact assessment of
its construction projects and prepare the assessment reports and assessment forms on the
environmental impact of construction projects. If the construction entities have the technical
capability of environmental impact assessment, it may carry out the above activities by itself.
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Pursuant to the Environmental Impact Assessment Law of the People’s Republic of China
() promulgated by the SCNPC on October 28, 2002 and
amended on July 2, 2016 and December 29, 2018 respectively, for any construction projects
have an impact on the environment, the construction entity is required to prepare either a
report, or a form, or a registration form on such environmental impact depending on the
seriousness of the impact that may be exerted on the environment.
The Interim Measures for Environmental Protection Acceptance upon Completion of
Construction Projects () was promulgated and
implemented by the former Ministry of Environmental Protection (now the Ministry of
Ecology and Environment) on November 20, 2017. The Measures stipulates the procedures and
standards for the construction entity to make independent environmental protection acceptance
upon the completion of construction projects.
Laws and Regulations Related to Work Safety
Under relevant construction safety laws and regulations, including the Work Safety Law
of the PRC () (the “ Work Safety Law ”) which was
promulgated by the SCNPC on June 29, 2002 and latest amended on June 10, 2021 and became
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 the employees with
protective equipment that meets the national or industrial standards.
Pursuant to the Work Safety Law, and the Measures for the Supervision and
Administration of “Three Simultaneities” for Safety Facilities of Construction Projects (ܔ
) promulgated by the State Administration of Work
Safety (now has been adjusted to the Ministry of Emergency Management) on April 2, 2015
and implemented on May 1, 2015, production and operation entities are responsible for the
construction of the safety facilities of construction projects. The safety facilities of a
construction project must be designed, constructed and put into production and use
simultaneously with the main part of the project. Investment in safety facilities shall be brought
into the budgetary estimate of the whole construction project.
Laws and Regulations Related to Fire Prevention
Fire Protection Design Review and Final Acceptance
According to the Interim Administration of Fire Protection Design Review and
Acceptance of Construction Projects ()
promulgated by the Ministry of Housing and Urban Rural Development on April 1, 2020, latest
amended on August 21, 2023 and effective on October 30, 2023, the fire protection design
review system applies to special construction projects including theaters, reading rooms in
public libraries, commercial indoor gyms and recreation centers, outpatient buildings in
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hospitals, and teaching buildings, libraries and canteens in universities, production and
processing workshops in labor-intensive enterprises, temples and churches with a total gross
floor area of more than 2,500 square meters. For a completed special construction project that
should go through the completion acceptance procedures, the construction entity shall apply to
the competent department of fire protection design review and acceptance for fire protection
completion acceptance. If the project fails to go through the procedures or fails to pass the fire
protection design review, it shall not be put into use. For the classified management of other
construction projects, a filing and random inspection system should be implemented. Any other
construction project that fails to pass the random inspection conducted in accordance with the
law shall be stopped from use.
Pursuant to the Fire Protection Law of the PRC ()
promulgated by the SCNPC on April 29, 1998 and last amended on April 29, 2021, for a
construction project subject to fire protection acceptance according to law, the construction
project shall not put it into use without fire protection acceptance or failing to pass the fire
protection acceptance. Any other construction project which fails to pass the spot check in
accordance with the law shall be stopped from use. The competent department of housing and
urban-rural development and the fire rescue agency may order suspension of construction or
use or suspension of operation or business and impose a fine ranging from RMB30,000 to
RMB300,000 in the following situations: where such construction work failed to undergo
legally required fire protection design examination or failed to pass such examination, and the
construction has been commenced illegally; where such construction work failed to undergo
legally required fire protection acceptance inspection or failed to pass fire protection
acceptance inspection, and the place was put into use illegally; and where any other
construction project fails to pass the spot check in accordance with the law, the project was not
stopped from use.
Laws and Regulations Related to Foreign Exchange
Pursuant to the Foreign Currency Administration Rules of the PRC ( ʕശɛ͏΍ձ਷̮
ි၍ଣૢԷ), as most recently amended in 2008, and various regulations issued by SAFE and
other relevant PRC government authorities, RMB is freely convertible to the extent of current
account items, such as trade related receipts and payments, interest and dividends. Capital
account items, such as direct equity investments, loans and repatriation of investment, unless
expressly exempted by laws and regulations, still require prior approval from SAFE or its
provincial branch for conversion of RMB into a foreign currency, and remittance of the foreign
currency outside of the PRC.
Pursuant to the provisions of the Notice of the State Administration of Foreign Exchange
on Issues Concerning the Foreign Exchange Administration of Overseas Listing (̮ි
) (Hui Fa [2014] No. 54) issued on December
26, 2014, where a joint stock limited company incorporated in the PRC (the “ Domestic
Company ”) issues shares overseas and is publicly listed and outstanding on overseas
exchanges upon the approval by the CSRC, it shall, within 15 business days after the date of
the end of its overseas listing issuance, register the overseas listing with the Administration of
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Foreign Exchange at the place of its establishment, and present its certificate of overseas listing
to open a “special account for overseas listing of Domestic Company” at a local bank to handle
the exchange, remittance and transfer of funds for the business concerned. The proceeds from
an overseas listing of a Domestic Company may be remitted to the domestic account or
deposited in an overseas account, but the use of the proceeds shall be consistent with the
content of the prospectus or offering documents for corporate bond, shareholders’ circulars,
resolutions of the board of directors or shareholders’ meetings and other publicly disclosed
documents.
Meantime, where a domestic shareholder of a Domestic Company listed overseas intends
to increase or decrease their shares of such overseas listed companies according to relevant
regulations upon the overseas listing of the Domestic Company, the domestic shareholder shall
register with the SAFE office in the place of domicile of such domestic shareholder for
overseas holdings within 20 working days before such increase or decrease of shares, and
present its overseas shareholding registration certificate to open a “special account of domestic
shareholders for overseas holding” at a local bank to handle the exchange, remittance and
transfer of funds for the business concerned. A domestic shareholder’s income raised from
reduction or transfer of overseas shares of a Domestic Company or raised from the shares
delisted from overseas stock exchange on the capital account may be deposited at the
shareholder’s overseas account or remitted to the domestic account for offshore shareholding.
Where the domestic shareholder chooses to remit the income to its domestic account, the
domestic shareholders may, by presenting the overseas shareholding registration certificate,
complete the transfer or settlement procedures with the bank.
Laws and Regulations Related to Labor Security, Social Insurance and Housing Provident
Fund
In accordance with the Labor Law of the PRC () promulgated
by the SCNPC on July 5, 1994, latest amended and became effective on December 29, 2018,
and Labor Contract Law of the PRC () promulgated by the
SCNPC on June 29, 2007, amended on December 28, 2012 and became effective on July 1,
2013, and the Implementation Regulation for the Labor Contract Law of the PRC ( ʕശɛ
ૢԷ) promulgated by the State Council and became effective on
September 18, 2008, the employer shall sign a labor contract in writing with the workers. The
wage paid to a worker by an employer shall not be lower than the local minimum wage
standard. The employer is required to establish occupational safety and health mechanism, and
strictly abide by national standards, and provide employees with relevant education.
Employees must work in a safe and sanitary environment. The Interpretation (II) of the
Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labor
Dispute Cases (༆ᙑ(ɚ)) came into
force as of September 1, 2025. It further clarifies the considerations to confirm the existence
of a labor relationship, renewal of the labor contract, the non-competition clause, the invalidity
of the promise that there is no need to pay social insurance premiums, among other issues.
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As required under the Social Insurance Law of the PRC (ᎈ
), the Regulation of Insurance for Work-Related Injury (ᎈૢԷ), the
Regulations on Unemployment Insurance (ᎈૢԷ), the Interim Regulation on the
Collection and Payment of Social Insurance Premiums (ᎈ൬ᅄᖮᅲБૢԷ) and
other laws, regulation and rules, the employer is required to pay social insurance premiums for
employees, including basic pension insurance, unemployment insurance, basic medical
insurance, work-related injury insurance, maternity insurance. Relevant premiums shall be paid
to local administrative authorities. Where the employer fails to pay social insurance premiums
in full and on time, the social insurance premium collection agency shall order it to pay or
made up within a time limit, and charge late payment fees at the daily rate of 0.05% from the
date of the default of payment, and if the employer fails to make the overdue contributions
within such time limit, a fine equal to one to three times the outstanding amount may be
imposed by relevant administrative authorities. According to the Regulations on Management
of Housing Provident Fund (၍ଣૢԷ) promulgated by the State Council on
April 3, 1999 and amended and implemented on March 24, 2002 and March 24, 2019,
respectively, the housing provident fund paid and deposited both by staff and workers
themselves and by the employer for their staff and workers shall be owned by the staff and
workers. An employer shall go to the housing provident fund management center to undertake
registration of payment and deposit of the housing provident fund and, upon verification by the
housing provident fund management center, open special housing provident fund accounts with
a commissioned bank. Where an employer fails to undertake payment and deposit registration
of housing provident fund or fails to open housing provident fund accounts for its staff and
workers, the housing provident fund management center shall order it to do so within a
prescribed time limit; where failing to do so at the expiration of the time limit, a fine of not
less than RMB10,000 and not more than RMB50,000 shall be imposed. Where an employer is
overdue in the payment and deposit of, or underpays, the housing provident fund, the housing
provident fund management center shall order it to make the payment and deposit within a
prescribed time limit; where the payment and deposit has not been made after the expiration
of the time limit, an application may be made to a people’s court for compulsory enforcement.
Laws and Regulations Related to Tax
Enterprise Income Tax
According to the Enterprise Income Tax Law of the PRC (the “ Enterprise Income Tax
Law”) came into effect on January 1, 2008, last amended and implemented on December 29,
2018, a uniform income tax rate of 25% applies to all resident enterprises and non-resident
enterprises that have set up institutions or sites in the PRC to the extent that such incomes are
derived from their set-up institutions or sites in the PRC, or such income is obtained outside
the PRC but have an actual connection with the set-up institutions or sites. An enterprise may
benefit from a preferential tax rate of 15% if it qualifies as a “High and New Technology
Enterprise” strongly supported by the state. Pursuant to the Administrative Measures on the
Recognition of High and New Technology Enterprises () (the
“Recognition Measures ”), as amended in January 2016, the provincial counterparts of the
Ministry of Science and Technology of the PRC (ኪҦஔ௅), the Ministry of
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Finance and the State Administration of Taxation make joint determination on whether an
enterprise is qualified as a “High and New Technology Enterprise” under the EIT Law. In
making such determination, these government agencies consider, among other factors,
ownership of core technology, whether the key technology supporting the core products or
services falls within the scope of the High and New Technology Strongly Supported by the
State, the ratios of research and development personnel to total personnel, the ratio of research
and development expenditures to sales revenues in the period, the ratio of revenues attributed
to high and new technology products or services to total revenues in the period. A “High and
New Technology Enterprise” certificate is effective for a period of three years.
V alue-added Tax
Pursuant to the Provisional Regulations on V alue-added Tax of the PRC ( ʕശɛ͏΍
೼ᅲБૢԷ) last amended and became effective on November 19, 2017, and the
Detailed Rules for the Implementation of the Interim Regulation of the PRC on V alue Added
Tax () promulgated on December 25, 1993,
amended on October 28, 2011 and became effective on November 1, 2011, all entities or
individuals in the PRC engaging in the sale of goods, provision of processing services, repairs
and replacement services and the importation of goods are required to pay value-added tax (the
“VAT”). The payable tax amount shall be calculated by deducting input tax for the current
period from output tax for the current period. The rate of V A T is usually 17%, and in certain
circumstances is 11% or 6%, subject to the situation involved.
In accordance with Notice of the Ministry of Finance and the State Administration of
Taxation on the Adjustment to V A T Rates ()
came into effect on May 1, 2018, for taxpayers engaging in taxable sales or import of goods,
the previously applicable V A T rates of 17% and 11% are adjusted to 16% and 10%,
respectively.
According to Announcement on Policies for Deepening the V A T Reform (௅e೼
ʮѓ) (Announcement No. 39 of 2019 of
the Ministry of Finance, the State Taxation Administration and the General Administration of
Customs, became effective on April 1, 2019), for general V A T payers engaging in taxable sales
or import of goods, the previously applicable V A T rates of 16% and 10% are adjusted to 13%
and 9%, respectively.
Taxation on Dividends
Pursuant to the Individual Income Tax Law of the PRC (੻೼
) lastly amended by the SCPNC on August 31, 2018 and came to effective on January 1,
2019 and the Implementation Rules of the Individual Income Tax Law of the PRC ( ʕശɛ
ૢԷ) lastly amended by the State Council on December 18,
2018 and came to effective on January 1, 2019 (the “ Individual Income Tax Law ”), dividends
distributed by PRC enterprises are subject to individual income tax levied at a flat rate of 20%.
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For a foreign individual who is not a resident of the PRC, the receipt of dividends from an
enterprise in the PRC is normally subject to individual income tax of 20% unless specifically
exempted by the tax authority of the State Council or reduced by relevant tax treaty.
However, pursuant to the Circular on Certain Policy Questions Concerning Individual
Income Tax () issued by the MOF and SA T on May
13, 1994 and effective from the same date, the income gained by foreign individuals from
dividends and bonuses of foreign-invested enterprises are exempted from individual income
tax for the time being.
Pursuant to the Individual Income Tax Law, the enterprise income tax rate is 25%. A
non-resident enterprise is generally subject to a 10% enterprise income tax on PRC-sourced
income (including dividends and bonus received from a PRC resident enterprise that issues
shares in Hong Kong), if it does not have an establishment or premise in the PRC or has an
establishment or premise but its PRC-sourced income has no real connection with such
establishment or premise. Pursuant to the applicable tax regulations, the aforementioned
income tax payable by non-resident enterprises shall be levied by way of withholding at source,
with the payer acting as the withholding agent and deducting the tax from the payments due
to the non-resident enterprise.
The Circular of the SA T on Issues Relating to the Withholding of Enterprise Income Tax
by PRC Resident Enterprises on Dividends Paid to Overseas Non-PRC Resident Enterprise
Shareholders of H Shares (͏ΆุΣྤ̮H೯
), which was issued by the SA T on November 6,
2008, further clarified that a PRC-resident enterprise must withhold and remit enterprise
income tax at a rate of 10% on the dividends of 2008 and onwards that it distributes to overseas
non-resident enterprise shareholders of H Shares. In addition, the Response to Questions on
Levying Enterprise Income Tax on Dividends Derived by Non-resident Enterprise from
Holding Stock such as B Shares (͏Άุ՟੻B੻೼ਪᕚ
ҭᔧ), which was issued by the SA T and came into effect on July 24, 2009, further
provides that any PRC-resident enterprise whose shares are listed on overseas stock exchanges
must withhold and remit enterprise income tax at a rate of 10% on dividends of 2008 and
onwards that it distributes to non-resident enterprises. Such tax rates may be further modified
pursuant to the tax treaty or agreement that China has entered into with a relevant country or
area, where applicable.
Pursuant to the Arrangement between the Mainland of 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 (ᅄ೼
τર) (the “ Arrangement ”), which was signed on August 21, 2006, the
Chinese Government may levy taxes on the dividends paid by a Chinese resident enterprise to
Hong Kong residents (including natural persons and legal entities) in an amount not exceeding
10% of the total dividends payable by the Chinese resident enterprise. If a Hong Kong resident
directly holds 25% or more of the equity interest in a Chinese resident enterprise, then such tax
shall not exceed 5% of the total dividends payable by the Chinese resident enterprise. The Fifth
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Protocol to the Arrangement between the Mainland and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income ( <ᅄ೼ձԣ˟ਊဍ
τર>), which came into effect on 6 December 2019, introduced criteria for
eligibility for treaty benefits. Notwithstanding other provisions of the Arrangement, if the
relevant income is reasonably considered, having regard to all relevant facts and
circumstances, to be obtained through an arrangement or transaction one of the principal
purposes of which is to obtain, directly or indirectly, a benefit under the Arrangement, such
benefit shall not be granted. However, this shall not apply if it is established that granting such
benefit under the specific circumstances would be consistent with the object and purpose of the
Arrangement. The implementation of the dividend article of the tax treaty must also comply
with relevant Chinese tax laws and regulations, including the Notice of the State Taxation
Administration on Issues Related to the Implementation of Dividend Clauses under Tax
Treaties ().
LA WS AND REGULATIONS OF THE U.S.
Business Entity Registration
In the U.S., businesses are registered or formed under state law, not at the federal level.
For example, under Delaware law, a business may form as a corporation, partnership, limited
liability company, or limited liability partnership. Formation typically requires filing a
certificate of organization or equivalent with the Secretary of State or equivalent regulatory
body in the desired U.S. state. An entity conducting business in other U.S. states may also be
required to qualify as a foreign corporation in such states. For instance, a Delaware corporation
conducting business, leasing property, or employing workers in California must register as a
foreign corporation in California and pay associated fees and taxes. Foreign-registered entities
must maintain good standing by fulfilling each jurisdiction’s corporate law requirements,
including annual filings. Some localities may also require separate business registration or
licensing.
Intellectual Property
Intellectual property (“ IP”) in the United States is governed by federal and state laws, and
includes patents, trademarks, copyrights, mask works, and trade secrets. Each category has
distinct subject matter, protection, and enforcement considerations. Patents, copyrights, and
mask works are regulated exclusively by federal law, while trademarks and trade secrets
involve both federal and state law. Federal statutes include 35 U.S.C.; 17 U.S.C.; 15 U.S.C.;
and 18 U.S.C. § 1836.
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Data Privacy, Data Protection, and Use of Information
In the U.S., privacy and data security are regulated by federal and state laws, regulations,
and common law principles. These laws address both the protection of consumer data and
broader privacy interests in personal communications and activities. At the federal level,
statutes such as the Federal Trade Commission Act (“ FTC Act ”), the Gramm-Leach-Bliley Act
(“GLBA ”), the Children’s Online Privacy Protection Act (“ COPPA”), and the CAN-SPAM Act
of 2003 impose obligations across consumer protection, financial services, children’s privacy,
and commercial email communications. The FTC Act, in particular, prohibits unfair or
deceptive practices, with the Federal Trade Commission serving as the primary federal
enforcement authority. Meanwhile, GLBA requires financial institutions to safeguard
nonpublic personal information, COPPA restricts online data collection from children under the
age of 13, and CAN-SPAM sets forth rules for commercial email communications.
Alongside these federal measures, numerous state laws create distinct requirements on a
state-by-state basis. California’s Consumer Privacy Act (“ CCPA”) is one example, offering
comprehensive consumer data rights, while recent legislation in Virginia, Colorado,
Connecticut, Delaware, Iowa, Nebraska, New Hampshire, New Jersey, Utah, Montana, Oregon,
Texas, and a growing number of other states similarly governs data collection, use, and breach
notification. Beyond these dedicated data protection statutes, many states separately enforce
invasion of privacy laws grounded in tort principles or standalone statutes, such as the
California Invasion of Privacy Act, Illinois Eavesdropping Act, and Florida Security of
Communications Act. These laws typically regulate the recording or monitoring of
communications and uphold personal privacy rights, imposing civil or criminal liability for
violations. Consequently, organizations must navigate both data protection regulations and
invasion of privacy requirements to maintain compliance in the evolving U.S. privacy
landscape.
Labor and Employment
Labor and employment laws in the United States arise from federal, state, and local laws.
Federal laws apply to all covered employers nationwide, while state and local laws address
issues that may not be covered by federal law or provide additional protections.
International Trade (Import/Export, Tariffs, Anti-Dumping Laws)
U.S. companies engaged in international trade may be subject to a patchwork of laws and
regulations controlling the import and export of commodities and services, including customs
laws, export licensing controls, and sanctions restrictions. These controls are complex and
frequently overlap, affecting the same transactions.
In the United States, the primary export control regime is the Export Administration
Regulations (“ EAR”), which is administered and enforced by the Department of Commerce’s
Bureau of Industry and Security (“ BIS”). The EAR may impose licensing requirements for the
export, reexport, and in-country transfer of certain commercial and dual-use commodities,
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software, and technology (each an “ item ” and collectively, the “ items ”), as well as “deemed”
exports and reexports involving the release of controlled technology and software source code
to foreign nationals. Specific authorization may be required depending upon the classification
of the item, its end destination and end use, as well as identity of the user. The EAR imposes
heightened licensing controls on various technology items including semiconductors and
telecommunications items, and their components. In addition to the EAR, there are U.S. export
regimes with exclusive jurisdiction over narrower categories of products, such as the
International Traffic in Arms Regulations (“ ITAR”), which is administered and enforced by the
State Department’s Directorate of Defense Trade Controls and regulates exports and other
transactions involving defense articles and defense services, and controls over commercial
nuclear equipment and technology controlled under regulations administered by the Nuclear
Regulatory Commission and the Department of Energy.
The United States also enforces economic sanctions, which cover a broad array of
activities with nexus to the United States or involving U.S. persons anywhere globally
(including in some cases foreign entities owned or controlled by U.S. persons). U.S. sanctions
are primarily administered and enforced by the U.S. Department of the Treasury’s Office of
Foreign Assets Control (“ OFAC”). These sanctions measures restrict or prohibit U.S. person
transactions with certain embargoed countries and regions (currently, Cuba, Iran, North Korea,
Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine) as well as restricted and
prohibited parties, in particular persons designated on the OFAC-administered Specially
Designated Nationals and Blocked Persons List (“ SDN List ”). Certain countries, such as
Belarus, Russia, and V enezuela, are subject to substantial restrictions that fall short of an
outright embargo but that restrict U.S. person transactions with broad economic sectors as well
as designated persons and companies.
Significant penalties can result from engaging in transactions in violation of export
control or sanctions laws, and there can be additional negative consequences, such as
designation of involved persons on restricted party lists, revocation of licenses, and blocking
of property. To the extent transactions may be restricted, specific licenses may be sought from
the relevant government authorities. General licenses may also be available for narrow
categories of transactions permitted under U.S. law.
Finally, U.S. Customs and Border Protection (“ CBP”) enforces a broad array of customs
laws and restrictions at the U.S. border. President Trump during both his administrations has
vigorously used authority under several laws to dramatically increase tariffs on imports, with
China a primary target of these measures. During his first term President Trump imposed tariffs
of up 25% on select Chinese imports under the authority of Section 301 of the Trade Act of
1974 (“ Section 301 ”), which measures remain in place today. In April 2025, “reciprocal” tariff
measures covering a broad range of products imported from most countries were imposed
under the authority of the International Emergency Economic Powers Act (“ IEEPA”). This
action followed the President’s imposition of separate IEEPA-based tariffs on China, Canada,
and Mexico related to illicit trade in fentanyl. Legal challenges to the President’s authority to
use IEEPA to impose tariffs were quickly filed in U.S. courts and eventually made their way
to the U.S. Supreme Court. On February 20, 2025, the Supreme Court in a 6-3 opinion held that
the President does not have tariff authority under IEEPA, invalidating the reciprocal and
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fentanyl-related tariffs. The President quickly pivoted to impose broad temporary tariffs of
10% under the authority of Section 122 of the Trade Act of 1974 (“ Section 122 ”). Section 122
permits tariffs of up to 150 days. The President has indicated that his administration would use
other available authorities, such as Section 301 of the Trade Act of 1974 and Section 232 of
the Trade Expansion Act of 1962 (“ Section 232 ”), to impose longer-term measures to replace
the IEEPA-based tariffs. Specific details of these measures are to be announced. The Trump
administration has also imposed product-specific tariffs on steel, aluminum, copper, and
automotive and truck items under Section 232 authority. Tariff measures under Section 232
were also recently imposed on a narrow scope of semiconductor items, with broader tariffs
potentially to follow. Additional duties may be imposed under antidumping and countervailing
duty laws. Aside from payment of duties, parties are required to declare imports accurately,
including valuation, classification under the Harmonized Tariff Schedule of the United States,
and declaration of the correct country of origin. Violations of the U.S. customs laws can result
in significant penalties up to the forfeiture value of involved goods, as well as seizure of goods
and revocation of favorable import status.
It is expected that the United States and China will continue to negotiate over various
tariff measures as the measures to replace the invalidated IEEPA-based tariffs come into focus.
Other tariffs and duties on China remain, including the Section 301 tariffs that have been in
place since 2018 and the Section 232 tariffs on steel, aluminum, and autos/auto parts as well
as antidumping/countervailing duties and normal customs duties.
FinCEN; Anti-Money Laundering
U.S. companies may be subject to specific regulations issued by the Financial Crimes
Enforcement Network (“ FinCEN ”) pursuant to the Bank Secrecy Act (“ BSA”) and related
Anti-Money Laundering (“ AML”) regulations.
All U.S. companies are subject to certain BSA requirements. Those requirements include
the filing of a Report of Foreign Bank and Financial Accounts if the person has a financial
interest in or signature authority over a foreign financial account, and the filing of a Report of
International Transportation of Currency or Monetary Instruments if physically transporting,
mailing, or shipping (or causing such) of currency or monetary instruments aggregating in
excess of $10,000 at one time out of or into the U.S.
In addition, each company or other person that, in the course of a trade or business in
which the business is engaged, receives currency in excess of $10,000 in a single transaction
(or two or more related transactions), must file reports of such transaction or transactions with
the Internal Revenue Service and FinCEN. These reports apply to cash transactions and, in
some cases, transactions made with cashier’s checks, money orders and similar instruments,
and the reports generally must include the tax identity number of the person from whom the
funds are received and of the person on behalf of which the transaction is conducted.
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U.S. companies that are “financial institutions” as defined in FinCEN regulation may be
required to develop and maintain a written AML program that is reasonably designed to prevent
the company from being used to facilitate money laundering and the financing of terrorist
activities, and otherwise to comply with FinCEN regulations specific to that form of financial
institution. Covered financial institutions include, among others, money services businesses
(“MSBs ”). One form of MSB is a provider of money transmission services, which means the
acceptance of currency, funds or other value from one person and the transmission of such to
another location or person by any means, including, without limitation, through informal value
transfer systems such as hawala.
Entities qualifying as MSBs also must register as such with FinCEN, and they are subject
to periodic examination for compliance with applicable BSA and AML requirements. In
addition, state-by-state requirements to obtain licenses to offer money transmission services
may be applicable. Many financial institutions also are required to establish and maintain
procedures reasonably designed to verify the identities of the beneficial owners of their legal
entity customers, though MSBs are not subject to this requirement at this time.
LA WS AND REGULATIONS OF GERMANY
Statutory Law
Below is an overview of the laws and regulations materially relevant to our business in
Germany. It does not claim to provide a complete and comprehensive presentation of all
relevant legal regulations.
Purchase Law
The sale of goods constitutes a sales contract (§ 433 et seq. of the German Civil Code —
“Bürgerliches Gesetzbuch ” (hereinafter also referred as: “BGB”)).
In Germany, sales law is largely governed by the German Civil Code, § 433 ff. BGB. If
the sales contract is concluded between two merchants, the sales law is modified by the
provisions of the German Commercial Code (“ Handelsgesetzbuch ” — hereinafter also referred
as: “HGB”), §§ 373 et seq. HGB. If the sale is made with a consumer (sale of consumer goods),
additional consumer protection standards apply (§§ 474 et seq. BGB).
The BGB implements various EU sales law directives.
According to the German Civil Code (BGB), the seller is obliged to hand over the item
to the buyer and to procure ownership of it — free of material defects and defects of title, §
433 Para. 1 BGB. The buyer is entitled to a fulfillment claim for the handover and transfer of
ownership of a defect-free item. If the item is defective at the time of the transfer of risk (§
446, § 447, § 475 para. 2, 3 BGB), this gives rise to warranty rights for the buyer. The burden
of proof that the goods were defective at the time of the transfer of risk generally falls to the
buyer, § 363 BGB, except if the goods are sold to a consumer, the burden of proof is reversed,
§ 477 BGB.
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If the item is defective, the buyer is entitled to request subsequent fulfillment, to
withdraw from the contract, to reduce the purchase price or to demand compensation for
damages or expenses, § 437 et seq. BGB. However, the buyer has to give the seller the
opportunity for subsequent fulfillment and set a grace period for this purpose before the buyer
can demand compensation or withdraw from the purchase contract. As part of the subsequent
fulfillment, the buyer must also bear the necessary expenses (e.g. transport costs).
Warranty claims for movable goods generally expire within two years, § 438 Para. 1 No.
3 BGB.
In addition to these warranty rights, the manufacturer or seller may grant the buyer
guarantee rights (guarantee), § 443 (1) BGB. If such a guarantee of durability is given, it is
assumed by law that a defect occurring during the guarantee period constitutes the guarantee
rights.
Consumer Law, Distance Selling Law and E-Commerce Law — Additional Regulations
for the Sale of Consumer Goods
In the case of sales to a consumer, the sales law is stricter in favor of the buyer in some
points.
The law contains further special provisions for consumer contracts for digital products.
These include the provision of payable digital content or digital services (Sections 327 ff.,
Section 475a, Section 475b, Section 475c, Section 475e BGB).
With regard to the applicable e-commerce law, several regulations are relevant in
Germany. In particular, the German Telemedia Act (TMG), the Telecommunication Act (TKG),
the Unfair Competition Act (UWG) and the provisions of the German Civil Code (BGB) which
concern digital or electronic means of contracting are of importance.
Among other things, the TMG contains regulations on the obligation to provide an imprint
containing mandatory business information, such as address and further information
obligations. The obligation to maintain an imprint also applies to foreign companies, insofar
as the obligations can be fulfilled under foreign law.
Civil law also contains special provisions for e-commerce. This is intended to standardize
a certain level of consumer protection. In particular, the regulation of distance contracts
(Section 312c BGB) is relevant, for which Sections 312d-312f BGB supplement consumer
protection with special obligations and provide for a separate right of withdrawal (Section
312g, Sections 355 et seq. BGB). The provisions of the third chapter under Sections 312i-312j
of the German Civil Code (BGB) include regulations on electronic commerce.
The sections of the BGB apply to foreign companies for contracts with consumers who
have their habitual residence in Germany, if the offer of the platform or web shop is directed
at customers in Germany. The platform operator can limit this by clearly identifying to which
customers in which countries he addresses his platform or the web shops therein respectively.
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Product Safety and Product Liability
In addition, there are other obligations that primarily apply to the manufacturer of a
product. These arise from product safety regulations and product liability regulations, in
particular under the Product Liability Act and under tort law.
A manufacturer within the meaning of the law is anyone who has manufactured the end
product, a raw material or a partial product. A manufacturer is also deemed to be anyone who
claims to be a manufacturer by affixing his name, trade mark or other distinctive sign.
Furthermore, anyone who imports or brings a product into the area of application of the
Agreement on the European Economic Area for the purpose of sale, rental, hire-purchase or any
other form of distribution with a commercial purpose within the scope of their business activity
is deemed to be a manufacturer. Depending on the specific circumstances of the individual
case, suppliers may also be considered manufacturers in exceptional cases.
Product compliance
As a general rule it can be stated that each product, which is put into the German market
must be designed, manufactured and being provided with appropriate user information
(manuals, warning messages as well as safety signs and labels) in a way that any hazardous
situation in course of the product use will be avoided. This rule is reflected by rules and
regulations within the Law on Product Safety and the Product Liability Law in Germany.
Furthermore, a product may be subject to further legal requirements imposing formal
requirements on the economic operators (manufacturers, importer and distributors) such as a
specific certification or documentation of the product quality. Before entering the German
market a proper product compliance organization must be managed to ensure the fulfillment of
the aforementioned requirements. In detail the legal framework on which the product
compliance shall apply consists for the scope of products in question mainly of:
Law on product safety
The Law on Product Safety of Germany consists of a framework of general rules such as
the Law on Product Safety (“ Produktsicherheitsgesetz — ProdSG ”), as well as the 14 German
product safety regulations, depending on the specific nature of the product
(“Produktsicherheitsverordnungen ”), the Law on Market Surveillance
(“Marktüberwachungsgesetz — MüG ”) as well as European Regulation on Market Surveillance
EU 2019/2020, specific regulations dealing with specific products mainly based on EU law and
general rules applicable to any kind of products. Products that do not comply with the Law on
Product Safety cannot be distributed in Germany nor the EU. These rules and regulations do
apply automatically when the product enters the German market. All these rules and
regulations are compulsory and cannot be excluded nor modified by a contractual agreement.
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For the products in question (considering optoelectronic devices as well as
telecommunications equipment and others), among others, the following selection of rules and
regulations shall be observed:
 Directive 2001/95/EC of the European Parliament and of the Council of 3 December
2001 on general product safety, updated by the General Product Safety Regulation
(GPSR) 2023/988 which will apply to all products placed on the EU market from 13
December 2024 (with a transitional period)
 Regulation (EU) 2017/1369 of the European Parliament and of the Council of 4 July
2017 setting a framework for energy labeling and repealing Directive 2010/30/EU
 European Parliament and Council Directive 94/62/EC of 20 December 1994 on
packaging and packaging waste
 Directive 2011/65/EU of the European Parliament and of the Council of 8 June 2011
on the restriction of the use of certain hazardous substances in electrical and
electronic equipment
 Directive 2014/35/EU of the European Parliament and of the Council of 26 February
2014 on the harmonisation of the laws of the Member States relating to the making
available on the market of electrical equipment designed for use within certain
voltage limits
 Directive 2014/53/EU of the European Parliament and of the Council of 16 April
2014 on the harmonisation of the laws of the Member States relating to the making
available on the market of radio equipment and repealing Directive 1999/5/EC
 Directive 2014/30/EU of the European Parliament and of the Council of 26 February
2014 on the harmonisation of the laws of the Member States relating to
electromagnetic compatibility
 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012
on waste electrical and electronic equipment (WEEE)
 Directive 2006/66/EC of the European Parliament and of the Council of 6 September
2006 on batteries and accumulators and waste batteries and accumulators and
repealing Directive 91/157/EEC
 Directive 2009/125/EC of the European Parliament and of the Council of 21 October
2009 establishing a framework for the setting of eco-design requirements for
energy-related products
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Briefly summarized, those aforementioned regulations, amongst others, provide for
requirements regarding product properties (such as restrictions on substances), product
labeling (such as the product itself as well as the manufacturer/importer identification
domiciled in the European Economic Area, applicable markings and moreover proper
instruction and information to users (e.g. such as warnings)).
Product Liability
In Germany, either the seller or the producer, or both jointly, can be held liable if the
product is defective. The harmed person may assert claims arising from product liability,
producer liability, and warranty for defects. The rules for liability are to be found in the
German Product Liability Law (“ Produkthaftungsgesetz — ProdHaftG ”) and the German Civil
Code as well as in special laws.
In the event a product has caused damage to persons or items (other than the defective
product), the producer is strictly liable pursuant to the German Product Liability Law
(“Produkthaftungsgesetz ”, “ ProdHaftG ”). Liability under the ProdHaftG can neither be
restricted nor excluded in advance. In principle, the individual who suffered damage must
(only) prove the fault, the damage, and the causal link between fault and damage, as liability
under the ProdHaftG is a so-called strict liability, meaning regardless of fault.
The ProdHaftG applies, if the harmed party has its habitual residence in Germany and the
defective product was placed on the German market or if the defective product was bought in
Germany arid was placed on the German market or if the harm arose in Germany and the
defective product was placed on the German market.
Additionally, producers as well as under certain circumstances sellers, can also be held
liable pursuant to tort law under the BGB if the product is defective. The liability under
German tort law is in principle unlimited and there is a liability for all damages caused by the
defective product. According to case law, the producer is also obliged to observe the market
(Pflicht zur Produktbeobachtung ). This constitutes a producer’s duty of investigation and
reaction since product safety and compliance first and foremost lies in the producer’s hand.
GDPR principles
The GDPR provides various principles that also run through the national regulations and
must therefore always be observed. If these principles/requirements are not met and unlawful
processing takes place, data subjects can assert their rights under the GDPR and sue for
damages. There may also be a threat of proceedings by the supervisory authorities.
Some of the most relevant principles of the GDPR are regulated in Art. 5. Any personal
data must always be processed on a legal basis (Art .5Ia ) GDPR), in a transparent manner
(Art . 5 I a), Art. 13 GDPR) and with the usage of such data limited to a specific, explicit
purpose (Art .5Ib ) GDPR). The personal data that is stored must be kept to a minimum (Art.
5 I c) GDPR) and up-to-date (Art .5Id ) GDPR), and must be deleted as soon as it is no longer
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needed for the specified purpose (Art .5Ie ) GDPR). The processing of personal data
with/between several parties must be regulated by corresponding data processing agreements
like a data processing agreement (Art. 28 GDPR) or a joint controller agreement (Art. 26
GDPR). This also applies for data processing between group companies and affiliates.
The transfer of personal data outside the EU/EEA must meet special requirements. There
must either be an adequacy decision by the EU Commission for the country in which the
recipient is located or additional guarantees in accordance with Art. 46 GDPR. This also
applies for data transfers between group companies and affiliates. If data of European citizens
will be stored on the servers in Hong Kong, appropriate guarantees (Art. 46 GDPR) must be
in place.
Legal consequences of violations of the GDPR
Any person who has suffered material or non-material damage as a result of an
infringement of this Regulation shall have the right to obtain compensation from the controller
or processor for the damage suffered. The data subjects may therefore bring an action for
damages before the civil courts. In May 2023, the European Court of Justice ruled that no
materiality threshold is to be observed and thus also allows for “trivial cases.” In addition to
legal action in the civil courts, administrative proceedings can also be brought before the
supervisory authorities. These can either carry out an inspection of the company on their own
initiative or because someone, e.g. a data subject, has issued a notification. Infringements of
the provisions of the GDPR can lead to fines of up to 20,000,000 EUR or up to 4% if the total
worldwide annual turnover of the preceding financial year, whichever is higher. Strictly
adhering to the GDPR is therefore important for any company operating within it’s framework.
Each supervisory authority has the corrective powers to impose a temporary or definitive
limitation including a ban on processing. In this case, the data processing that is not lawful in
the opinion of the supervisory authority must be stopped accordingly. Depending on the
circumstances, this can cause the entire operation of a company to come to a standstill.
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LA WS AND REGULATIONS OF SINGAPORE
Telecommunications Act 1999 of Singapore (“TA”)
The TA and the regulations promulgated thereunder regulate the operation and provision
of telecommunication systems and services in Singapore, and for the matters therewith. The
regulatory authority that administers the TA is the Infocomm Media Development Authority of
Singapore (“ IMDA ”).
Under Regulation 3 of the Telecommunications (Dealers) Regulations (“ Dealers
Regulations ”) (which are promulgated under TA), a person who manufactures, imports, lets for
hire, sells, or offers or possesses for sale any telecommunication equipment registered for sale
under Regulation 20(6) of the Dealers Regulations or telecommunication equipment set out in
the First Schedule of the Dealers Regulations (“ Telecommunication Equipment ”) shall be
deemed to have been granted a dealer’s class licence for that purpose (“ Dealer’s Class
Licence ”). FS Singapore holds such a Dealer’s Class Licence. A Dealer’s Class Licence shall
remain valid unless it is canceled in accordance with the terms of the TA or the Dealers
Regulations. The holder of a Dealer’s Class License are required to comply with the
requirements and conditions of that license set out in the Dealer’s Regulations.
In addition, under Regulation 20 of the TDR, subject to certain exceptions, it shall be a
condition of a licence that the licensee shall not sell (a) any type of telecommunication
equipment to be used for connection to any telecommunication system or equipment belonging
to a telecommunication system licensee; or (b) any type of radio-communication equipment to
be used in Singapore, unless the type of equipment has been approved for sale by way of
registration with IMDA.
A holder of a Dealer’s Class Licence who is carrying on any business or trade as a dealer
(i.e. a person who manufactures, imports for sale, lets for hire, sells, or offers or possesses for
sale any equipment which is capable of being used for the purpose of telecommunication) shall,
in turn, register with the IMDA each of the premises under his control or occupation where he
manufactures, imports, lets for hire, sells or offers or possesses for sale any Telecommunication
Equipment. A holder of a Dealer’s Class Licence who fails to do so shall be guilty of an offence
and, in addition to the forfeiture of any article seized, be liable on conviction to a fine not
exceeding S$10,000 or to imprisonment for a term not exceeding 3 years or to both and, in the
case of a continuing offence, to a further fine not exceeding S$1,000 for every day or part of
a day during which the offence continues after conviction.
Regulation of Imports and Exports Act 1995 of Singapore
The Regulation of Imports and Exports Act 1995 of Singapore (“ RIEA ”) and the
regulations promulgated thereunder govern the regulation, registration and control of goods
imported into and exported from Singapore. The RIEA is administered by the Director-General
of Customs of Singapore appointed under the Customs Act 1960 of Singapore.
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Under the Regulation of Imports and Exports Regulations (“ RIER ”), promulgated under
the RIEA, save as otherwise provided therein, no goods shall be imported into Singapore,
exported out of Singapore, or transhipped in Singapore, except in accordance with a permit
granted by the Director-General of Customs.
An application for permit to import, export or tranship any goods is required to be made
to the Director-General of Customs by (a) the importer, exporter, shipping agent, air cargo
agent, freight forwarder or common carrier, as the case may be, or (b) a declarant, who have
registered with the Singapore Customs.
Except where otherwise provided, any person guilty of an offense under the RIER shall
be liable: (a) on the first conviction, to a fine not exceeding S$100,000 or 3 times the value
of the goods in respect of which the offense was committed, whichever is the greater, or to
imprisonment for a term not exceeding 2 years or to both; and (b) on the second or subsequent
conviction to a fine not exceeding S$200,000 or 4 times the value of the goods in respect of
which the offense was committed, whichever is the greater, or to imprisonment for a term not
exceeding 3 years or to both.
Workplace Safety and Health Act 2006 of Singapore
The Workplace Safety and Health Act 2006 of Singapore (“ WSHA ”) regulates the safety,
health and welfare of persons at work in workplaces. The WSHA is administered by the
Commissioner for Workplace Safety and Health (“ WSH Commissioner ”) appointed by the
Minister of Manpower of Singapore (“ MOM”).
The WSHA provides, among other things, that every employer has the duty to take, so far
as is reasonably practicable, such measures as are necessary to ensure the safety and health of
the employer’s employees at work.
These measures include, among other things:
(a) providing and maintaining a work environment which is safe, without risk to health,
and adequate as regards to the facilities and arrangements for the employee’s
welfare at work;
(b) ensuring that adequate safety measures are taken in respect of any machinery,
equipment, plant, article or process used by the employees at work;
(c) ensuring that the employees at work are not exposed to hazards arising out of the
arrangement, disposal, manipulation, organization, processing, storage, transport,
working or use of things, in their workplace or near their workplace and under the
control of the employer;
(d) developing and implementing procedures for dealing with emergencies that may
arise while employees are at work; and
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(e) ensuring that the employees at work have adequate instruction, information, training
and supervision as is necessary for them to perform their work.
The Workplace Safety and Health (General Provisions) Regulations, which are
promulgated under the WSHA, also impose more specific duties on employees in relation to
the safety and health of employees in the workplace.
Subject to the provisions of the WSHA, any person who is in breach of its duty under the
WSHA shall be guilty of an offense and shall be liable on conviction, in the case of a body
corporate, to a fine not exceeding S$500,000, and if the contravention continues after the
conviction, shall be guilty of a further offense and shall be liable to a fine not exceeding
S$5,000 for every day or part thereof during which the offense continues after conviction.
Under the WSHA, the WSH Commissioner, may serve a remedial order or a stop-work
order in respect of a workplace if the WSH Commissioner is satisfied that:
(a) the workplace is in such condition, or is so located, or any part of the machinery,
equipment, plant or article in the workplace is so used, that any work or process
carried on in the workplace cannot be carried on with due regard to the safety, health
and welfare of the persons at work;
(b) any person has contravened any duty imposed by the WSHA; or
(c) any person has done any act, or has refrained from doing any act which, in the
opinion of the WSH Commissioner, poses or is likely to pose a risk to the safety,
health and welfare of persons at work.
Under the Workplace Safety and Health (Risk Management) Regulations, which are
promulgated under the WSHA, the employer in a workplace is required to, among other things,
conduct a risk assessment in relation to the safety and health risks posed to any person who
may be affected by his undertaking in the workplace, take all reasonably practicable steps to
eliminate foreseeable risks, implement reasonably practicable measures/procedures to
minimise and control the risk, inform workers of the nature of the risk involved and
implemented measures/procedures, maintain records of such risk assessments and implemented
measures/procedures for a period of not less than three (3) years and submit such records to
the WSH Commissioner from time to time when required.
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Under the Workplace Safety and Health (Registration of Factories) Regulations 2008
(“WSH Factories Regulations ”), which are promulgated under the WSHA, among other
things, any person who desires to occupy or use any premises as a factory (other than those
falling within the classes of factories described in Parts I, II and III of the First Schedule) is
required to give notification to the WSH Commissioner before commencement of operation. If
the factory falls within the classes of factories described in Parts I, II and III of the First
Schedule, then the premises would have to be registered as a factory or major hazard
installation. For this purpose, “factory” is defined in the WSHA to mean any premises:
(a) within which persons are employed in any of the following processes: (i) the
handling, sorting, packing, storing, altering, repairing, construction, processing or
manufacturing of any goods or product; (ii) the handling, sorting, storing,
processing, manufacturing or use of any hazardous substances; (iii) the repair,
construction or manufacturing of any vessel or vehicle; (iv) any building operation
or work of engineering construction; or (v) the operation or maintenance of any
facility or system related to the provision of any public utility; and
(b) which is specified in the Fourth Schedule of the WSHA. One of the items listed in
the Fourth Schedule is any premises where mechanical power is used in connection
with the sorting, packing, handling or storing of articles. The term “mechanical
power” is defined to mean any energy derived from steam, water, wind, electricity,
compressed air or gas, or the combustion of fuel or explosive, which is used to drive
or work any machinery.
Where the requirement applies, operating a factory without notifying or registering is an
offense, and the person in default may be subject to a fine not exceeding S$5,000.
Work Injury Compensation Act 2019 of Singapore
The Work Injury Compensation Act 2019 of Singapore (“ WICA ”) regulates (among other
things) the payment of compensation to employees for injury suffered arising out of and in the
course of their employment as well as providers of insurance for liability under the WICA. The
WICA is administered by the Ministry of Manpower (“ MOM”).
The WICA applies to all employees who have entered into or works under a contract of
service with an employer (save for the classes of individuals specified in the Third Schedule
of the WICA), in respect of injury suffered by them arising out of and in the course of their
employment and sets out, among other things, the amount of compensation that they are
entitled to and the method(s) of calculating such compensation.
Under the WICA, subject to the provisions therein, where personal injury is caused to an
employee by an accident arising out of and in the course of employment, the employer of the
employee shall be liable to pay compensation in accordance with the provisions of the WICA.
The amount of compensation will be computed in accordance with a fixed formula as set out
in the WICA, subject to maximum and minimum limits.
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Under the WICA, read with the Work Injury Compensation (Insurance) Regulations 2020
(“WIC Insurance Regulations ”), employers are required to maintain work injury
compensation insurance for all employees, excluding certain prescribed classes of employees,
in accordance with the requirements under the WICA. The excluded classes of employees
include employees who are employed otherwise than by way of manual labor, and employees
whose salary (within the meaning of the EA) received from the employer exceeds S$2,600 a
month.
Employment Act 1968 of Singapore
The Employment Act 1968 of Singapore (“ EA”) is Singapore’s main labor law and,
among other things, provides for the basic terms and conditions of employment, and the rights
and responsibilities of employers as well as employees who are covered under the EA. The EA
is administered by the MOM.
The term “employee” is defined in the EA to mean a person who has entered into or works
under a contract of service with an employer and includes, among other things, a workman, but
does not include certain specified categories of employees including, among other things, any
seafarer or domestic worker.
The EA regulates certain aspects of the contract of service or employment, including the
termination, dismissal, right to join, participate in or organise trade unions, change of
employer, transfer of employment, public holiday, sick leave and annual leave entitlements,
payment of salary and allowable deductions. Section 8 of the EA provides that every term of
a contract of service which provides a condition of service which is less favorable to an
employee than any of the conditions of service prescribed by the EA is illegal and void to the
extent that it is so less favorable. In addition, a contravention of any of the provisions may also
be an offense, the penalties for which depend on the particular provision that is contravened.
Part 4 of the EA, in particular, sets out conditions of service that are applicable only to:
(a) workmen who receive salaries not exceeding S$4,500 a month (or such other amount
prescribed by the Minister for Manpower); and (b) employees (other than workmen or a person
employed in a managerial or an executive position) who receive salaries not exceeding S$2,600
a month (or such other amount prescribed by the Minister for Manpower). Under the EA, a
“workman” is defined under the EA to mean, among other things: (i) any person, skilled or
unskilled, who has entered into a contract of service with an employer in pursuance of which
he is engaged in manual labor, including any artisan or apprentice, but excluding any seafarer
or domestic worker; (ii) any person, other than clerical staff, employed in the operation or
maintenance of mechanically-propelled vehicles used for the transport of passengers for hire
or for commercial purposes; (iii) any person employed partly for manual labor and partly for
the purpose of supervising in person any workman in and throughout the performance of his
work; and (iv) certain persons specified in the First Schedule to the EA, including construction
workers, machine operators and lorry and van drivers.
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Part 4 of the EA regulates, among other things, working hours, overtime, rest days,
payment of retrenchment benefit, priority of retirement benefit, annual wage supplements and
other conditions of work or service in relation to employees covered under Part 4.
Generally, in terms of working hours of an employee covered under Part 4 of the EA,
he/she: (a) must not be required to work more than 6 consecutive hours without a period of
leisure, or more than 8 hours in one day or more than 44 hours in one week, subject to certain
exceptions; (b) must not under any circumstances work for more than 12 hours in any one day
except in specified circumstances, such as in the case of accident, actual or threatened, or work
the performance of which is essential to the life of the community, or work essential for defense
or security, or urgent work to be done to machinery or plant, or an interruption of work which
it was impossible to foresee; and (c) must not be permitted to work overtime for more than 72
hours a month.
Under the EA, the Commissioner for Labor may, after considering the operational needs
of the employer and the health and safety of the employee or class of employees, by written
order exempt an employee or any class of employees from the overtime limits subject to such
conditions as the Commissioner thinks fit.
Any employer who employs any person as an employee who is covered under Part 4 of
the EA and fails to comply with Part 4 of the EA shall be guilty of an offense and shall be liable
on conviction to a fine not exceeding S$5,000, and for a second or subsequent offense to a fine
not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both.
Employment of Foreign Manpower Act 1990 of Singapore
The Employment of Foreign Manpower Act 1990 of Singapore (“EFMA”) regulates the
employment of foreign manpower in Singapore. The EFMA is administered by the MOM.
Section 5 of the EFMA provides that no person shall employ a foreign employee unless
he has obtained in respect of the foreign employee a valid work pass from the MOM, which
allows the foreign employee to work for him in accordance with the conditions of the foreign
employee’s work pass.
Any person who fails to comply with or contravenes Section 5(1) of the EFMA shall be
guilty of an offense and shall:
(a) be liable on conviction to a fine of at least S$5,000 and not more than S$30,000 or
to imprisonment for a term not exceeding 12 months or to both; and
(b) on a second or subsequent conviction:
(i) in the case of an individual, be punished with a fine of not less than S$10,000
and not more than S$30,000 and with imprisonment for a term of not less than
one month and not more than 12 months; or
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(ii) in any other case, be punished with a fine not less than S$20,000 and not more
than S$60,000.
Under the Employment of Foreign Manpower (Work Passes) Regulations 2012 of
Singapore (“ Work Passes Regulations ”), which are promulgated under the EFMA, among
other things, employers must purchase and maintain medical insurance that covers certain
medical costs for the foreign employee’s specified employment period, in accordance with the
requirements under the Work Passes Regulations.
In addition to the EFMA, an employer of foreign workers is also required to comply with
the provisions in the EA, the Immigration Act 1959 of Singapore (“ Immigration Act ”) and the
regulations issued pursuant to the Immigration Act.
Central Provident Fund Act 1953 of Singapore
The Central Provident Fund Act 1953 of Singapore (“ CPF Act ”) provides for a mandatory
social security savings scheme, known as the Central Provident Fund (“ Fund ”), that is funded
by contributions from employers and employees. The CPF Act is administered by the Central
Provident Fund Board.
Under the CPF Act, every employer of an employee who is a Singapore citizen or
permanent resident and employed in Singapore under a contract of service (save for employees
who are employed as a master, a seaman or an apprentice in any vessel, unless where such
employee is a Singapore citizen employed under a contract of service entered into in Singapore
and the owners of the vessel have not been exempted from the provisions of the CPF Act)),
shall pay to the Fund monthly in respect of such employee contributions at the appropriate rates
set out in the First Schedule of the CPF Act. CPF contributions are not applicable to employee
who is not a citizen of Singapore or permanent resident.
Under the CPF Act, notwithstanding the provisions of any written law or any contract to
the contrary, an employer who has made such contribution to the Fund of an employee is
allowed to recover from the monthly wages of that employee the amount shown in the First
Schedule of the CPF Act as so recoverable from the employee.
Where the amount of the contributions which an employer is liable to pay under the CPF
Act in respect of any month is not paid within such period as may be prescribed, the employer
shall be liable to pay interest on the amount for every day the amount remains unpaid and the
interest is to be calculated at the rate of 1.5% per month or the sum of S$5, whichever is the
greater.
Where any employer who has recovered any amount from the monthly wages of an
employee in accordance with the CPF Act and fails to pay the contributions to the Fund within
such time as may be prescribed, the employer shall be guilty of an offense and shall be liable
on conviction to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding
seven years or to both.
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Any person convicted of an offense under the CPF Act for which no penalty is provided,
subject to exceptions, shall be liable on conviction (a) to a fine not exceeding S$5,000 or to
imprisonment for a term not exceeding six months or to both; and (b) if that person is a repeat
offender in relation to the same offense, to a fine not exceeding S$10,000 or to imprisonment
for a term not exceeding 12 months or to both.
Companies Act and Constitution
The Companies Act 1967 of Singapore generally governs, among other things, matters
relating to the status, power and capacity of a company, shares and share capital of a company
(including issuances of new ordinary shares and preference shares), treasury shares, share
buybacks, redemption, share capital reduction, declaration of dividends, financial assistance,
directors and officers and shareholders of a company (including meetings and proceedings of
directors and shareholders, dealings between such persons and the company), protection of
minority shareholders’ rights, accounts, arrangements, reconstructions and amalgamations,
winding up and dissolution.
In addition, members of a company are subject to, and bound by the provisions of the
Constitution. The Constitution contains, among other things, provisions relating to some of the
matters in the foregoing paragraph, transfers of shares as well as sets out the rights and
privileges attached to the different classes of shares of the company (if applicable).
Singapore Taxation
The discussion in this section is not intended to be and does not constitute legal or tax
advice. It is based on the current tax laws and practice in Singapore and is subject to changes
in such laws, or in the interpretation thereof. Such changes may be retrospective. No assurance
can be given that courts or fiscal authorities responsible for the administration of such laws will
agree with this interpretation or that changes in such laws and practice will not occur on a
retrospective basis.
Corporate Tax
Corporate taxpayers (whether Singapore tax resident or non-Singapore tax resident) are
generally subject to Singapore income tax on income accruing in or derived from Singapore,
and on foreign-sourced income received or deemed to be received in Singapore (unless
specified conditions for exemption are satisfied). Foreign income in the form of dividends,
branch profits and service fee income received or deemed to be received in Singapore by a
Singapore tax resident corporate taxpayer may however be exempt from Singapore tax if
specified conditions are met.
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Section 43(1) of the Income Tax Act 1947 of Singapore (“ ITA”) provides, among other
things, that the prevailing corporate income tax rate is 17%. Section 43(6B) of the ITA
provides, among other things, that there is partial tax exemption for normal chargeable income
of up to S$200,000 as follows:
(a) for every dollar of the first S$10,000 of chargeable income, only 25% is chargeable
with tax; and
(b) for every dollar of the next S$190,000 of chargeable income, only 50% is chargeable
with tax.
New companies will also, subject to certain conditions and exceptions, be eligible for an
exemption of three-quarters of up to the first S$100,000, and one-half of up to the next
S$100,000, of their normal chargeable income for each of the company’s first three years of
assessment.
Dividend Distributions and Withholding Tax
All Singapore tax resident companies are under the one-tier corporate taxation system of
Singapore (“ One-Tier System ”). Under the One-Tier System, the tax collected from corporate
profits is a final tax and the after-tax profits of the company resident in Singapore can be
distributed to the shareholders as tax-exempt (one-tier) dividends. Such dividends are
tax-exempt in the hands of the shareholders, regardless of whether the shareholder is a
company or an individual and whether or not the shareholder is a Singapore tax resident.
Singapore currently does not impose withholding tax on dividends paid to resident or
non-resident shareholders. Foreign shareholders are advised to consult their own tax advisers
to take into account the tax laws of their respective home countries or countries of residence
and the applicability of any double taxation agreement which the relevant tax jurisdiction may
have with Singapore.
Goods and Services Tax
The Goods and Services Tax Act 1993 of Singapore governs goods and services tax
(“GST”), which is a consumption tax that is levied on the import of goods into Singapore, as
well as nearly all supplies of goods and services in Singapore. GST on the import of goods into
Singapore is collected by the Singapore Customs while GST on local supplies of goods and
services is collected by GST-registered persons.
The prevailing rate of GST is 9%. Certain supplies are exempt from GST. Broadly, these
include the provision of certain financial services, and the sale and lease of residential
properties. The provision of international services and the export of goods are generally
zero-rated (i.e. subject to GST at a rate of 0%).
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Stamp Duty
There is no stamp duty payable on the subscription and issuance of shares.
Where shares evidenced in certificate form are acquired in Singapore and where a
company maintains a share registry in Singapore, stamp duty is payable on the instrument of
transfer of such shares at the rate of 0.2% of the consideration for, or the net asset value of,
such shares, whichever is higher. The purchaser has an obligation to pay stamp duty, unless
there is an agreement to the contrary. No stamp duty is payable if no instrument of transfer is
executed or the instrument of transfer is executed outside Singapore. However, stamp duty is
payable if the instrument of transfer which is executed outside Singapore, is subsequently
received in Singapore.
Personal Data Protection Act 2012 of Singapore
The Personal Data Protection Act 2012 of Singapore (“ PDPA”) establishes the Singapore
regime for the protection of personal data (i.e. data, whether true or not, about an individual
who can be identified from that data or other information accessible to the relevant
organization) and seeks to ensure that organisations comply with a baseline standard of
protection for personal data of individuals. The PDPA currently imposes ten data protection
obligations on organisations collecting, using or disclosing personal data of individuals,
namely, the accountability obligation, the notification obligation, the consent obligation, the
purpose limitation obligation, the accuracy obligation, the protection obligation, the retention
limitation obligation, the transfer limitation obligation, the access and correction obligation,
and the data breach notification obligation. Non-compliance may lead to financial penalties, or
civil or criminal liability. The Personal Data Protection Commission also has broad powers to
direct the organisations to comply with the provisions of the PDPA.
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OVERVIEW
Our history can be traced back to April 2009 when our Company was founded by Mr.
Xiang under the name of Shenzhen Y uxuan Network Technology Co., Ltd. ( ଉέ̹ρ৐ၣഖҦ
ʮ̡). In October 2020, our Company was converted into a joint stock company with
limited liability and was renamed as FS.COM Limited (ʮ̡).
Over the years of development, we have become a globally leading provider of enterprise-
grade networking solutions. According to Frost & Sullivan, we were the world’s second largest
online DTC networking solution provider in terms of revenue in 2024.
OUR BUSINESS MILESTONES
The following table summarizes the key milestones in our business development:
Y ear Milestone
2009 /H1118/H1118/H1118/H1118/H1118Our Company was founded by Mr. Xiang.
2011 /H1118/H1118/H1118/H1118/H1118We launched our online sales platform.
2015 /H1118/H1118/H1118/H1118/H1118Our flagship brand “FS” was launched and our online sales platform was
officially renamed as FS.com .
2016 /H1118/H1118/H1118/H1118/H1118FS HK was incorporated signifying our glocalized operation and delivery.
We officially launched our product standard system.
2017 /H1118/H1118/H1118/H1118/H1118We established our delivery center in Germany to expand our glocalized
delivery.
FS Germany was incorporated.
2018 /H1118/H1118/H1118/H1118/H1118In line with our global market strategy, FS U.S. and FS Singapore were
incorporated to enhance our global layout.
We established our delivery center in Australia and UK to further expand
our glocalized delivery.
2019 /H1118/H1118/H1118/H1118/H1118Our Global R&D Center was established.
2020 /H1118/H1118/H1118/H1118/H1118Our revenue for the year of 2020 exceeded RMB1 billion.
2022 /H1118/H1118/H1118/H1118/H1118We established our delivery center in Japan to further expand our
glocalized delivery.
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Y ear Milestone
2023 /H1118/H1118/H1118/H1118/H1118We were recognized as a “National Specialized and Sophisticated Little
Giant” Enterprise (ॴਖ਼ၚतอ“ʃ̶ɛ”Άุ) by the Ministry of
Industry and Information Technology of the PRC.
2024 /H1118/H1118/H1118/H1118/H1118Our Global Operation Center was established.
2025 /H1118/H1118/H1118/H1118/H1118We had served more than 500,000 customers, and we offered over 120,000
SKUs under our proprietary brand.
OUR MAJOR SUBSIDIARIES
Our business operations have been carried out by our Company and our global network
of subsidiaries. The table below sets forth the details of our major subsidiaries as of the Latest
Practicable Date:
Name
Place of
incorporation
Date of
incorporation Principal business activities
FS HK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hong Kong November 8,
2016
International trade of our
networking solutions
FS Germany /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Germany May 11, 2017 Sales and delivery of our
networking solutions
FS U.S. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118U.S. April 30, 2018 Sales and delivery of our
networking solutions
FS Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Singapore June 4, 2018 Sales and delivery of our
networking solutions
FS Wuhan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC October 15,
2018
R&D and testing of our
networking solutions
CORPORATE DEVELOPMENT
Incorporation and Early Shareholding Changes of our Company
On April 9, 2009, our Company was incorporated as a limited liability company in the
PRC by Mr. Xiang under the name of Shenzhen Y uxuan Network Technology Co., Ltd. ( ଉέ
ʮ̡) with a registered share capital of RMB100,000. Upon incorporation,
our Company was wholly owned by Mr. Xiang.
On May 8, 2012, the registered share capital of our Company was increased from
RMB100,000 to RMB1,000,000 with the newly increased registered share capital subscribed
by Mr. Xiang at par value.
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Pre-IPO Investments
From November 2015 to March 2025, we have conducted several rounds of Pre-IPO
Investments. See “— Pre-IPO Investments” in this section for details of the Pre-IPO
Investments.
Employee Incentive Scheme
In August 2018, our then Shareholders approved an employee incentive scheme and
resolved to issue RMB73,323 of new registered share capital, representing 5% of the then total
registered share capital of the Company, to Y uxuan Prudence, Y uxuan Progress and Y uxuan
Growth, the employee incentive platforms of the Company, at a total consideration of
RMB45,768,421.
On December 19, 2019, Y uxuan Growth transferred approximately RMB10,900 of
registered share capital, representing approximately 0.71% of the then total registered share
capital of the Company to Y uxuan Prudence, and approximately RMB3,964 of registered share
capital, representing approximately 0.26% of the then total registered share capital of the
Company to Y uxuan Progress at nominal consideration.
Joint Stock Conversion
On October 21, 2020, our Company was converted into a joint stock company with
limited liability and was renamed as FS.COM Limited (ʮ̡)
with our registered share capital increased from RMB1,547,402 to RMB60,000,000. Our then
Shareholders’ respective shareholding percentages remain unchanged immediately before and
after the joint stock conversion.
Capitalization Issue
On December 23, 2021, our then Shareholder resolved to conduct capitalization of the
capital reserve of the Company (the “ Capitalization Issue ”), pursuant to which, the registered
share capital of our Company was increased from RMB63,057,325 to RMB360,000,000, and
a total of 296,942,675 Shares were issued to the then Shareholders in proportion to their
respective then shareholding in the Company. Our then Shareholders’ respective shareholding
percentages remain unchanged immediately before and after the Capitalization Issue.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CAPITALIZATION
The table below summarizes the shareholding structure of our Company as of the Latest
Practicable Date and immediately prior to the completion of the Global Offering.
Name of Shareholder
Number of
Unlisted
Shares held
Approximate
percentage of
shareholding
(%)
Controlling Shareholders
Mr. Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118203,928,528 56.65
Y uxuan Prudence /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,489,819 3.19
Y uxuan Progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,650,548 0.74
Y uxuan Growth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,091,006 0.58
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,159,901 61.16
Fupeng Investors
Gongqingcheng Fupeng Hongxiang No. 3
V enture Capital Partnership (Limited
Partnership) (၅ᘄ҃ୂ䂋໮௴ุҳ༟Υ
ྫΆุ(Υྫ)) (“ Fupeng No. 3 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H111839,405,738 10.95
Ningbo Meishan Bonded Port Area Fupeng
Hongxiang No. 8 Equity Investment
Management Centre (Limited Partnership) ( ྐྵ
ᛆҳ༟၍ଣʕ
ː(Υྫ)) (“ Fupeng No. 8 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,514,646 4.87
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,920,384 15.82
Haitong Innovation Securities Investment Co.,
Ltd. (ʮ̡)( “ Haitong
Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,069,116 4.46
Mr. Y ang Jie (؏)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,850,897 4.40
SCGC Investors
Shenzhen Capital Group Co., Ltd. ( ଉέ̹௴อ
ʮ̡)( “ SCGC ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,272,725 0.91
Shenzhen Hongtu No. 1 Private Equity
Investment Fund Partnership (Limited
Partnership) (ᛆҳ༟ਿ
ΥྫΆุ(Υྫ)) (“ Hongtu No. 1 ”) /H1118/H1118/H11188,181,818 2.27
Shenzhen Nanshan Hongtu Equity Investment
Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ))
(“Nanshan Hongtu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,181,820 0.61
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,636,363 3.79
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Name of Shareholder
Number of
Unlisted
Shares held
Approximate
percentage of
shareholding
(%)
Chaoyue Future and Mr. Peng Chao
Shenzhen Chaoyue Future V enture Capital
Partnership (Limited Partnership) ( ଉέ̹൴
൳͊Ը௴ุҳ༟ΥྫΆุ(Υྫ))
(“Chaoyue Future ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,860,832 1.91
Shenzhen Chaoyue No. 1 Investment
Partnership (Limited Partnership)
(ଉέ൴൳ɓ໮ҳ༟ΥྫΆุ(Υྫ))
(“Chaoyue No. 1 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,636,362 0.45
Mr. Peng Chao ( ు൴) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508,680 0.14
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,005,874 2.50
H&S Investors
Guosen (Zhuhai) Energy Industry Private Equity
Fund Partnership Enterprise (Limited
Partnership) (̾ସ(मऎ)ږ(Ϟ
Υྫ)) (“ Zhuhai H&S ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,478,800 0.97
Xiamen Guosen Lianfa Intelligent Technology
Industry Private Equity Investment Fund
Partnership Enterprise (Limited Partnership)
(Υ
ྫΆุ(Υྫ)) (“ Xiamen H&S ”) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,739,509 0.48
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,218,309 1.45
Hainan Orcas Private Equity Investment Fund
Partnership (limited Partnership) (ᗼӷ
ΥྫΆุ(Υྫ)) (“ Orcas
Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,548,848 1.26
Xiamen Taiya Phase I V enture Capital Partnership
(Limited Partnership) (इԭɓಂ௴ุҳ༟Υ
ྫΆุ(Υྫ)) (“ Taiya Investment ”)/H1118/H1118/H1118/H1118/H1118/H11183,892,093 1.08
Zhuhai Lafang Excellence No. 7 Investment Fund
(Limited Partnership) (ՙ൳ɖ໮ҳ༟ਿ
ږ(Υྫ)) (“ Lafang No. 7 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,083,880 0.86
Jieyang Herun Investment Co., Ltd. ( ౧ජ̹ձᆗ
ʮ̡)( “ Herun Investment
”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,083,880 0.86
Mingcheng Investors
Jinggangshan Mingcheng Ruiying Equity
Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Mingcheng Ruiying ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,090,910 0.30
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Name of Shareholder
Number of
Unlisted
Shares held
Approximate
percentage of
shareholding
(%)
Jinggangshan Mingcheng Feisu Equity
Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Mingcheng Feisu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,090,910 0.30
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,181,820 0.60
Xuzhou Y ongzheng Investment Partnership
(Limited Partnership) (ψ͍͑ҳ༟ΥྫΆุ
(Υྫ)) (“ Y ongzheng Investment ”)/H1118/H1118/H1118/H1118/H1118/H1118/H11181,785,335 0.50
Shenzhen Chiyu Enterprise Management
Partnership (Limited Partnership) ( ଉέཱུ̹༃
Άุ၍ଣΥྫΆุ(Υྫ)) (“ Shenzhen
Chiyu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,739,069 0.48
Ms. Gong Cuihua (ၯശ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,542,048 0.43
Mr. Chen Shaofeng ( ௓ˇᔮ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118649,272 0.18
Shenzhen Sailvan Network Technology Co., Ltd.
(ʮ̡)( “ Sailvan
Network ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118632,911 0.18
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/H1118360,000,000 100.00
MATERIAL ACQUISITIONS, DISPOSALS AND MERGERS
We have not conducted any acquisitions, disposals or mergers during the Track Record
Period and up to the Latest Practicable Date that we consider to be material to us.
PRE-IPO INVESTMENTS
Details of the Pre-IPO Investments are summarized below.
Name of Pre-IPO
Investor Investment method
Date of
contract
Date of
settlement
Amount of
registered share
capital/number of
Shares subscribed/
acquired Consideration (1)
Cost per
Share paid
Discount to
the Offer
Price (5)
(RMB in millions) (RMB) (%)
Angel Investment
Fupeng No. 3 /H1118/H1118/H1118/H1118Subscribe for new
registered share
capital
November 6,
2015
November 9,
2015
RMB178,010 34.00 0.86
(2)(3) 97.59
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Name of Pre-IPO
Investor Investment method
Date of
contract
Date of
settlement
Amount of
registered share
capital/number of
Shares subscribed/
acquired Consideration (1)
Cost per
Share paid
Discount to
the Offer
Price (5)
(RMB in millions) (RMB) (%)
Series Pre-A Investment
Fupeng No. 8 /H1118/H1118/H1118/H1118Subscribe for new
registered share
capital
October 7,
2016
October 26,
2016
RMB79,120 45.00 2.57
(2)(3) 92.79
Taiya Investment /H1118/H1118Subscribe for new
registered share
capital
October 7,
2016
October 26,
2016
RMB17,582 10.00 2.57
(2)(3) 92.79
Mr. Y ang Jie (7) /H1118/H1118/H1118Transfer from Mr.
Xiang
June 28, 2017 November 13,
2020
RMB76,483 48.00 2.84 (2)(3)(4) 92.03
Series A Investment
Lafang No. 7 /H1118/H1118/H1118/H1118Subscribe for new
registered share
capital
September 1,
2017
October 17,
2017
RMB13,931 10.87 3.52
(2)(3) 90.12
Herun Investment /H1118/H1118Subscribe for new
registered share
capital
September 1,
2017
October 23,
2017
RMB13,931 10.87 3.52
(2)(3) 90.12
Ms. Gong Cuihua
(ၯശ) /H1118/H1118/H1118/H1118/H1118
Subscribe for new
registered share
capital
September 1,
2017
December 15,
2017
RMB6,966 5.44 3.52
(2)(3) 90.12
Mr. Chen Shaofeng
(௓ˇᔮ) /H1118/H1118/H1118/H1118/H1118
Transfer from Yihua
Capital (6)
July 10, 2019 July 11, 2019 RMB2,933 4.00 6.16 (2)(3)(4) 82.71
Y ongzheng
Investment (7) /H1118/H1118/H1118
Transfer from Yihua
Capital (6)
July 10, 2019 July 11, 2019 RMB8,065 11.00 6.16 (2)(3)(4) 82.71
Series B Investment
Zhuhai H&S /H1118/H1118/H1118/H1118/H1118Subscribe for new
registered share
capital
July 18, 2019 August 9,
2019
RMB15,715 30.00 8.62
(2)(3) 75.80
Xiamen H&S /H1118/H1118/H1118/H1118Subscribe for new
registered share
capital
July 19, 2019 August 9,
2019
RMB7,858 15.00 8.62
(2)(3) 75.80
Haitong Investment /H1118Transfer from Yihua
Capital (6)
December 11,
2019
December 27,
2019
RMB72,590 123.20 7.67 (2)(3)(4) 78.47
Mr. Peng Chao
(ు൴) /H1118/H1118/H1118/H1118/H1118/H1118
Transfer from Mr.
Xiang
March 24,
2020
February 27,
2020 (12)
RMB2,298 4.50 8.85 (2)(3)(4) 75.16
Shenzhen Chiyu /H1118/H1118/H1118Transfer from
Wanfeng
Investment
(8)
September 23,
2020
September 25,
2020
RMB7,856 18.00 10.35 (2)(3)(4) 70.94
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Name of Pre-IPO
Investor Investment method
Date of
contract
Date of
settlement
Amount of
registered share
capital/number of
Shares subscribed/
acquired Consideration (1)
Cost per
Share paid
Discount to
the Offer
Price (5)
(RMB in millions) (RMB) (%)
Series C Investment
SCGC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subscribe for new
Shares
November 19,
2021
November 29,
2021
573,248 Shares 60.00 18.33 (3) 48.54
Hongtu No. 1 /H1118/H1118/H1118/H1118Subscribe for new
Shares
November 19,
2021
November 26,
2021
1,433,121
Shares
150.00 18.33 (3) 48.54
Nanshan Hongtu /H1118/H1118/H1118Subscribe for new
Shares
November 19,
2021
November 26,
2021
382,166 Shares 40.00 18.33 (3) 48.54
Mingcheng Ruiying /H1118Subscribe for new
Shares
November 19,
2021
November 29,
2021
191,083 Shares 20.00 18.33 (3) 48.54
Mingcheng Feisu /H1118/H1118Subscribe for new
Shares
November 19,
2021
November 29,
2021
191,083 Shares 20.00 18.33 (3) 48.54
Chaoyue No. 1 (13) /H1118/H1118Subscribe for new
Shares
November 19,
2021
December 8,
2021
286,624 Shares 30.00 18.33 (3) 48.54
Chaoyue Future /H1118/H1118/H1118Transfer from
Grandway
Chuangfu
(9)
December 20,
2023
December 20,
2023
5,798,073
Shares
64.42 11.11 (4) 68.81
Transfer from
Grandway
Investment
(10)
July 9, 2024 July 12, 2024 1,062,759
Shares
13.00 12.23 (4) 65.67
Orcas Investment /H1118/H1118Transfer from
Mingcheng
Phase I
(11)
October 16,
2024
October 18,
2024
2,531,646
Shares
40.00 15.80 (4) 55.64
Transfer from
Mingcheng
Phase I
(11)
November 29,
2024
December 4,
2024
937,202
Shares
14.81 15.80 (4) 55.64
Transfer from
Mr. Y ang Jie
March 1,
2025
March 7,
2025
1,080,000
Shares
16.20 15.00 (4) 57.89
Sailvan Network /H1118/H1118/H1118Transfer from
Mingcheng
Phase I
(11)
October 16,
2024
October 21,
2024
632,911
Shares
10.00 15.80 (4) 55.64
Notes:
(1) The consideration was determined after arm’s length negotiations between the parties with reference to the
timing of the investments and the prospect of our business.
(2) For purpose of joint stock conversion, our registered share capital was increased from RMB1,547,402 to
RMB60,000,000, representing an increase of approximately 38.7747 times. See “— Corporate Development
— Joint Stock Conversion” in this section for details. Given the registered share capital of the Company
increased without introduction of any new Shareholder or any investment funds, for purpose of presenting the
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 164 ---
cost per Share paid on a comparable basis especially on a consistent basis with the current registered share
capital of the Company, the cost per Share paid is calculated by dividing the total consideration by 38.7747
times of the total amount of registered share capital subscribed or acquired.
(3) For purpose of the Capitalization Issue, our registered share capital was increased from RMB63,057,325 to
RMB360,000,000, representing an increase of approximately 5.7091 times. See “— Corporate Development
— Capitalization Issue.” Given the registered share capital of the Company increased without introduction of
any new Shareholder or any investment funds, for purpose of presenting the cost per Share paid on a
comparable basis especially on a consistent basis with the current registered share capital of the Company, the
cost per Share paid is calculated by dividing the total consideration by 5.7091 times of the total amount of
registered share capital or total number of Shares subscribed or acquired.
(4) To the best knowledge of the Company, the consideration for such transfer of registered share capital/Shares
was determined among Shareholders after arm’s lengths negotiations taking into consideration our then
valuation, business and prospects, as well as timing of the transaction. Our Company was not involved in such
negotiation.
(5) The discount to the Offer Price is calculated based on the assumption that the Offer Price is HK$38.40 per H
Share, being the mid-point of the indicative Offer Price range of HK$35.20 to HK$41.60 per H Share.
(6) On September 1, 2017, Yihua Capital Management Co., Ltd. (ʮ̡)( “ Yihua Capital ”)
entered into a share subscription agreement with, among others, the Company to subscribe RMB83,588 of new
registered share capital of the Company at a total consideration of RMB65.22 million. The consideration was
determined after arm’s length negotiations between the parties with reference to the timing of the investments
and the prospect of our business. Such subscription was completed on September 28, 2017. Yihua Capital
ceased to be a Shareholder of the Company since December 2019 following the completion of transfer of its
equity interests in the Company to the shareholders of the Company including Mr. Chen Shaofeng, Y ongzheng
Investment and Haitong Investment.
(7) Such Pre-IPO Investors subscribed or acquired our registered share capital through their nominees by proxy
for administrative convenience purpose. The shareholding proxy arrangements have been terminated and the
relevant Shares were directly held by such Pre-IPO Investors as of the Latest Practicable Date.
(8) On July 10, 2019, Wanfeng Jinyuan Investment Co., Ltd. (ʮ̡)( “ Wanfeng Investment ”)
entered into a share subscription agreement with, among others, the Company to subscribe RMB15,712 of new
registered share capital of the Company at a total consideration of RMB29.99 million. The consideration was
determined after arm’s length negotiations between the parties with reference to the timing of the investments
and the prospect of our business. Such subscription was completed on August 21, 2019. Wanfeng Investment
ceased to be a Shareholder of the Company since September 2020 following the completion of transfer of its
equity interests in the Company to the shareholders of the Company including Shenzhen Chiyu, Shenzhen
Grandway Investment Partnership (Limited Partnership) ( ଉέ̹ྗჃҳ༟ΥྫΆุ(Υྫ)) (“ Grandway
Investment ”) and Hangzhou Mingcheng Zhihui Phase I Equity Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Mingcheng Phase I ”).
(9) On July 19, 2019, Shenzhen Grandway Capital Management Co., Ltd. (ʮ̡)
(“Grandway Capital ”) entered into a share subscription agreement with, among others, the Company to
subscribe RMB26,192 of new registered share capital of the Company at a total consideration of RMB50.00
million. The consideration was determined after arm’s length negotiations between the parties with reference
to the timing of the investments and the prospect of our business. Such subscription was completed on August
21, 2019. In November 2021, Grandway Capital transferred all its equity interests in the Company to the
Shenzhen Grandway Chuangfu Investment Partnership (Limited Partnership) ( ଉέ̹ྗჃ௴బҳ༟ΥྫΆุ
(Υྫ)) (“ Grandway Chuangfu ”). Following the completion of the transfer of all its equity interests in
the Company to Chaoyue Future in June 2024, Grandway Chuangfu ceased to be a shareholder of the Company.
(10) Following the completion of the transfer of all its equity interests in the Company to Chaoyue Future in July
2024, Grandway Investment ceased to be a shareholder of the Company.
(11) On March 9, 2020, Mingcheng Phase I entered into a share subscription agreement with, among others, the
Company to subscribe RMB15,474 of new registered share capital of the Company at a total consideration of
RMB31.00 million. The consideration was determined after arm’s length negotiations between the parties with
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reference to the timing of the investments and the prospect of our business. Such subscription was settled on
March 16, 2020. Following the completion of the transfer of all its equity interests in the Company to Orcas
Investment and Sailvan Network in December 2024, Mingcheng Phase I ceased to be a shareholder of the
Company.
(12) In February 2020, Mr. Peng Chao and Mr. Xiang reached a consensus that Mr. Peng Chao would acquire, and
Mr. Xiang would dispose RMB2,298 share capital of the Company at the consideration of RMB4.5 million.
Such consideration was settled on February 27, 2020. Affected by the outbreak of COVID-19 pandemic in
early 2020, Mr. Peng Chao and Mr. Xiang were not able to execute the contract documenting such consensus
in February 2020. Such written contract was ultimately executed and dated March 24, 2020 instead.
(13) On May 21, 2025, the general partner of Chaoyue No.1 was changed from Grandway Capital, being the general
partner of Chaoyue No. 1 at the time of subscription for our Shares, to Hainan Chaoyue V enture Capital Co.,
Ltd. (ʮ̡), which is controlled and owned as to 56% by Mr. Peng Chao.
At the time of the Pre-IPO Investments, our Directors were of the view that our Company
would benefit from the additional capital provided by the Pre-IPO Investors’ investments in our
Company, and that the Pre-IPO Investors’ investments in our Company demonstrated their
confidence in our Group’s operations and served as an endorsement of our Group’s
performance, strengths and prospects.
Use of Proceeds from the Pre-IPO Investments
As of the Latest Practicable Date, all net proceeds from the Pre-IPO Investments had been
utilized for our general operation and business development.
Lock-up Period
Pursuant to the applicable PRC law, the Shares held by our Pre-IPO Investors are subject
to a lock-up period of 12 months after the Listing Date.
Special Rights of Our Pre-IPO Investors
In connection with the Pre-IPO investments, our Pre-IPO Investors were granted certain
special rights. In anticipation of the Global Offering, pursuant to the agreement dated May 27,
2025 entered into, among others, the Company, the Controlling Shareholder, and the
Shareholders (the “ 2025 Shareholders’ Agreement ”), all such special rights including
information right, right of first refusal and tag-along rights, and divestment right, etc. granted
to our Pre-IPO Investors were terminated as of the date of our first submission of the Listing
application to the Stock Exchange.
Pursuant to the 2025 Shareholders’ Agreement, if the Listing does not take place under
circumstances including withdrawal of the Listing application, the rejection or return of the
Listing application by the Stock Exchange, and the lapse of the Listing application without
resubmission of the Listing application within a prescribed time, the divestment right as
previously granted to Pre-IPO Investors (which were then borne by the Controlling
Shareholder) shall be resumed to be exerciseable and borne by our Company (the “ Resumption
of Divestment Rights ”). See Notes 33 and 44 to the Accountants’ Report in Appendix I to this
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prospectus for details. Considering the Company had no obligation to repurchase the Shares
from January 1, 2022 to May 27, 2025, no redemption liability was recorded for the three years
ended December 31, 2024. The redemption liability recorded as at September 30, 2025 is
RMB664.2 million.
As confirmed by the Company, during the Track Record Period and up to the date of this
Prospectus, 1) there has been no other side arrangements between the Company and the
Pre-IPO investors or between the Company and Mr. Xiang regarding divestment rights granted
to the Pre-IPO Investors; and 2) the Company did not provide any guarantee on the divestment
rights as previously granted by Mr. Xiang to the Pre-IPO Investors. The redemption obligation
in respect of the divestment right granted to the Pre-IPO Investors was borne by the Controlling
Shareholder, Mr. Xiang, from the beginning of the Track Record Period (January 1, 2022) until
the date of the 2025 Shareholders’ Agreement. Upon entering into the 2025 Shareholders’
Agreement which provided for the Resumption of Divestment Rights, such redemption
obligation was assumed by the Company instead of the Controlling Shareholder and was
recognized as financial liability of the Company. See Notes 33 and 44 to the Accountants’
Report in Appendix I to this prospectus for details. As confirmed by the Controlling
Shareholders, there has been no other side agreements between the Controlling Shareholders
and the Pre-IPO Investments regarding the divestment rights granted to the Pre-IPO Investors
during the Track Record Period and up to the date of this Prospectus.
Compliance with the Guide for New Listing Applicants
On the basis that the consideration for the Pre-IPO Investments was settled more than 120
days before the Listing Date and all special right have been terminated, the Joint Sponsors
confirmed that the Pre-IPO Investments are in compliance with Chapter 4.2 of the Guide for
New Listing Applicants.
Information regarding Our Pre-IPO Investors
Set out below is a description of our Pre-IPO Investors. To the best of our knowledge,
save as disclosed below, each of the Pre-IPO Investors is independent from each other.
Fupeng No. 3 and Fupeng No. 8
Fupeng No. 3 is a limited partnership established under the laws of the PRC. The general
partner of Fupeng No. 3 is Shenzhen Jiwang Enterprise Management Partnership Enterprise
(Limited Partnership) (Άุ၍ଣΥྫΆุ(Υྫ), the “ Shenzhen Jiwang ”),
whose general partner is Shenzhen Fupeng Asset Management Co., Ltd. ( ଉέ̹၅ᘄ༟ପ၍ଣ
ʮ̡)( “ Fupeng Asset ”). The largest limited partner of Shenzhen Jiwang is Mr. Y ang Jie
holding approximately 99.92% partnership interests therein. Fupeng Asset is wholly owned by
Mr. Chen Baogan ( ௓䄕଑), an Independent Third Party. The largest limited partner of Fupeng
No. 3 is Mr. Y uan Ruping ( ঺ϧ̻), an Independent Third Party, holding 15.36% partnership
interests therein. Each of the other 19 limited partners of Fupeng No. 3 holds less than 12%
of the partnership interest in Fupeng No. 3 and is an Independent Third Party.
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Fupeng No. 8 is a limited partnership established under the laws of the PRC and managed
by its general partner, Fupeng Asset. Mr. Lin Shiyi (ۯand Mr. He Hongzhou (ݲ,)
each an Independent Third Party, are limited partner of Fupeng No. 8 and hold 88.87% and
11.11% partnership interests therein, respectively.
Haitong Investment
Haitong Investment is a limited liability company incorporated under the laws of the
PRC, which is wholly owned by Guotai Haitong Securities Co., Ltd. (ࠢ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 601211) and the Main
Board of the Stock Exchange (stock code: 02611).
Chaoyue Future, Chaoyue No. 1 and Mr. Peng Chao (
ు൴)
Chaoyue Future and Chaoyue No. 1 are limited partnerships established under the laws
of the PRC. The general partner of Chaoyue Future and Chaoyue No. 1 are Hainan Chaoyue
V enture Capital Co., Ltd. (ʮ̡) which is owned as to 56% by Mr. Peng
Chao, our non-executive Director, with the remaining shareholding held by four Independent
Third Parties, each holding less than 20% equity interests therein. The largest limited partner
of Chaoyue Future is Changdu Kaifeng Investment Management Co., Ltd. (ே̹௱ᔮҳ༟၍
ʮ̡) holding approximately 33.3% partnership interests therein which is owned as to
50% by Mr. Wu Xing (݋an Independent Third Party. None of the other shareholders of
Changdu Kaifeng Investment Management Co., Ltd. holds more than 20% equity interests
therein. Mr. Peng Chao is also a limited partner of Chaoyue Future holding approximately 3.3%
partnership interest therein. Except for Changdu Kaifeng Investment Management Co., Ltd.,
each of the other 12 limited partners of Chaoyue Future holds less than one third of the
partnership interest in Chaoyue Future. Except for Mr. Peng Chao, each of the other 12 limited
partners of Chaoyue Future is an Independent Third Party. Each of the limited partners of
Chaoyue No.1 holds less than one third of the partnership interest in Chaoyue No.1 and is an
Independent Third Party.
Mr. Peng Chao is an individual Pre-IPO Investor who from time to time participates in
various investment opportunities with a primary focus in China and a non-executive Director
of our Company. See “Directors, Supervisors and Senior Management” in this prospectus for
biographic details of Mr. Peng Chao.
Taiya Investment
Taiya Investment is a limited partnership established under the laws of the PRC. The
general partner of Taiya Investment is Xiamen Taiya Dingfu Investment Management Co., Ltd.
(ʮ̡), which is owned by Mr. Lin Shiyi (ۯMr. Qin Wei ( ॢ
ਃ) and Ms. Huang Xiaorong ( රʃႂ), each an Independent Third Party, as to 50%, 30% and
20%, respectively. Taiya Investment has only one limited partner, Mr. Lin Songbai (ݡؒ؍,)
an Independent Third Party who holds approximately 99.5% of the partnership interest therein.
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Zhuhai H&S and Xiamen H&S
Zhuhai H&S and Xiamen H&S are limited partnerships established under the laws of the
PRC. The general partner of both Zhuhai H&S and Xiamen H&S is Guosen H&S Private
Equity Fund Management Co., Ltd. (ʮ̡), which is a wholly
owned subsidiary of Shenzhen Guosen Securities Co., Ltd. (ʮ̡), a
company listed on the Shenzhen Stock Exchange (stock code: 002736). The largest limited
partner of Zhuhai H&S holding approximately 33.3% partnership interests therein is Hubei
Culture Tourism Capital Co., Ltd. (ʮ̡), a wholly-owned subsidiary of
Hubei Culture & Tourism Group Co., Ltd. (ʮ̡), which is in turn
owned as to 72.4% by the State-owned Assets Supervision and Administration Commission of
the People’s Government of Hubei Province (ึ). The
largest limited partner of Xiamen H&S holding approximately 33.3% partnership interests
therein is United Nations Development Group Co., Ltd. (ʮ̡) which is owned
as to 95% by Xiamen C&D Inc. (ʮ̡), a company listed on the Shanghai
Stock Exchange (stock code: 600153). Except for Hubei Culture Tourism Capital Holding Co.,
Ltd. and United Nations Development Group Co., Ltd., each of the other 2 limited partners of
Zhuhai H&S and 4 limited partners of Xiamen H&S holds less than one third of the partnership
interest in Zhuhai H&S and/or Xiamen H&S and is an Independent Third Party.
Lafang No. 7
Lafang No. 7 is a limited partnership established under the laws of the PRC. The general
partner of Lafang No. 7 is Shenzhen Lafang Investment Management Co,. Ltd. (ҳ
ʮ̡), which is owned by Mr. Wu Guiqian (ᑹ) and Ms. Zheng Qingying ( ቍ
ߵeach an Independent Third Party, as to 70% and 30%, respectively. The largest limited
partner of Lafang No. 7 holding approximately 85.75% partnership interests therein is Zhuhai
Hengqin Mingchen V enture Capital Fund (Limited Partnership) (ږ
(Υྫ)) whose general partner is Shenzhen Shenghaoyuan Investment Management Co.,
Ltd. (ʮ̡), a company owned by Mr. Tan Qing ( ሔ૶) and Mr. Wu
Guangting ( юΈҒ), each an Independent Third Party, as to 70% and 30%, respectively. The
other limited partners of Lafang No. 7 are Mr. Wu Binhua ( юᏵശ), Ms. Zheng Yingqing ( ቍ
ߵeach an Independent Third Party, holding 7.09% and 7.09% partnership interests therein,
respectively.
Herun Investment
Herun Investment is a limited liability company incorporated under the laws of the PRC,
which is owned by Mr. Chen Jianwu (؛and Mr. Chen Junhong (҃), each an
Independent Third Party, as to 70% and 30%, respectively. Mr. Chen Jianwu is an individual
investor who from time to time engages in equity investment business.
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Y ongzheng Investment
Y ongzheng Investment is a limited partnership established under the laws of the PRC, the
general partner of which is Mr. Cai Dujie ( ᇹӁ௫), an Independent Third Party. Y ongzheng
Investment has three limited partners, namely Mr. Chen Zhiwei ( ௓౽ਃ), Mr. Huang Junchao
(ᆓ) and Mr. Li Xinbiao (ᅺ), who are Independent Third Parties holding 50%,
27.27% and 4.55% partnership interests therein. Mr. Cai Dujie, Mr. Chen Zhiwei, Mr. Huang
Junchao and Mr. Li Xinbiao are individual investors who from time to time engage in equity
investment business.
Shenzhen Chiyu
Shenzhen Chiyu is a limited partnership established under the laws of the PRC, the
general partner of which is Mr. Huang Xiaoyan ( රʃඨ), an Independent Third Party. The
largest limited partner of Shenzhen Chiyu is Ms. Peng Xiumei ( ు㝫ૠ), an Independent Third
Party, holding 25.21% partnership interests therein. Each of the other 7 limited partners of
Shenzhen Chiyu holds less than 21% of the partnership interest therein and is an Independent
Third Party. Mr. Huang Xiaoyan is a private securities investment fund manager and the legal
representative and general manager of Shenzhen Tainzhihui Investment Management Co., Ltd.
(ʮ̡).
SCGC, Hongtu No. 1 and Nanshan Hongtu
SCGC is a limited liability company incorporated in the PRC, the largest shareholder of
which is State-owned Assets Supervision and Management Commission of Shenzhen
Municipal People’s Government (ึ) holding 28.20% equity
interest therein. None of the other shareholders of SCGC holds more than 25% equity interest
therein.
Hongtu No. 1 is a limited partnership established under the laws of the PRC, the general
partner of which is SGCG Hongtu Private Equity Investment Fund Management (Shenzhen)
Co., Ltd. (၍ଣ(ଉέ)ʮ̡), a wholly-owned subsidiary of
SCGC. The largest limited partners of Hongtu No. 1 are Shenzhen Guiding Fund Investment
Co., Ltd. (ʮ̡), a company wholly owned by the Finance Bureau of
Shenzhen (҅), and CCB Navigation Strategic Emerging Industry Development
Fund (Limited Partnership) (ږ(Υྫ)), each holding
22.15% partnership interests therein. The general partner of CCB Navigation Strategic
Emerging Industry Development Fund (Limited Partnership) is CCB Equity Investment
Management Co., Ltd. (ப΂ʮ̡), which is ultimately controlled by
China Construction Bank Corporation (ʮ̡), a PRC commercial bank
with its shares listed on the Main Board of the Stock Exchange (stock code: 00939) and the
Shanghai Stock Exchange (stock code: 601939). Each of the other 28 limited partners of
Hongtu No. 1 holds less than one third of the partnership interest in Hongtu No. 1 and is an
Independent Third Party.
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Nanshan Hongtu is a limited partnership established under the laws of the PRC, the
general partner of which is Shenzhen Nanshan Hongtu Equity Investment Fund Management
Co., Ltd. (ʮ̡), a wholly-owned subsidiary of SGCG
Hongtu Private Equity Investment Fund Management (Shenzhen) Co., Ltd. Shenzhen Hongtu
V enture Capital Co., Ltd. (ʮ̡), a wholly owned subsidiary of
SCGC, and Shenzhen Guiding Fund Investment Co., Ltd., as limited partners of Nanshan
Hongtu, hold 40% and 35% of partnership interest therein, respectively. Except for Shenzhen
Hongtu V enture Capital Co., Ltd. and Shenzhen Guiding Fund Investment Co., Ltd., each of the
other 4 limited partners of Nanshan Hongtu holds less than one third of the partnership interest
in Nanshan Hongtu and is an Independent Third Party.
Mingcheng Feisu and Mingcheng Ruiying
Mingcheng Feisu and Mingcheng Ruiying are limited partnerships established under the
laws of the PRC. The general partner of Mingcheng Feisu and Mingcheng Ruiying is
Mingcheng Zhihui (Hangzhou) Equity Investment Co., Ltd. (ᅆ(ψ)ʮ
̡), which is owned as to 68% by Mr. Hu Huayong (ۇan Independent Third Party. The
largest limited partner of Mingcheng Feisu holding approximately 59.86% partnership interests
therein is Mr. Wu Fucai ( ю၅ৌ), an Independent Third Party. The largest limited partner of
Mingcheng Ruiying holding approximately 52.03% partnership interests therein is Shenzhen
Huanyi Investment Partnership Enterprise (Limited Partnership) (Ὸҳ༟ΥྫΆุ(ࠢ
Υྫ)), the general partner of which is Shenzhen Qianhai Zhaohuan Capital Co., Ltd. (ۃ
ʮ̡), a company ultimately controlled by Mr. Zhang Xiangdong (؇an
Independent Third Party. Except for Mr. Wu Fucai and Shenzhen Huanyi Investment
Partnership (Limited Partnership), each of the other 4 limited partners of Mingcheng Feisu and
4 limited partners of Mingcheng Ruiying holds less than one third of the partnership interest
in Mingcheng Feisu and/or Mingcheng Ruiying and is an Independent Third Party.
Orcas Investment
Orcas Investment is a limited partnership established under the laws of the PRC whose
general partner is Hainan Orcas Private Equity Investment Fund Management Co., Ltd. (ی
ʮ̡), a company owned as to 85.5% by Mr. HO
CHUN YU (ρ), an Independent Third Party. The largest limited partner of Orcas
Investment is Service Trade Innovation Development Guidance Fund (Limited Partnership) (؂
ږ(Υྫ)) holding 20% partnership interests therein. Each of the
other 20 limited partners of Orcas Investment holds less than 20% of the partnership interest
in Orcas Investment and is an Independent Third Party.
Sailvan Network
Sailvan Network is a limited liability company incorporated in the PRC and a
wholly-owned subsidiary of Sailvan Times Technology Co., Ltd. (ʮ
̡), a company listed on the Shenzhen Stock Exchange (stock code: 301381).
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Mr. Yang Jie (؏)
Mr. Y ang Jie is an individual investor who from time to time participates in various
investment opportunities with a primary focus in China. Mr. Y ang Jie is the largest limited
partner of Shenzhen Jiwang holding approximately 99.92% partnership interests therein.
Shenzhen Jiwang is the general partner of Fupeng No. 3, one of our Shareholders.
Ms. Gong Cuihua (
ၯശ)
Ms. Gong Cuihua is an individual investor who from time to time engages in investment
business.
Mr. Chen Shaofeng ( ௓ˇᔮ)
Mr. Chen Shaofeng is an individual investor who from time to time engages in equity
investment related business.
PUBLIC FLOAT
Pursuant to Rule 19A.13A(1) of the Listing Rules, assuming that the Over-allotment
Option is not exercised, (i) based on an Offer Price of HK$35.20 per Offer Share (being the
low end of the indicative Offer Price range), our expected market capitalization upon the
Listing is HK$14.08 billion, and the minimum prescribed public float percentage applicable to
our Shares is 15.00%; (ii) based on an Offer Price of HK$38.40 per Offer Share (being the
mid-point of the indicative Offer Price range), our expected market capitalization upon the
Listing is HK$15.36 billion, and the minimum prescribed public float percentage applicable to
our Shares is 15.00%; and (iii) based on an Offer Price of HK$41.60 per Offer Share (being
the top end of the indicative Offer Price range), our expected market capitalization upon the
Listing is HK$16.64 billion, and the minimum prescribed public float percentage applicable to
our Shares is 15.00%.
Upon completion of the Global Offering (assuming the Over-allotment Option is not
exercised) and the Conversion of Unlisted Shares into H Shares, an aggregate of 286,086,159
H Shares held by (i) Mr. Xiang, Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth, our
Controlling Shareholders, (ii) Fupeng No. 3 and Fupeng No. 8, our substantial shareholders,
(iii) Mr. Peng Chao, our non-executive Director, and (iv) Chaoyue Future and Chaoyue No. 1,
entities ultimately controlled by Mr. Peng Chao, will not be counted towards the public float.
Except as stated above, all the 73,913,841 H Shares held by other Shareholders and the
40,000,000 H Shares to be issued under the Global Offering will be counted towards the public
float for the purpose of Rule 19A.13A(1) of the Listing Rules, representing 28.48% of total
issued Shares. Accordingly, at the time of Listing, we will maintain a sufficient public float as
required under Rule 19A.13A(1) of the Listing Rules.
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FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC issuer
with no other listed shares at the time of Listing, this will normally mean that the portion of
H shares for which listing is sought that are held by the public and not subject to any disposal
restrictions (whether under contract, the Listing Rules, applicable laws or otherwise), at the
time of listing, must: (a) represent at least 10% of the total number of issued shares in the class
to which H shares belong at the time of listing (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.
It is expected that immediately following completion of the Listing, a market
capitalization of not less than HK$600 million of the H Shares listed on the Stock Exchange
will not be subject to such disposal restrictions at the time of the Listing. Accordingly, our
Company will be able to satisfy the requirements under Rule 19A.13C(b) of the Listing Rules.
PRC LEGAL ADVISOR’S CONFIRMATION
As advised by our PRC Legal Advisor, the abovementioned equity transfers involving our
Shares, increase in share capital and conversion from a limited liability company to a joint
stock company with limited liability have been properly and legally completed in all material
respects and all requisite regulatory approvals have been obtained in accordance with the
applicable PRC laws and regulations in all material respects.
EMPLOYEE INCENTIVE PLATFORMS
In order to further enhance our corporate governance structure, attract and retain
management talents and employees, incentivize our employees to promote our sustainable
development and balance our long-term and short-term goals, we adopted employee incentive
schemes to award the partnership interests in our Employee Incentive Platforms to the scheme
participants.
See “Statutory and General Information — 5. Employee Incentive Schemes” in Appendix
V to this prospectus for details of our employee incentive schemes and employee incentive
platforms.
PREVIOUS A SHARE LISTING ATTEMPT
To explore the opportunity of establishing a capital market platform in the A-share
market, our Company submitted the A share listing application to the CSRC on June 21, 2022
(the “ A Share Listing Application ”). In November 2023, considering overall capital markets
condition and as a company with global layout, the Listing on the Stock Exchange would
provide the Company with an international platform to gain access to foreign capital and to
promote the Group to overseas investors, the Company discussed with professional parties to
explore the possibility of switching to the Listing on the Stock Exchange and had some
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preliminary discussions with certain Shareholders. After thorough discussions with the then
Directors (including, among others, the non-executive Directors nominated by Shareholders
and independent Directors), on March 22, 2024, the Directors unanimously approved to
withdraw the A Share Listing Application. According to our application to withdraw the A
Share Listing Application submitted on April 2, 2024, the Shenzhen Stock Exchange
terminated its vetting process on May 11, 2024.
On March 21, 2023 and September 4, 2023, we received certain comments (the “ SSE
Comments ”) from relevant regulatory authorities in respect of our A Share Listing Application
mainly regarding our industry and business, IT system, and financial information etc.
Considering (i) the Company and relevant parties have submitted responses on June 7, 2023
and February 2, 2024, in response to the SSE Comments, revised draft listing documents and
other documents to the relevant regulatory authorities and no further follow-up comments were
received by the Company or relevant parties with respects to the matters mentioned in the SSE
Comments from the relevant authorities; and (ii) there were no outstanding comments from the
Shenzhen Stock Exchange at the time of lodging the withdrawal application of the A Share
Listing Application, the Company is of the view that the SSE Comments had been satisfactorily
addressed in all material respects.
The Shenzhen Stock Exchange conducted a two-week on-site supervision from March 11,
2024 to March 24, 2024. On January 10, 2025, Shenzhen Stock Exchange issued a regulatory
letter (the “ Regulatory Letter ”) to our Company and Mr. Xiang, which was mainly regarding
certain deficiencies in our Company’s internal control system, including (i) the accuracy of
certain information displayed in the front-end sales platform (the “ Front-End Display
Deficiency ”). The Company assigned different product IDs to the different specifications (e.g.
compatibility, colour etc.) of one type of product. The back-end financial systems recorded the
sales volume per product ID to ensure accuracy. On the other hand, the front-end sales platform
displays the aggregated sales volume of multiple product IDs for the same type of product, to
give potential customers a consistent impression and a full picture of the aggregated sales
volume for any single type of product; (ii) system operation logs retaining deficiency (the
“Operating Log Retaining Deficiency ”). During an operation log system upgrade in April
2023 for server mitigation, unforeseen technical issues during the upgrade resulted in loss of
one-month operation logs. The Company initiated such system upgrade due to the large volume
of operation logs data and anticipated shortage of storage space on the original server; and (iii)
lack of internal management systems for reverse settlement and reverse audit (the “ Reverse
Settlement/Audit Deficiency ”). To ensure accuracy of data in the Company’s financial system,
responsible financial staff may remove data with errors, or those data the auditor of the
Company required to adjust, and input the correct data in the Company’s financial system.
Such actions were labelled as reverse settlement by the financial system of the Company. The
internal control deficiencies do not constitute a breach of any applicable laws and rules. No
disciplinary actions or penalties were taken by the Shenzhen Stock Exchange in respect of the
Regulatory Letter and no response was required for the Regulatory Letter. To the best of our
knowledge and as confirmed by our PRC Legal Advisor, there are no outstanding matters,
ongoing investigations or disciplinary actions by the Shenzhen Stock Exchange, the CSRC or
other competent authorities against our Company, our subsidiaries, Directors, shareholders and
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the sponsor, auditor, PRC counsel as well as the asset appraisal institution engaged by the
Company for the A Share Listing Application in respect of the Regulatory Letters and the A
Share Listing Application. The Company has rectified the issues identified in the Regulatory
Letter and had enhanced its internal control mechanisms by (i) establishing a real-time
synchronization and update mechanism to align the information display approach across
front-end and back-end systems, relevant information was presented/recorded per product ID
in front-end and back-end systems, rather than on an aggregated basis; (ii) rectifying the
technical issues which resulted in the loss of operation logs. There has been no reoccurrence
of any loss of operation logs up to the Latest Practicable Date; and (iii) establishing
corresponding internal control measures which require that any reverse settlement must be
pre-approved and followed by a written record setting out the details of the reverse settlement.
In addition, we have taken into consideration of such comments and also enhanced our internal
control system in preparing for the Listing. The Directors are of the view that, considering (i)
the nature of the three issues identified in the Regulatory Letter; (ii) the three issues identified
in the Regulatory Letter have been rectified; (iii) no administrative penalty has been taken by
the Shenzhen Stock Exchange, the CSRC or other competent authorities, and to the best of our
knowledge and as confirmed by our PRC Legal Advisor, there are no outstanding matters,
ongoing investigations or disciplinary actions by the Shenzhen Stock Exchange, the CSRC or
other competent authorities against our Company, our subsidiaries, Directors, shareholders and
the sponsor, auditor, PRC counsel, asset appraisal institution engaged by the Company for the
A Share Listing Application, the internal control issues identified in the Regulatory Letter do
not have any material adverse impact on our Group.
To the best of our Directors’ knowledge and belief, considering (i) the nature of the issues
identified in the Regulatory Letter which do not relate to any fraudulent conduct of the
Company and Mr. Xiang; (ii) the Regulatory Letter did not make any findings of fact
suggesting acts of dishonesty or actions in bad faith by our Company and Mr. Xiang, (iii) it was
not an intentional breach of the duty of good faith and trustworthiness for the issues identified
in the Regulatory Letter, whose nature does not involve any suggestion of bad faiths, (iv) our
Company has enhanced our internal control systems and the internal control deficiencies
identified in the Regulatory Letter have been rectified, and (v) save for being addressed in the
Regulatory Letter, the Company and Mr. Xiang was not involved in any administrative penalty,
convicted, charged, summoned, penalised or named in any regulatory letter over any offences,
violations or breach of laws or regulations with respect to the A Share Listing Application, our
Directors have confirmed that they are not aware of any material matters or findings relating
to the A Share Listing Application or the Regulatory Letter which have been brought to their
attention that might materially and adversely affect our suitability for the Listing under Rule
8.04 of the Listing Rules or Mr. Xiang’s suitability under Rules 3.08 and 3.09 of the Listing
Rules or should be brought to the attention of the Stock Exchange and/or the prospective
investors in the Global Offering. See “Directors, Supervisors and Senior Management —
Directors’ and Supervisors’ Interest and Confirmation.”
In respect of the A Share Listing Application, the Joint Sponsors have conducted the
following due diligence: (i) obtaining and reviewing the A Share Listing Application
documents and the subsequent replies to the comments of the Shenzhen Stock Exchange; (ii)
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conducting interviews with the management of the Company and key professional parties
involved in the A Share Listing Application to understand, among others, the background of
and reason for the withdrawal of the A Share Listing Application; and (iii) interviewing the
professional parties involved in the A Share Listing Application process, which confirmed that
the Company and Mr. Xiang were fully cooperative throughout.
In respect of the Regulatory Letter, the Joint Sponsors have conducted the following due
diligence:(i) conducting interviews with the management of the Company and key professional
parties involved in the A Share Listing Application to understand, among others, the
background and their view on the Regulatory Letter; (ii) consulting the Company’s PRC Legal
Advisor, which have confirmed that the Regulatory Letter does not constitute any
administrative penalty or sanction under PRC laws, and does not affect the qualification of Mr.
Xiang acting as a director under applicable PRC laws; and (iii) interviewing the professional
parties involved in the A Share Listing Application process, and noted that none of them
disclosed any concerns regarding Mr. Xiang’s integrity.
In respect of the Front-End Display Deficiency, the Joint Sponsors have conducted the
following due diligence: (i) conducting interviews with the management of the Company to
understand, among others, the background and their view on the Front-End Display Deficiency;
(ii) reviewing the internal control report prepared by an independent internal control consultant
engaged by the Company; (iii) reviewing the report on the Company’s information technology
system prepared by an independent information technology consultant engaged by the
Company, which has found no material discrepancies between the back-end data of the
Company financial system and the front-end data of the Company’s sales platform and (iv)
selecting samples of products of the Group and checked the consistency between their numbers
of the sales volume on the Company’s online sales platform and the Company’s enterprise
resource planning system. On the basis of the foregoing, the Joint Sponsors are satisfied that
the Front-End Display Deficiency has been rectified.
In respect of the Operating Log Retaining Deficiency, the Joint Sponsors have conducted
the following due diligence: (i) conducting interviews with the management of the Company
to understand, among others, the background and their view on the Operating Log Retaining
Deficiency; (ii) reviewing the internal control report prepared by an independent internal
control consultant engaged by the Company, which confirms, among others, that appropriate
policies on operation system logs retention have been put in place for six months and there
have been no adverse findings; and (iii) reviewing the available samples of system logs and
system logs report during the Track Record Period, and have not identified any additional loss
of logs. On the basis of the foregoing, the Joint Sponsors are satisfied that the Operating Log
Retaining Deficiency has been rectified.
In respect of the Reverse Settlement/Audit Deficiency, the Joint Sponsors have conducted
the following due diligence: (i) conducting interviews with the management of the Company
to understand, among others, the background and their view on the Reverse Settlement/Audit
Deficiency; (ii) reviewing the internal control report prepared by an independent internal
control consultant engaged by the Company, as well as a list of transactions relating to the
Company’s internal reverse settlement requests and approval status in 2024 and 2025, which
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confirms, among others, that enhanced approval procedures and documentary record
requirements relating to reverse settlements and audit procedures have been implemented; and
(iii) reviewing the relevant updated policy about reverse settlement of the Company, and the
Company’s internal records for approval procedures for reverse settlement. On the basis of the
foregoing, the Joint Sponsors are satisfied that Reverse Settlement/Audit Deficiency has been
rectified.
Based on the above due diligence, the Joint Sponsors are of the view that the issues
identified in the Regulatory Letter do not have any material adverse impact on the Group and
are not aware of any material issues that would affect the suitability of the Company or its
business for listing under Rule 8.04 of the Listing Rules and there is nothing else in connection
with the A Share Listing Application and the Regulatory Letters that should be brought to
attention of the Stock Exchange.
Based on the due enquiries, review of relevant documents, and independent due diligence
conducted by the Joint Sponsors as detailed above, nothing has come to the attention of the
Joint Sponsors that would lead them to believe there is any matter that may affect Mr. Xiang’s
suitability under Rules 3.08 and 3.09 of the Listing Rules in relation to the Regulatory Letter.
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CORPORATE STRUCTURE
Corporate structure immediately before completion of the Global Offering
The following chart sets forth our shareholding structure as of the Latest Practicable Date and immediately before completion of the Global
Offering:
Haitong
Investment (3)
Yu xu a n
Prudence(2)
Yu xu a n
Growth(2)
Yu xu a n
Progress(2)
Fupeng No. 3
and
Fupeng No. 8(3)
Mr. Peng Chao
(ᖝ䎵), Chaoyue
Future and
Chaoyue No. 1 (3)
Zhuhai H&S
and
Xiamen H&S(3)
Orcas
Investment (3)
Mr. Xiang(2)
Taiya
Investment (3)
SCGC, Hongtu
No.1 and
Nanshan Hongtu (3)
Our Company
56.65% 3.19% 0.74% 0.58%
Controlling Shareholders
15.81% 4.46% 4.40% 3.79% 2.50% 1.45% 1.08%
Other Pre-IPO
Investors (1)
1.26% 4.09%
Mr.Y ang Jie
(ὺᶠ)(3)
Feisu Innovation
Com m unication Technology
(Shanghai) Co., Ltd. (伋䙏
ᢰ㺃(к⎧)
ਨ)
(PRC)
FS Wuhan
(PRC)
Shenzhen Feisu Innovation
International Trade Co., Ltd.
(ᯠ഻䳋䋯᱃
ਨ)
(PRC)
Wuhan Feisu Innovation
B usiness Service C o., L td.
(ᯠ୶उᴽउ
ਨ)
(PRC)
FS HK
(Hong Kong)
100% 100% 100% 100% 100%
FS U.S.
(U.S.)
100%
FS.COM INNOVATION
LT D
(UK)
100%
FS Germany
(Germany)
100%
FS.COM PTY L TD
(Australia)
100%
FS Singapore
(Singapore)
100%
FS JAPAN CO., LTD.
(Japan)
100%
FS INNOVATION
CANADA INC.
(Canada)
100%
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Notes:
(1) Refers to 9 Pre-IPO Investors of the Company, including Lafang No. 7, Herun Investment, Mingcheng Ruiying,
Mingcheng Feisu, Y ongzheng Investment, Shenzhen Chiyu, Ms. Gong Cuihua, Mr. Chen Shaofeng and Sailvan
Network. See “— Capitalization” and “— Pre-IPO Investments.”
(2) Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth are employee incentive platforms of our Company,
which are controlled and managed by their general partner, Mr. Xiang. See “— Employee Incentive Platforms”
and “Appendix V — Statutory and General Information — 5. Employee Incentive Schemes.”
(3) See “— Pre-IPO Investments — Information regarding Our Pre-IPO Investors.”
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Corporate structure immediately following completion of the Global Offering
The following chart sets forth our corporate structure immediately after the completion of the Global Offering and the Conversion of Unlisted
Shares into H Shares (assuming the Over-allotment Option is not exercised):
Haitong
Investment (3)
Yu xu a n
Prudence(2)
Yu xu a n
Growth(2)
Yu xu a n
Progress(2)
Fupeng No. 3
and
Fupeng No. 8(3)
Mr. Peng Chao
(ᖝ䎵), Chaoyue
Future and
Chaoyue No. 1 (3)
Zhuhai H&S
and
Xiamen H&S(3)
Orcas
Investment (3)
Mr. Xiang(2)
Taiya
Investm ent(3)
SCGC, Hongtu
No. 1 and
Nanshan Hongtu (3)
Our Company
50.98% 2.87% 0.66% 0.52%
Controlling Shareholders
14.23% 4.02% 3.96% 3.41% 2.25% 1.30% 0.97%
Other Pre-IPO
Investors (1)
1.14% 3.67%
Mr.Y ang Jie
(ὺᶠ)(3)
Feisu Innovation
Com m unication Technology
(Shanghai) Co., Ltd. (伋䙏
ᢰ㺃(к⎧)
ਨ)
(PRC)
FS Wuhan
(PRC)
Shenzhen Feisu Innovation
International Trade Co., Ltd.
(ᯠ഻䳋䋯᱃
ਨ)
(PRC)
Wuhan Feisu Innovation
B usiness Service C o., L td.
(ᯠ୶उᴽउ
ਨ)
(PRC)
FS HK
(Hong Kong)
100% 100% 100% 100% 100%
FS U.S.
(U.S.)
FS.COM INNOVATION
LT D
(UK)
FS Germany
(Germany)
FS.COM PTY L TD
(Australia)
FS Singapore
(Singapore)
FS JAP AN CO., LTD.
(Japan)
100% 100% 100% 100% 100% 100%
FS INNOVATION
CANADA INC.
(Canada)
100%
Other Public
Shareholders
10.00%
Notes:
(1) to (3) See notes in “— Corporate Structure — Corporate structure immediately before completion of the Global Offering.”
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OVERVIEW
We were the world’s second largest online DTC networking solution provider in terms of
revenue in 2024 with a 6.9% market share, according to Frost & Sullivan. Our networking
solutions empower businesses globally to achieve efficient digital transformations. Through
our online sales platform, FS.com , we deliver scalable, cost-effective and one-stop networking
solutions. Our solutions range includes high-performance networking equipment, scalable
networking equipment operating system and cloud-based network management platform. Our
solutions support scenarios include high-performance computing, data centers, enterprise
networks and telecommunications, meeting the demand for both enterprise-grade high-
performance networking solutions and general networking solutions for worldwide customers
through our platform-centric and online-enabled approach.
Our customer-centric approach has fostered a global customer base spanning across
various industries. As of the Latest Practicable Date, we had served more than 500,000
customers in over 200 countries and regions worldwide, covering approximately 60% of
Fortune 500 companies from a wide spectrum of sectors including, among others, information
technology, financial services, healthcare, education, automotive and electronics. In 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, approximately 74,000,
76,600, 82,500, 69,100 and 69,300 customers placed orders on our online sales platform, with
an average revenue per customer of approximately RMB26,900, RMB28,900, RMB31,700,
RMB28,300 and RMB31,400 in the same respective periods. We witnessed improving
customer loyalty, with our net dollar retention rate reaching 94.4%, 102.3% and 93.0% in 2023,
2024 and the nine months ended September 30, 2025, respectively.
FS
operating
system
Networking
equipment
Technology
platform
Business
platformCloud-based
network
management
Intelligent service
delivery
Product-driven
customer acquisition
Digitalized management
system
D
s
platform
Prod
cust
High-performance
computing (“HPC”)
Data center
Telecommunications
Enterprise network
FS networking solutions
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We have established a technology platform which sets new standards in global networking
solutions. It boosts the efficiency of our one-stop networking solutions and drives continuous
product and service innovation. It has enabled us to create a versatile and comprehensive
proprietary product portfolio.
 Comprehensive portfolio of networking equipment. As of the Latest Practicable
Date, we offered over 120,000 SKUs under our proprietary brand, covering optical
modules and high-speed cables, fiber optic cables, switches, optical transmission
equipment, optical fiber cabling management products and copper system products.
As of the Latest Practicable Date, we had the most diversified portfolio of
proprietary brand networking equipment SKUs among all online DTC networking
solution providers in the world, according to Frost & Sullivan. Our portfolio of
networking equipment meets the spectrum of customer needs with flexible product
configurations and custom parameters for diverse networking scenarios. This
significantly reduces design and technical validation cycles and boosts deployment
efficiency.
 Networking equipment operating system. Our networking equipment operating
system, FS OS, deployed on our networking equipment is the backbone of our
networking solutions. It delivers compatibility, reliability and scalability for our
multi-speed networking solutions while providing robust network security. This
powerful combination simplifies deployment and reduces operating costs for our
customers.
 Cloud-based network management platform. Our cloud-based network
management platform integrates seamlessly with our networking equipment
operating system. This powerful duo enables SDN and allows our customers to
configure, deploy and manage networking equipment intelligently and efficiently.
By streamlining operational and maintenance tasks, our platform significantly
enhances network efficiency, reduces network disruptions and accelerates the
transition to intelligent networks.
On the other hand, we have developed a product-driven business platform that transforms
the way we acquire, manage and create value for customers. With this platform, we have
expanded our international reach, enhanced our global brand influence and optimized our
cross-border operational efficiency.
 Product-driven customer acquisition. With a comprehensive product portfolio
fulfilling customers’ needs under diverse scenarios, our online sales platform,
FS.com , has enabled us to reach global customers efficiently. Our platform offers a
seamless one-stop procurement and delivery process from solution design to testing
and validation, deployment and installation and after-sales technical support,
ensuring swift and smooth operations.
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 Intelligent service delivery. Our FS Agent is fully integrated into our online sales
platform. It allows our customers to have access to personalized online customer
service support such as recommendations for networking solutions and relevant
equipment, technical consultations and troubleshooting support at any time.
Meanwhile, we have achieved intelligent and efficient logistics through our global
delivery centers. Coupled with FS Agent , we have significantly improved our
service efficiency and customer satisfaction.
 Digitalized management system. We have developed an end-to-end digitalized
management system comprising a wide spectrum of functions including order
management, supply chain management, warehouse management and customer
relationship management. By applying digitalized management tools to our core
operating processes such as research and development, precision marketing and
supply chain optimization, we are able to enhance our operational efficiency.
Capitalizing on our well-established global ecosystem and platform-based service
capabilities, we have achieved significant growth in our business and profitability during the
Track Record Period. We derived almost all of our revenue overseas during the Track Record
Period. Our revenue increased from RMB1,988.2 million in 2022 to RMB2,611.8 million in
2024, representing a CAGR of 14.6%. Our revenue increased from RMB1,953.7 million in the
nine months ended September 30, 2024 to RMB2,174.7 million in the nine months ended
September 30, 2025. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and
2025, our gross profit margin was 45.4%, 49.4%, 50.0%, 51.0% and 52.6%, respectively, and
our profit for the year/period amounted to RMB364.5 million, RMB456.7 million, RMB397.3
million, RMB350.8 million and RMB423.2 million, respectively, during the same periods.
The diagram below illustrates our key operating metrics and financial performance:
Leadership Customers
EarningsRevenue
500,000+/200+(1)
Number of customers we had served/
number of countries and regions where
our served customers are from
Online DTC networking solution
provider in terms of revenue in 2024
World’s Second Largest
RMB2.6 billion;
RMB2.2 billion
Revenue in 2024 and the nine months
ended September 30, 2025, respectively
14.6%
CAGR of revenue 2022-2024
50.0%; 52.6%
Gross profit margin in 2024 and the
nine months ended September 30,
2025, respectively
Net profit in 2024 and the nine months
ended September 30, 2025, respectively
RMB397.3 million;
RMB423.2 million
(1) As of the Latest Practicable Date
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Our Market Opportunities
In recent years, AI has surged as a thrust for technological advancement and global
economic growth. Network infrastructure plays a vital role in integrating AI into business
operations, and it is an essential element for enterprises undergoing digital and intelligent
transformation. The increasing penetration and rising popularity of AI applications across
various industries will further drive the demand for localized network services by enterprises.
In 2024, 29.0% of global enterprise network infrastructure adopted localized network
deployment. In particular, only approximately 10% of small-and-medium sized network
infrastructure adopted localized network deployment, and it is expected to grow to
approximately 20% by 2029, according to Frost & Sullivan.
According to Frost & Sullivan, the market for enterprise-grade networking solutions is
expected to experience significant growth in the AI era. The market size is projected to grow
from USD162.8 billion in 2024 to USD245.3 billion by 2029, representing a CAGR of 8.5%.
As the industry evolves, enterprises face increasingly diverse requirements for their localized
network infrastructure. This heightens the demand for SDN capabilities. Consequently, global
enterprises commonly encounter the following challenges during the digital and intelligent
transformation of their network infrastructure:
 Inadequacy of traditional service models in meeting the business needs of global
enterprises. Global enterprises generally require digital and intelligent
transformation of their network infrastructure. According to Frost & Sullivan, in
2024, more than 90% of such enterprises were small-and-medium sized networks
with fewer than 1,000 network deployment locations to manage. Under traditional
approach, solution providers deploy such networks primarily through multiple
third-party service intermediaries. The limitations for such approach are twofold,
including relatively high service costs charged by third-party intermediaries and
operational inefficiencies that fail to timely address the demands from global
enterprises for their network transformation.
 Insufficient compatibility in intelligent network deployment. During the course of
intelligent transformation and upgrade of network infrastructure, enterprises would
typically refrain from replacing all or a majority of the existing networking
equipment at once in order to maintain network availability and stability. This
necessitates robust compatibility between the operating systems of the new
equipment and cloud-based network management platforms on one hand, and the old
network infrastructure on the other hand. Nonetheless, conventional networking
equipment providers often fail to offer such flexibility or cross-device or cross-
system compatibility, resulting in enterprises having to carry out a full-scale
infrastructure replacement or look for third-party customization, which may
compromise the reliability and timeline of the transformation and upgrade.
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 Inefficient delivery. Network infrastructure used by an enterprise typically involves
a wide variety of equipment, devices and components. Considering the diversity and
complexity of these networking equipment and devices, an enterprise generally
procures from multiple sources and with various vendors. Given the substantial
differences in equipment specifications and standards across suppliers, it would
often result in a lack of synergy and coordination among them, leading to a delay in
completing the deployment of the network infrastructure.
 Low cost-effectiveness. Network upgrades and transformation by enterprises are
cyclical in nature, which precludes them from making bulk purchases for
networking equipment. Instead, enterprises often carry out frequent and small-scale
procurements and therefore seldom enjoy price advantages. In addition, the high
market concentration among traditional networking equipment providers constrains
their ability to adapt flexibly to specific requirements through product innovation or
cost optimization, resulting in persistently high costs for deploying and upgrading
network infrastructure.
Our Differentiated Customer Value Proposition
Our networking solutions effectively address the challenges faced by global enterprises
when upgrading their network infrastructure. The core value propositions we offer to our
customers around the globe include:
 Intelligent professional services . We offer end-to-end networking solutions
covering the entire product lifecycle, ranging from planning and design of
networking solutions, testing and validation, to ongoing network management and
operation. Guided by our customer-centric philosophy, we have established a global
24/5 professional service team who promptly addresses the diverse needs of our
customers through our intelligent online sales platform. In the nine months ended
September 30, 2025, we handled an average of approximately 3,700 customer
enquiries expressing interests in our networking solutions on a daily basis, garnering
widespread recognition from our global customer base.
 Strong compatibility and openness. Leveraging the advanced virtualization layer
technology, our operating system mitigates compatibility issues among networking
equipment from different manufacturers, thereby supporting cross-device and
cross-system networks with varied specifications. Our cloud-based network
management platform adopts an open network architecture that ensures uniform
control over mainstream networking equipment. With an intuitive, easy-to-use
interface, it facilitates fast and efficient automatic network deployment and
management.
 One-stop procurement platform. Our high-quality networking equipment adheres to
uniform standards and is compatible with a wide range of product categories used
in an enterprise’s network. Further, we render intelligent services which enable
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automated designs of tailored networking solution based on individual customer
needs, and generation of the corresponding procurement list. Together with its
seamless integration with our backend ordering and warehousing systems, we are
able to greatly enhance our customers’ procurement efficiency. In particular, our
global service network further ensures reliable delivery, with most orders delivered
within five days from the date of order.
 Synergy along the industrial value chain. Our online sales platform consolidates
the procurement demands from our customers worldwide. Capitalizing on our
intelligent data analytics capabilities, we generate forecasts of procurement
demands of our customers around the globe on a rolling basis based on sales orders
and customer enquiries on our online sales platform. Through the consolidation of
global supply chain resources, we enable efficient alignment of evolving customer
demands with scalable production, thereby driving synergistic effect throughout the
industrial value chain.
Our Growth Flywheel
Our growth is driven by our high-quality products and dynamic ecosystem. Leveraging
our operational efficiency empowered by our online sales platform, diversified portfolio of
proprietary brand SKUs and delivery capabilities, we have successfully attracted global
customers and cultivated our distinguished brand over the years. It further fostered our
collaboration with global supply chain partners to achieve economies of scale. As our business
grows, we will continue to strengthen our product innovation and enhance our ecosystem to
further elevate customer experience.
R&D and expansion of
proprietary brand SKUs
Collaboration with global
supply chain partners
Intelligent and
efficient services
Glocalized delivery
Enhancement of customer stickiness and
optimization of customer experience
Accurate identification of customer needs
Customer growth
and customer
value creation
Continuous business
expansion
Product-driven Ecosystem-driven
 Product-driven. We continuously develop and launch scenario-based product
solutions to drive sustainable customer and business growth. Our online sales
platform offers an extensive range of enterprise-grade networking equipment SKUs
applicable to a diverse set of scenarios. Leveraging our capabilities in offering
specialized and customizable products in a full spectrum of scenarios, we are able
to accurately identify customer needs, optimize our one-stop procurement processes
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and customer experience throughout the entire product lifecycle. We reshape
customer procurement behaviors and continuously enhance customer satisfaction to
expand our global customer base. As we expand our global footprint and continue
to strengthen our brand reputation, we deepen our collaboration with global supply
chain partners. Such collaboration enables us to formulate globally uniform
standards for our products and services, thereby further driving global customer
acquisition and business expansion.
 Ecosystem-driven . We strive to enhance customer stickiness and optimize customer
experience to create value for customers. We continue to invest in the development
of our ecosystem for localized networking solutions. Through continuously meeting
diverse customer needs, providing intelligent and efficient services on our online
platform and improving our delivery capabilities, we further enhance our
competitiveness globally. Our DTC approach eliminates intermediary layers,
enabling us to offer more competitive pricing, faster response times, and greater
flexibility in customizing solutions. Direct engagement with customers allows us to
gather real-time feedback and data, which we use to continuously improve our
products and services. Supported by advanced digital infrastructure, we achieve
high levels of automation and operational efficiency, reducing costs and minimizing
errors. This will bring along an increase in the average purchase amount of our
customers and improved cross-selling performance.
OUR STRENGTHS
Dynamic platform ecosystem and robust networking effect make us a leading provider of
networking solutions
We are a globally leading provider of enterprise-grade networking solutions. According
to Frost & Sullivan, we were the world’s second largest online DTC networking solution
provider in terms of revenue in 2024. Our platform features open architecture that supports
core networking equipment from multiple manufacturers. Fueled by our sustained growth, we
expect to expand our customer base even further. This growth will further intensify our
networking effect and enhance our brand recognition with word-of-mouth promotion from our
customers.
Empowered by our robust networking effect, we have experienced significant growth in
customer base worldwide and built a sustainable global supply chain ecosystem.
 Well-established and highly loyal global customer base. As of the Latest
Practicable Date, we had served over 500,000 customers in over 200 countries and
regions worldwide, covering approximately 60% of Fortune 500 companies from a
wide spectrum of sectors. In addition, the number of customers who placed orders
on our sales platform increased from approximately 74,000 in 2022 to
approximately 76,600 in 2023, and further to approximately 82,500 in 2024.
Approximately 69,300 customers placed orders on our sales platform in the nine
months ended September 30, 2025. Furthermore, we recorded net dollar retention
rate of 94.4% in 2023, 102.3% in 2024, and 93.0% in the nine months ended
September 30, 2025, respectively, reflecting our strong customer loyalty and
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stickiness. In addition, in each of 2022, 2023, 2024 and the nine months ended
September 30, 2025, customers purchasing three or more enterprise-grade product
categories and solutions accounted for over 80% of our total revenue, with an
average revenue per such customer of approximately RMB61,700, RMB63,500,
RMB75,600 and RMB84,100, respectively.
 Deep collaboration with global supply chain network. We have established trusted
relationships with our partners in the global supply chain over the decades. It
enables us to efficiently serve local customers while mitigating potential risks in
supply chain management. As of the Latest Practicable Date, we collaborated with
over 200 telecommunication product suppliers and networking equipment
manufacturers across the globe. Our strong supply chain integration capabilities
have empowered us to continuously optimize our product standards, swiftly respond
to evolving customer demands, shorten delivery cycles, and enhance customers’
efficiency in technical validation and order placement.
We believe that our dynamic platform ecosystem, coupled with our strong customer
stickiness, would create entry barriers for new entrants and continue to drive our sustainable
growth.
A Go-to Platform for Networking Solutions with Glocalization Strategy
We have established a highly efficient and cost-effective global operations network. This
network is empowered by our intelligent platform services and globalized delivery system.
According to Frost & Sullivan, we have become one of the most preferred one-stop platforms
for enterprise-grade networking solutions globally.
Our intelligent online sales platform automates and synchronizes all networking
equipment SKUs and optimized networking solutions across eight major languages. This
allows our customers worldwide to access to our latest cutting-edge products and services.
Backed by FS Agent , our professional support team is capable of providing swift response to
customer enquiries. According to Frost & Sullivan, we are a pioneer in the application of
intelligent interaction technologies to enterprise-grade networking solutions, and we have
achieved an industry-leading rate of customer satisfaction.
Our platform provides us with in-depth insights into the product and service preferences
of our customers in different regions. We have established a localized service network that is
highly compatible with global customers. We have established glocalized intelligent delivery
centers in China and overseas countries to ensure the reliability and cost-effectiveness of our
product and service delivery. During the Track Record Period, we recorded an average of less
than 2% of product return rate, which was at a low level of industry average among global
online networking solution providers, according to Frost & Sullivan. To enhance intelligent and
efficient logistics, we have established seven global delivery centers with gross floor area of
over 68,000 square meters in China, the U.S., Germany, Australia, Singapore, the U.K. and
Japan as of the Latest Practicable Date. During the Track Record Period, the majority of our
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orders were shipped on the date of order and delivered within five days from the date of order.
Furthermore, our professional customer service team operates in eight languages, ensuring 24/5
response to customer needs. We also support 22 local currency payment methods worldwide.
By offering a variety of localized payment methods and adapting to local tax policies, we better
cater to the habits and preferences of our customers.
Diverse Products and Solutions with Flexibility to Meet the Differentiated Needs of Global
Customers
Leveraging our intelligent online sales platform, we are able to gain insights into the
evolving and diverse needs of our global customers, enabling us to continuously upgrade and
enhance our product and solutions portfolio in a timely manner. As of the Latest Practicable
Date, we had over 120,000 SKUs under our proprietary brand. According to Frost & Sullivan,
as of the Latest Practicable Date, we had the most diversified portfolio of proprietary brand
networking equipment SKUs among all online DTC networking solution providers in the
world. Meanwhile, we proactively address the demands for network upgrades in the AI era by
continuously expanding into new networking service scenarios, including multi-tier high-speed
networks for data centers and Wi-Fi 7 networks supporting cutting-edge intelligence.
Through decoupling hardware and network protocol stack development architecture
design, our platform has enabled us to mitigate compatibility issues among networking
equipment from our proprietary brand and those from different manufacturers, thereby
supporting cross-device and cross-system networks and enabling flexible SDN with scalable
network deployment and management. Our platform is capable of unifying the management of
thousands of networking devices for enterprise-grade networks. Our capability for open
architecture and automated expansion redefines the network deployment paradigms for global
enterprises.
Platform-Based Full-Stack Technologies
Our platform-based full-stack technologies drive force for our growth and development.
We continuously stay at the forefront of enterprise-grade networking solutions and lead
industry breakthroughs.
 Outstanding software and hardware development capabilities. We set a globally
leading product standard. Our breakthroughs, such as high-speed 800G optical
modules and switches, silicon photonic transceivers, high-density cabling
management solutions and active wavelength division multiplexers, meet the
demands for high-speed networking and support AI application deployment.
 Advanced solution design and validation system. We have established a solutions
team comprised of over 60 with globally recognized certifications in the field of
information and communication technology engineers and industry experts. They
offer efficient, stable and reliable networking solutions to our global customers
under a wide range of scenarios, including, among others, high-performance
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computing, data centers, enterprise networks and telecommunications, helping our
customers improve operational efficiency and reduce operational costs. We have
also established a leading testing system. As of September 30, 2025, networking
equipment under our proprietary brand had obtained over 20 internationally
recognized certifications across the U.S., the European Union, Australia, Japan and
other regions, ensuring globally consistent high-quality products and services.
 Innovative and intelligent system tools. We have integrated intelligent system tools,
including FS Agent , into our online sales platform. FS Agent offers real-time and
customized interactions with our customers under a diverse set of scenarios. For
instance, in dealing with customers’ troubleshooting enquiries on our networking
products, FS Agent is able to provide tailored solutions after comprehensive analysis
on the causes of error, work logs and connection status.
Visionary Management Team and Deep-Rooted Corporate Culture for Innovation
Our growth and development are underpinned by our management team’s visionary
strategic direction and their decades of proven industry experience and professional expertise.
Our renowned founder, Mr. Xiang Wei (our founder, chairman of the Board, executive Director
and general manager), is an industry veteran with nearly twenty years of experience in the
networking solution industry. Mr Xiang has witnessed the evolution of the industry from
traditional business model to intelligent platform-driven model. He has accumulated extensive
industry experience with profound market insights and strategic foresights. Guided by our
founder and management team with global vision, we have been focusing on global market
opportunities since our inception, which has laid a solid foundation for our international
expansion.
We have built a highly agile and flat organizational structure, driven by our open,
learning-oriented, proactive and innovative corporate culture that fuels our talent acquisition
and retention strategy. During the Track Record Period, the retention rate of our core staff
exceeded 80%. Our core team members have diverse expertise in various fields such as
network communications and big data, and possess work experience in renowned global
leaders in the information technology industry. We have a dynamic and innovative team of core
staff with an average work experience of almost ten years to support our global expansion and
product innovation.
OUR STRATEGIES
Driving Technological Upgrades and Platform Iterations
The widespread application of AI technology has raised the standard for the development
of next-generation networking technologies and infrastructure. In light of such trend, we will
continue to iterate and upgrade our existing technologies and platform to maintain our
market-leading position for platform capabilities. Over the next five years, we plan to continue
enhancing our product and solution development capabilities, advancing the underlying system
architecture and developing new protocol functionalities. This will allow us to provide
customers with more efficient, flexible and intelligent networking solutions.
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We will continue to expand our full-stack technological capabilities, including but not
limited to the integration of intelligent technologies with SDN for traffic prediction and
dynamic optimization to enhance network intelligence and automation. We will also continue
to upgrade our customer service system to further enhance customer service experience and
efficiency. We will also apply data intelligence technologies to platform data analysis to
generate real-time insights and ensure that our cutting-edge technologies cater to meet market
needs. Over the next five years, we intend to further develop our networking equipment
operating system, cloud-based network management platform and online sales platform, as
well as upgrade our existing digitalized infrastructure.
Enriching Product Portfolio
Leveraging our leading position in the global networking solutions market and our
diversified products, we will continue to enrich our product portfolio and broaden the
application scenarios of our solutions. This will enable us to better meet the diverse needs of
our customers and stay ahead in the industry.
We will capitalize on our data insights accumulated through our intelligent platform to
better understand customers’ needs. We are committed to taking the lead in setting standards
for product forms and technical parameters. We will continue to provide products and solutions
that fully adapt to open source interfaces and are compatible with evolving, cutting-edge
protocol stacks. For example, to meet the needs of large-scale AI networks for lossless and
efficient transmission, we have introduced a lossless Ethernet solutions based on RoCE for data
centers, and we will continue the development of 800G and future 1.6T switch products. We
will also continue to develop and upgrade our cloud-based network management platform to
achieve more efficient automated deployment of computing power networks, meeting the needs
of large-scale AI networks for intelligent management and operation.
We will further promote the widespread application of our networking solutions in
cutting-edge fields such as data centers, industrial internet and smart campuses. This will meet
the massive data communication requirements in the AI era and fully empower the digital
transformation and intelligent upgrading in various industries.
Expanding a Diversified Ecosystem
We will further expand our global delivery centers to provide customers with efficient
end-to-end support, ranging from networking solution design to network deployment and
operations. Over the next five years, we plan to progressively enhance our delivery capabilities
in major overseas markets by establishing our global delivery centers and international
management team. By enhancing the efficiency of our services, we will continue to strengthen
customer loyalty and stickiness, improve our cross-selling and up-selling capabilities for our
products and solutions and expand our customer base through our online sales platform and our
global network.
We are committed to enhancing our global supply chain system through deepening
collaboration with local suppliers in various global markets. Over the next five years, we intend
to further enhance our multi-tier warehousing system, upgrade the level of automation of the
workflow and expand service network, which will effectively support and complement our
existing supply chain system.
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Strengthening Global Talents Acquisition and Team Building
We believe that attracting global talents is the core driver of future innovation and
development. We are committed to making concerted efforts in both talent acquisition and
talent cultivation, with an aim to build a robust and solid pipeline of talents to empower our
long-term growth and development.
We will continue to focus on industry frontiers and vigorously actively attract high-end
professionals. We are committed to optimizing our employee development system, empowering
employees in leadership, teamwork and professional skills. We plan to improve our promotion
and selection mechanism, adhering to the principles of fairness, justice and transparency, in
order to provide employees with clear career development paths. We plan to refine our
incentive and performance reward schemes to motivate employees and stimulate their
creativity, bringing momentum for our long-term development.
OUR DTC BUSINESS MODEL
We have established a fully integrated DTC model that enables efficient global delivery
of scenario-based solutions. Unlike conventional models that separate network architecture
design, multi-supplier procurement and after-sales support across different parties, our DTC
model integrates these functions into a unified, platform-based system, providing global
customers with a fully integrated experience that combines solution design, product validation
and one-stop procurement.
The following diagram illustrates the major steps of our workflow under our DTC
business model:
Display of
Products and
Solutions
Technology
Support and
Solutions Design
Testing and
Validation
Product
Delivery and
Deployment
Sales
Consulting
Contract inception
Pre-sales activities
The major steps of the workflow under our DTC business model can be summarized as
below. Depending on individual needs, some of the customers undergo each of the steps of the
workflow during their procurement while some of them only go through part of them.
 Step 1: Display of products and solutions. As an online networking solution
provider, our end-to-end workflow begins with a robust product-driven platform,
FS.com , showcasing over 120,000 SKUs, which are exhibited through online
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channels, complemented by comprehensive use case demonstrations as of the Latest
Practicable Date. This digital storefront serves as the entry point for customer
engagement as it facilitates both product discovery and business networking within
our ecosystem.
 Step 2: Sales consulting. We have established a global professional service team to
promptly address customers’ diverse needs. We interact with potential customers
through online occasions, expressing interests in our networking solutions to
identify their demands, provide technical consultation and offer tailored product
recommendations. This process is also facilitated by FS Agent , which is fully
integrated into our online sales platform, enabling natural language interactions for
customer enquiries.
 Step 3: Technology support and solutions design. Following initial engagement,
some customers may be transitioned to technical engineering team for solution
customization. We provide comprehensive pre-sales services encompassing
hardware integration, software configuration and system architecture design, which
is primarily conducted through our online networking equipment operating system,
our cloud-based network management platform and other digital tools for online
solution services such as DC Fabric Scaling Tool and MTP Polarity Detection Tool.
These digital tools enable real-time remote collaboration, troubleshooting, and
solution customization, allowing customers to access technical expertise and design
services regardless of location. For certain products, software components are
pre-configured and embedded into the hardware prior to delivery, forming an
integral part of the overall solution.
 Step 4: Testing and validation. All solutions undergo rigorous testing and validation
process to ensure compatibility and reliability through online interactions. This may
include replicating the customers’ network environment, running actual data
workloads and stress-testing scalability for future growth-all coordinated and
monitored remotely. Depending on customer requirements, our solution engineers
may develop test plans, execute the tests in our R&D center and provide detailed
report via our digital channels. We may also invite customers to remotely experience
network configuration process, depending on their needs, before final order
confirmation.
 Step 5: Product delivery and deployment. Once order is confirmed, the digitalized
supply chain management and warehouse management system then help coordinate
procurement and warehousing with global suppliers and service providers. We
manage our inventories dynamically according to product specifications, projected
demand and historical data all through our online systems. Order fulfillment is
executed through our global and local warehouses, with shipping handled by
third-party logistics service providers. Networking solution deployment is typically
handled by customers, with support from detailed installation guides and online
technical assistance when needed. For software and system configuration, our
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solution engineers provide remote support and guidance, ensuring seamless
integration and operation through our proprietary FS OS. After delivering our
solutions to our customers, we continue to ensure their exceptional quality and
performance with our robust full-stack technological capabilities.
Step 1 to Step 4 above are pre-sales activities that aim to enhance sales and customer
experience. They together support and enable the final delivery of fully integrated networking
products to customers. Revenue is generated at Step 5 when our contractual obligations to
customers are fulfilled and is recognized at the point in time when control of the product
transfers to the customer, typically upon receipt of the goods.
Compared with peers that rely on a mix of distribution and direct sales, our DTC business
model enables seamless integration and greater operational efficiency, allowing us to better
serve the diverse needs of a large global customer base with enhanced speed, consistency and
scalability. Our DTC approach eliminates intermediary layers, allowing us to offer more
competitive pricing, faster response times, and greater flexibility in customizing solutions to
meet diverse customer requirements. The direct relationship with our customers also enables
us to gather real-time feedback and data, which we leverage to continuously improve our
products, services, and user experience. Furthermore, our digital infrastructure supports high
levels of automation and operational efficiency, reducing costs and minimizing errors
compared to traditional distribution models. This fully integrated DTC model allows us to scale
operations while preserving service quality across the following key dimensions, which also
helps us to establish competitive edges as compared with other market players as advised by
Frost & Sullivan:
 Intelligent Solutions Design . Our sales platform employs FS Agent to analyze
customer requirements in real time, proposing and automating solution design and
product selection, reducing manual intervention and delivering scenario-based
solutions that precisely match customers’ operational scenarios.
 Service Scale . Our fully integrated DTC model standardizes and automates key
business processes from customer engagement to solution deployment, enabling
efficient operational scaling and allowing us to support over 500,000 customers
across over 200 countries and regions worldwide with a lean team of over 1,000
sales personnel and solution engineers as of the Latest Practicable Date.
 Procurement Efficiency . Our platform offered over 120,000 SKUs as of the Latest
Practicable Date, offering a seamless one-stop procurement process to meet the full
spectrum of customer needs with flexible product configurations and custom
parameters for diverse networking scenarios. This significantly reduces design and
technical validation cycles and boosts deployment efficiency.
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 Cost Efficiency . Our online sales platform consolidates the procurement demands
from our customers worldwide. By aggregating global demand and centralizing
upstream sourcing, we achieve scale-based procurement advantages and offer
competitive pricing.
 Quality Consistency . We ensure that all solutions undergo rigorous testing and
validation before deployment. In addition, our supply chain and quality control
systems ensure cross-device compatibility and reliability.
 Delivery Certainty . By leveraging advanced intelligent demand forecasting, coupled
with our expansive global warehousing and digital supply chain systems, we ensure
stable and predictable lead times. This capability allows us to meet customer
expectations consistently, providing reliable delivery schedules that enhance
operational planning and efficiency for our customers worldwide.
OUR NETWORKING SOLUTIONS
We offer enterprise-grade networking solutions designed to meet the demands of
high-performance computing, data centers, enterprise networks and telecommunications,
empowering global customers to design, operate and optimize networks with enhanced
efficiency, agility and cost-effectiveness. Our solutions encompass pre-sales activities
including sales consulting, technology support and solutions design as well as testing and
validation, which together support and enable the delivery of fully integrated networking
products to customers. Our solutions are built on a decoupled architecture that combines
standardized networking hardware with scalable, cloud-based software capabilities. This
enables advanced remote orchestration, intelligent resource provisioning and streamlined
operational management, allowing customers to dynamically adapt network resources to
evolving operational demands while maintaining enterprise-grade reliability.
Hardware Design and Development Capabilities. Our hardware design and development
capabilities form the foundation of our networking solutions. As of the Latest Practicable Date,
we offered over 120,000 SKUs under our proprietary brand, covering optical modules and
high-speed cables, fiber optic cables, switches, optical transmission equipment, optical fiber
cabling management products and copper system products. We have launched advanced
equipment such as high-speed 800G optical modules and switches, silicon photonic
transceivers, high-density cabling management solutions and active wavelength division
multiplexers, supporting next-generation networking demands including AI applications,
distributed computing and low-latency data transmission.
Software Development Capabilities. Our software development capabilities are anchored
in our proprietary FS OS and cloud-based networking management platform. FS OS is a
programmable, modular and interoperable networking equipment operating system that enables
cross-device integration and dynamic protocol stacking. It decouples software functionality
from hardware configuration, supporting flexible deployment across our proprietary devices
and other third-party networking devices that the customers sourced separately.
Complementing FS OS, our cloud-based network management platform provides a centralized
control interface that integrates configuration, orchestration and lifecycle management.
Together, these systems enable SDN, allowing customers to intelligently configure, deploy and
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manage heterogeneous networks with enhanced automation, scalability and efficiency. Our
SDN capabilities have been successfully applied across complex enterprise scenarios,
delivering significant improvements in deployment time, operational agility and total cost of
ownership.
Our Networking Products
As part of our networking solutions, we offer an extensive portfolio of proprietary
networking equipment. To address varying performance requirements, we offer high-
performance networking solutions and general networking solutions. Our high-performance
networking products cater to bandwidth-intensive environments, delivering high throughput,
low latency and scalable architectures. Our general networking products feature secure and
reliable connectivity as well as simplified deployment and maintenance for everyday needs. In
addition to our high-performance and general networking products, we also offer other
networking products such as fiber optic cassettes, chassis, wavelength division multiplexers
and other ancillary products.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025,
approximately 74,000, 76,600, 82,500, 69,100 and 69,300 customers placed orders on our
online sales platform, with an average revenue per customer of approximately RMB26,900,
RMB28,900, RMB31,700, RMB28,300 and RMB31,400 in the same respective periods. We
recorded net dollar retention rate of 94.4% in 2023, 102.3% in 2024 and 93.0% in the nine
months ended September 30, 2025, respectively. The following table sets forth a breakdown of
our revenue by product category for the periods indicated.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
High-performance
networking
solutions /H1118/H1118/H1118/H1118/H1118472,910 23.8 577,368 26.0 831,107 31.9 618,512 31.7 788,004 36.2
General networking
solutions /H1118/H1118/H1118/H1118/H11181,290,865 64.9 1,388,641 62.8 1,497,508 57.3 1,125,942 57.6 1,139,408 52.4
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118224,469 11.3 246,842 11.2 283,178 10.8 209,247 10.7 247,306 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 100.0 2,212,851 100.0 2,611,793 100.0 1,953,701 100.0 2,174,718 100.0
(1) Others mainly include fiber optic cassettes, chassis, wavelength division multiplexers and other ancillary
products.
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The following table presents our key networking product portfolio as of the Latest
Practicable Date:
Networking Product Product Description Key Features Product Picture
Pricing range
of 2024
Optical modules
and high-speed
cables /H1118/H1118/H1118/H1118/H1118
An optical module functions as a
photoelectric converter which
converts the electrical signal into
light and vice versa. High-speed
cables (including direct attach
cables (DAC) and active optical
cables (AOC)) facilitate rapid
data transfer between devices.
They are both core components
of high-speed data networks,
responsible for photoelectric
signal conversion.
 Full transmission speed coverage from
1G to 800G and beyond with optical
modules ranging from 100M to 1.6T,
addressing diverse deployment needs
 Equipped with advanced chips and silicon
photonics technology to ensure leading
high-speed performance for modern data
centers
 Strong compatibility with mainstream
networking devices, meeting industry
standards and verified through rigorous
interoperability testing
 Broad product portfolio offering multiple
rates, cable lengths and interface types to
accommodate diverse connection
scenarios
 High reliability and stability, meeting
carrier-grade and data center-grade
quality requirements through precision
manufacturing and comprehensive testing
between
US$7 and
US$6,297
Switches /H1118/H1118/H1118/H1118/H1118A switch is a hardware device that
connects multiple devices within
a local area network, enabling
them to communicate by
forwarding data packets to their
intended destinations.
 Comprehensive switch portfolio covering
enterprise campuses, data centers and
industrial environments
 Supports high-throughput, high-
concurrency and low-latency network
deployments for mission-critical
applications such as financial data centers
 Delivers high reliability, scalability and
security to support enterprises in their
digitalization and intelligent
transformation initiatives
between
US$171 and
US$91,815
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Networking Product Product Description Key Features Product Picture
Pricing range
of 2024
Fiber optic cables Fiber optic cables are assemblies that
contain one or more optical fibers
and are used to transmit data as
light pulses.
 Full range of multi-fiber push-on (MPO),
multi-fiber termination push-on (MTP),
patch and specialty fiber cables and
pigtails for diverse deployment needs
 Portfolio including models built for
structured cabling, high-density layouts
and harsh environments
 Adopting advanced standards to ensure
reliability and stability
 Standard polarity, insertion loss and
return loss testing to ensure signal
integrity
between
US$1 and
US$15,311
Optical
transmission
equipment /H1118/H1118
Our optical transmission equipment
encompasses Wavelength Division
Multiplexing (“WDM”) devices
that combine multiple optical
signals on a single fiber, Optical
Transport Network (“OTN”)
devices for long-haul multi-
service transmission and Passive
Optical Network (“PON”)
equipment for
point-to-multipoint fiber access.
 Wide range of types and models of WDM
devices for diverse transmission needs,
with low insertion loss and high
reliability
 OTN devices supporting full service
coverage from GE to 400G, with flexible,
scalable and low-latency network design
 Rich product portfolio of PON equipment
including EPON, GPON and XG(S)-PON
series, with diverse port types and
configurations
between
US$6 and
US$19,978
Optical fiber
cabling
management
products /H1118/H1118/H1118
Our optical fiber cabling management
products include panels, cassettes,
enclosures, cable managers, racks
and cabinets. They are mainly
used to organize, secure and route
fiber cables within network
infrastructures.
 Supporting high-density, modular
deployments in various scenarios
 Designed to optimize rack space, airflow
and cable organization for efficient
operations
 Enabling quick plug-and-play setup and
scalable infrastructure development
between
US$15 and
US$884
Copper system
products /H1118/H1118/H1118
Our copper system products include
patch cords, trunks, bulk cables,
connectors and other ancillary
products.
 Pre-terminated and factory-tested
assemblies for fast deployment in
enterprise and data center environments
 Designed to support structured cabling
systems with high density, flexibility and
ease of maintenance
between
US$2 and
US$1,032
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Our product pricing varies across categories and is influenced by factors such as market
conditions, product specifications, and component configurations. While these pricing ranges
of our major products reflect data from a single year, Frost & Sullivan has reviewed our pricing
information across the entire Track Record Period and is of the view that our major products
were generally priced more competitively than comparable offerings from other leading market
players and traditional vendors.
The following table summarizes the key differentiating features between our high-
performance and general networking solutions.
Feature
High-performance
networking solutions General networking solutions
Typical Use Case /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Scalable AI infrastructure, high-
performance computing, large-scale
data centers
Enterprise networks, small to
medium-sized data centers and
networking solution
Maximum Data Speed /H1118/H1118/H1118/H1118/H1118 Optical Transceivers: 1.6T
 Networking: 800G/400G
 Switches: 800G
 Optical Transceivers: 50G/100G
 Networking: 25G
 Switches: 1G/10G/25G
Supported Interface /H1118/H1118/H1118/H1118/H1118/H1118PCIe 6.0 PCIe 4.0
Switching Capacity /H1118/H1118/H1118/H1118/H1118/H111851.2 Tbps 4 Tbps
Port Density (Fiber Optic
Cables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
12 fibers per cable 2 fibers per cable
Port Density (Fiber Optic
Panels) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
288 fibers per panel 96 fibers per panel
Relative Product Cost /H1118/H1118/H1118/H1118/H1118Significantly higher Lower
Target Customer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hyperscalers, large enterprises with
specialized computing needs
Small and medium-sized enterprises
(SMEs), general enterprise
The gross profit margin for high-performance networking solutions is typically lower
than that of general networking solutions due to higher production costs and competitive
pricing strategies. High-performance products incorporate advanced components and complex
designs, driving up unit costs. To penetrate the premium market, these products are priced
aggressively to emphasize value-for-money rather than margin optimization, resulting in a
narrower gap between cost and selling price. In contrast, general networking solutions leverage
mature, cost-efficient technologies and economies of scale, enabling structurally higher
margins.
High-Performance Networking Solutions
The following use cases demonstrate how our high-performance networking solutions
address the evolving demands for scalable AI infrastructure and cloud-based data centers.
These scenarios typically involve massive data throughput, strict latency requirements and
multi-layer network architectures. Our high-performance networking solutions leverage
advanced switching technologies, state-of-the-art optical transmission, and integrated software
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platforms to deliver infrastructure that is not only scalable and resilient but also energy-
efficient and future-ready. These solutions are specifically engineered to support mission-
critical applications such as large-scale AI model training, real-time data analytics, and
high-capacity data center interconnects, where performance, reliability, and manageability are
paramount.
Use Case 1: 400G RoCE Lossless Networking Solution for Scalable AI Infrastructure
Scenario: Designed for large-scale AI models and data-intensive workloads, where lossless, low-latency networking
is essential for compute and storage nodes.
With the rapid development of large-scale AI models and data-intensive workloads, there is a growing demand
for high-speed, low-latency and lossless networking infrastructure that can support the compute and storage needs
of modern AI architectures. Businesses often encounter challenges such as port compatibility between devices,
complex multi-layered network topologies and rising pressure on backend throughput and stability.
Key Features:
– Our 400G RoCE supports ultra-low latency and high throughput for stable, lossless transmission.
– Integrates seamlessly with existing Ethernet infrastructure, reducing deployment complexity and cost.
– Enables backend, frontend, storage, and out-of-band networks, each optimized for specific operational
domains.
– Consolidates performance, compatibility, and manageability, allowing leaner, scalable networks ready
for future AI expansion.
Distinctive V alue:
Our 400G RoCE specifically addresses the challenges of port compatibility, complex topologies, and backend
throughput in AI environments, offering a unified solution of high-bandwidth, lossless data exchange. This solution
is purpose-built for environments with extreme demands on bandwidth, latency, and reliability, such as large-scale
AI model training and data-intensive workloads.
Use Case 2: All-In-One 100G DWDM PAM4 Solution for a Singapore-based Internet Service Provider
Scenario: Tailored for internet service providers requiring cost-effective, simplified data center interconnect (DCI)
across multiple sites.
A Singapore-based Internet Service Provider, operating across Southeast Asia, the U.S. and Europe, sought to
upgrade its data center interconnect (“DCI”) capabilities across three sites. Faced with the challenges of complex
configuration, limited skilled manpower and budget constraints, the client needed a simplified, cost-effective solution
that could support 100G transmission while remaining easy to deploy and manage.
Key Features:
– Compact 1U platform integrating 100G PAM4 modules for streamlined deployment.
– Supports automatic parameter adjustment and zero-touch provisioning, enabling non-specialist staff to
manage operations.
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– Achieves seamless transmission of 8×100G services within 80 km on a single fiber, delivering 800G
capacity.
– Delivers approximately 30% cost savings compared to conventional 100G coherent solutions.
Distinctive V alue:
Our All-in-One 100G DWDM PAM4 solution focuses on ease of deployment, operational efficiency, and
significant cost reduction for high-capacity DCI, with remote training and product demonstrations for smooth
onboarding. This solution is designed for data center interconnect scenarios requiring high-capacity, long-distance
transmission with simplified deployment and management.
General Networking Solutions
Unlike high-performance networking solutions, which are engineered for ultra-high
throughput, strict latency, and complex multi-layer architectures, our general networking
solutions emphasize operational simplicity, centralized management, and automation to reduce
the technical burden on network teams. The following use cases showcase how our general
networking solutions support a wide range of enterprise scenarios, including OTT
(Over-the-Top) and IPTV (Internet Protocol Television) content delivery, campus networks and
hospitality environments. These solutions prioritize secure, reliable and scalable connectivity
while simplifying operations and reducing the burden on network technical teams. While each
scenario has distinct technical demands, such as concurrent access in IPTV networks, coverage
across distributed buildings in campuses or aesthetic requirements in hotel rooms, our solutions
are able to deliver high service quality through centralized management, automation and
tailored network design.
Use Case 3: High-Performance Content Delivery Network (“CDN”) Solution for OTT and IPTV Services
Scenario: Addresses the needs of OTT and IPTV platforms facing massive concurrent access, geographic dispersion,
and latency sensitivity.
OTT and IPTV platforms face unique networking challenges such as massive concurrent access during peak
hours, geographically dispersed user bases and user sensitivity to latency. Traditional solutions are often unable to
respond to real-time traffic surges, leading to degraded video quality, increased bounce rates and costly customer
churn.
Key Features:
– Ensures fast, stable, and reliable content delivery across the full chain.
– Supports large-scale concurrent access, minimizing latency and optimizing user experience.
– Incorporates Priority Flow Control (PFC), Explicit Congestion Notification (ECN), and Policy-Based
Routing (PBR) for intelligent traffic management and resilience.
– Centralized management platform for zero-touch provisioning, remote updates, and compliance
enforcement.
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Distinctive V alue:
Our high-performance CDN solution for OTT and IPTV services is purpose-built for content delivery
networks, with advanced traffic management and centralized control, ensuring premium video experiences and
operational agility, while preparing networks for the next wave of digital entertainment demands. This solution
addresses the needs of OTT and IPTV platforms, which require secure, reliable, and scalable content delivery to large,
geographically dispersed user bases. It manages massive concurrent access, minimizes latency, and optimizes user
experience through network-level optimizations. Unlike high-performance solutions for AI and DCI, this use case
focuses on optimizing user experience and operational efficiency in content delivery rather than supporting extreme
compute or storage demands.
Use Case 4: Large and Midsize Campus Networking Solution
Scenario: Designed for campuses with dispersed buildings, high user density, and expanding digital services.
As campuses grow in size and complexity with dispersed buildings, increasing user density and expanding
digital services, their network infrastructure must also evolve to ensure consistent performance, security and
manageability. Common challenges include signal attenuation between structures, limited wireless coverage from
single access points and congestion in high-traffic zones. At the same time, institutions must safeguard sensitive data
and ensure high availability to support uninterrupted operations.
Key Features:
– High-bandwidth, low-latency architecture for stable, secure connectivity across large areas.
– Standardized three-layer networking with up to 100G uplinks and MLAG-based redundancy.
– Centralized management, zero-touch provisioning, agentless automation, and intelligent backup.
– Advanced security protocols and tailored designs for specific campus layouts.
Distinctive V alue:
Our large and midsize campus networking solution delivers scalable, resilient connectivity for complex
campus environments, with future-proof architecture and streamlined operations. This solution is tailored for
enterprise and institutional campuses with distributed buildings and high user density. It provides stable, secure
connectivity through a standardized three-layer architecture, up to 100G uplinks, and MLAG-based redundancy.
Use Case 5: Hospitality Networking Solution
Scenario: Meets the requirements of hotels and hospitality venues for seamless, secure, and aesthetically integrated
network connectivity.
Seamless and secure network connectivity is essential to delivering a positive guest experience and enabling
efficient hotel operations in modern hospitality settings. Guests expect fast, reliable and hassle-free internet access
from the moment they check in, while operators need to maintain smooth daily operations and preserve the aesthetic
integrity of rooms and public spaces. Network infrastructure must therefore deliver not only high performance and
full coverage, but also be discreet and easy to deploy, naturally blending into hospitality interiors.
Key Features:
– Wi-Fi 6/6E access points for high-speed coverage in guest rooms, lobbies, and outdoor areas.
– Ceiling-mount, wall plate, and outdoor APs for complete wireless coverage and minimalist design.
– End-to-end automation, centralized management, and real-time alerts for simplified operations.
– Data protection and user isolation protocols, with customizable captive portals for branding.
Distinctive V alue:
Our hospitality networking solution combines high performance and full coverage with discreet, easy-to-
deploy infrastructure, supporting both technical and aesthetic standards in hospitality settings. This solution delivers
seamless, secure Wi-Fi 6/6E connectivity across guest rooms and public spaces.
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OUR TECHNOLOGIES
Our technologies serve as the foundation of our business, integrating hardware, software
and intelligent system tools into a scalable and reliable architecture. Through scalable
hardware design and development, decoupled and programmable software systems and
intelligent system tools, our platform delivers comprehensive capabilities across the entire
network lifecycle, from product design and solution generation to deployment, orchestration
and real-time management. This platform-centric approach empowers us to address diverse
application scenarios in a standardized yet customizable manner, significantly enhancing the
speed of delivery, cost efficiency and quality consistency of our networking solutions.
Scalable Hardware Design and Development
Our hardware design and development capabilities lay the foundation for the breadth,
scalability and performance of our networking solutions. Covering both hardware
specifications and aesthetic design, our hardware design and development enables consistent
performance, cohesive visual identity and streamlined user experience across product lines.
Our equipment is designed with standardized interfaces and adaptable modules, supporting
cross-scenario reusability and facilitating rapid customization.
We emphasize design scalability and reusability, enabling equipment to be flexibly
configured and repurposed across different product categories and application scenarios. Our
design architecture supports operational scaling by allowing seamless expansion, modular
upgrades and cost-effective maintenance, particularly in large-scale deployments across data
centers, smart campuses and enterprise networks.
We have also achieved technological breakthroughs, launching equipment including the
high-speed 800G optical modules and switches, silicon photonic transceivers, high-density
cabling management solutions and active wavelength division multiplexers, meeting the
demands for high-speed networking and supported AI application deployment.
Networking Equipment Operating System
At the core of our software capabilities lies FS OS, our proprietary networking equipment
operating system is designed to decouple software functionality from hardware configuration.
FS OS provides a programmable, modular and open architecture that enables dynamic protocol
stacking, hybrid networking and centralized control. It supports both our proprietary devices
and other third-party networking devices that the customers sourced separately, facilitating
deployment in heterogeneous environments.
FS OS leverages advanced virtualization layer technology to mitigate compatibility issues
among networking equipment from different manufacturers, thereby supporting hybrid
networking across devices with varied specifications. It also adopts an open network
architecture that ensures uniform control over mainstream protocol networking equipment,
facilitating fast and efficient automatic network deployment and management.
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Cloud-Based Network Management Platform
Our cloud-based network management platform is engineered to support both on-premise
and cloud-based operating models by seamlessly integrating with our networking equipment
operating system. This integration enables SDN, allowing customers to configure, deploy and
manage networking equipment intelligently and efficiently. By streamlining operational and
maintenance tasks, our platform significantly enhances network efficiency, reduces network
disruptions and accelerates the transition to intelligent networks. In doing so, it not only
supports rapid adaptation to evolving business requirements but also delivers substantial cost
savings and improved overall network reliability.
We have developed SDN architecture that delivers a centralized, programmable network,
making it more flexible and easier to manage. SDN centralizes management by abstracting the
control plane from the data forwarding function in the discrete networking equipment. SDN
enables centralized management and control, automation and policy enforcement across
physical and virtual network environments.
Intelligent System Tools
We have integrated cutting-edge intelligent system tools in our service delivery process
and management system to enhance solution design compatibility, customer experience and
operational efficiency. Our FS Agent is fully integrated into our online sales platform. It allows
our customers to have access to real-time and personalized online customer service support
such as recommendations for networking solutions and relevant equipment, technical
consultations and troubleshooting support at any time, all through natural language interaction
supported by FS Agent , we have significantly improved our service efficiency and customer
satisfaction.
In addition, we have developed an end-to-end digitalized management system comprising
a wide spectrum of functions including order management, supply chain management,
warehouse management and customer relationship management. By applying intelligent
system tools to these core operating processes, we are able to perform real-time demand
forecasting, optimize inventory turnover and streamline delivery coordination. These
intelligent system tools collectively enable us to deliver reliable, responsive and personalized
services across global markets, strengthening customer engagement and reinforcing our
platform-centric service model.
RESEARCH AND DEVELOPMENT
Technological innovation and product development are fundamental drivers of our
sustained growth and core competitiveness. To strengthen our technical capabilities and
support continuous product evolution, we have maintained a consistently high level of R&D
investment. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our
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research and development expenses amounted to RMB99.8 million, RMB110.5 million,
RMB143.7 million, RMB99.8 million and RMB124.3 million, respectively, accounting for
5.0%, 5.0%, 5.5%, 5.1% and 5.7% of our total revenue in the same respective periods.
Our R&D initiatives span a broad range of product categories, including optical modules
and high-speed cables, fiber optic cables, switches, optical transmission equipment, optical
fiber cabling management products and copper system products. We follow a demand-driven
approach in designing and standardizing our networking products and solutions. By leveraging
feedback from our large and diverse customer base, we conduct data analysis to continuously
refine product quality and standards, enabling standardized delivery process tailored to
customer application scenarios.
As a result of our continued R&D investment, we have accumulated a robust base of
proprietary technologies across both hardware and software domains, including high-density
cabling systems and modular software architecture. These technologies form the foundation of
our product competitiveness. See “Business — Intellectual Property Rights.”
We also attach great importance to product design. Guided by industry trends, customer
feedback and extensive market research, we integrate patented technologies and user-centric
design principles to develop products that combine advanced functionality, reliability and
aesthetic appeal. Our dedicated product design center oversees the entire design lifecycle from
functional and structural design to appearance, packaging and user experience, ensuring
professional and cohesive execution across all offerings. Supported by our in-depth
understanding of the industry and customer needs, we continuously refine material selection,
component configuration and industrial design to deliver differentiated, application-specific
networking solutions.
Our R&D Team
We have built a high-performing R&D team composed of professionals across multiple
disciplines, including electronics, mechanical structure, industrial and packaging design, as
well as software development and testing. This team forms the foundation of our sustained
innovation and competitive advantage. As of September 30, 2025, our R&D team consisted of
684 experienced personnel, over 80% of whom held a bachelor’s degree or above. Supported
by this strong talent base, we have established a matrix-style R&D structure spanning product
development, digital platform engineering and systems R&D. This cross-functional approach
enables multidimensional collaboration across business units and ensures integrated
technology development. In addition, to address evolving customer demands, our R&D team
navigates our research directions and continuously formulates innovative R&D projects,
enabling us to stay at the forefront of the industry.
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Our Product Development Process
Our product development process follows the “Market Management — Integrated Product
Development” framework, combining market-driven planning with integrated product
development and lifecycle management. In the early stage, our charter development team
conducts market research and defines product requirements, which are formalized into a
project charter. The charter is then transferred to the Integrated Product Development process,
where cross-functional teams including product management, engineering, testing and
operations teams, work together to develop, verify, and launch the product.
During development, we implement detailed design, software engineering, industrial
design and product testing through dedicated subprocesses, ensuring critical progress is
reviewed at each technical and business checkpoint. Key activities include concept planning,
prototype validation, pilot production and readiness assessments before full-scale launch.
After release, we continue lifecycle operations through product updates, improvements
and marketing support, eventually planning product phase-out based on strategic and market
factors.
Driven by market demand and refined through large-scale customer feedback, we
prioritize standardized design to enhance product consistency, reduce engineering time and
improve development efficiency. At the same time, we accommodate diverse customer
scenarios by offering differentiated designs tailored to specific applications. Our hardware and
software R&D efforts are closely integrated, ranging from unified product aesthetics and
structural systems for cabling, switching and transmission, to the development of proprietary
platforms for networking equipment management.
SALES AND DELIVERY
Our Online Sales Platform
We have developed an online DTC platform, FS.com , that transforms the way we acquire,
manage and create value for our customers, underpinned by our self-operated online sales
platform and cutting-edge technologies, enabling intelligent customer interaction.
We have deployed a combination of sales mode of customer self-service online ordering
with customer-commissioned ordering for our sales of solutions. Through our self-operated
website, customers can complete solution design, product selection, compatibility check, order
placement, payment, logistics tracking and after-sales support entirely online. In terms of our
customer-commissioned ordering, it refers to the process where customers inform our sales
personnel of their product procurement needs via email or the online customer service on
FS.com .
We have recruited approximately 1,000 multilingual sales personnel. Our sales personnel
are based in China and serve global customers by engaging with them to understand their
requirements, confirm product specifications and prepare quotations. Depending on customer
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needs, our solution engineers based in China provide comprehensive pre-sales solution
customization and design services. Our overseas supply and delivery staff may assist in
facilitating communication and coordination with local customers where needed. Upon the
customer’s confirmation and settlement of the quotation, the sales personnel receive the
confirmation and our ERP system generates a sales order for the customer.
With this platform, we have expanded our international reach, enhanced our global brand
influence and optimized our cross-border operational efficiency. Our international sales may be
subject to relevant international trade policies and trade barriers including the imposition of
tariffs. During the Track Record Period, the U.S. import tariffs are borne by FS U.S., our U.S.
subsidiary responsible for sales and delivery of our networking solutions in the U.S. See “Risk
Factors — Risks relating to Our Business and Industry — Rising international political
tensions, including changes in international trade policies and trade barriers, or the escalation
of trade tensions, particularly between the U.S. and China, may have an adverse effect on our
business operations.”
Sales Services
Guided by our customer-centric philosophy, we have established a global 24/5
professional service team to promptly address customers’ diverse needs. Our sales services
cover the entire sales process from interacting with customers to recommend optimized
networking solutions, providing comprehensive technical support through our online platforms
to facilitate order delivery, to providing after-sales services to ensure the quality and
performance of our solutions.
Our FS Agent is fully integrated into our online sales platform, enabling natural language
interactions for customer enquiries. This integration allows customers to access personalized
recommendations for networking solutions and relevant equipment, receive technical
consultations and obtain troubleshooting support at any time. By leveraging this online tool,
we significantly improve our service response speed while reducing customer service costs.
Brand
Our marketing primarily focuses on enhancing our market awareness of our proprietary
brand, expanding the influence of FS.com , and highlighting the advantages of our products and
services.
We attach great importance on achieving the professional needs of our customers. Our
FS.com platform as a well-known digital product knowledge base in the industry, it not only
lists our product and services details, but also offers a wealth of scenario simulations and
solution-building instructional videos.
We are dedicated to product innovation and the development of our dynamic ecosystem
to further elevate customer experience. We continuously develop and launch new product
solutions to expand our global customer base and strengthen our brand reputation.
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Leveraging the attributes of internet digital marketing, we also use third-party tools like
Google Analytics and our own tools to connect external channel traffic data with internal user
behavior data. Throughout the marketing process, we conduct all key activities
online—including market demand analysis, user profiling, channel optimization, customer
value assessment, and promotional strategy development—based on insights drawn from
platform feedback, customer experience surveys, social media interactions, CRM data, ERP
operational metrics, and advertising platform analytics. This enables us to deliver products and
solutions that are well-suited to target groups, supporting an efficient brand marketing
operation model driven by technology and data.
Delivery and After-sales Services
We have established glocalized delivery centers in China and overseas countries to ensure
the reliability and cost-effectiveness of our product and service delivery. Our global service
network further ensures reliable delivery, with most orders delivered within five days from the
date of order. We have recruited approximately 400 supply and delivery employees across
China, U.S., Germany, Australia, Japan, Singapore and the U.K. Leveraging on our glocalized
delivery centers, our overseas supply and delivery team is mainly responsible for managing
inventory, coordinating the shipment and delivery of products to customers, and handling
post-delivery matters such as after-sales requests and logistics enquiries. They also assist in
facilitating communication and coordination with local customers where needed. This enables
us to efficiently serve customers across various international markets with reliable fulfillment
and responsive support. Networking solution deployment is typically handled by customers,
with support from our detailed installation guides and online technical assistance when needed.
We typically provide one to five-year warranties, depending on product type (length of
warranties differs from products for non-consumable products) as stated in our contracts with
our customers. Our warranty term is usually limited to defects or failure of products or
solutions that do not meet the quality standards as specified and agreed with our customers. In
case of product failure within the warranty period, we will arrange for repair or replacement
of products and/or solutions without extra charge. After the warranty period expires, we may
provide maintenance and repair services. We did not receive any material warranty claims or
product returns during the Track Record Period.
Pricing
We consider various factors when determining the price of our products, including overall
internal costs and expected gross margins of each product, internal sales strategy and prices for
similar products offered by our competitors. We also evaluate the overall market conditions and
estimate the popularity of our certain products, setting cost-effective pricing strategy on a
product basis in order to obtain market shares. Our prices of all products are transparent and
publicly available on our official website. Against this backdrop, any pricing adjustments,
where made, form part of our ordinary course pricing practices and are determined based on
a holistic assessment of commercial considerations, including gross margin headroom, price
elasticity, competitive positioning and the strategic importance of individual products. Such
adjustments are applied selectively and may vary by product category. In certain
circumstances, this assessment may also take into account specific and temporary market
conditions, such as increase in procurement costs, changes in tariff policies, or foreign
exchange rates fluctuations, within the context of our broader pricing framework, rather than
as a standalone or tariff-driven measure. During the Track Record Period, as an integral part
of our networking solutions, we did not charge additional prices for our services including
technical consultation, solution design and after-sales technical support.
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OUR CUSTOMERS
As of the Latest Practicable Date, we had served more than 500,000 customers in over 200
countries and regions worldwide, covering approximately 60% of Fortune 500 companies from
a wide spectrum of sectors including, among others, information technology, financial services,
healthcare, education, automotive and electronics. Such customers generally do not impose
specific requirements on the source or brand of materials used, but may request certain
customized product functionalities, which we endeavor to accommodate to the best of our
technical capabilities. We attach great importance to meeting customers’ customized needs and
have established the necessary technical expertise and service mechanisms to respond to and
implement such requirements.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, our revenue from
the five largest customers in each year or period was RMB95.2 million, RMB82.5 million,
RMB164.5 million and RMB149.8 million, respectively, accounting for 4.8%, 3.8%, 6.3% and
6.9% of our total revenue, respectively. In the same years or periods, our revenue from the
single largest customer in each year or period during the Track Record Period amounted to
RMB41.2 million, RMB26.0 million, RMB66.5 million and RMB46.0 million, accounting for
2.1%, 1.2%, 2.5% and 2.1% of our total revenue, respectively. During the Track Record Period,
our five largest customers primarily purchased high-performance networking solutions and
general networking solutions from us and paid by bank transfers and credit cards. During the
Track Record Period, substantially all of our customers were enterprise customers. The
following tables set forth the details of our top five customers in each year or period during
the Track Record Period.
For the year ended December 31, 2022
Customer
Transaction
amount
Percentage of
total revenue
Y ear of
commencement
of business
relationship
Background and principal
business activities Credit period
(RMB in
millions)
Customer A /H1118/H1118 41.2 2.1% 2016 A U.S. technology services company primarily
engaged in cloud computing, computer
networks and other technology services
45 days
Customer B /H1118/H1118 18.6 0.9% 2016 A leading U.S. based company providing
software and services related to wireless
technology
60 days
Customer C /H1118/H1118 15.8 0.8% 2015 A world’s leading media production company
headquartered in the U.S.
30 days
Customer D /H1118/H1118 9.9 0.5% 2017 A world’s leading payment company
headquartered in the Netherlands
30 days
Customer E /H1118/H1118/H1118 9.7 0.5% 2018 A leading manufacturer of automatic test
equipment (A TE) headquartered in Japan
30 days
Total /H1118/H1118/H1118/H1118/H1118/H111895.2 4.8%
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For the year ended December 31, 2023
Customer
Transaction
amount
Percentage of
total revenue
Y ear of
commencement
of business
relationship
Background and principal
business activities Credit period
(RMB in
millions)
Customer F /H1118/H1118 26.0 1.2% 2023 A U.S. based technology company that
provides data center and hosting services
Advanced
payment
Customer C /H1118/H1118 21.2 1.0% 2015 A world’s leading media production company
headquartered in the U.S.
30 days
Customer B /H1118/H1118 12.5 0.6% 2016 A leading U.S. based company providing
software and services related to wireless
technology
60 days
Customer G /H1118/H1118 11.6 0.5% 2018 A multinational technology, digital and data
company headquartered in France
30 days
Customer H /H1118/H1118 11.2 0.5% 2015 An online learning platform headquartered in
the U.K. that focuses on education in data
science, machine learning and data analysis
30 days
Total /H1118/H1118/H1118/H1118/H1118/H111882.5 3.8%
For the year ended December 31, 2024
Customer
Transaction
amount
Percentage of
total revenue
Y ear of
commencement
of business
relationship
Background and principal
business activities Credit period
(RMB in
millions)
Customer F /H1118/H1118 66.5 2.5% 2023 A U.S. based technology company that
provides data center and hosting services
Advanced
payment
Customer I /H1118/H1118 37.2 1.4% 2017 A network infrastructure provider
headquartered in Luxembourg
30 days
Customer J /H1118/H1118 27.9 1.1% 2019 A U.S.-headquartered AI cloud provider
specializing in high-performance GPU
computing for large-scale AI model training
and inference
60 days
Customer K /H1118/H1118 17.2 0.7% 2021 An Australia-based company focusing on the
development and operation of renewable
energy power generation facilities
30 days
Customer B /H1118/H1118 15.7 0.6% 2016 A leading U.S. based company providing
software and services related to wireless
technology
60 days
Total /H1118/H1118/H1118/H1118/H1118/H1118164.5 6.3%
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Nine months ended September 30, 2025
Customer
Transaction
amount
Percentage of
total revenue
Y ear of
commencement
of business
relationship
Background and principal
business activities Credit period
(RMB in
millions)
Customer J /H1118/H1118/H111846.0 2.1 2019 A U.S.-headquartered AI cloud provider
specializing in high-performance GPU
computing for large-scale AI model training
and inference
60 days
Customer A /H1118/H1118 38.4 1.8 2016 A U.S. technology services company primarily
engaged in cloud computing, computer
networks and other technology services
45 days
Customer N /H1118/H1118 24.7 1.1 2019 A global investment and technology
development firm headquartered in U.S. and
recognized for its quantitative and
computational finance strategies
30 days
Customer M /H1118/H1118 23.6 1.1 2018 A semiconductor company headquartered in
U.S. that specializes in high-performance
computing technologies for data centers,
gaming and embedded systems
60 days
Customer P /H1118/H1118/H111817.1 0.8 2018 A U.S. company engaged in manufacturing
and refurbishing computer hardware
30 days
Total /H1118/H1118/H1118/H1118/H1118/H1118149.8 6.9
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, all of our five largest customers in each year or period during the Track
Record Period were Independent Third Parties. As of the Latest Practicable Date, none of our
Directors, Supervisors, their associates or any of our Shareholders (who or which to the
knowledge of the Directors or Supervisors owned more than 5% of our issued share capital)
had any interest in any of our five largest customers in each year or period during the Track
Record Period.
The salient terms of our standard sales agreements during the Track Record Period are set
out below:
Duration. Our sales agreements are generally one-time purchase orders with no fixed
duration.
Minimum Purchase Amount. There are typically no minimum purchase requirements
under standard sales agreements. Depending on factors such as profit margin of respective
products and customer demand forecasts, we may agree on a minimum purchase amount with
customers where we provide competitive discounts, but we do not impose mandatory purchase
obligations.
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Pricing Policy. We publish our products prices on the official website which can be easily
acknowledged by our direct customers. In terms of customized projects, we generally negotiate
project prices at arm’s length according to its complexity. Based on customers’ project timeline
requirements or internal procurement policies, we may offer non-standard price protection
terms to customers to accommodate their needs.
Payment and Credit Term. Payment methods vary depending on the destination of the end
customer and the outcome of negotiations. Based on the type of products purchased, the
cooperation relationship and the negotiation results between both parties, we generally agree
for customers to settle payments through advanced payment, payment within 15, 30, 45, 60 or
90 days after invoice issuance, or installment payments. Customers seeking credit terms are
required to submit supporting financial documents for credit approval, and the credit period is
granted only upon successful review.
Logistics. Generally, we are responsible for delivering our products to locations
designated by our direct sales customers.
Return Arrangements. During the warranty period, if the product experiences non-
human-induced quality issues, we are responsible for free repairs or replacements. During the
warranty period, for damages or malfunctions caused by non-product quality issues, we will
charge customer for repair and related costs according to the standards agreed upon by both
parties.
Termination. Either party can request to amend or terminate the contract with a written
notification. Upon mutual agreement, both parties shall execute the amendment or termination
agreement in writing.
OUR SUPPLIERS
We have established deep collaborative partnerships with networking equipment
manufacturers worldwide. As of September 30, 2025, we had collaborated with over 200
telecommunication product suppliers and networking equipment manufacturers across the
globe. Our robust supply chain integration capabilities have enabled us to rapidly respond to
customer demands, shorten delivery cycles, and enhance customers’ efficiency in technical
validation and order placement.
The purchases from our top five suppliers in each year or period during the Track Record
Period was RMB625.0 million, RMB450.2 million, RMB507.9 million and RMB246.9 million,
respectively, representing 50.3%, 50.7%, 47.3% and 36.3% of our total purchase in the same
respective years or periods. The purchases from our largest supplier in each year or period
during the Track Record Period was RMB190.1 million, RMB141.9 million, RMB146.4
million and RMB61.4 million, respectively, representing 15.3%, 16.0%, 13.6% and 9.0% of our
total purchase in the same respective years or periods. During the Track Record Period, our five
largest suppliers primarily provided high-performance networking products and general
networking products to us and we paid them by bank transfers. The following tables set forth
the details of our top five suppliers in each year or period during the Track Record Period.
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For the year ended December 31, 2022
Supplier
Transaction
amount
Percentage of
total purchase
Y ear of
commencement of
business relationship
Background and principal
business activities
Size of
operations Credit period
(RMB in
millions)
(Registered
capital)
Supplier A /H1118/H1118190.1 15.3% 2020 A global company headquartered in
China that primarily provides
networking equipment and networking
security products
RMB60
million
70% advanced
payment; 30%
within 30 days
of delivery
Supplier B /H1118/H1118168.7 13.6% 2019 A global company headquartered in
China primarily engaged in R&D,
development, production and sales of
communication equipment
US$24
million
30 days
Supplier C /H1118/H1118118.0 9.5% 2021 A U.S. manufacturer of optical
communication components and
subsystems
US$155
million
30 days
Supplier D /H1118/H1118 81.3 6.5% 2020 A global company headquartered in
China primarily engaged in
development and manufacture of
optoelectronic devices and modules
RMB794
million
30 days
Supplier E /H1118/H1118 66.9 5.4% 2014 A global company headquartered in
China primarily engaged in R&D,
design, production, sales and
technical consulting of optoelectronic
devices and related equipment
RMB227
million
50% within 150
days of
delivery; 50%
within 180
days of
delivery
Total /H1118/H1118/H1118/H1118/H1118625.0 50.3%
For the year ended December 31, 2023
Supplier
Transaction
amount
Percentage of
total purchase
Y ear of
commencement of
business relationship
Background and principal
business activities
Size of
operations Credit period
(RMB in
millions)
(Registered
capital)
Supplier A /H1118/H1118141.9 16.0% 2020 A global company headquartered in
China that primarily provides
networking equipment and networking
security products
RMB60
million
70% advanced
payment; 30%
within 30 days
of delivery
Supplier F /H1118/H1118107.9 12.1% 2022 A global company headquartered in
China primarily engaged in the
wholesale, import and export of fiber-
optic communication products
US$30
million
60 days
Supplier C /H1118/H1118 79.8 9.0% 2021 A U.S. manufacturer of optical
communication components and
subsystems
US$155
million
30 days
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Supplier
Transaction
amount
Percentage of
total purchase
Y ear of
commencement of
business relationship
Background and principal
business activities
Size of
operations Credit period
(RMB in
millions)
(Registered
capital)
Supplier E /H1118/H1118 63.6 7.2% 2014 A global company headquartered in
China primarily engaged in R&D,
design, production, sales and
technical consulting of optoelectronic
devices and related equipment
RMB227
million
50% within 150
days of
delivery; 50%
within 180
days of
delivery
Supplier G /H1118/H1118 57.0 6.4% 2022 A global distributor of IT hardware,
software and solutions headquartered
in the U.S.
US$99,000
(1) Advanced
payment
Total /H1118/H1118/H1118/H1118/H1118450.2 50.7%
(1) This amount represents the issued share capital, instead of registered capital of Supplier G.
For the year ended December 31, 2024
Supplier
Transaction
amount
Percentage of
total purchase
Y ear of
commencement of
business relationship
Background and principal
business activities
Size of
operations Credit period
(RMB in
millions)
(Registered
capital)
Supplier F /H1118/H1118146.4 13.6% 2022 A global company headquartered in
China primarily engaged in the
wholesale, import and export of fiber-
optic communication products
US$30
million
60 days
Supplier C /H1118/H1118 98.5 9.2% 2021 A U.S. manufacturer of optical
communication components and
subsystems
US$155
million
30 days
Supplier A /H1118/H1118 98.4 9.2% 2020 A global company headquartered in
China that primarily provides
networking equipment and networking
security products
RMB60
million
30% advanced
payment and
remaining
70% within 45
days of
delivery
Supplier E /H1118/H1118 87.5 8.1% 2014 A global company headquartered in
China primarily engaged in R&D,
design, production, sales and
technical consulting of optoelectronic
devices and related equipment
RMB227
million
50% within 150
days of
delivery; 50%
within 180
days of
delivery
Supplier D /H1118/H1118 77.1 7.2% 2020 A global company headquartered in
China primarily engaged in
development and manufacture of
optoelectronic devices and modules
RMB794
million
30 to 60 days
Total /H1118/H1118/H1118/H1118/H1118507.9 47.3%
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Nine months ended September 30, 2025
Supplier
Transaction
amount
Percentage of
total purchase
Y ear of
commencement of
business relationship Background and principal business activities
Size of
operations Credit period
(RMB in
millions)
(Registered
capital)
Supplier F /H1118/H1118/H111861.4 9.0 2022 A global company headquartered in
China primarily engaged in the
wholesale, import and export of fiber-
optic communication products
US$30
million
60 days
Supplier C /H1118/H1118/H111858.6 8.6 2021 A U.S. manufacturer of optical
communication components and
subsystems
US$155
million
30 days
Supplier E /H1118/H1118/H111853.4 7.9 2014 A global company headquartered in
China primarily engaged in R&D,
design, production, sales and
technical consulting of optoelectronic
devices and related equipment
RMB227
million
50% within 150
days of
delivery; 50%
within 180
days of
delivery
Supplier D /H1118/H1118/H111838.3 5.6 2020 A global company headquartered in
China primarily engaged in
development and manufacture of
optoelectronic devices and modules
RMB794
million
60 days
Supplier H /H1118/H1118/H111835.2 5.2 2019 A global company headquartered in
China, primarily engaged in the
development and manufacture of
precision optical connectivity
products
HK$1
million
90 days
Total /H1118/H1118/H1118/H1118/H1118246.9 36.3
Our Directors confirm that we had not experienced any significant material fluctuation in
prices set by our suppliers, material breach of contract on the part of our suppliers or delay in
delivery of our orders from our suppliers during the Track Record Period. As of the Latest
Practicable Date, none of our Directors, Supervisors, their associates or any of our
Shareholders (who or which to the knowledge of the Directors or Supervisors owned more than
5% of our issued share capital) had any interest in any of our top five suppliers.
We may enter into master contracts with our suppliers and place purchase orders with
them on case-by-case basis. Set forth below is a summary of our standard supply agreement for
networking equipment.
 Duration . Our standard supply agreements generally do not have definite duration
terms.
 Product specification . Production and processing shall be carried out in accordance
with our corporate quality standards. For those we have no specific standards, the
standards of the country or industry of the final sales destination shall be applied and
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must meet the usage requirements of our designated customers. If we have special
customization requirements for the goods or if the export country of the goods has
mandatory certification requirements, these requirements must also be followed as
well.
 Minimum purchase commitment . Typically, the supply agreements do not stipulate
a minimum purchase requirement.
 Price adjustment provision . Typically, the price after tax will not change, while the
taxes under unsettled parts shall follow the tax rate fluctuations if any.
 Payment . We are generally required to pay the price in the form of either
prepayment, payment within 30, 60, 120 or 180 days after receiving invoices, or
installment payments.
 Logistics . The suppliers are typically responsible for the delivery of products to our
designated location specified in each purchase order.
 Quality Guarantee . For non-conforming products, the supplier shall identify the
cause and implement corrective measures within a specified period. In the event of
product quality issues, quality incidents or violations of the agreed quality
standards, the supplier shall bear our losses and any associated costs.
 Risk Transfer . The risk transfers to us after the products are received by us.
 Return arrangements . We have the right to return non-conforming products and to
conduct tests and analyses on non-conforming materials. The corresponding testing
costs and material losses shall be borne by the supplier.
 Termination . Either party is entitled to terminate the agreement in accordance with
the terms specified in the agreement, including material breach of contract.
INTELLECTUAL PROPERTY RIGHTS
Intellectual property rights are critical to our business. As of the Latest Practicable Date,
we had (i) 263 registered patents in Mainland China, including 21 invention patents, 125 utility
model patents and 117 design patents; and (ii) 91 overseas registered patents in countries and
regions including the U.S., Europe and Singapore.
We have taken the following key measures to protect our intellectual property rights,
including: (i) implementing a set of comprehensive internal policies to establish robust
management over our intellectual property rights, (ii) establishing an intellectual property
taskforce to guide, manage, supervise and monitor our daily work regarding intellectual
properties, (iii) timely registration, filing and application for ownership of our intellectual
properties, (iv) actively tracking the registration and authorization status of intellectual
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properties and take action in timely manner if any potential conflicts with our intellectual
property rights are identified, and (v) clearly stating all rights and obligations regarding the
ownership and protection of intellectual properties in the employment agreements we enter
into. Despite our precautions, we may be subject to risks associated with alleged infringement
of third parties’ intellectual property rights, or infringement of our intellectual property rights
by third parties. See “Risk Factors — Risks Relating to Our Business and Industry — Our
failure to protect our intellectual property rights may undermine our competitive position, and
litigation to protect our intellectual property rights or defend against third-party allegations of
infringement may be costly and ineffective” and “Risk Factors — Risks Relating to Our
Business and Industry — We may be involved in legal and other disputes from time to time
arising from allegations relating to our infringement of intellectual property rights of third
parties, which, if determined adversely to us, could cause us to pay significant damages.”
During the Track Record Period and up to the Latest Practicable Date, we had not been subject
to any infringement or allegations of infringement by third parties that may have material
adverse effects on our business operations.
LOGISTICS, INVENTORY MANAGEMENT AND MANUFACTURING
Logistics and Inventory Management
We utilize automated information systems for warehouse and logistics management such
as warehouse management system or replenishment system, achieving full-process
management from product warehousing, inventory inspection, to picking, waybill tracking and
order completion which effectively ensures sufficient and reasonable inventory levels to meet
the needs for rapid delivery. Our warehouse data department generates transfer-related data
based on sales orders, which is then handed over to the warehouse logistics department for
logistics transportation. We engage qualified third-party logistics service providers for the
delivery of all finished products that have passed quality inspections from our nearest
warehouses to locations specified by our customers. As of the Latest Practicable Date, apart
from the delivery center in China, we have six localized overseas delivery centers in the U.S.,
Germany, Australia, Singapore, the U.K. and Japan. By applying intelligent tools to our core
operating processes such as research and development, coupled with our FS Agent , we have
significantly improved our service efficiency and customer satisfaction.
Our inventory mainly includes finished goods, goods in transit and consumables.
Leveraging our automated information systems’ analysis results, we formulate procurement
plans, inventory plans, intelligent replenishment and product inventory structure adjustments.
We could promptly adjust inventory through global transfer and replenishment methods to
ensure sufficient and reasonable inventory levels in various warehouses. As of December 31,
2022, 2023, 2024 and September 30, 2025, our inventories were RMB659.1 million,
RMB606.1 million, RMB572.3 million and RMB484.8 million, respectively.
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Manufacturing
We rely on contract manufacturers for our manufacturing needs. We require some
manufacturers to procure the core components, such as switch chips, optical fiber jumper
connectors and optical fiber cores, from our designated raw material brands for certain
products, ensuring the high-quality standard of our self-branded products. The manufacturing
process also enables us to configure the hardware and software in unique combinations to meet
a wide variety of individual customer requirements. The manufacturing process also uses
automated testing equipment, as well as comprehensive inspection, testing and statistical
process controls, which are designed to help ensure the quality and reliability of our products.
Our arrangements with contract manufacturers generally provide for quality, cost and
delivery requirements, as well as manufacturing process terms; flexibility regarding capacity,
quality and cost management; and oversight of manufacturing. The agreements generally also
include conditions for the use of our intellectual property, specifying the type and scope of
permitted use, duration, licensing terms, confidentiality obligations along with liabilities in
case of infringement or breach. The licensing is typically non-exclusive and non-transferable.
We rely on these contractual arrangements to protect the usage of our intellectual property by
the contract manufacturers. We are prepared to take prompt action through formal notices or
escalation procedures in case of unauthorized use.
We select contract manufacturers primarily based on their technology and manufacturing
capabilities, quality of their products/services and commercial terms offered. We generally
enter into long-term framework agreements with contract manufacturers and place orders
separately based on actual demand. The long-term framework agreements typically
automatically renew for one year. These arrangements with contract manufacturers generally
do not set minimum purchase requirements.
COMPETITION
The networking solution industry is highly competitive, with established players and new
entrants vying for market share in a rapidly evolving landscape. Our ability to maintain and
grow our market position depends on competing effectively against other networking solution
providers. The competitive landscape is shaped by multiple factors, including the performance
of networking products, technology and customization capability applicable in new scenarios,
products and service delivery efficiency and prompt after-sales services, brand awareness and
recognition and end-to-end digital operation capability. Despite high barriers to entry, new
market participants may emerge, introducing innovative or cost-effective solutions that
challenge existing players. If we are unable to keep pace with such advancements, or fail to
differentiate our solutions in terms of quality, performance or cost, we risk losing market share
to competitors. See “Industry Overview.” For risks associated with our competitiveness in the
industry, see “Risk Factors — Risks Relating to Our Business and Industry — The industry in
which we participate is increasingly competitive, and if we do not compete effectively, our
business and results of operations could be adversely affected.”
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QUALITY CONTROL
We are committed to maintaining high level of quality and safety for our networking
solutions and have obtained ISO9001 quality management system certification. To comply with
the safety standards and quality requirements of various countries and regions, we have
developed, complete and high-standard quality control system for product development, supply
chain and after-sales service management. We strictly deployed quality control system
throughout the product lifecycle, including structural design validation, supplier management
and quality inspection, which could effectively preventing design defects and quality issues.
Our quality control personnel are stationed at key suppliers’ production sites, supervising them
from raw material procurement to production processes and packaging. This guarantees our
delivery of high-quality products. We have also established four major testing systems,
including networking equipment, optical modules, optical transmission and integrated cabling,
covering from the sample stage to small batch trial production, as well as quality assurance
testing of finished products during mass production. We generally use performance,
functionality, compatibility, parameters and reliability as testing indicators. We engaged
independent product testing and certification organizations to test and certify our self-branded
networking equipment on the relevant standards of each target market.
As a result of our adherence to quality control procedures, we did not experience any
material sales returns or any material product liability or major legal claims due to product
safety and quality control issues, and we did not recall any products during the Track Record
Period and up to the Latest Practicable Date.
EMPLOYEES
As of September 30, 2025, we had 2,174 employees located in China and 250 employees
located in the U.S., Germany, Australia, Japan, Singapore and the U.K. The following table sets
forth a breakdown of our employees by function and location as of the same date.
Business Function/Location
Number of
employees Percent
Research and development
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118684 28.2%
Sales and marketing
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118983 40.6%
Solution Engineers
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 3.8%
Supply and delivery
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220
U.S. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889
Germany /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867
Australia /H1118/H1118/H1118/H1118/H1118/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
Japan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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
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Business Function/Location
Number of
employees Percent
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865
U.K. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813
Sub-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/H1118470 19.4%
General administration and management /H1118/H1118/H1118/H1118/H1118/H1118194 8.0%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,424 100.0%
Attracting, retaining and motivating qualified employees are important to our success. We
believe that our high-quality talent pool is one of our core strengths and competitive
advantages. We recruit with high standards and rigorous procedures and through various
methods, including campus recruitment, online recruitment and third-party recruiters to select
the best-fit personnel for the corresponding positions in response to our various talent
demands. We invest in continuing training programs and establish a FS college for internal
employee learning and training, ranging from induction training, orientation, business training,
to product training and management trainings, to improve their professional knowledge and
management skills, upgrade their skill sets and keep abreast of the industry standards in their
respective positions. We offer competitive remuneration package to our employees, which are
generally based on their qualifications, industry experience, position and performance. We
regularly evaluate the performance of our employees and reward the well-performed with
incentives and priority opportunities of promotion.
As required by the laws and regulations in the jurisdictions in which we operate, we
participate in various employee social security plans that are administered by local
governments. During the Track Record Period, we did not make full contributions to the social
insurance and housing provident funds as required by the relevant PRC laws and regulations
for our employees in certain PRC operating entities of our Group. Nevertheless, contributions
for all employees were made at no less than the statutory minimum thresholds as stipulated
under applicable PRC laws and regulations. For the same period and up to the Latest
Practicable Date, we had not received any notices or penalties from the social insurance
authorities or the housing provident fund authorities requiring us to make any additional social
insurance and housing provident fund contributions. According to the interviews conducted by
our PRC Legal Advisor with the competent social insurance authorities and housing provident
fund authorities, the competent authorities confirmed that they would not take the initiative to
conduct inspections requiring us to make up for historical arrears of social insurance
premiums, or of housing provident fund, or impose penalties on us. Furthermore, there were
no significant complaints, reports, or class actions related to social insurance or housing
provident fund. As advised by our PRC Legal Advisor, taking into account of the relevant
regulatory assurances and the facts stated above, the risk of us being required by relevant PRC
authorities to pay the shortfall of social insurance and housing provident fund contributions or
being penalized for failing to make social insurance and housing provident funds in full is
remote. As a result, we had not made any provision for the shortfall in our social insurance and
housing provident fund contributions during the Track Record Period and up to the Latest
Practicable Date. See “Risk Factors — Risks Relating to Our Business And Industry — Failure
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to comply with the PRC Social Insurance Law and the Regulation on the Administration of
Housing Provident Funds or other PRC labor related regulations may subject us to fines and
other legal or administrative sanctions.”
The relevant provision of The Interpretation (II) of the Supreme People’s Court on Issues
Concerning the Application of Law in the Trial of Labor Dispute Cases (׵
༆ᙑ(ɚ)), which came into effect as of September 1,
2025, emphasizes the agreement to avoid paying social insurance premiums is invalid. We do
not have such promise or agreement to or with our employees. As advised by our PRC Legal
Advisor, such provision does not increase the likelihood for making additional contributions,
overdue payments or being fined regarding to the social insurance and housing provident fund
contributions. To strengthen our internal control in this regard, we will maintain close
communication with relevant authorities, regularly check the latest regulations and policies and
consult our PRC legal advisors from time to time. We will also regularly review the calculation
of the social insurance and housing provident fund contributions to ensure that the calculation
and payment methods are in compliance with the relevant laws and regulations.
None of our employees are currently represented by labor unions. We believe we maintain
a good working relationship with our employees and we have not experienced any material
labor dispute or any difficulty in recruiting staff for our operations during the Track Record
Period and up to the Latest Practicable Date.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
According to Frost & Sullivan, we were the world’s second largest online DTC
networking solution provider in terms of revenue in 2024. We consistently integrate
environmental, social, and governance (ESG) factors into our strategic core, driving
sustainability through systematic practices. On the environmental front, we significantly
reduce resource consumption through digital process optimization, implement green supply
chain management and actively explore renewable energy applications. In the social
dimension, we have developed an inclusive culture, covering gender equality at workplace,
comprehensive integrity training system, supply chain social responsibility management and
support for community initiatives, continually reinforcing the symbiotic value between our
Group, employees, customers and society. In the governance area, we ensure decision-making
transparency and quality through our anti-fraud monitoring system, multi-tiered data security
management mechanism and professional independent directors.
ESG Governance System
A comprehensive and robust ESG governance framework is a crucial foundation for
achieving sustainable development. We deeply integrate the concept of sustainability into our
management practices and actively develop our ESG governance structure, committed to
establishing a three-tier management system composed of our Board, Strategy Committee and
an ESG working group. Our Board, as the highest decision-making body for ESG strategy,
oversees the direction of ESG development, approves major issues and allocates resources. The
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Strategy Committee focuses on researching and guiding ESG topics, responsible for
formulating action plans and monitoring execution progress. The ESG working group, which
we intend to establish in due course, will implement strategic plans, promote cross-department
collaboration, regularly assess risks and opportunities and dynamically optimize management
systems.
Our core management team demonstrates a diverse range of professional backgrounds and
practical experience in the ESG field. They have experience in integrating ESG principles and
driving social responsibility. Their expertise in ESG disclosure and financial evaluation further
strengthens our market competitiveness.
Environment
We always regard environmental protection as the core driving force of our sustainable
development strategy. We implement a comprehensive environmental indicator system, drive
green operations and advance low-carbon transformation. Through technological innovation
and process optimization, we enhance efficiency and reduce emissions while embracing clean
technology and actively exploring renewable energy to balance economic growth with
sustainability.
Environmental Management
We have successfully passed the ISO14001 environmental management systems
certification, demonstrating our commitment to international environmental standards. We will
continue to innovate and enhance our environmental management, striving for a more efficient
and sustainable green development model.
Emission
We primarily generate industrial solid waste, such as cartons, wooden pallets and plastic
films, as well as domestic waste from daily office activities. In 2024, we have actively taken
a number of measures in compliance with laws and regulations such as the PRC Environmental
Protection Law and the PRC Law on the Prevention and Control of Environmental Pollution
by Solid Wastes. For example:
 Solid waste management. Our delivery centers have established classified
temporary storage points with identification signs. Waste is transferred promptly,
with storage sites equipped with safety facilities such as rainproof and anti-leakage
devices. Disposed equipment is managed in specific areas separately. Recyclable
waste is collected by dedicated personnel and sold to qualified units with relevant
records in place to ensure full traceability.
 Domestic waste management. According to our environmental policies and
procedures, we strategically place garbage bins for domestic waste and enforce
classified collection and management. Professional property management agencies
are engaged to handle transportation, ensuring disposal at compliant waste treatment
sites according to established standards and schedules.
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Environmental Protection Objectives and Measures
To promote our sustainable transformation, we have set clear objectives and implemented
targeted measures for energy efficiency, carbon emission reduction, climate resilience and
resource circularity.
 Energy conservation . Using 2024 as the base year, we aim to achieve an annual
reduction of 1% to 2% in comprehensive energy consumption per unit areas across
self-owned properties, targeting a cumulative decrease of 5% to 10% by 2030. Key
management initiatives include optimizing facility operating hours and deploying
intelligent systems to regulate air conditioning and water dispenser usage.
 Green power transition . Subject to necessary regulatory approvals, we target a
green power procurement ratio of at least 30% by 2030. To support this goal, we
plan to partner with external suppliers to install rooftop photovoltaic systems within
our premises to generate power for on-site consumptions.
 Operational carbon reduction . To promote low-carbon transportation, we plan to
prioritize new energy vehicles for future procurement. Relevant measures include
updating our internal policies, expanding necessary charging infrastructure,
conducting cost-benefit analysis and establishing supervision mechanisms to ensure
alignment with our carbon reduction objectives.
 Climate risk prevention . To strengthen climate resilience, we plan to conduct
systematic assessments of climate-related vulnerabilities and implement targeted
protective upgrades. We plan to install detachable waterproof baffles in flood-prone
areas and ensure that each warehouse maintains a minimum number of emergency
sandbags by 2026. These measures are designed to mitigate operational risks and
enhance our preparedness for extreme weather events.
The table below sets forth our carbon emissions during the Track Record Period.
Y ears ended December 31,
Nine months
ended
September 30,
Classification Unit 2022 2023 2024 2025
Scope 1 (1) /H1118/H1118/H1118/H1118/H1118/H1118Metric tonnes of
carbon dioxide
equivalent
1,317.5 1,506.0 1,797.0 22.9
Scope 2
(2) /H1118/H1118/H1118/H1118/H1118/H1118Metric tonnes of
carbon dioxide
equivalent
966.7 1,660.3 3,184.3 3,377.7
Scope 3
(3) /H1118/H1118/H1118/H1118/H1118/H1118Metric tonnes of
carbon dioxide
equivalent
3.7 4.6 5.8 5.3
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Notes:
(1) Scope 1 emission refers to direct greenhouse gas emissions from operations that are owned or controlled
by our Group. Our Scope 1 emissions primarily originate from the use of company-owned vehicles. In
the nine months ended September 30, 2025, our Scope 1 emissions were significantly reduced due to
limited utilization of these vehicles.
(2) Scope 2 emission refers to energy indirect greenhouse gas emissions resulting from the generation of
purchase or acquired electricity, heating, cooling and steam consumed within our Group.
(3) Scope 3 emission refers to all other indirect greenhouse gas emissions that occur outside our Group
including both upstream and downstream emissions.
Resource Consumption
We have implemented systematic measures to enhance resource efficiency and cut carbon
emissions. Through awareness campaigns, we promote water and energy conservation, while
upgrading facilities with energy-saving technologies. Employees are encouraged to turn off
lights and appliances after work, integrating sustainability into daily operations. We also
optimize office energy consumption through time-sharing management and intelligent systems,
reducing unnecessary usage and improving efficiency.
The table below sets forth details of resource consumption of our Group companies in
China during the Track Record Period.
Y ears ended December 31,
Nine months
ended
September 30,
Resource Classification Unit 2022 2023 2024 2025
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh 1,695.0 2,911.2 5,583.5 5,922.7
Heating /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh 20.2 80.8 238.0 135.8
Air Conditioning /H1118/H1118MWh 122.6 230.0 547.0 680.3
Water Resource /H1118/H1118/H1118MT 8,454.3 10,891.0 12,781.0 13,144.0
The increase in resource consumption from 2023 to 2024 reflects the natural outcome of
our strategic expansion and operational scaling. Growth in workforce and facility size led to
higher baseline consumption of electricity and water, while newly installed equipment required
continuous power supply. Additional resource demand was also driven by the construction and
operation of specialized functional areas, including laboratories and clean-rooms with
round-the-clock environmental controls.
Climate Governance
We prioritize climate-related governance by systematically assessing risks and
opportunities. Wuhan’s subtropical monsoon climate, with moderate temperatures and distinct
seasons, supports stable business operations and minimizes disruptions caused by extreme
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weather. The region’s ample precipitation provides sufficient water resources, mitigating risks
associated with water shortages. By leveraging these climate advantages, we strengthen our
business continuity and enhance environmental sustainability in our business operations.
Social
According to Frost & Sullivan, we were the world’s second largest online DTC
networking solution provider in terms of revenue in 2024. We have deeply integrated corporate
social responsibility (CSR) into our development strategy. By establishing a comprehensive
CSR management system, we are committed not only to creating value for our customers but
also to promoting the development of our employees, communities and the industry as a whole.
Employment
We have established a code of conduct committed to making decisions free from any
discriminations and providing equal employment opportunities for all job applicants and
employees. We respect individual beliefs, cultural customs and lifestyles, and are dedicated to
fostering an open and inclusive working environment.
We place great importance on employee career development and have established tailored
training policies for staff in different departments. These policies help employees acquire
necessary knowledge and skills for their roles through diverse training programs. During the
Track Record Period, we have organized over 3,700 training sessions, with more than 108,100
attendances and a cumulative training duration over 116,700 hours.
During the Track Record Period and up to the Latest Practicable Date, there were no
incidents in violation of relevant laws and regulations pertaining to child labor or forced labor.
Occupational Safety
We place great emphasis on employees’ occupational safety. In addition to providing
safety equipment for operations and R&D personnel, we offer mandatory safety training for all
new onboarding employees. We have also held safety campaign to promote awareness, foster
a strong safety culture and encourage hands-on learning through interactive activities.
Through a comprehensive safety training system, we strive to ensure the occupational
safety of every employee. During the Track Record Period and up to the Latest Practicable
Date, we had not experienced any major accident during our business operations. We organize
two fire drills per year, one annual first aid training session and regularly conduct operational
safety training during morning and evening meetings. During the Track Record Period, over
4,100 employee attendances were recorded for occupational safety development training.
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Employee Development and Training
We prioritize employee development through a comprehensive career system, diverse
growth pathways and competitive benefits. During the Track Record Period, we conducted
employee development training sessions, fostering both individual and organizational growth.
We support employee growth through comprehensive onboarding and professional
development programs, enhancing their core competitiveness. Our benefits system includes
performance-based bonuses, housing allowances, subsidies and various perks to boost
employee satisfaction and team cohesion.
Product Responsibility
Product responsibility is a key pillar of our sustainable development. We have
implemented a rigorous quality management system throughout the product lifecycle and
achieved ISO9001 quality management system certification, ensuring high standards for
quality and safety.
We have implemented a robust internal audit process and a comprehensive product quality
control plan, ensuring high standards from raw materials to finished products. We regularly
conduct relevant testings, delivering safe, reliable and environmentally friendly products and
solutions. During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material product recalls, returns or complaints, and we are not aware of any
pending product recalls or investigations or actions by relevant authorities or customers which
may lead to a product recall.
Governance
Our governance system is centered around compliance, transparency and accountability,
covering key areas such as anti-corruption, data security and internal auditing through
multi-tiered institutional design and execution mechanisms. Our governance framework
primarily includes three major components.
 Anti-Corruption and Business Ethics. We have adopted the Code of Business
Conduct and the Anti-Fraud and Integrity Management System . Our internal policies
expressly prohibit bribery, kickbacks and improper benefit transfer, fostering an
integrity culture.
 Data Security and Privacy Protection. Based on our Personal Information Security
Management System and Data Security Management System , we have created a
lifecycle data management mechanism to ensure the security of user and employee
information.
 Internal Auditing and Risk Control. We conduct regular assessments and specific
audits, ensuring the effective policy implementation.
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Anti-Corruption and Business Ethics
We uphold a “zero tolerance” policy on corruption, enforcing strict regulations through
our Code of Business Conduct and Anti-Fraud and Integrity Management System . These
frameworks regulate employee interactions, require gift and conflict of interest declarations,
and establish independent reporting channels to ensure transparency and swift issue resolution.
Data Security and Privacy Protection
We have built a comprehensive data management system, emphasizing the classified and
multi-tiered protection of sensitive data. Personal biometric information is encrypted and
stored securely with restricted access. Cross-border data transfers must undergo security
assessments with relevant agreements in place to ensure compliance with international
regulations. We also conduct regular data security drills and employee trainings to enhance
overall risk awareness.
Internal Auditing and Risk Control
Our audit department operates with independent investigation authority according to our
internal rules and policies. It conducts special reviews on financial anomalies and suspected
fraud, implementing measures such as document withholding and duty suspension. Our Audit
Committee also evaluates anti-bribery policies through inspections, while our conflict of
interest declaration mechanism enhances transparency and mitigates biased decision-making.
INSURANCE
We maintain insurance coverage over our daily operations. Our principal insurance
policies differ from countries we operate, primarily include employee-related insurance,
employers liability insurance, public liability insurance, commercial liability insurance,
transportation insurance and product liability insurance, among others which we believe have
covered major risks in our daily operations in the jurisdictions in which we operate. In line with
general market practice, we do not maintain certain policies that are not available in the
jurisdictions in which we operate, or that are not generally required by laws. See “Risk Factors
— Our insurance coverage is limited and may not be sufficient to cover all of our potential
losses.” During the Track Record Period, we did not make any material insurance claim in
relation to our business.
PROPERTIES
Our headquarters offices are located in Shenzhen and Wuhan, PRC. As of the Latest
Practicable Date, we owned properties in Mainland China and leased properties in Mainland
China, the U.S., Germany, Australia, Singapore, Japan and the U.K. Except for the property
interest described in the valuation report prepared by Jones Lang LaSalle Corporate Appraisal
and Advisory Limited, our Group has no other owned single property interest that forms part
of our non-property activities that has a carrying amount of 15% or more of the total assets
pursuant to Rule 5.01B(2)(b) of the Listing Rules. For details of property valuation report, see
“Appendix III — Property V aluation Report” to this prospectus.
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Owned Properties
As of the Latest Practicable Date, we owned 117 properties with an aggregate gross floor
area of approximately 119,000 square meters in Mainland China, which were primarily used for
commercial services, offices and industrial purposes. As of the Latest Practicable Date, we
have obtained the real estate title certificates for all of our owned properties.
Leased Properties
As of the Latest Practicable Date, we leased five properties in Mainland China relating
to our business operations in total with an aggregate gross floor area of approximately 3,415.4
square meters, which have been mainly used as offices and warehouses. As of the Latest
Practicable Date, one lease agreement for above leased properties in Mainland China had yet
to be filed with relevant competent authorities. Pursuant to the applicable laws and regulations
in China, property lease agreements for leased properties shall be filed with the relevant real
estate administration bureaus in China. As advised by our PRC Legal Advisor, the lack of
registration does not affect the validity and enforceability of the lease agreements, or result in
us being required to vacate these leased properties, but we may be ordered by relevant
competent authorities to complete the filing within a designated time limit, and may be subject
to fines from RMB1,000 to RMB10,000 for each such lease agreement for failure to do so
within the time limit. During the Track Record Period and up to the Latest Practicable Date,
we had not been subject to any penalties arising from the non-registration of our lease
agreement. Based on the foregoing, our PRC Legal Advisor is of the view that the
non-registration of such lease agreement would not have any material adverse impact on our
business operations.
As of the Latest Practicable Date, we leased eight properties in the U.S., Germany,
Australia, Singapore, Japan and the U.K. relating to our business operations in total with an
aggregate gross floor area of approximately 20,186.6 square meters, which have been mainly
used as offices and warehouses.
For risks relating to our leased properties, see “Risk Factors — Risks Relating to Our
Business and Industry — Our rights to use our leased properties may be defective and could
be challenged by property owners or other third parties, which may negatively affect our ability
to operate our business and incur relocation costs.”
DATA SECURITY AND PRIV ACY
Our networking equipment and networking solutions do not process any personal
information of customers. We do not engage in any cross-border data transfers from China to
overseas. During our provision of networking equipment and networking solutions, with the
prior consent of our customers, we collect and process their delivery information including
names and contact details to the extent necessary and in accordance with the relevant laws and
regulations on data privacy and security. We also process other relevant information during our
business operations, such as contact information of our business partners and personal
information of our employees.
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We have taken measures to maintain the confidentiality of relevant information to ensure
regulatory compliance. We process personal information in accordance with the principles of
legality, legitimacy and necessity. Specifically, we perform de-identification on raw data
stored, such as name and phone number of a specific customer. Since the collection, storage,
usage, retention and transmission of information that can be identified as specific individuals
or reflect the relevant activities of specific individuals are all subject to relevant data protection
laws and regulations, the de-identification of raw data is necessary for us to efficiently protect
personal data of our customers. We also set up an access control system for personal
information in our internal system so that it cannot be viewed without proper authorization or
exported in bulk. We set up firewalls to prevent information loss or leakage caused by
cyber-attacks. To ensure regulatory compliance, we have (i) appointed a head of information
security who is responsible for our cyber security and data protection; and (ii) established a
comprehensive data and personal information security management system and operational
procedures comprising a data security management system, a personal information
management policy and information security incidents response guiding document. In addition,
we from time to time examine the security of our data storage system. We strictly restrict the
range of data that our employees are authorized to access based on their title and function. We
have entered into confidentiality agreements with our employees to prevent improper use or
disclosure of information.
In addition, we continue to pay close attention to the legislative and regulatory
developments in cybersecurity and data protection and conduct routine cybersecurity and data
protection compliance check and rectification to keep pace with regulatory development. In
particular, we have established a comprehensive set of internal cybersecurity and data
protection rules and policies. We have also formulated the overarching data security
management policy, user personal information protection management policy and network
security management policy, which provide the principal management rules on cybersecurity
and data protection.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material data leakage or received any claim from any third party against us on
the ground of infringement of such party’s right to data protection as provided by applicable
PRC laws and regulations or any applicable laws and regulations in other jurisdictions. As
advised by our PRC Legal Advisor, we are in compliance with all applicable PRC data privacy
and cybersecurity laws and regulations in all material respects during the Track Record Period
and up to the Latest Practicable Date.
LICENSES, APPROV ALS AND PERMITS
We are required to maintain various licenses, permits and approvals in order to operate
our business. We continually monitor our compliance with the requirements related to licenses,
permits and approvals in order to ensure that we have all such licenses, permits and approvals
which are necessary to operate our business. As advised by our PRC Legal Advisor, during the
Track Record Period and up to the Latest Practicable Date, we had obtained all requisite
licenses, approvals and permits from relevant authorities that are material to the operation of
our existing business.
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The following table sets out a list of material licenses, permits and approval held by us
as of the Latest Practicable Date.
License/permit
Entity holding the
license/permit Grant date Expiration date
Customs Import and Export Goods Consignee
and Consignor Registration Receipt ( ऎᗫආ
Ϋੂ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company February 18, 2021 Long term
Enterprise Overseas Investment Certificate ( Ά
ࣣ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company November 12,
2020
N/A
A W ARDS AND RECOGNITIONS
During the Track Record Period and up to the Latest Practicable Date, we received a
number of awards and recognitions in connection with our business. Some of the significant
awards and recognitions we have received are set forth below.
Awards and Recognition Awarding Parties Y ear of Award
Outstanding Case of Cross-border
E-commerce Brand International Expansion
(Է) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Department of Commerce of Guangdong
Province
2025
Hubei Provincial Manufacturing Single
Champion Enterprise (ڿ
Άุ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hubei Provincial Department of Economic and
Information Technology
2025
Advanced Smart Factory of the Y ear 2025
(2025΋ආॴ౽ঐʈᅀ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hubei Provincial Department of Economic and
Information Technology
2025
Development and Expansion Incentive under
the International Headquarters Award /H1118/H1118/H1118/H1118/H1118
Singapore Economic Development Board 2025
National Specialized and New “Little Giant”
Enterprise (ॴਖ਼ၚतอ“ʃ̶ɛ”Άุ) /H1118
Ministry of Industry and Information
Technology
2023
National Intellectual Property Advantage
Enterprise (ᗆପᛆᎴැΆุ) /H1118/H1118/H1118/H1118/H1118/H1118
China National Intellectual Property
Administration
2022
National High-Tech Enterprise (৷อҦஔ
Άุ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Finance Bureau of Shenzhen Municipality, State
Taxation Administration of Shenzhen Tax
Service, Shenzhen Municipal Science and
Technology Innovation Commission
2022
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LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We may from time to time become a party to various legal, arbitration or administrative
proceedings arising in the ordinary course of our business. As of the Latest Practicable Date,
we and our major subsidiaries are not involved in any litigation, arbitration or administrative
proceedings pending or threatened against our Company or any of the Directors which we
believe may have a material and adverse effect on our financial condition or results of
operations.
On February 21, 2020, Corning, Inc. (“ Corning ”) filed a complaint with the USITC for
infringement of several of its patents by FS U.S. and several other companies. These patents
generally relate to fiber optic technology commonly used in data centers. The subject of the
infringement charge against FS U.S. was the FHX product line of high-density fiber optic
equipment (which FS U.S. ceased to offer in the U.S. upon receipt of Corning’s complaint).
Corning requested the USITC to initiate a Section 337 investigation and to issue a general or
limited exclusion order, along with cease-and-desist orders. On August 3, 2021, the USITC
issued a final determination finding infringement of Corning’s patents as well as a general
exclusion order prohibiting the importation of high-density fiber optic equipment and
components at issue in the subject proceeding. The USITC also issued cease and desist orders
directed against FS U.S. and four other respondents. The FHX product line was the sole
product line impacted by these orders. On November 29, 2021, FS U.S. filed a notice of appeal
with the U.S. Court of Appeals for the Federal Circuit challenging the USITC’s final
determination. On April 20, 2023, the Federal Circuit issued its decision and affirmed the
USITC’s determination.
In addition, on September 27, 2021, FS U.S. filed an ex parte re-examination request with
the United States Patent and Trademark Office (“ USPTO ”) challenging the validity of U.S.
Patent No. 9,020,320 (the “ 320 Patent ”), which was one of the patents asserted by Corning in
the Section 337 investigation. The re-examination request was eventually denied by the
USPTO. As of the date of this prospectus, Corning has not filed any patent infringement claim
against FS U.S.
As advised by K&L Gates, our U.S. Legal Advisor, (i) the infringement finding and
resulting exclusion order issued by the USITC relates solely to the FHX product line, which
we ceased offering in the U.S. immediately upon receipt of the complaint, and no other product
lines are affected, and (ii) as of the date of this Prospectus, Corning has not initiated any patent
infringement action against FS U.S.. Based on the foregoing, we are of the view that the risk
exposure to us from the intellectual property dispute between FS U.S. and Corning is limited,
and it will not materially and adversely impact our business operations and financial
performance.
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To prevent the recurrence of intellectual property infringement incidents, we have
implemented enhanced internal control measures to prevent future incidents. We have
established a robust intellectual property management policy that governs the full lifecycle of
IP creation, usage, protection and administration. Prior to product development, we conduct
searches and risk assessments to identify potential infringement issues. During design and
promotional activities, we strictly adhere to a /H11033prior authorization /H11033principle, ensuring that all
third-party materials are properly licensed before use to prevent copyright infringement. In
addition, we regularly conduct IP training to enhance employees’ understanding of relevant
laws and strengthen awareness of IP protection, fostering a corporate culture that respects
innovation and intellectual property rights.
Compliance
We are subject to various regulatory requirements and guidelines issued by regulatory
authorities. During the Track Record Period and as of the Latest Practicable Date, we did not
commit any material non-compliance of the laws and regulations, and we did not experience
any material non-compliance incident, which taken as a whole, in the opinion of our Directors,
is likely to have a material and adverse effect on our business, financial condition or results
of operations.
RISK MANAGEMENT AND INTERNAL CONTROL
Our Board is responsible for ensuring that our Group establishes and maintains
appropriate and effective risk management system and internal control system, overseeing the
management in the design, implementation and monitoring of such systems and ensuring that
review of the effectiveness of such systems are conducted at least annually. We have
established and continue to maintain risk management and internal control systems consisting
of policies and procedures that are appropriate for our business operations, and we are
dedicated to continuously improving and implementing these systems to ensure our policies
and implementation are effective and sufficient.
We have engaged an internal control consultant to review the internal controls associated
with our major business processes, identify deficiencies and areas for improvement, provide
recommendations and review the implementation status of these remedial actions. To ensure
the above compliance culture is embedded into everyday workflow and sets the expectations
for individual behavior across the organization, we will regularly review our risk management
and internal control policies and procedures, adopt strict accountability internally and conduct
compliance training. Our Directors are of the view that our enhanced internal control system
is adequate and effective for our current operations.
THIRD-PARTY PAYMENT ARRANGEMENTS
Background
During the Track Record Period, certain of our customers (individually or collectively,
the “ Relevant Customer(s) ”) settled their payments with us through third-party payers
(“Third-Party Payment Arrangement(s) ”). In 2022, 2023, 2024 and the nine months ended
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September 30, 2025, the number of Relevant Customers (originating from over 100 countries
and regions) amounted to 2,157, 1,307, 1,231 and 895, respectively, and the aggregate amount
of payment from their designated third parties to our Group that contributed to our revenue was
RMB32.0 million, RMB79.7 million, RMB91.7 million and RMB42.0 million, respectively,
representing 1.6%, 3.6%, 3.5% and 1.9% of the total payments we received from all customers
in the same respective periods. In 2022, 2023, 2024 and the nine months ended September 30,
2025, the average transaction amount under the Third-Party Payment Arrangements was
RMB5,512.6, RMB20,053.1, RMB19,776.8 and RMB12,334.5, respectively. The average
transaction amount under the Third-Party Payment Arrangements increased in 2023 and 2024
because one of our five largest customers in both 2023 and 2024 settled its payments with us
through third-party payers. No other individual Relevant Customers had made material
contribution to our revenue during the Track Record Period.
During the Track Record Period, to our best knowledge, information and belief, (i) the
third parties designated by the Relevant Customers for payment to the Group primarily
consisted of (a) affiliates of the Relevant Customers, such as entities within the same group or
under common control with the Relevant Customers or (where the Relevant Customer is a
public body) a related public body; and (b) independent third parties engaged or designated by
Relevant Customers, such as third party settlement agents and their nominees, forwarders, and
business partners of Relevant Customers; (ii) all the Third-Party Payment Arrangements were
genuine transactions between us and the Relevant Customers; and (iii) the amount of payments
from the designated third parties received by us corresponded with the transaction amount in
the relevant sales orders, records, and/or invoices between the Relevant Customers and us.
During the Track Record Period, (i) we have not proactively initiated any Third-Party
Payment Arrangements, but only accepted the Third-Party Payment Arrangements when they
are arranged by the Relevant Customers; (ii) we have not provided any discount, commission,
rebate or other benefit to any of the Relevant Customers or the third-party payors to facilitate
or incentivize the Third-Party Payment Arrangements; and (iii) the pricing and payment terms
we provide to the Relevant Customers were generally in line with those of customers not
involved in the Third-Party Payment Arrangements.
To their best knowledge, information and belief, our Directors confirmed that, during the
Track Record Period and up to the Latest Practicable Date, we have not been the subject of any
investigations, enquiries, penalties, surcharges or additional tax payments as a result of our
involvement in the Third-Party Payment Arrangements, and we have not encountered any
disputes with, nor received any refund request in relation to the Third-Party Payment
Arrangements from, any Relevant Customer, their designated third parties or their liquidators.
As advised by our PRC Legal Advisor, in the PRC, there was no (i) any administrative or
criminal penalties imposed on the Company, or (ii) any formally documented governmental
investigations initiated against the Company, with regards to the relevant Third-Party Payment
Arrangements, during the Track Record Period and up to the Latest Practicable Date.
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Reasons for Utilizing Third-Party Payment Arrangements
The use of the Third-Party Payment Arrangements is primarily due to the following
reasons:
 Industry norm . As confirmed by Frost & Sullivan, it is in line with industry practice
for customers on DTC online sales platform to settle their corporate transactions
through third-party payors, including but not limited to their affiliates and business
partners as it is more convenient and flexible for them to settle payments through
third-party payors. It is commercially burdensome and impracticable, and not in line
with industry practice, for our Group to arrange for refund and request the Relevant
Customers to re-arrange direct payment, taking into account the large number of
Relevant Customers involved and the size of each of their payment. According to
Frost & Sullivan, it is a common industry practice for payment processing service
providers to disclose incomplete or unmatched payor/cardholder information to
merchants. Therefore, such payment arrangements are considered an industry norm
and do not indicate irregularities in business operations.
 Payment convenience. In line with our vision to provide flexible, convenient and
intelligent networking solutions, we accommodate various payment arrangements
for our customers to suit their financial arrangements. Many of our Group’s
customers are small-sized private enterprises. To avoid the complexity of setting up
and using multiple corporate bank accounts, some of them have arrangements with
companies in the same group.
 Operation flexibility . At the early stage of a small-sized business, some of them may
prefer informal financial arrangement of payment through third-party payors, which
is sufficient for their current needs and may offer more flexibility in terms of
handling transactions.
Internal Control Measures for Third-Party Payment Arrangements
To safeguard our Group’s interest against risks associated with Third-Party Payment
Arrangements, we have significantly enhanced and implemented various internal control
measures in order to rectify Third-Party Payment Arrangements. As of the Latest Practicable
Date, we had implemented the following measures to rectify the Third-Party Payment
Arrangements (the “ Third-Party Payment Internal Control Measures ”):
(i) we initiated the implementation of Third-Party Payment Arrangements rectification
measures and informed our employees regarding the enhanced internal control
measures;
(ii) we amended the standard terms and conditions of our sales order form on our online
sales platform requiring, among other things, our customers to explicitly authorize
their chosen third-party payer;
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(iii) to prevent fraud or money laundering activities and ensure the accuracy and
completeness of our accounting books and records, we further strengthened our
know-your-customer procedures and have implemented robust internal control
measures combining automated system monitoring with manual review. Our system
conducts real-time monitoring of transaction data to identify potential third-party
payments or suspicious activity. Any transaction flagged by the system is promptly
escalated for manual review by our dedicated risk management team, who assess the
customer’s background, transaction history, and the legitimacy of the payment
arrangement. We require explicit authorization from customers for any third-party
payment, and only accept such payments if they fall within our list of acceptable
scenarios. Transactions without proper authorization or outside acceptable scenarios
are subject to further investigation and will be promptly rejected if the customer
cannot provide the required information or documentation. These measures ensure
only legitimate and authorized third-party payments are processed, ensuring strict
adherence to our policies. Acceptable third-party payment scenarios are: (i)
payments made by a customer’s affiliate or related party with a valid explanation of
the relationship; (ii) payments made by national treasury or financial authorities on
behalf of schools, government departments, or non-profit institutions; (iii) payments
by checks where the payer is not specified but confirmed by the customer; and (iv)
payments made through authorized agents in free trade zones due to foreign
exchange restrictions, with customer confirmation;
(iv) We have connected our business system with major payment platforms to make the
refund process more efficient and traceable. When a refund is needed, the system
submits the request, our finance team reviews it, and the payment platform processes
it automatically. These steps are handled separately to ensure proper checks and
balances. Our finance team also performs monthly reconciliations to confirm that
the actual account balances match our records, with special attention to any pending
refunds. If a refund is found to be missing, we will investigate the transaction and
manually process the refund as needed; and
(v) If our employees are aware of any abnormalities, they will review the relevant
transaction and report to members of senior management where necessary. Our
senior management will then assess the risks and take appropriate courses of action,
including terminating the transaction with the Relevant Customer if necessary.
As of the Latest Practicable Date, we had ceased all Third-Party Payment Arrangements,
unless such arrangements comply with the Third-Party Payment Internal Control Measures
described above. In 2022, 2023 and 2024, and the nine months ended September 30, 2025, the
aggregate amount of payment from their designated third parties to our Group that contributed
to our revenue was RMB32.0 million, RMB79.7 million, RMB91.7 million and RMB42.0
million, respectively, representing 1.6%, 3.6%, 3.5% and 1.9% of the total payments we
received from all customers in the same respective periods. We intend to minimize the use of
Third-Party Payment Arrangements, unless there are compelling reasons to do so and such
arrangements comply with the Third-Party Payment Internal Control Measures described
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above. We regularly check the effectiveness of our Third-Party Payment Internal Control
Measures (including utilizing our internal audit department to conduct random inspections on
the implementation of the above measures from time to time to ensure compliance) and
promptly address any abnormalities. As of the Latest Practicable Date, we had not identified
any third-party payment arrangements that were in breach of our internal control measures or
raised concerns of non-compliance with our rectification protocols. Based on the review of the
implementation of our Third-Party Payment Internal Control Measures, our Directors, after
consultation with our internal control consultant, are of the view that such measures are
effective and adequate in identifying the sources of funds from the Relevant Customers,
ensuring the accuracy and completeness of our accounting books and records and preventing
risks associated with Third-Party Payment Arrangements. Based on the foregoing, our
Directors, after consultation with our internal control consultant, consider that the above
measures are effective and adequate in preventing the risks associated with Third-party
Payment Arrangements. Our Directors are also of the view that the cessation of Third-Party
Payment Arrangements (unless such arrangements comply in accordance with our Third-Party
Payment Internal Control Measures) did not have any material adverse impact on our Group.
As advised by our PRC Legal Advisor, the Third-Party Payment Arrangements merely
constitute a transfer of liabilities from the relevant customer to the third-party payer. The
payments received by us under the Third-Party Payment Arrangements are solely used for the
settlement of sales and are not related to any proceeds of crime. As per advice from our PRC
Legal Advisor, our Directors are of the view, and the Joint Sponsors concur, that the
Third-Party Payment Arrangement itself does not, in any material respect, violate or
circumvent (i) the Civil Code of the People’s Republic of China; and (ii) applicable anti-money
laundering laws (including Article 191 of the Criminal Law of the People’s Republic of China).
After consulting with local counsels in the US, UK, Germany, Singapore, Australia and Japan,
where our subsidiaries operate, our Directors are of the view, and the Joint Sponsors concur,
that the Third-Party Payment Arrangement itself does not violate any local laws, and the risk
of potential claims (such as for refund of payments) is low.
INTRA-GROUP TRANSACTIONS
During the Track Record Period, we primarily carried out our operations in overseas
jurisdictions including the Hong Kong, U.S., Australia, Germany, UK, Singapore and Japan,
and conducted businesses with customers in different jurisdictions. We have established
overseas distribution entities in the US, Australia, Germany, UK, Singapore and Japan, as well
as Hong Kong. Apart from the sale of our products to third-party customers, we engaged in
intra-Group sales of products and provisions of services such as management consulting,
marketing and sales support services.
The Organization for Economic Co-operation and Development (the “ OECD ”), an
international organization of international cooperation, promulgated the transfer pricing
guidelines for multinational enterprises and tax administrations (the “ OECD Transfer Pricing
Guidelines ”). According to the OECD Transfer Pricing Guidelines, our intra-Group
transactions should be at arm’s length basis to comply with the relevant transfer pricing laws
and regulations of different jurisdictions. The arm’s length principle is respected by all tax
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jurisdictions of our subsidiaries, including the Hong Kong, U.S., Australia, Germany, UK,
Singapore and Japan. In order to ensure compliance with the relevant transfer pricing
regulations, we have engaged an independent transfer pricing consultant, (the “ Transfer
Pricing Advisor ”) to conduct benchmarking studies on the intra-Group transactions during the
Track Record Period in accordance with the OECD Transfer Pricing Guideline. We set out
below a summary of our primary intra-Group transactions during the Track Record Period.
During the Track Record Period, we primarily carried out our business through (i) FS
Germany, FS Singapore, FS U.S., FS.COM INNOV A TION LTD (UK) , FS.COM PTY LTD
(Australia), FS JAPAN CO., LTD. and FS HK (collectively, the “ Overseas Sales Entities ”);
and (ii) our Company, FS Wuhan, Shenzhen Feisu Innovation International Trade Co., Ltd.
(“FS International Trade ”) and Wuhan Feisu Innovation Business Services Co., Ltd.
(“Wuhan Services ”, collectively, the “ Domestic Sales Entities ”).
Our Overseas Sales Entities primarily responsible for overseas sales and delivery. In
particular, FS Singapore, in addition to acting as an overseas distributor, also undertakes
marketing support and overseas procurement functions. FS HK generally serves as a resale
platform and intermediary within the Group with relevant operational and administrative
support functions. In terms of our Domestic Sales Entities, our Company’s functions generally
cover the full spectrum of the Group’s business operations, including global strategy, R&D,
outsourcing manufacturing, quality control, sales and marketing, as well as other
administrative support. FS International Trade is generally responsible for the overseas sales
and export related functions since 2024. FS Wuhan is generally responsible for outsourcing
manufacturing, procurement, logistics, inventory management and associated functions. FS
Wuhan also gradually assumes part of R&D responsibilities during the Track Record Period.
Wuhan Services generally acted as a customer service center of our Group. During the Track
Record Period, our intra-group transactions mainly included:
Transaction I : Purchase and Sale among our Domestic Sales Entities. This mainly
comprises (i) Goods transactions among our Company, FS Wuhan, and FS International Trade;
(ii) Integrated supply chain management consulting services provided by our Company to FS
Wuhan; and (iii) Online customer engagement services provided by Wuhan Services, acting as
the customer service center, to FS Wuhan. For Transaction I, we recorded intra-group
transactions of RMB178.6 million, RMB708.4 million, RMB1,269.6 million and RMB1,391.3
million in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
Transaction II : Purchase and Sale between Domestic Sales Entities and Overseas
Sales Entities. This mainly comprises (i) Products sold and managing consultant services
provided by our Company to Overseas Sales Entities; (ii) Products sold either by FS
International Trade to Overseas Sales Entities or by FS HK to FS Wuhan. For Transaction II,
we recorded intra-group transactions of RMB1,413.4 million, RMB1,590.2 million,
RMB1,977.8 million and RMB1,425.3 million in 2022, 2023, 2024 and the nine months ended
September 30, 2025, respectively.
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Transaction III : Purchase and Sale among our Overseas Sales Entities. This mainly
refers to (i) Marketing support services provided by FS Singapore to FS U.S. and FS Germany;
(ii) Goods sold by FS HK, as a transshipment hub, to other Overseas Sales Entities. For
Transaction III, we recorded intra-group transactions of RMB756.8 million, RMB744.9
million, RMB977.6 million and RMB438.3 million in 2022, 2023, 2024 and the nine months
ended September 30, 2025, respectively.
The following diagram illustrates our intra-group transactions during the Track Record
Period:
OverseasDomestic
Sales of products
FS HK
Sales of products FS International
Trade
Overseas
Sales Entities
Sales of products
Sales of Services
Our Company
Wuhan Service
FS Wuhan
Sales of Services Sales of Services
Sales of Services(1)
Sales of products
Note:
(1) During the Track Record Period, products have been exported to overseas sales entities through our Company
in general. Since February 2025, products have been exported to overseas sales entities through FS
International Trade instead of our Company.
Our Transfer Pricing Advisor determined that the Transactional Net Margin Method
(“TNMM ”) was the most appropriate transfer pricing method to assess whether the transfer
pricing arrangements related to the intra-Group transactions involved were consistent with the
arm’s length principle. The range of reasonable profit level was determined by reference to the
range of reasonable profit level derived from comparable companies. The Transfer Pricing
Advisor has performed benchmarking studies for the intra-Group transactions to search for
reliable comparable companies with publicly available information. The Transfer Pricing
Advisor has applied both quantitative and qualitative criteria to select comparable companies.
Based on the above analysis, our Transfer Pricing Advisor is of the view that the major
intra-group transactions during the Track Record Period complied with the arm’s length
principle in accordance with applicable regulations and guidelines. In addition, our Transfer
Pricing Advisor is of the view that our Group has complied with relevant transfer pricing
documentation requirements during the Track Record Period.
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Internal Control Measures of Intra-Group Transactions
We have adopted the following measures to ensure on-going compliance with relevant
transfer pricing laws and regulations in the jurisdictions of our subsidiaries.
 Our management team and finance personnel participate in transfer pricing training
sessions organized by tax authorities or professional firms to maintain a
comprehensive understanding of regulatory requirements and key tax practices;
 Our management team continuously monitors the transfer pricing arrangements for
the intra-Group transactions and updates the comparability analysis based on market
conditions to ensure compliance with applicable transfer pricing regulations in
relevant jurisdictions and the arm’s length principle as outlined in OECD Transfer
Pricing Guidelines;
 Our management team closely oversees the scale of transfer pricing transactions to
ensure timely preparation and submission of relevant transfer pricing documentation
upon reaching the thresholds; and
 If any transfer pricing documents are required for submission to tax authorities, such
documents would be prepared by designated personnel and submitted after internal
review and approval.
During the Track Record Period and up to the Latest Practicable Date, we were not aware
of any audit, investigation or challenge by any relevant tax authorities in relation to our
intra-Group transactions.
IMPACT OF COVID-19 ON OUR OPERATIONS
During the Track Record Period, the COVID-19 pandemic presented various operational
challenges to the Group. For example, certain front-line personnel were subject to regional
quarantine restrictions, preventing on-site work. In response, we implemented a series of
mitigation measures, including remote working arrangements and the distribution of personal
protective equipment to employees, which resulted in additional operating costs.
Despite these challenges, our financial performance remained resilient. COVID-19 did
not have any material disruption to our operations, nor did it have a material adverse impact
on the Group’s overall operations or financial results during the Track Record Period. In 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, we recorded revenue of
RMB1,988.2 million, RMB2,212.9 million, RMB2,611.8 million, RMB1,953.7 million and
RMB2,174.7 million, respectively.
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OVERVIEW
As of the Latest Practicable Date, Mr. Xiang directly and indirectly controlled 61.16%
voting rights of the Company, among which, (i) he was directly interested in 56.65% of the
total issued share capital of our Company; and (ii) he controlled voting rights attached to the
3.19%, 0.74% and 0.58% issued share capital of our Company held by Y uxuan Prudence,
Y uxuan Progress and Y uxuan Growth, respectively, through acting as their respective general
partner. See “History, Development and Corporate Structure — Corporate Structure.”
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised), Mr. Xiang will, directly and indirectly through Y uxuan
Prudence, Y uxuan Progress and Y uxuan Growth, continue to control 55.04% voting rights of
our Company. Therefore, Mr. Xiang, Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth
will remain as our Controlling Shareholders upon the Listing.
INTERESTS OF OUR CONTROLLING SHAREHOLDERS IN OTHER BUSINESSES
Each of our Controlling Shareholders confirmed that as of the Latest Practicable Date,
apart from the business of our Company, he/it did not have any interest in other business, which
competes or is likely to compete, directly or indirectly, with our business, which would require
disclosure under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently from our Controlling Shareholders and its close
associates after the Listing.
Management Independence
Upon the completion of the Listing, our Board will comprise of seven Directors,
comprising two executive Directors, two non-executive Directors and three independent
non-executive Directors. See “Directors, Supervisors and Senior Management.”
Our Directors believe that our Board and senior management is able to manage our
business and function independently from our Controlling Shareholders and their respective
associates based on the following reasons:
(a) Save for Mr. Xiang acting as one of our Controlling Shareholders, none of the other
Directors and members of our senior management team hold any position in the
Controlling Shareholders or their respective associates. In addition, Mr. Zeng Di,
one of our executive Directors, joined the Company in 2019, has in-depth
understanding of our business and extensive experience in financial management;
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(b) each of our Directors is aware of his/her fiduciary duties as a Director of our
Company which require, among other things, that he/she acts for the benefit and in
the best interests of our Company and does not allow any conflict between his/her
duties as a Director and his/her personal interest;
(c) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and our Directors or their respective
associates, the interested Directors shall abstain from voting at the relevant board
meetings of our Company in respect of such transactions and shall not be counted
in the quorum;
(d) our Board has a balanced composition of executive Directors, non-executive
Directors and independent non-executive Directors which ensures the independence
of the Board in making decisions affecting our Company. Specifically, (a) our
independent non-executive Directors are not associated with any of the Controlling
Shareholders or their respective close associates; (b) our independent non-executive
Directors account for more than one-third of the Board; and (c) our independent
non-executive Directors, details of whom are set out in the section headed
“Directors, Supervisors and Senior Management” in this prospectus, together
possess the requisite knowledge, expertise and experience for their views to carry
weight. In conclusion, the Directors believe that our independent non-executive
Directors are able to bring impartial and sound judgment to the decision-making
process of our Board and protect the interest of our Company and our Shareholders
as a whole;
(e) we have established a Supervisory Committee comprising three Supervisors who are
independent from our Controlling Shareholders. Our Supervisors shall be
responsible for the supervision of performance of our Directors and the senior
management team, including monitoring any acts of a Director or senior
management member which may be detrimental to the interests of our Company;
and
(f) upon Listing, we will adopt a series of corporate governance measures and sufficient
and effective control mechanisms to manage conflicts of interest, if any, between our
Company and our Controlling Shareholders which would support our independent
management. See “— Corporate Governance.”
Based on the above, our Directors believe that our Board as a whole and together with our
senior management are able to perform the managerial role in our Company independently
from our Controlling Shareholders and their respective close associates after the Listing.
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Operational Independence
Although Mr. Xiang will retain a controlling interest in our Company upon Listing, we
believe that we can operate our business independently from our Controlling Shareholders due
to the following reasons:
 we hold and enjoy the benefit of all relevant qualifications and licenses necessary
to operate our business;
 we have a sufficient level of operations, assets, facilities, technologies and
employees including research and development employees to support our own
listing status and to operate and function independently from our Controlling
Shareholders;
 we also maintain a comprehensive set of internal control procedures for facilitating
the effective operation of our business. With reference to the relevant laws,
regulations and rules, we have developed sound corporate governance practice and
have adopted our rules of procedure for general meetings, rules of procedure for
Board meetings and connected transactions regulations;
 we have our own financial department, human resources and administration
department and audit department. These departments are led and supervised by our
own senior management team who reports to the Board. In addition, we have our
own internal financial procedures and prepare our own financial budget
independently; and
 we have also adopted a set of corporate governance measures and internal control
procedures to maintain effective and independent operation. See the corporate
governance measures stipulated under “— Management Independence” and
“— Corporate Governance.”
We entered into a cooperation framework agreement (the “ Framework Agreement ”)
with Cloud V enture LLC, an associate of Mr. Xiang, pursuant to which, Cloud V enture LLC
agreed to grant us the exclusive authorization to market and sublicense certain software
products of Cloud V enture LLC (the “ CV Software ”), including a network switches operating
system and its ancillary intellectual property rights. See “Connected Transaction—Continuing
Connected Transaction.” Despite that we have our own propriety in-house network switches
operating system which is well recognized by our clients, similar network switches operating
systems are available on the market. To offer more options to our clients, we obtained CV
Software authorization from Cloud V enture. For the years ended December 31, 2022, 2023,
2024 and the nine months ended September 30, 2025, among all the network switches sold to
our clients, nil, nil, 3.7% and 4.5% were pre-installed with the CV Software, respectively. The
revenue generated from sub-licensing CV Software represents nil, 0.07%, 0.35% and 0.32% of
the revenue of the Group for each of the period during the Track Record Period.
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As such, our Directors believe that entering into the Framework Agreement will not give
rise to any business dependence or reliance issue for our Group and is in the interest of our
Company and the Shareholders as a whole.
Based on the above, our Directors believe that we are able to operate independently of our
Controlling Shareholders and their respective close associates.
Financial Independence
We have an independent financial system and make financial decisions according to our
Company’s own business needs. We have our own internal control and accounting systems and
an independent finance department for discharging the treasury function and independent
access to third party financing. We do not expect to rely on our Controlling Shareholders and
their respective close associates for financing after the Listing.
As of the Latest Practicable Date, we did not have any outstanding loans, guarantees or
other form of financial assistance provided by Controlling Shareholders or their respective
close associates to the Group.
Based on the above, our Directors believe that from a financial perspective, we are
capable of carrying on our business independently from the Controlling Shareholders and their
respective close associates and are able to maintain our financial independence.
NON-COMPETE UNDERTAKING
Mr. Xiang has executed a non-competition undertaking in February 2023 in favor of the
Company, pursuant to which, Mr. Xiang has undertaken that, among others:
(a) he has not and will not directly or indirectly engage in any business or activities that
competes or is likely to compete with the business or products of our Company;
(b) the Group shall have the right of first refusal to engage in new business, neither he
nor companies controlled by him shall engage any similar business; and
(c) if he or companies controlled by him may obtain any business opportunity which
directly or indirectly compete with our Company, he will immediately notify us and
procure such business opportunity to be offered to us on reasonable terms and
conditions acceptable to us.
CORPORATE GOVERNANCE
Our Company will comply with the provisions of the Corporate Governance Code in
Appendix C1 to the Listing Rules (the “ Corporate Governance Code ”), which sets out
principles of good corporate governance.
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Our Directors recognize the importance of good corporate governance in protection of our
Shareholders’ interests. We would adopt the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Company and our
Controlling Shareholders:
(a) where a Board meeting is held for the matters in which any Director or his/her
associates have a material interest, such Director(s) shall abstain from voting on the
relevant resolutions and shall not be counted in the quorum for the voting;
(b) where a Shareholders’ meeting is to be held for considering proposed transactions
in which any one of our Controlling Shareholders or their respective associates has
a material interest, our Controlling Shareholders or their respective associates will
not vote on the resolutions and shall not be counted in the quorum in the voting;
(c) as part of our preparation for the Listing, we have amended our Articles of
Association to comply with the Listing Rules which will become effective upon
Listing. In particular, our Articles of Association provides that, a Director shall be
abstained from voting on any resolution approving any contract, transaction or
arrangement in which such Director or any of his/her associates has a material
interest nor shall such Director be counted in the quorum present at the Board
meeting;
(d) our Company has established internal control mechanisms to identify connected
transactions. Upon the Listing, if our Company enters into connected transactions
with our Controlling Shareholders or any of their respective associates, our
Company will comply with the applicable Listing Rules;
(e) we are committed that our Board shall include a balanced composition of executive
Director and non-executive Directors (including independent non-executive
Directors). We have appointed three independent non-executive Directors, and we
believe our independent non-executive Directors (i) possess sufficient experiences,
(ii) are free of any business or other relationship which could interfere in any
material manner with the exercise of their independent judgment, and (iii) will be
able to provide an impartial and independent opinion to protect the interests of our
Shareholders as a whole. For details of the independent non-executive Directors, see
“Directors, Supervisors and Senior Management”;
(f) where our Directors reasonably request the advice of independent professionals,
such as financial advisors, the appointment of such independent professionals will
be made at our Company’s expenses; and
(g) we have appointed Rainbow Capital (HK) Limited as our Compliance Advisor to
provide advice and guidance to us in respect of compliance with the Listing Rules,
including various requirements relating to corporate governance.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage conflicts of interest between our Company and our
Controlling Shareholders, and to protect minority Shareholders’ interests after the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
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You should read the following discussion and analysis in conjunction with our
consolidated financial statements, included in the Accountants’ Report in Appendix I,
together with the respective accompanying notes. Our consolidated financial information
has been prepared in accordance with the 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, many of which we cannot control or
foresee. In evaluating our business, you should carefully consider all of the information
provided in this document, including the sections headed “Risk Factors” and “Our
Business,” and elsewhere in this prospectus. For further details, see “Forward-Looking
Statements.”
OVERVIEW
We are a globally leading provider of enterprise-grade networking solutions. Our
networking solutions empower businesses globally to achieve cutting-edge digital
transformations. With our industry-leading online DTC platform, FS.com , we deliver scalable,
cost-effective and comprehensive one-stop networking solutions. Our product and service
range includes high-performance networking equipment, scalable networking equipment
operating system and cloud-based network management platform. Our solutions support
scenarios include high-performance computing, data centers, enterprise networks and
telecommunications, meeting the demand for both enterprise-grade high-performance
networking solutions and general networking solutions. According to Frost & Sullivan, we
were the world’s second largest online DTC networking solution provider in terms of revenue
in 2024.
Our revenue increased by 11.3% from RMB1,988.2 million in 2022 to RMB2,212.9
million in 2023 and further increased by 18.0% to RMB2,611.8 million in 2024. Our revenue
increased by 11.3% from RMB1,953.7 million in the nine months ended September 30, 2024
to RMB2,174.7 million in the nine months ended September 30, 2025. In 2022, 2023, 2024 and
the nine months ended September 30, 2024 and 2025, we recorded profit for the year/period
of RMB364.5 million, RMB456.7 million, RMB397.3 million, RMB350.8 million and
RMB423.2 million respectively. Eliminating impact of items including share-based payment
expenses, professional fees, listing expenses and finance cost of interest on redemption
liabilities, we generated an adjusted net profit (non-IFRS measure) of RMB388.1 million,
RMB469.7 million, RMB408.2 million, RMB359.3 million and RMB460.5 million in 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, respectively. See “—
Non-IFRS Financial Measure.” In 2022, 2023, 2024 and the nine months ended September 30,
2024 and 2025, our net profit margin was 18.3%, 20.6%, 15.2%, 18.0% and 19.5%,
respectively.
FINANCIAL INFORMATION
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BASIS OF PRESENTATION
Our historical financial information has been prepared based on IFRS, issued by the
International Accounting Standards Board. See Note 3 of the Accountants’ Report in Appendix
I to this Prospectus for material accounting policy information.
The preparation of the historical financial information in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management to exercise its
judgment in the process of applying our accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions are significant to the historical
financial information are disclosed in Note 4 to the Accountants’ Report included in Appendix
I to this prospectus.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, materially
affected by a number of factors, many of which are outside of our control, including the
following:
Factors Affecting the Networking Solutions Industry
Our results of operations and financial condition are affected by general factors affecting
the global networking solutions industry, including the development of end markets, economic
conditions in China and global markets that affect the business activities in general.
We believe that our financial performance and future growth are dependent on the overall
growth and our competitiveness in the global networking solutions industry. We anticipate
strong demand for our networking solutions across a broad range of industries. According to
Frost & Sullivan, in 2024, the global networking solutions market reached USD162.8 billion,
and is expected to reach USD245.3 billion in 2029, at a CAGR of 8.5% from 2024 to 2029. The
global online networking solution industry is expected to be more active and prominent, which
is expected to grow at a CAGR of 10.7% from RMB31.7 billion in 2024 to RMB52.7 billion
in 2029, accounting for 21.5% of the global networking solution market by 2029, according to
Frost & Sullivan. In addition, the penetration rate of the global online DTC networking
solutions market still has significant growth potential, estimated to rise from 17.8% in 2024 to
20.5% in 2029. We expect our strategic focus on innovations to further strengthen our
competitive edge and enable us to capture additional market shares, thereby boosting our
financial performance. Our innovative products and dynamic ecosystem allow us to respond
promptly to enquiries by automatically generating tailored networking solutions designs based
on individual customer needs. Our solutions offer seamless connectivity and achieve desired
outcomes at competitive prices, positioning us well to capture market opportunities.
FINANCIAL INFORMATION
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Our Ability to Enhance Technology and Develop Competitive Networking Solutions
The growth of our revenue depends on our ability to advance technology and develop
networking solutions that meet our customers’ evolving needs. We help our customers navigate
emerging technological shifts primarily through our industry-leading technology platform. As
the backbone of our continuous innovation, this technology platform has enabled us to develop
a proprietary matrix of networking equipment with over 120,000 SKUs under our proprietary
brand as of the Latest Practicable Date, covering optical modules and high-speed cables, fiber
optic cables, switches, optical transmission equipment, optical fiber cabling management
products and copper system products, addressing high-speed networking demands and
supporting AI application deployment. As of September 30, 2025, networking equipment under
our proprietary brand had obtained over 20 internationally recognized certifications across the
U.S., the European Union, Australia, Japan and other regions, ensuring globally consistent
high-quality products and services. We also built a networking equipment operating system
compatible with equipment from different manufacturers as well as a real-time management
platform that supports software-defined networking through real-time configuration and
management.
We offer enterprise-grade networking solutions to empower global customers to design,
operate and optimize networks with enhanced efficiency, agility and cost-effectiveness. Our
solutions are built on a decoupled architecture that combines standardized networking
hardware with scalable, cloud-based software capabilities. This enables our customers to
dynamically adapt network resources to evolving operational demands while maintaining
enterprise-grade reliability. To address varying performance requirements, we offer (i)
high-performance networking solutions and (ii) general networking solutions. Our high-
performance networking products cater to bandwidth-intensive environments, delivering high
throughput, low latency and scalable architectures. Our general networking products feature
secure and reliable connectivity as well as simplified deployment and maintenance for
everyday needs.
We adopt a global pricing strategy in relation to our networking solutions, which is
responsive to various market conditions, while taking into account regional demand for
networking solutions and cost structure. We strategically adjust prices based on market
dynamics, considering factors including local competitive landscape in the respective region,
so as to ensure competitiveness and profitability across regions.
Our Ability to Enhance Our Customer Loyalty, Grow Customer Base and Establish Brand
Recognition
We have amassed a large and diverse customer base spanning across various industries
including information technology, financial services, healthcare, education, automotive and
electronics. As of the Latest Practicable Date, we had served more than 500,000 customers in
over 200 countries and regions worldwide, covering approximately 60% of Fortune 500
companies. By offering swift and smooth operations from products design to equipment
selection, deployment and installation, we earn and maintain customer trust. This trust leads
them to engage us for more complex networking solutions.
FINANCIAL INFORMATION
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Revenue from sales of general networking solutions and high-performance networking
solutions are both driven by our customer base expansion and the average revenue per
customer. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025,
approximately 74,000, 76,600, 82,500, 69,100 and 69,300 customers placed orders on our
online sales platform, with an average revenue per customer of approximately RMB26,900,
RMB28,900, RMB31,700, RMB28,300 and RMB31,400 in the same respective periods.
Furthermore, we recorded net dollar retention rate of 94.4% in 2023, 102.3% in 2024 and
93.0% in the nine months ended September 30, 2025, respectively, reflecting our strong
customer loyalty and stickiness.
Our sales platform displays our proprietary matrix of networking equipment with over
120,000 SKUs under our proprietary brand with transparent pricing as of the Latest Practicable
Date. Our platform offers a seamless one-stop procurement processes, which in turn establish
our brand recognition among customers.
Our Ability to Offer and Deliver Our Products Globally
We believe that there is a significant opportunity to offer and deliver our products in
overseas markets. During the Track Record Period, we strengthened our sales and marketing
capabilities and our global supply chain network and enhanced strategic partnerships in target
overseas markets including the U.S., Germany, Australia, Singapore, the U.K. and Japan. In
2015, we launched our product-driven online sales platform FS.com , which allows us to
respond quickly to enquiries by automatically generating tailored networking solutions based
on individual customer needs. In addition, we have established a global professional service
team to respond to various differentiated needs of our customers at any time and provide
real-time feedback through our platform. To enhance intelligent and efficient logistics, we have
established seven global delivery centers with gross floor area of over 68,000 square meters in
China, the U.S., Germany, Australia, Singapore, the U.K. and Japan as of the Latest Practicable
Date.
To better serve our customers in overseas markets, we have established global delivery
centers in the U.S., Germany, Australia, Singapore, the U.K., and Japan. Our revenue from
sales to overseas markets outside China (including Mainland China, Hong Kong, Macau
Special Administrative Region and Taiwan, China) amounted to RMB1,959.8 million,
RMB2,172.4 million, RMB2,564.7 million, RMB1,919.4 million and RMB2,129.5 million in
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, respectively,
representing 98.6%, 98.2%, 98.2%, 98.2% and 97.9% of our total revenue in the same
respective periods. Going forward, we expect to achieve sustainable growth in the foreseeable
future as we continue to attract more customers and deepen relationships with our existing
customers in our key industries.
Our Ability to Manage Global Supply Chain and Enhance Operating Efficiency
Our ability to continuously manage our global supply chain and enhance our operating
efficiency depends significantly on our ability to manage and optimize our costs and operating
expenses. During the Track Record Period, our gross profit margin improved from 45.4% in
FINANCIAL INFORMATION
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2022 to 49.4% in 2023, and further to 50.0% in 2024. Our gross profit margin increased from
51.0% in the nine months ended September 30, 2024 to 52.6% in the nine months ended
September 30, 2025. As we continue to develop highly standardized networking solutions that
allow us to address user demand effectively and efficiently. In addition, we have established
deep collaborative partnerships with networking equipment manufacturers around the globe.
As of the Latest Practicable Date, we collaborated with over 200 telecommunication product
suppliers and networking equipment manufacturers across the globe. Our robust global supply
chain integration capabilities have enabled us to rapidly respond to customer demands, shorten
delivery cycles, and enhance customers’ efficiency in technical validation and order placement.
As such, we believe that we are well positioned to scale up our sales and achieve significant
cost efficiency.
Moreover, we will further prudently control our operating expenses. In 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, our research and development
expenses as a percentage of our revenue was 5.0%, 5.0%, 5.5%, 5.1% and 5.7%, respectively.
To ensure effective implementation of our technology strategies, we will expand our research
and development team on a continuous basis and recruit more industry-leading talents.
Moreover, with a goal to strengthen our commercialization capabilities effectively, we plan to
expand our in-house sales and marketing team by recruiting more professionals with rich
industry and customer insights. Our selling and distribution expenses as a percentage of our
revenue was 13.6%, 15.3%, 18.7%, 18.1% and 17.9%, respectively. As such, we expect the
absolute amounts of our research and development expenses and selling and marking expenses
will continue to increase along our business growth in the future. Nevertheless, as we diversify
our product offerings and expand the scale and scope of our business and product offerings, we
expect to benefit from various economies of scale to improve our operational efficiency,
resulting in our costs and expenses as percentages of our revenue to continue to decline.
Foreign Currency
Our financial statements presentation and reporting currency is RMB. Our operating
companies in overseas markets have functional currencies such as the US dollar and Euro,
which are different from our reporting currency. Consequently, foreign currency exchange rates
have a significant impact on our consolidated financial information. Changes in the value of
our operating companies’ functional currencies against RMB in which their costs and expenses
are priced may affect those operating companies’ cost of sales and operating expenses. Certain
bank balances and trade and other receivables are denominated in foreign currency of
respective entities. We currently do 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 arise. See “— Financial Risks
Disclosure — Market Risk.” Historically, we have been able to raise prices and implement
cost-saving initiatives to partly offset increases in cost and expense due to exchange rate
volatility.
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Any change in the exchange rates between our operating companies’ functional currencies
and our reporting currency affects our consolidated income statements and consolidated
statements of financial position when the results of those operating companies are translated
into the reporting currency for reporting purposes as translational exposures are not hedged.
Decreases in the value of our operating companies’ functional currencies against the reporting
currency tend to reduce their contribution to, among other things, our revenue and profit. For
further details regarding the currencies in which our revenue is realized and the effect of
foreign currency fluctuations on our results of operations, see Note 3 to the Accountants’
Report in Appendix I to this prospectus.
MATERIAL ACCOUNTING POLICY INFORMATION
We have identified certain accounting policies that are significant to the preparation of
our financial statements. Material accounting policies that are significant for understanding our
financial condition and results of operations are set forth in detail in Note 2 and 3 to the
Accountants’ Report in Appendix I to this Prospectus. 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 historical experiences and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. There has not been any material
deviation between our management’s estimates or assumptions and actual results, and we have
not made any material changes to these estimates or assumptions during the Track Record
Period. We do not expect any material changes in these estimates and assumptions in the
foreseeable future.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
The following table sets forth a summary of our consolidated statements of profit or loss
for the periods indicated:
Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 2,212,851 2,611,793 1,953,701 2,174,718
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,085,386) (1,120,379) (1,305,484) (958,042) (1,031,899)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902,858 1,092,472 1,306,309 995,659 1,142,819
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,241 12,989 12,811 9,984 6,375
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Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Impairment losses under
expected credit loss model,
net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272 (1,659) (1,008) (485) (1,638)
Other gains and losses /H1118/H1118/H1118/H1118/H111842,704 38,682 (948) 8,746 49,761
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(270,490) (338,941) (487,665) (353,373) (390,154)
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(170,373) (175,156) (209,777) (140,110) (161,835)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(99,824) (110,482) (143,710) (99,824) (124,273)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,511) (4,655) (18,544) (12,823) (19,997)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (893) – (18,110)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418,877 513,250 456,575 407,774 482,948
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118(54,370) (56,503) (59,318) (56,967) (59,774)
Profit for the year/period /H1118/H1118/H1118364,507 456,747 397,257 350,807 423,174
Item that may be reclassified
subsequently to profit or
loss:
Exchange differences arising
on translation of foreign
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,606 2,446 (247) (1,507) 5,595
Total comprehensive income
for the year/period /H1118/H1118/H1118/H1118/H1118/H1118371,113 459,193 397,010 349,300 428,769
NON-IFRS FINANCIAL MEASURE
To supplement our consolidated financial statements, which are presented in accordance
with IFRS, we also use adjusted net profit (non-IFRS measure) as additional financial measure,
which is not required by, or presented in accordance with IFRS. We believe this non-IFRS
measure facilitates comparisons of operating performance from year to year and company to
company by eliminating potential impacts of certain items. We believe this measure provides
useful information to investors and others in understanding and evaluating our combined
results of operations in the same manner as they help our management. However, such
non-IFRS financial measure we presented may not be directly comparable to similar measures
presented by other companies. The use of this non-IFRS measure should not be considered as
a substitute for analysis of, our results of operations or financial condition as reported under
IFRS.
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We define adjusted net profit (non-IFRS measure) as profit for the year or period adjusted
by adding back (i) share-based payment expenses, (ii) professional fees, (iii) listing expenses,
and (iv) finance cost of interest on redemption liabilities. The following table reconciles our
adjusted net profit (non-IFRS measure) and presented in accordance with IFRS, which is profit
for the year/period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Profit for the year/period /H1118/H1118/H1118/H1118364,507 456,747 397,257 350,807 423,174
Add:
– Share-based payment
expenses
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,595 6,373 5,745 4,291 14,401
– Professional fees (2) /H1118/H1118/H1118/H1118/H1118/H111812,983 6,615 4,292 4,206 –
– Listing expenses (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 893 – 18,110
– Finance cost of interest on
redemption liabilities (4) /H1118/H1118/H1118 –––– 4,848
Adjusted net profit (non-
IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,085 469,735 408,187 359,304 460,533
Notes:
(1) Share-based payment expenses are non-cash in nature, and mainly represent the employee benefit
expenses incurred in connection with our award to key employees.
(2) Professional fees represent professional service fees incurred in connection with the A Share Listing
Application.
(3) Listing expenses represent professional service fees incurred in connection with the Global Offering.
(4) Finance cost of interest on redemption liabilities represents the non-cash interest expense recorded to
reflect interest incurred on our conditional obligation to redeem equity securities issued in our pre-IPO
investors. This redemption obligation was initially measured at fair value (representing the present value
of the cash flows for settling the related obligations if these rights are exercised by the investors), and
are subsequently measured at amortized costs. We will not incur such finance cost of interest on
redemption liabilities upon Listing as the redemption liabilities will be reclassified to equity when the
redemption rights lapse upon Listing.
Our adjusted net profit (non-IFRS measure) increased by 21.0% from RMB388.1 million
in 2022 to RMB469.7 million in 2023, and then decreased by 13.1% from RMB469.7 million
in 2023 to RMB408.2 million in 2024, generally in line with the changes in our profit for the
year. Our adjusted net profit (non-IFRS measure) increased by 28.2% from RMB359.3 million
in the nine months ended September 30, 2024 to RMB460.5 million in the nine months ended
September 30, 2025, primarily due to an increase in our profit for the period.
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DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenue
During the Track Record Period, our revenue was primarily derived from the sales of
networking solutions to overseas markets.
Revenue by Product Category
During the Track Record Period, we mainly sold high-performance networking solutions
and general networking solutions. In 2022, 2023, 2024 and the nine months ended September
30, 2024 and 2025, revenue derived from sales of networking solutions accounted for 88.7%,
88.8%, 89.2%, 89.3% and 88.6%, respectively, of our total revenue in the same respective
periods. In particular, the revenue contribution from high-performance networking solutions
has shown consistent growth, accounted for 23.8%, 26.0%, 31.9%, 31.7% and 36.2%,
respectively, of our total revenue in the same respective periods.
The following table sets forth a breakdown of our revenue by product category, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
High-performance
networking solutions /H1118/H1118472,910 23.8 577,368 26.0 831,107 31.9 618,512 31.7 788,004 36.2
General networking
solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,290,865 64.9 1,388,641 62.8 1,497,508 57.3 1,125,942 57.6 1,139,408 52.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,469 11.3 246,842 11.2 283,178 10.8 209,247 10.7 247,306 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 100.0 2,212,851 100.0 2,611,793 100.0 1,953,701 100.0 2,174,718 100.0
Note:
(1) Others mainly include fiber optic cassettes, chassis, wavelength division multiplexers and other ancillary
products.
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Sales of High-performance Networking Solutions
The increase of our revenue was mainly due to the growth in high-performance
networking solutions. The revenue from sales of high-performance networking solutions
amounted to RMB472.9 million, RMB577.4 million, RMB831.1 million, RMB618.5 million
and RMB788.0 million in 2022, 2023, 2024 and the nine months ended September 30, 2024 and
2025, accounting for 23.8%, 26.0%, 31.9%, 31.7% and 36.2% of our total revenue for the
same respective periods. The overall increase was mainly attributable to (i) our expanded
business scale of high-performance networking solutions which is attributable to our abundant
product portfolio, along with improved product quality and upgraded core technologies, has
contributed to a growing customer base as well as improved sales performance; and (ii) the
increase of customer demand driven by the rapid development of the AI industry. According
to Frost & Sullivan, the global online DTC networking solution market size increased from
USD4.7 billion in 2022 to USD5.7 billion in 2024, at a CAGR of 10.1%. In addition, we were
the largest global online DTC high-performance networking solutions provider in terms of
revenue in 2024.
Sales of General Networking Solutions
During the Track Record Period, we derived a substantial portion of our revenue from
sales of general networking solutions. In 2022, 2023 and 2024, revenue from sales of general
networking solutions amounted to RMB1,290.9 million, RMB1,388.6 million and RMB1,497.5
million, accounting for 64.9%, 62.8% and 57.3% of our total revenue for the same respective
periods. The overall increase was mainly attributable to our comprehensive product portfolio,
substantial customer base, steadily growing customer base and relatively stable sales volume.
It is also attributable to the increase of customer demand driven by the rapid development of
the AI industry. According to Frost & Sullivan, the global online DTC networking solution
market size increased from USD4.7 billion in 2022 to USD5.7 billion in 2024, at a CAGR of
10.1%. In 2024, we were the second largest global online DTC networking solutions provider,
accounting for 6.9% market share, according to Frost & Sullivan. The revenue from sales of
general networking solutions remained relatively stable at RMB1,125.9 million in the nine
months ended September 30, 2024 and RMB1,139.4 million in the nine months ended
September 30, 2025.
Sales of Others
In addition, we provide fiber optic cassettes, chassis, wavelength division multiplexers
and other ancillary products. The revenue from sales of others amounted to RMB224.5 million,
RMB246.8 million, RMB283.2 million, RMB209.2 million and RMB247.3 million in 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, accounting for 11.3%,
11.2%, 10.8%, 10.7% and 11.4% of our total revenue for the same respective periods.
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Revenue by Geographical Region
The following table sets forth a breakdown of revenue from sales by geographical region
in absolute amounts and as a percentage of our total revenue for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
United States /H1118/H1118/H1118/H1118/H1118/H1118/H1118919,625 46.3 1,027,025 46.4 1,223,166 46.8 920,822 47.1 1,178,357 54.2
Europe (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,707 33.4 767,381 34.7 898,048 34.4 674,979 34.5 617,744 28.4
Asia (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,019 8.9 183,221 8.3 228,118 8.7 167,288 8.6 200,329 9.2
– China (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,456 1.4 40,405 1.8 47,062 1.8 34,252 1.8 45,216 2.1
Americas (excluding the
United States) (4) /H1118/H1118/H1118/H1118124,640 6.3 123,219 5.6 143,927 5.5 105,088 5.4 97,882 4.5
Oceania (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,939 4.1 91,658 4.1 95,845 3.7 68,516 3.5 67,629 3.1
Africa (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,314 1.0 20,347 0.9 22,689 0.9 17,008 0.9 12,777 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 100.0 2,212,851 100.0 2,611,793 100.0 1,953,701 100.0 2,174,718 100.0
Notes:
(1) Our revenue from Europe was derived from Germany, the U.K., France, Netherlands, Italy, Iceland,
Switzerland, Spain, Austria, Sweden and 43 other countries and regions in Europe.
(2) Our revenue from Asia was derived from Japan, Singapore, India, China, Republic of Korea, United Arab
Emirates, Malaysia, Thailand and 35 other countries and regions in Asia.
(3) Our revenue from China was derived from Mainland China, Hong Kong, Macau Special Administrative Region
and Taiwan, China.
(4) Our revenue from Americas (excluding the United States) was mainly derived from Canada, Mexico and Puerto
Rico.
(5) Our revenue from Oceania was mainly derived from Australia and New Zealand.
(6) Our revenue from Africa was mainly derived from South Africa, Kenya and Nigeria.
Our revenue was primarily derived from the United States market. Sales from the United
States market increased from RMB919.6 million in 2022 to RMB1,027.0 million in 2023 and
further to RMB1,223.2 million in 2024, accounting for 46.3%, 46.4% and 46.8% of our total
revenue for the same respective year. Sales from the United States market also increased from
RMB920.8 million for the nine months ended September 30, 2024 to RMB1,178.4 million for
the nine months ended September 30, 2025, accounting for 47.1% and 54.2% of our total
revenue for the same respective periods. Such revenue growth reflected the success of our sales
and marketing strategies during the Track Record Period.
Our sales from the Europe markets increased from RMB664.7 million in 2022 to
RMB767.4 million in 2023 and further to RMB898.0 million in 2024, accounting for 33.4%,
34.7% and 34.4% of our total revenue for the same respective years. Sales from the Europe
FINANCIAL INFORMATION
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market decreased from RMB675.0 million for the nine months ended September 30, 2024 to
RMB617.7 million for the same period in 2025, accounting for 34.5% and 28.4% of our total
revenue for the same respective periods.
We also generated revenue from Asia, Americas (excluding the United States), Oceania
and Africa markets, which cumulatively amounted to RMB403.9 million, RMB418.4 million,
RMB490.6 million, RMB357.9 million and RMB378.6 million in 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, respectively, accounting for 20.3%, 18.9%,
18.8%, 18.4% and 17.4% of our total revenue for the same respective periods.
Cost of Sales
Our cost of sales primarily consisted of (i) cost of inventories sold primarily refers to
contract manufacturing cost, (ii) logistics costs and (iii) customs duties of various countries,
including US tariffs. The following table sets forth a breakdown of our cost of sales by nature,
in absolute amounts and as a percentage of our total cost of sales, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Costs of inventories
sold (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118896,836 82.7 946,968 84.5 1,094,231 83.8 811,616 84.7 782,345 75.8
Logistics costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118141,348 13.0 125,333 11.2 152,883 11.7 107,657 11.2 118,304 11.5
Customs duties /H1118/H1118/H1118/H1118/H1118/H111847,202 4.3 48,078 4.3 58,370 4.5 38,769 4.1 131,250 12.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,085,386 100.0 1,120,379 100.0 1,305,484 100.0 958,042 100.0 1,031,899 100.0
Note:
(1) Costs of inventories primarily include hardware contract manufacturing costs, which amounted to RMB896.8
million, RMB947.0 million, RMB1,094.2 million, RMB811.6 million and RMB782.3 million, respectively,
representing 100.0%, 99.9%, 99.5%, 99.5% and 99.4% of the costs of inventories sold in 2022, 2023, 2024 and
the nine months ended September 30, 2024 and 2025.
Gross Profit and Gross Profit Margin
Our gross profit amounted to RMB902.9 million, RMB1,092.5 million, RMB1,306.3
million, RMB995.7 million and RMB1,142.8 million in 2022, 2023, 2024 and the nine months
ended September 30, 2024 and 2025, respectively. Our gross profit margin was 45.4%, 49.4%,
50.0%, 51.0% and 52.6% in 2022, 2023, 2024 and the nine months ended September 30, 2024
and 2025, respectively.
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Gross Profit and Gross Profit Margin by Product Category
Our gross profit represents our revenue less our cost of sales, and our gross profit margin
represents gross profit divided by our revenue, expressed as a percentage. The following table
sets forth a breakdown of our gross profit and gross profit margin by product category for the
periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
(%) (%) (%) (%) (%)
(RMB in thousands, except for percentage)
(unaudited)
High-performance
networking solutions /H1118196,232 41.5 262,467 45.5 372,280 44.8 277,987 44.9 372,125 47.2
General networking
solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,203 45.2 685,635 49.4 773,517 51.7 594,154 52.8 630,241 55.3
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,423 55.0 144,370 58.5 160,512 56.7 123,518 59.0 140,453 56.8
Total gross profit/
overall gross profit
margin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902,858 45.4 1,092,472 49.4 1,306,309 50.0 995,659 51.0 1,142,819 52.6
The gross profit margin of our solutions is largely affected by costs of inventories sold
and changes in revenue contributions from different categories. Due to the mix of products
offered in each category and their varying gross profit margins, changes in sales contribution
from solutions with different gross profit margins may offset the effects and contribute to the
overall changes of gross profit margin of each category. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, the overall gross profit margin was 45.4%, 49.4%,
50.0%, 51.0% and 52.6%, respectively. See “— Period-to-Period Comparison of Results of
Operations” for reasons for changes in revenue and gross profit margin of our solutions by
product category.
For details on the changes in our gross profit and gross profit margin during the Track
Record Period, see “— Period-to-Period Comparison of Results of Operations.”
FINANCIAL INFORMATION
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Other Income
Our other income primarily consisted of (i) government grants, and (ii) bank interest
income. The government grants mainly included subsidies received from government
authorities, including subsidy for steady growth in software and information technology
service industry, subsidy for cross-border e-commerce enterprise and high-tech enterprise
subsidy. There is no unfulfilled condition and requirement to defer. Our other income amounted
to RMB18.2 million, RMB13.0 million, RMB12.8 million, RMB10.0 million and RMB6.4
million in 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025,
respectively, representing 0.9%, 0.6%, 0.5%, 0.5% and 0.3%, respectively, of our total revenue.
The following table sets forth a breakdown of our other income for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Government grants /H1118/H1118/H1118/H111811,928 65.4 7,468 57.5 5,646 44.1 4,475 44.8 1,486 23.3
Bank interest income /H1118/H1118/H11183,725 20.4 4,725 36.4 6,651 51.9 5,130 51.4 4,149 65.1
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,588 14.2 796 6.1 514 4.0 379 3.8 740 11.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,241 100.0 12,989 100.0 12,811 100.0 9,984 100.0 6,375 100.0
Impairment Losses Under Expected Credit Loss Model, Net of Reversal
Our impairment losses under expected credit loss model, net of reversal primarily
represent impairment losses recognized/reversed on our trade and other receivables. We
recorded a reversal under expected credit loss model amounted to RMB0.3 million in 2022. We
recognized impairment losses under expected credit loss model amounting to RMB1.7 million
and RMB1.0 million in 2023 and 2024, respectively. We recognized impairment losses under
expected credit loss model amounting to RMB0.5 million and RMB1.6 million in the nine
months ended September 30, 2024 and 2025, respectively.
Other Gains and Losses
Our other gains and losses primarily included (i) foreign exchange gains (losses), net, (ii)
fair value changes of financial assets at FVTPL and (iii) gain (loss) on disposal of property,
plant and equipment. We recorded RMB42.7 million net other gains in 2022, RMB38.7 million
net other gains in 2023, RMB0.9 million net other losses in 2024, RMB8.7 million net other
gains in the nine months ended September 30, 2024 and RMB49.8 million other gains in the
nine months ended September 30, 2025.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our other gains and losses for the periods
indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Fair value changes of
financial assets /H1118/H1118/H1118/H1118/H1118/H111814,113 33.0 12,993 33.6 8,731 (921.0) 6,378 72.9 9,116 18.3
Foreign exchange gains
(losses), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,369 66.5 25,792 66.7 (9,615) 1,014.3 2,346 26.8 40,292 81.0
Gains (losses) on disposal
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222 0.5 (156) (0.4) (97) 10.2 (11) (0.1) (10) 0.0
Gain on early termination
of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 53 0.1 33 (3.5) 33 0.4 363 0.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,704 100.0 38,682 100.0 (948) 100.0 8,746 100.0 49,761 100.0
Selling and Distribution Expenses
Our selling and distribution expenses primarily consisted of (i) employee compensation
expenses, including share-based payments, and (ii) advertising and promotion expenses. Our
selling and distribution expenses amounted to RMB270.5 million, RMB338.9 million, RMB487.7
million, RMB353.4 million and RMB390.2 million in 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, respectively, representing 13.6%, 15.3%, 18.7%, 18.1% and 17.9%
of our total revenue in the same periods.
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:
Y ears ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Employee compensation
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118167,302 61.9 198,774 58.6 267,453 54.9 184,637 52.2 230,104 59.0
Advertising and
promotion expenses /H1118/H111854,494 20.1 68,688 20.3 103,007 21.1 77,805 22.0 71,812 18.4
FINANCIAL INFORMATION
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Y ears ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Depreciation expenses /H1118/H111819,219 7.1 25,672 7.6 49,915 10.2 37,653 10.7 36,990 9.5
Labor service fees /H1118/H1118/H1118/H111824 – 6,505 1.9 13,144 2.7 10,083 2.9 7,809 2.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,451 10.9 39,302 11.6 54,146 11.1 43,195 12.2 43,439 11.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118270,490 100.0 338,941 100.0 487,665 100.0 353,373 100.0 390,154 100.0
Note:
(1) Others mainly included office expenses, consulting service fees and rental expenses.
General and Administrative Expenses
Our general and administrative expenses primarily consisted of (i) employee
compensation expenses, including share-based payments, (ii) transaction fees paid to third-
party platforms for processing payments, (iii) depreciation expenses and (iv) office expenses.
Our general and administrative expenses amounted to RMB170.4 million, RMB175.2 million,
RMB209.8 million, RMB140.1 million and RMB161.8 million in 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, respectively, representing 8.6%, 7.9%, 8.0%,
7.2% and 7.4% of our total revenue in the same periods.
The following table sets forth a breakdown of our general and administrative expenses in
absolute amounts and as a percentage of our total general and administrative expenses for the
periods indicated:
Y ears ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Employee compensation
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,840 38.6 65,604 37.5 67,795 32.3 46,988 33.5 49,259 30.4
Transaction fees /H1118/H1118/H1118/H1118/H111826,034 15.3 30,361 17.3 37,651 17.9 24,870 17.8 27,111 16.8
Depreciation expenses /H1118/H111818,287 10.7 21,503 12.3 28,630 13.6 20,553 14.7 34,912 21.6
Office expenses /H1118/H1118/H1118/H1118/H1118/H111810,100 5.9 13,177 7.5 26,368 12.6 13,820 9.9 18,249 11.3
Consulting service fees /H1118 15,153 8.9 14,273 8.1 16,851 7.6 11,516 8.2 13,365 8.3
Professional fees /H1118/H1118/H1118/H1118/H111812,983 7.6 6,615 3.8 4,292 2.0 4,292 3.1 – –
Travel expenses /H1118/H1118/H1118/H1118/H11182,411 1.4 4,298 2.5 4,224 2.0 3,162 2.3 2,223 1.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,565 11.6 19,325 11.0 23,966 12.0 14,909 10.5 16,716 10.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,373 100.0 175,156 100.0 209,777 100.0 140,110 100.0 161,835 100.0
FINANCIAL INFORMATION
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Note:
(1) Others mainly included rental expenses, amortization expenses and property management expenses.
Research and Development Expenses
Our research and development expenses primarily consisted of (i) employee
compensation expenses, including share-based payments, and (ii) depreciation expenses. Our
research and development expenses amounted to RMB99.8 million, RMB110.5 million,
RMB143.7 million, RMB99.8 million and RMB124.3 million in 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, respectively, representing 5.0%, 5.0%, 5.5%,
5.1% and 5.7% of our total revenue in the same periods.
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:
Y ears ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Employee compensation
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,975 76.1 84,179 76.2 107,354 74.7 72,375 72.5 95,009 76.5
Depreciation expenses /H1118/H111810,074 10.1 10,807 9.8 16,776 11.7 12,981 13.0 13,677 11.0
Raw material costs /H1118/H1118/H1118/H11184,626 4.6 1,698 1.5 2,869 2.0 1,944 2.0 3,500 2.8
Amortization expenses /H1118/H11182,051 2.1 1,312 1.2 2,211 1.5 1,706 1.7 1,480 1.2
Consulting service fees /H1118/H11182,537 2.5 7,415 6.7 3,515 2.4 3,399 3.4 518 0.4
Others
(1)
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,561 4.6 5,071 4.6 10,985 7.7 7,419 7.4 10,089 8.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,824 100.0 110,482 100.0 143,710 100.0 99,824 100.0 124,273 100.0
Note:
(1) Others primarily included property management expenses, rental expenses and office expenses.
Finance Costs
Our finance costs included (i) interest on bank loans, (ii) interest on lease liabilities, and
(iii) interest on redemption liabilities. Our finance costs amounted to RMB4.5 million, RMB4.7
million, RMB18.5 million, RMB12.8 million and RMB20.0 million in 2022, 2023, 2024 and
the nine months ended September 30, 2024 and 2025, respectively.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our finance costs in absolute amounts and
as a percentage of our total finance costs for the periods indicated:
Y ears ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentage)
(unaudited)
Interests on:
– Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,402 75.4 3,357 72.1 13,631 73.5 9,655 75.3 10,078 50.4
– Lease liabilities /H1118/H1118/H1118/H1118/H11181,109 24.6 1,298 27.9 4,913 26.5 3,168 24.7 5,071 25.4
– Redemption liabilities /H1118 – – – – – – – – 4,848 24.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,511 100.0 4,655 100.0 18,544 100.0 12,823 100.0 19,997 100.0
Income Tax Expense
Our income tax expense amounted to RMB54.4 million, RMB56.5 million, RMB59.3
million, RMB57.0 million and RMB59.8 million in 2022, 2023, 2024 and the nine months
ended September 30, 2024 and 2025, respectively. We are subject to income tax on an entity
basis on profits arising in or derived from tax jurisdictions in which members of our Group are
domiciled and operate. See Note 10 of the Accountants’ Report in Appendix I to this
prospectus.
PRC
Our Company operates in the PRC and was qualified as “High and New Technology
Enterprises” in 2019, with a valid period of three years and was entitled to a preferential
income tax rate of 15%. The qualification was subsequently successfully renewed in 2022 and
2025, respectively. FS Wuhan, a subsidiary of our Company, was also qualified as a “High and
New Technology Enterprise” in 2024, with a valid period of three years from December 2024
and entitled to a preferential income tax rate of 15%. During the Track Record Period, several
of our subsidiaries in PRC were qualified as small and micro enterprises under the PRC
Enterprise Income Tax regime, which enjoyed an EIT rate of 5%. The tax rate of our remaining
PRC subsidiaries was 25% during the Track Record Period under the EIT Law and
Implementation Regulation of the EIT Law.
According to a policy promulgated by the State Taxation Administration of the PRC and
effective from 2018 onwards, enterprises engaged in research and development activities are
entitled to claim 75% of the research and development expenses incurred in a year as extra tax
deductible expenses in determining the taxable income for that year (“ Super Deduction ”). The
Super Deduction rate was increased to 100% since October 2022. We and FS Wuhan claimed
such Super Deduction in determining its tax assessable profits for 2022, 2023, 2024 and the
nine months ended September 30, 2025.
FINANCIAL INFORMATION
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Other Jurisdictions
The tax rate of our overseas subsidiaries was subject to the corporate income tax law in
the countries in which they operated. Under the two-tiered profits tax rates regime of Hong
Kong Profits Tax, our subsidiary in Hong Kong was entitled to the preferential EIT rate of
8.25% for the first HKD2 million of estimated assessable profits and at 16.5% on the estimated
assessable profits above HKD2 million. Our subsidiary in U.S. was taxed at the federal tax rate
of 21% and other relevant state tax rate ranging from nil to 9.99%. Our subsidiaries in
Germany, Australia, Singapore and Japan were taxed at the tax rate of 28.08%, 30%, 17% or
5% (17% during January 1, 2022 to March 31, 2025 and 5% from April 1, 2025) and 36.80%
respectively. Our subsidiary in the U.K. was taxed at the tax rate ranging from 19% to 25%
during the Track Record Period.
As of the Latest Practicable Date, we did not have any dispute with any tax authority.
During the Track Record Period and up to the Latest Practicable Date, we have not been subject
to any tax investigation or any material penalties or surcharges.
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Nine months ended September 30, 2025 Compared with Nine months ended September 30,
2024
Revenue
Our revenue increased by 11.3% from RMB1,953.7 million in the nine months ended
September 30, 2024 to RMB2,174.7 million in the nine months ended September 30, 2025,
primarily due to our expanded business scale of high-performance networking solutions as we
optimized our product mix in response to the market demand.
 Our revenue from sales of high-performance networking solutions increased by
27.4% from RMB618.5 million in the nine months ended September 30, 2024 to
RMB788.0 million in the nine months ended September 30, 2025, primarily due to
(i) an increase in customer base from approximately 10,000 in the nine months
ended September 30, 2024 to approximately 11,000 in the nine months ended
September 30, 2025; and (ii) an increase in sales volume of the high-performance
networking solutions from approximately 462,000 in the nine months ended
September 30, 2024 to approximately 571,000 in the nine months ended September
30, 2025.
 Our revenue from sales of general networking solutions remained relatively stable
at RMB1,125.9 million in the nine months ended September 30, 2024 and
RMB1,139.4 million in the nine months ended September 30, 2025, primarily
because our customer base and sales volume of the general networking solutions
both remained stable in the nine months ended September 30, 2024 and 2025.
FINANCIAL INFORMATION
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 Our revenue from sales of others increased by 18.2% from RMB209.2 million in the
nine months ended September 30, 2024 to RMB247.3 million in the nine months
ended September 30, 2025. Our other networking products are typically deployed in
conjunction with our high-performance networking solutions and general
networking solutions. The increase in revenue from sales of others is generally in
line with the revenue increase corresponding to our revenue increase in high-
performance networking solutions and general networking solutions.
Cost of Sales
Our cost of sales increased by 7.7% from RMB958.0 million in the nine months ended
September 30, 2024 to RMB1,031.9 million in the nine months ended September 30, 2025,
primarily due to an increase in customs duties, mainly include U.S. import tariffs.
Gross Profit and Gross Profit Margin
Our gross profit increased by 14.8% from RMB995.7 million in the nine months ended
September 30, 2024 to RMB1,142.8 million in the nine months ended September 30, 2025. Our
gross profit margin increased from 51.0% in the nine months ended September 30, 2024 to
52.6% in the nine months ended September 30, 2025, respectively.
 The gross profit margin for high-performance networking solutions increased from
44.9% in the nine months ended September 30, 2024 to 47.2% in the nine months
ended September 30, 2025, primarily driven by (i) a decrease in procurement costs
for high-speed modules and network equipment; and (ii) an adjustment in the
product mix, as the revenue proportion of high-performance fiber optic cables, with
relatively higher gross margin, increased during the period.
 The gross profit margin for general networking solutions increased from 52.8% in
the nine months ended September 30, 2024 to 55.3% in the nine months ended
September 30, 2025, primarily due to a decrease in procurement costs for general
modules and network equipment.
 The gross profit margin for others slightly decreased from 59.0% in the nine months
ended September 30, 2024 to 56.8% in the nine months ended September 30, 2025,
reflecting normal period-to-period fluctuations in product mix, pricing and
procurement costs.
Other Income
Our other income decreased by 36.1% from RMB10.0 million in the nine months ended
September 30, 2024 to RMB6.4 million in the nine months ended September 30, 2025,
primarily attributable to government’s reduction in the allocation of certain grants.
FINANCIAL INFORMATION
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Impairment Losses Under Expected Credit Loss Model, Net of Reversal
We recorded impairment losses under expected credit loss model of RMB0.5 million and
RMB1.6 million in the nine months ended September 30, 2024 and 2025, respectively,
primarily due to an increase in credit sales to certain major customers in 2025, which led to
a higher provision for impairment losses in accordance with our expected credit loss model.
Other Gains
Our net other gains increased from RMB8.7 million in the nine months ended September
30, 2024 to RMB49.8 million in the nine months ended September 30, 2025, respectively,
primarily due to an increase in the foreign exchange gains and an increase in fair value changes
of financial assets at FVTPL. The increase in foreign exchange gains was mainly attributable
to the increase in the exchange rates of the Euro which we held. The increase in fair value
changes of financial assets was mainly attributable to an increase in structured deposits.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 10.4% from RMB353.4 million in the
nine months ended September 30, 2024 to RMB390.2 million in the nine months ended
September 30, 2025, primarily due to an increase in employee compensation expenses,
partially offset by a decrease in advertising and promotion expenses. The increase in employee
compensation expenses was mainly attributable to the increase in the average number of
employees in the sales team during the relevant period in 2025 and salary adjustments. The
decrease in advertising and promotion expenses was mainly attributable to the decrease in
expenditure on online advertising.
General and Administrative Expenses
Our general and administrative expenses increased by 15.5% from RMB140.1 million in
the nine months ended September 30, 2024 to RMB161.8 million in the nine months ended
September 30, 2025, primarily due to (i) an increase in depreciation expenses, and (ii) an
increase in office expenses, partially offset by a decrease in professional fees. The increase in
depreciation expenses was mainly attributable to additional office space in Singapore and an
additional building in Shenzhen. The increase in office expenses was mainly attributable to
expenditure in relation to office software. The decrease in professional fees was attributable to
our previous A share listing attempt. We voluntarily withdrew our A share listing application
in the first half of 2024. For details, please see “History, Development and Corporate Structure
— Previous A Share Listing Attempt” in this prospectus.
Research and Development Expenses
Our research and development expenses increased by 24.5% from RMB99.8 million in the
nine months ended September 30, 2024 to RMB124.3 million in the nine months ended
September 30, 2025, primarily due to an increase in employee compensation expenses, mainly
attributable to the increase in the number of R&D personnel.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs increased by 55.9% from RMB12.8 million in the nine months ended
September 30, 2024 to RMB20.0 million in the nine months ended September 30, 2025,
primarily due to an increase in redemption liabilities, mainly refers to our obligation to
purchase our equity instruments.
Income Tax Expense
Our income tax expense remained relatively stable at RMB57.0 million in the nine
months ended September 30, 2024 and RMB59.8 million in the nine months ended September
30, 2025.
Profit for the Period
As a result of the foregoing, our profit for the period increased by 20.6% from RMB350.8
million in the nine months ended September 30, 2024 to RMB423.2 million in the nine months
ended September 30, 2025.
Y ear Ended December 31, 2024 Compared with Y ear Ended December 31, 2023
Revenue
Our revenue increased by 18.0% from RMB2,212.9 million in 2023 to RMB2,611.8
million in 2024, primarily due to (i) our expanded business scale of high-performance
networking solutions as we optimized our product mix in response to the market demand; and
(ii) an increase of our net dollar retention rate from 94.4% in 2023 to 102.3% in 2024.
 Our revenue from sales of high-performance networking solutions increased by
43.9% from RMB577.4 million in 2023 to RMB831.1 million in 2024, primarily due
to (i) an increase in customer base from approximately 10,800 in 2023 to
approximately 12,100 in 2024; (ii) an increase in sales volume of the high-
performance networking solutions from approximately 486,000 in 2023 to
approximately 618,000 in 2024; and (iii) the growing market demand which also
contribute to the increase of customers purchasing amount. According to Frost &
Sullivan, the global online DTC networking solution market size increased by 9.6%
from USD5.2 billion in 2023 to USD5.7 billion in 2024. We ranked first in the
high-performance networking solutions market in 2024.
 Our revenue from sales of general networking solutions increased by 7.8% from
RMB1,388.6 million in 2023 to RMB1,497.5 million in 2024, primarily due to (i)
our substantial general networking solutions customer base of approximately 69,400
in 2023 and approximately 74,000 in 2024; (ii) an increase in sales volume of the
general networking solutions from 10.2 million in 2023 to 11.3 million in 2024; and
FINANCIAL INFORMATION
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(iii) the growing market demand which also contribute to the increase of customers
purchasing amount. According to Frost & Sullivan, the global online DTC
networking solution market size increased by 9.6% from USD5.2 billion in 2023 to
USD5.7 billion in 2024.
 Our revenue from sales of others increased by 14.7% from RMB246.8 million in
2023 to RMB283.2 million in 2024. Our other networking products are typically
deployed in conjunction with our high-performance networking solutions and
general networking solutions. The increase in revenue from sales of others is
generally in line with the revenue increase corresponding to our revenue increase in
high-performance networking solutions and general networking solutions.
Cost of Sales
Our cost of sales increased by 16.5% from RMB1,120.4 million in 2023 to RMB1,305.5
million in 2024, primarily due to an increase in the costs of inventories sold. This increase
mainly reflects higher costs paid to contract manufacturers that correspond to such costs of
sales, which is in line with the increase in our revenue.
Gross Profit and Gross Profit Margin
Our gross profit increased by 19.6% from RMB1,092.5 million in 2023 to RMB1,306.3
million in 2024. Our gross profit margin remained relatively stable at 49.4% and 50.0% in 2023
and 2024, respectively.
 The gross profit margin for high-performance networking solutions remained
relatively stable at 45.5% and 44.8% in 2023 and 2024, respectively. The slight
decrease was primarily attributable to an adjustment in the product mix, as the
revenue proportion of high-performance optical transceivers, with relatively lower
gross margin, increased during the period.
 The gross profit margin for general networking solutions increased from 49.4% in
2023 to 51.7% in 2024, primarily due to a decrease in the unit cost of general
networking solutions by 7.2%.
 The gross profit margin for others remained relatively stable at 58.5% and 56.7% in
2023 and 2024, respectively.
Other Income
Our other income remained relatively stable at RMB13.0 million and RMB12.8 million
in 2023 and 2024, respectively.
FINANCIAL INFORMATION
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Impairment Losses Under Expected Credit Loss Model, Net of Reversal
Our impairment losses under expected credit loss model decreased from RMB1.7 million
in 2023 to RMB1.0 million in 2024, primarily due to the subsequent settlement of trade
receivables. In 2024, we strengthened the collection of trade receivables, especially for
long-aged receivables, resulting in such reversal.
Other Gains and Losses
We recorded net other gains of RMB38.7 million in 2023, and subsequently recorded net
other losses of RMB0.9 million in 2024, primarily due to the foreign exchange gains in 2023
turned into losses in 2024 and a decrease in gains on disposal of financial assets at FVTPL. The
increase in foreign exchange losses was mainly attributable to the decrease in the exchange
rates of the Euro which we held.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 43.9% from RMB338.9 million in
2023 to RMB487.7 million in 2024, primarily due to (i) an increase in employee compensation
expenses, (ii) an increase in advertising and promotion expenses and (iii) an increase in
depreciation expenses. The increase in employee compensation expenses was mainly
attributable to the increase in the number of employees in the sales team. The increase in
advertising and promotion expenses was mainly attributable to the increase in expenditure on
online advertising. The increase in depreciation expenses was mainly attributable to the
addition of owned properties and leased warehouses. In particular, our selling and distribution
expenses, as a percentage of our total revenue increased from 15.3% in 2023 to 18.7% in 2024.
General and Administrative Expenses
Our general and administrative expenses increased by 19.8% from RMB175.2 million in
2023 to RMB209.8 million in 2024, primarily due to (i) an increase in office expenses, (ii) an
increase in transaction fees and (iii) an increase in depreciation of fixed assets. The increase
in office expenses was mainly attributable to the renovation of office premises in Shenzhen and
purchase of certain office software. The increase in transaction fees was mainly attributable to
the increase in payments processed through these platforms. The increase in depreciation
expenses was mainly attributable to the addition of owned properties. In particular, our
administrative expenses, as a percentage of our total revenue remained relatively stable at 7.9%
and 8.0% in 2023 and 2024, respectively.
Research and Development Expenses
Our research and development expenses increased by 30.1% from RMB110.5 million in
2023 to RMB143.7 million in 2024, primarily due to (i) an increase in employee compensation
expenses and (ii) an increase in depreciation expenses. The increase in employee compensation
FINANCIAL INFORMATION
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expenses was mainly attributable to the increase in the number of R&D personnel in 2024. The
increase in depreciation expenses was mainly attributable to the addition of owned properties
used for research and development activities.
Finance Costs
Our finance costs increased by 298.4% from RMB4.7 million in 2023 to RMB18.5 million
in 2024, primarily due to the addition of two borrowings in 2024. See “— Indebtedness —
Borrowings.”
Income Tax Expense
Our income tax expense remained relatively stable at RMB56.5 million in 2023 and
RMB59.3 million in 2024.
Profit for the Y ear
As a result of the foregoing, our profit for the year decreased by 13.0% from RMB456.7
million in 2023 to RMB397.3 million in 2024.
Y ear Ended December 31, 2023 Compared with Y ear Ended December 31, 2022
Revenue
Our revenue increased by 11.3% from RMB1,988.2 million in 2022 to RMB2,212.9
million in 2023, primarily due to our expanded business scale of high-performance networking
solutions as we optimized our product mix in response to the market demand.
 Our revenue from sales of high-performance networking solutions increased by
22.1% from RMB472.9 million in 2022 to RMB577.4 million in 2023, primarily due
to (i) an increase in high-performance networking solutions customer base from
approximately 9,400 in 2022 to approximately 10,800 in 2023; (ii) an increase in
sales volume of the high-performance networking solutions from approximately
451,000 in 2022 to approximately 486,000 in 2023; and (iii) the growing market
demand which also contribute to the increase of customers purchasing amount.
According to Frost & Sullivan, the global online DTC networking solution market
size increased by 10.6% from USD4.7 billion in 2022 to USD5.2 billion in 2023.
 Our revenue from sales of general networking solutions increased by 7.6% from
RMB1,290.9 million in 2022 to RMB1,388.6 million in 2023, primarily due to (i)
our substantial general networking solutions customer base of approximately 66,800
in 2022 and approximately 69,400 in 2023; (ii) an increase in sales volume of the
general networking solutions from 9.6 million in 2022 to 10.2 million in 2023; and
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(iii) the growing market demand which also contribute to the increase of customers
purchasing amount. According to Frost & Sullivan, the global online DTC
networking solution market size increased by 10.6% from USD4.7 billion in 2022
to USD5.2 billion in 2023.
 Our revenue from sales of others increased by 10.0% from RMB224.5 million in
2022 to RMB246.8 million in 2023. Our other networking products are typically
deployed in conjunction with our high-performance networking solutions and
general networking solutions. The increase in revenue from sales of others is
generally in line with the revenue increase corresponding to our revenue increase in
high-performance networking solutions and general networking solutions.
Cost of Sales
Our cost of sales increased by 3.2% from RMB1,085.4 million in 2022 to RMB1,120.4
million in 2023, primarily due to an increase in the costs of inventories sold. This increase
mainly reflects higher costs paid to contract manufacturers that correspond to such costs of
sales, which is in line with the increase in our revenue.
Gross Profit and Gross Profit Margin
Our gross profit increased by 21.0% from RMB902.9 million in 2022 to RMB1,092.5
million in 2023. Our gross profit margin increased from 45.4% in 2022 to 49.4% in 2023,
primarily due to the decrease in our improved product mix and favorable fluctuation of foreign
exchange rates.
 The gross profit margin for high-performance networking solutions increased from
41.5% in 2022 to 45.5% in 2023, primarily due to the decrease of unit cost of
high-margin optical transceiver products, while the sales volume of such optical
transceiver products increased by 11.7%.
 The gross profit margin for general networking solutions increased from 45.2% in
2022 to 49.4% in 2023, primarily due to a decrease in the unit cost of general
networking solutions by 6.0%.
 The gross profit margin for others increased from 55.0% in 2022 to 58.5% in 2023,
primarily attributable to the unit price adjustments of other products.
Other Income
Our other income decreased by 28.8% from RMB18.2 million in 2022 to RMB13.0
million in 2023, primarily due to a decrease in the government grants, mainly attributable to
certain reduced government incentive programs relating to platform establishment and tax
relief policies; partially offset by an increase in certain government support programs awarding
the steady growth of the software, IT services and internet industries.
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Impairment Losses Under Expected Credit Loss Model, Net of Reversal
We recorded a reversal of impairment losses under expected credit loss model of RMB0.3
million in 2022. In 2023, we recognized impairment losses of RMB1.7 million, primarily due
to the reclassification of certain receivables to over one year, which under the expected credit
loss model requires recognition of impairment losses.
Other Gains and Losses
Our net other gains decreased by 9.4% from RMB42.7 million in 2022 to RMB38.7
million in 2023, primarily due to (i) a decrease in foreign exchange gains and (ii) a decrease
in gains on disposal of financial assets at FVTPL. The decrease in foreign exchange gains was
mainly attributable to a lower increase in the US Dollar exchange rate in 2023 compared to
2022. The decrease in gains on disposal of financial assets at FVTPL was mainly attributable
to the decrease in the annualized interest rate of structured deposits.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 25.3% from RMB270.5 million in
2022 to RMB338.9 million in 2023, primarily due to (i) an increase in employee compensation
expenses, (ii) an increase in advertising and promotion expenses and (iii) an increase in
depreciation expenses. The increase in employee compensation expenses was mainly
attributable to an increase in the number of sales personnel. The increase in advertising and
promotion expenses was mainly attributable to the increase in expenditure on online
advertising. The increase in depreciation expenses was mainly attributable to the addition of
leased warehouses. In particular, our selling and distribution expenses, as a percentage of our
total revenue increased from 13.6% in 2022 to 15.3% in 2023.
General and Administrative Expenses
Our general and administrative expenses increased by 2.8% from RMB170.4 million in
2022 to RMB175.2 million in 2023, primarily due to (i) an increase in transaction fees, (ii) an
increase in depreciation expenses and (iii) an increase in office expenses. The increase in
transaction fees was mainly attributable to the increase in payments processed through these
platforms. The increase in depreciation expenses was mainly attributable to new office
premises in Wuhan. The increase in office expenses was mainly attributable to the expansion
of our business scale. In particular, our administrative expenses, as a percentage of our total
revenue decreased from 8.6% in 2022 to 7.9% in 2023, respectively.
Research and Development Expenses
Our research and development expenses increased by 10.7% from RMB99.8 million in
2022 to RMB110.5 million in 2023, primarily due to (i) an increase in employee compensation
expenses and (ii) an increase in consulting service fees. The increase in employee
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compensation expenses was mainly attributable to the increase in the number of R&D
personnel. The increase in consulting service fees was mainly attributable to our increased
research and development projects.
Finance Costs
Our finance costs remained relatively stable at RMB4.5 million and RMB4.7 million in
2022 and 2023, respectively.
Income Tax Expense
Our income tax expense remained relatively stable at RMB54.4 million in 2022 and
RMB56.5 million in 2023.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by 25.3% from RMB364.5
million in 2022 to RMB456.7 million in 2023.
DISCUSSION OF KEY ITEMS OF CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
The following table sets forth selected information from our consolidated statements of
financial position included in Appendix I to this prospectus.
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11181,712,283 1,888,923 2,015,571 2,213,269
Total non-current assets /H1118/H1118/H1118/H1118441,532 830,493 1,534,828 1,508,351
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,815 2,719,416 3,550,399 3,721,620
Total current liabilities /H1118/H1118/H1118/H1118/H1118529,887 563,065 539,309 625,985
Total non-current liabilities /H1118 91,512 158,369 610,353 1,111,123
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118621,399 721,434 1,149,662 1,737,108
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
Share Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000 360,000 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,416 1,637,982 2,040,737 1,624,512
Total Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
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Non-Current Assets and Liabilities
The following table sets forth our non-current assets and liabilities as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,669 346,866 1,194,069 1,171,163
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,651 87,511 119,041 118,413
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118– – – 11,037
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,017 20,917 18,375 14,619
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,610 90,865 110,536 122,677
Other receivables, deposits
and prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H11188,265 16,154 88,296 67,375
Deposits for the acquisition
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,320 268,180 4,511 3,067
Total non-current assets /H1118/H1118/H1118441,532 830,493 1,534,828 1,508,351
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,299 85,415 509,573 345,548
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,097 69,317 100,780 101,332
Other payables and accruals /H1118 7,116 3,637 – –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118– – – 664,243
Total non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,512 158,369 610,353 1,111,123
Property, Plant and Equipment
Our property, plant and equipment primarily consisted of owned properties, owned
properties improvement, construction in process and electronic equipment. Our property, plant
and equipment increased by 11.3% from RMB311.7 million as of December 31, 2022 to
RMB346.9 million as of December 31, 2023, primarily due to the completion of the renovation
for buildings in Wuhan. Our property, plant and equipment further increased by 244.2% from
RMB346.9 million as of December 31, 2023 to RMB1,194.1 million as of December 31, 2024,
primarily due to the completion of new office premises and delivery facilities in Wuhan. Our
property, plant and equipment remained relatively stable at RMB1,194.1 million as of
December 31, 2024 and RMB1,171.2 million as of September 30, 2025.
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Right-of-use Assets
Our right-of-use assets primarily consisted of leased properties. Our right-of-use assets
increased by 185.5% from RMB30.7 million as of December 31, 2022 to RMB87.5 million as
of December 31, 2023, and further increased by 36.0% from RMB87.5 million as of December
31, 2023 to RMB119.0 million as of December 31, 2024, primarily due to our new leases for
warehouses in line with our business expansion. Our right-of-use assets remained relatively
stable at RMB119.0 million as of December 31, 2024 and RMB118.4 million as of September
30, 2025.
Net Current Assets
The following table sets forth our current assets and liabilities as of the dates indicated:
As of December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
(RMB in thousands)
(Unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,077 606,115 572,271 484,835 493,171
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,007 122,599 154,616 218,364 201,896
Other receivables, deposits and
prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,701 115,885 120,304 125,828 135,402
Rights to returned good assets /H1118/H1118 5,382 2,962 3,392 3,658 2,927
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,559 13,045 10,606 11,798 20,030
Financial assets at fair value
through profit or loss
(“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,038 180,347 506,444 694,046 765,363
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H111816,799 14,662 17,363 32,011 32,032
Short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118– – 93,000 23,400 –
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118370,720 833,308 537,575 619,329 883,111
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,712,283 1,888,923 2,015,571 2,213,269 2,533,932
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,630 278,330 251,449 217,423 252,619
Other payables and accruals /H1118/H1118/H1118/H111881,555 112,718 139,283 130,058 143,661
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,711 6,000 6,987 7,555 6,433
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,560 109,499 40,692 46,219 67,557
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,674 24,062 8,191 16,047 21,480
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,716 11,364 63,787 176,245 176,390
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,897 16,866 24,371 26,462 26,739
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,144 4,226 4,549 5,976 1,930
Redemption Liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 669,128
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118529,887 563,065 539,309 625,985 1,365,937
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,182,396 1,325,858 1,476,262 1,587,284 1,167,995
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Our net current assets increased by 12.1% from RMB1,182.4 million as of December 31,
2022 to RMB1,325.9 million as of December 31, 2023, primarily due to an increase in bank
balance and cash of RMB462.6 million, primarily offset by (i) a decrease in financial assets at
FVTPL of RMB209.7 million and (ii) an increase in contract liabilities of RMB64.9 million.
Our net current assets increased by 11.3% from RMB1,325.9 million as of December 31,
2023 to RMB1,476.3 million as of December 31, 2024, primarily due to (i) an increase in
financial assets at FVTPL of RMB326.1 million, and (ii) a decrease in contract liabilities of
RMB68.8 million, partially offset by a decrease in bank balance and cash of RMB295.7
million.
Our net current assets increased by 7.5% from RMB1,476.3 million as of December 31,
2024 to RMB1,587.3 million as of September 30, 2025, primarily due to (i) an increase in
financial assets at FVTPL of RMB187.6 million; and (ii) an increase in bank balances and cash
of RMB81.8 million, partially offset by (i) an increase in borrowings of RMB112.5 million;
and (ii) a decrease in inventories of RMB87.4 million.
Our net current assets decreased by 26.4% from RMB1,587.3 million as of September 30,
2025 to RMB1,168.0 million as of January 31, 2026, primarily due to the reclassification of the
redemption liabilities of RMB669.1 million from non-current assets to current assets and an
increase in other payables and accruals of RMB13.6 million, partially offset by an increase in
bank balances and cash of RMB263.8 million.
Inventories
Our inventories consisted of (i) finished goods, (ii) goods in transit, and (iii)
consumables. The following table sets out a breakdown of our inventories as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118630,367 570,338 547,841 454,637
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,301 25,374 11,437 13,550
Consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,409 10,403 12,993 16,648
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,077 606,115 572,271 484,835
Our inventories decreased by 8.0% from RMB659.1 million as of December 31, 2022, to
RMB606.1 million as of December 31, 2023, primarily due to the depletion of additional
inventories maintained in 2022. We adopted a strategic decision in 2022 to reserve additional
inventory in our warehouses to ensure supply stability based on the market environment at that
time. In 2023, as market dynamics evolved, we optimized our supply chain management
FINANCIAL INFORMATION
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strategies and reduced our inventory level maintained in the central warehouse. Our inventories
decreased by 5.6% from RMB606.1 million as of December 31, 2023 to RMB572.3 million as
of December 31, 2024, primarily due to reduced procurement activities in alignment with our
2024 procurement plan. Further, our inventories decreased by 15.3% from RMB572.3 million
as of December 31, 2024 to RMB484.8 million as of September 30, 2025, primarily due to (i)
the ongoing consumption of certain switches that were stocked in advance for certain strategic
partner; and (ii) a strategic adjustment to our stocking cycle in the United States in 2025,
shortening the inventory coverage period due to U.S. tariff policies.
We periodically assess and recognize an allowance for impairment of inventories when
their carrying amount exceeds their net realizable value. Our allowance for impairment of
inventories amounted to RMB27.1 million, RMB53.7 million, RMB90.2 million and RMB80.0
million as of December 31, 2022, 2023 and 2024 and September 30, 2025, respectively. The
increase in the allowance for impairment of inventories from 2022 to 2024 was primarily due
to the increase in the balance of aged inventories, which resulted in higher allowance for
impairment. Our allowance for impairment of inventories decreased from RMB90.2 million as
of December 31, 2024 to RMB80.0 million as of September 30, 2025, primarily due to the
implementation of targeted sales strategies, which facilitated the sale of aged inventories. Our
Directors believe that sufficient allowance has been made for the inventories of our Company
with consideration of factors such as inventory aging, market prices, technological renewal and
changes in product demand that may affect the net realizable value of inventories. See “Risk
Factor — Risks Relating to Our Business and Industry — Failure to manage our inventory
effectively may have a material and adverse effect on our business, financial condition and
results of operations.”
The following table sets forth an aging analysis of our inventories as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118653,912 572,998 543,631 385,831
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,093 31,685 23,828 71,470
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,072 1,432 4,812 27,534
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,077 606,115 572,271 484,835
FINANCIAL INFORMATION
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The following table sets forth our inventory turnover days for the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H1118 159.7 206.1 164.7 138.3
Note:
(1) Inventory turnover days are calculated using the average of opening balance and closing balance of
inventories for a period divided by cost of sales for the relevant period and multiplied by the number
of days for the relevant period (i.e. 365 days for each year and 270 days for the nine months ended
September 30, 2025).
Our inventory turnover days increased from 159.7 days in 2022 to 206.1 days in 2023 and
then decreased to 164.7 days in 2024. Our inventory turnover days were relatively longer in
2023, primarily because we stocked up around 2022 year end to ensure delivery efficiency in
response to the market condition, resulting in a relatively high opening balance for 2023. Our
inventory turnover days further decreased to 138.3 days in the nine months ended September
30, 2025, primarily due to (i) the ongoing consumption of certain switches that were stocked
in advance for certain strategic partner; and (ii) a strategic adjustment to our stocking policy
in the United States in 2025, shortening the inventory coverage period due to U.S. tariff
policies.
As of January 31, 2026, RMB259.8 million, or 53.6% of inventories as of September 30,
2025, had been used, consumed or sold.
Trade Receivables
Trade receivables are amounts due for goods sold in the ordinary course of business. The
following table sets out a breakdown of our trade receivables as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,170 124,744 156,889 221,095
Less: allowance for credit
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,163) (2,145) (2,273) (2,731)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,007 122,599 154,616 218,364
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Our trade receivables increased from RMB103.0 million as of December 31, 2022, to
RMB122.6 million as of December 31, 2023, and further increased to RMB154.6 million as of
December 31, 2024, primarily due to our sales growth throughout the Track Record Period. Our
trade receivables further increased to RMB218.4 million as of September 30, 2025, primarily
due to an increase in credit sales to certain major customers in 2025.
We generally require the customers to make full upfront payment to us before we ship our
products. For certain customers with longstanding relationships, we have engaged in credit sale
with them during the Track Record Period and we usually grant credit terms of up to 90 days,
but we impose a maximum credit limit on such customers. We seek to maintain strict control
over our outstanding receivables. Our finance team is responsible for minimizing credit risks.
Overdue balances are reviewed regularly by senior management.
The following table sets out an aging analysis of our trade receivables based on the date
of delivery as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,993 115,388 146,843 210,589
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,154 5,195 4,659 5,644
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,860 2,016 3,114 2,131
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,007 122,599 154,616 218,364
The following table sets forth our trade receivables turnover days for the periods
indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Trade receivables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
17.8 18.6 19.4 23.2
Note:
(1) Trade receivables turnover days are calculated using the average of opening balance and closing balance
of trade receivables for a period divided by revenue for the relevant period and multiplied by the number
of days for the relevant period (i.e. 365 days for each year and 270 days for the nine months ended
September 30, 2025).
FINANCIAL INFORMATION
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Our trade receivables turnover days remained relatively stable at 17.8, 18.6 and 19.4 days
in 2022, 2023 and 2024, respectively. Our trade receivables turnover days increased to 23.2
days for the nine months ended September 30, 2025, primarily due to an increase in credit sales
to certain major customers in 2025.
As of January 31, 2026, approximately RMB206.4 million, or 94.5% of our trade
receivables as of September 30, 2025 had been settled.
Other Receivables, Deposits and Prepayments (Current)
Our current other receivables, deposits and prepayments primarily consisted of (i)
deductible value-added tax, (ii) refundable value added tax, and (iii) advances to supplier.
Our current other receivables, deposits and prepayments decreased by 22.1% from
RMB148.7 million as of December 31, 2022, to RMB115.9 million as of December 31, 2023,
primarily due to a decrease in refundable value-added tax of RMB56.6 million, which was
mainly attributable to (i) the settlement of tax recoverable in Shenzhen and (ii) the settlement
of value-added tax recoverable in Germany. The decrease was partially offset by an increase
in deductible value-added tax, primarily because certain tax recoverable incurred for 2023 was
received in 2024. Our current other receivables, deposits and prepayments remained relatively
stable at RMB115.9 million as of December 31, 2023 and RMB120.3 million as of December
31, 2024. Our current other receivables, deposits and prepayments remained relatively stable
at RMB120.3 million as of December 31, 2024, and RMB125.8 million as of September 30,
2025.
Financial Assets at Fair Value through Profit or Loss (“FVTPL”)
Our financial assets at FVTPL mainly included structured deposits issued by commercial
banks. See Note 24 to the Accountants’ Report included in Appendix I to this prospectus. We
had financial assets at FVTPL of RMB390.0 million, RMB180.3 million, RMB506.4 million
and RMB694.0 million as of December 31, 2022, 2023, 2024 and September 30, 2025,
respectively. We managed and evaluated the performance of investments on a fair value basis
in accordance with our business needs and investment strategy. We endeavor to increase the
return of idle cash and bank balances by placing investments in wealth financial assets with
high liquidity and low risk such that our risk exposure arising from such investments is
controlled. We have adopted a comprehensive set of internal policies and guidelines to manage
our investments while mitigating our exposure to investment risks. These policies and
measures include:
 investments shall be made when we have idle funds and not interfere with our
normal business activities or capital expenditures;
 investments shall generally be short-term in order to maintain our liquidity and
financial flexibility;
FINANCIAL INFORMATION
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--- page 279 ---
 we invest in structured deposits and wealth management products issued by
reputable commercial banks;
 any investments involving total assets or operating revenue or net profit or
transaction consideration or profits derived from the investment that reach or exceed
10% of the corresponding audited figures of our Company for the most recent fiscal
year and simultaneously meet the prescribed absolute thresholds (RMB10 million
for assets or transaction consideration, or RMB1 million for net profit or profits
derived from the investment) shall be subject to approval by our Board in
accordance with relevant laws and regulations and our Articles of Association; and
 any investments involving total assets or operating revenue or net profit or
transaction consideration or profits derived from the investment that reach or exceed
50% of the corresponding audited figures of our Company for the most recent fiscal
year and simultaneously meet the prescribed absolute thresholds (RMB50 million
for assets or transaction consideration, or RMB5 million for net profit or profits
derived from the investment) shall be subject to approval by our Shareholders in
accordance with relevant laws and regulations and our Articles of Association.
We have categorized our financial assets at FVTPL as Level 2 of the fair value hierarchy
because they are valued with reference to recent transaction price. For details of the fair value
measurement of our financial instruments, please refer to Note 42 to the Accountants’ Report
in Appendix I to this prospectus.
Our finance department is responsible for proposing, analyzing and evaluating potential
investment in such products. Our management, including our finance department, has extensive
experience in managing the financial aspects of an enterprise’s operations. Upon the Listing,
we intend to continue our investments strictly in accordance with our internal control policy,
Articles of Association and, to the extent that such investment is a notifiable transaction under
Chapter 14 of the Listing Rules, we will comply with the relevant requirements under Chapter
14 of the Listing Rules, including the announcement, reporting and/or shareholders’ approval
requirements (if applicable).
Our investment strategy related to such products focuses on minimizing the financial risks
by reasonably and conservatively matching the maturities of the portfolio to anticipated
operating cash needs, while generating desirable investment returns. To control our risk
exposure, we make investment decisions related to low risk wealth management products, after
thoroughly considering a number of factors, including, but not limited to, macro-economic
environment, general market conditions, risk control and credit of issuing financial institutions,
our own working capital conditions, and the expected profit or potential loss of the investment.
FINANCIAL INFORMATION
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Restricted Bank Deposits
Our restricted bank deposits decreased by 12.7% from RMB16.8 million as of December
31, 2022 to RMB14.7 million as of December 31, 2023, primarily due to the reduction of credit
card deposits by subsidiaries in Hong Kong, the U.S., and Germany by RMB2.1 million. Our
restricted bank deposits subsequently increased by 18.4% from RMB14.7 million as of
December 31, 2023, to RMB17.4 million as of December 31, 2024, primarily due to the
additional customs and import-export guarantees with a term of five years. Our restricted bank
deposits increased by 84.4% from RMB17.4 million as of December 31, 2024 to RMB32.0
million as of September 30, 2025, primarily attributable to (i) guarantees for customs duties in
relation to import and export declarations, and (ii) merchant deposits paid to certain platforms.
Bank Balance and Cash
Our bank balance and cash increased by 124.8% from RMB370.7 million as of December
31, 2022 to RMB833.3 million as of December 31, 2023, primarily due to the growth in our
revenue and our strengthened trade receivable management, which enhanced our operating
cash flow. In addition, we redeemed certain financial products, which were converted into bank
deposits. Our bank balance and cash subsequently decreased by 35.5% from RMB833.3 million
as of December 31, 2023 to RMB537.6 million as of December 31, 2024, primarily due to the
purchase of structured deposits with idle funds. Our bank balance and cash increased by 15.2%
from RMB537.6 million as of December 31, 2024 to RMB619.3 million as of September 30,
2025, primarily due to the growth in our revenue, which enhanced our operating cash flow.
Trade Payables
Our trade payables primarily consisted of trade payables to our suppliers of hardware
components. Our trade payables are due to third parties and amounted to RMB345.6 million,
RMB278.3 million, RMB251.4 million and RMB217.4 million as of December 31, 2022, 2023,
2024 and September 30, 2025, respectively. The decreasing trend is primarily attributable to
changes in the payment mix between advance and credit-term purchases.
The trade payables are typically settled upon delivery or within 120 days. The following
table sets out an aging analysis of our trade payables as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,541 223,723 169,869 207,782
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,516 53,666 62,249 8,837
6 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,573 941 19,331 804
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,630 278,330 251,449 217,423
FINANCIAL INFORMATION
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--- page 281 ---
The following table sets forth our trade payables turnover days for the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Trade payables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892.4 101.6 74.1 61.3
Note:
(1) Trade payables turnover days are calculated using the average of opening balance and closing balance
of trade payables for a period divided by cost of sales used for the relevant period and multiplied by the
number of days for the relevant period (i.e. 365 days for a calendar year and 270 days for the nine
months ended September 30, 2025).
Our trade payables turnover days increased from 92.4 days in 2022 to 101.6 days in 2023,
primarily because we stocked up around 2022 year end to ensure delivery efficiency in
response to the market condition, resulting in higher opening balance of trade payables for
2023 for procurement required. Our trade payables turnover days decreased from 101.6 days
in 2023 to 74.1 days in 2024, primarily because we made advances to suppliers for certain
finished goods, mainly due to changes in payment arrangements in response to our adjustments
into a more globalized supply chain. Our trade payables turnover days decreased from 74.1
days in 2024 to 61.3 days in the nine months ended September 30, 2025, primarily due to the
decrease of procurement.
As of January 31, 2026, RMB198.6 million, or 91.3% of our trade payables as of
September 30, 2025 had been settled.
Other Payables and Accruals (Current)
Our current other payables and accruals primarily consisted of (i) accrued staff costs, (ii)
other tax payable and (iii) accrued advertising costs. The following table sets out a breakdown
of our current other payables and accruals as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Accrued staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,804 41,312 52,182 33,016
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,339 19,964 23,478 35,114
Payables for patent use
right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,270 3,409 3,581 1,770
Accrued advertising costs /H1118/H1118/H11188,948 14,180 16,203 15,579
FINANCIAL INFORMATION
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--- page 282 ---
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Other accrued expenses /H1118/H1118/H1118/H11186,553 9,536 8,032 9,587
Accrued freight costs /H1118/H1118/H1118/H1118/H1118/H11184,837 10,003 13,926 12,527
Accrued listing expenses and
issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,674
Payables for construction
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,894 13,156 19,623 14,775
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,910 1,158 2,258 1,016
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,555 112,718 139,283 130,058
Our current other payables and accruals increased by 38.2% from RMB81.6 million as of
December 31, 2022, to RMB112.7 million as of December 31, 2023, primarily due to the
increase in accrued staff costs, payables for construction costs, accrued advertising costs and
accrued freight costs. Our current other payables and accruals further increased by 23.6% from
RMB112.7 million as of December 31, 2023 to RMB139.3 million as of December 31, 2024,
primarily due to the increase in accrued staff costs, payables for construction costs and accrued
freight costs. Our current other payables and accruals further decreased by 6.6% from
RMB139.3 million as of December 31, 2024 to RMB130.1 million, as of September 30, 2025,
primarily due to the decrease in accrued staff costs, partially offset by an increase in other tax
payables.
As of January 31, 2026, RMB112.2 million, or 86.3% of our other payables and accruals
as of September 30, 2025 had been settled.
Refund Liabilities
Our refund liabilities primarily relate to the right of return under our return policy during
the warranty period. Our refund liabilities decreased by 38.2% from RMB9.7 million as of
December 31, 2022 to RMB6.0 million as of December 31, 2023, primarily due to a decrease
in our historical return rate, which led to a decrease in recognized refund liabilities. Our refund
liabilities subsequently increased by 16.5% from RMB6.0 million as of December 31, 2023 to
RMB7.0 million as of December 31, 2024, primarily due to an increase in our revenue, which
led to a higher provision for estimated liabilities in accordance with revenue recognition
standards. Our refund liabilities increased by 8.1% from RMB7.0 million as of December 31,
2024 to RMB7.6 million as of September 30, 2025, primarily due to a further increase in our
revenue, thus led to a higher provision for estimated liabilities.
FINANCIAL INFORMATION
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Contract Liabilities
Our contract liabilities represent the advance payments received from our customers for
solutions and solutions to be provided during a period of time in the future. Our contract
liabilities increased by 145.5% from RMB44.6 million as of December 31, 2022 to RMB109.5
million as of December 31, 2023, primarily due to an increase in sales of solutions where
customers were required to make prepayments, which will be recognized as revenue upon
delivery. Our contract liabilities subsequently decreased by 62.8% from RMB109.5 million as
of December 31, 2023 to RMB40.7 million as of December 31, 2024, primarily due to the
delivery of solutions, which recognized the contract liabilities as revenue. Our contract
liabilities increased by 13.6% from RMB40.7 million as of December 31, 2024 to RMB46.2
million as of September 30, 2025, primarily due to an increase in sales of solutions where
customers were required to make prepayments, which will be recognized as revenue upon
delivery or after service was provided.
As of January 31, 2026, RMB40.1 million, or 86.8% of our outstanding contract liabilities
as of September 30, 2025 has been subsequently recognized as revenue.
LIQUIDITY AND CAPITAL RESOURCES
We have historically funded our cash requirements principally from proceeds from our
business operations, bank borrowings and capital contribution from shareholders. After the
Global Offering, we intend to finance our future capital requirements through cash generated
from our business operations, bank borrowings and the net proceeds from the Global Offering.
We do not anticipate any changes to the availability of financing to fund our operations in the
future.
Cash Flow
The following table sets forth a summary of our cash flows for the periods indicated:
Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Net cash flows generated
from operating activities /H1118/H1118170,832 586,010 408,841 249,491 542,647
Net cash flows used in
investing activities /H1118/H1118/H1118/H1118/H1118/H1118(274,323) (119,436) (1,140,761) (996,128) (179,236)
Net cash flows (used
in)/generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118(27,041) (7,284) 437,161 461,973 (289,126)
Cash and cash equivalents at
the beginning of
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,939 367,576 829,082 829,082 533,026
FINANCIAL INFORMATION
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--- page 284 ---
Y ears ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Effect of foreign exchange
rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169 2,216 (1,297) (1,974) 6,042
Cash and cash equivalents at
the end of year/period /H1118/H1118/H1118367,576 829,082 533,026 542,444 613,353
Net Cash Flows Generated from Operating Activities
In the nine months ended September 30, 2025 we had net cash flows generated from
operating activities of RMB542.6 million, which represents our cash generated from operations
of RMB607.9 million, as adjusted by income tax paid of RMB65.3 million.
In 2024, we had net cash flows generated from operating activities of RMB408.8 million,
which represents our cash generated from operations of RMB502.3 million, as adjusted by
income tax paid of RMB93.4 million.
In 2023, we had net cash flows generated from operating activities of RMB586.0 million,
which represents our cash generated from operations of RMB663.7 million, as adjusted by
income tax paid of RMB77.7 million.
In 2022, we had net cash flows generated from operating activities of RMB170.8 million,
which represents our cash generated from operations of RMB241.4 million, as adjusted by
income tax paid of RMB70.5 million.
Net Cash Flows Used in Investing Activities
In the nine months ended September 30, 2025, our net cash flows used in investing
activities was RMB179.2 million, which was primarily attributable to purchases of financial
assets at FVTPL of RMB1,190.0 million, partially offset by proceeds from redemption of
financial assets at FVTPL upon maturity of RMB1,011.5 million.
In 2024, our net cash flows used in investing activities was RMB1,140.8 million, which
was primarily attributable to (i) purchases of financial assets at FVTPL of RMB1,805.0
million, and (ii) purchase and deposits paid for property, plant and equipment of RMB725.3
million, partially offset by proceeds from disposal of financial assets at FVTPL of RMB1,487.6
million.
In 2023, our net cash flows used in investing activities was RMB119.4 million, which was
primarily attributable to (i) purchases of financial assets at FVTPL of RMB2,509.5 million, and
(ii) purchase and deposits paid for property, plant and equipment of RMB339.5 million,
partially offset by proceeds from disposal of financial assets at FVTPL of RMB2,732.2 million.
FINANCIAL INFORMATION
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--- page 285 ---
In 2022, our net cash flows used in investing activities was RMB274.3 million, which was
primarily attributable to (i) purchases of financial assets at FVTPL of RMB1,728.0 million, and
(ii) purchase and deposits paid for property, plant and equipment of RMB208.8 million,
partially offset by proceeds from disposal of financial assets at FVTPL of RMB1,672.9 million.
Net Cash Flows (Used in)/Generated from Financing Activities
In the nine months ended September 30, 2025, our net cash flows used in financing
activities were RMB289.1 million, primarily attributable to (i) dividend paid of RMB200.0
million, and (ii) repayments of borrowings of RMB51.5 million.
In 2024, our net cash flows generated from financing activities were RMB437.2 million,
primarily attributable to new borrowings raised of RMB523.4 million, partially offset by (i)
repayments of borrowings of RMB46.9 million, and (ii) repayments of lease liabilities of
RMB20.9 million.
In 2023, our net cash flows used in financing activities were RMB7.3 million, primarily
attributable to (i) repayments of lease liabilities of RMB20.4 million, and (ii) repayments of
borrowings of RMB8.7 million, partially offset by new borrowings raised of RMB26.5 million.
In 2022, our net cash flows used in financing activities were RMB27.0 million, primarily
attributable to (i) dividend paid of RMB60.0 million, (ii) repayments of borrowings of
RMB24.1 million, and (iii) repayment of lease liabilities of RMB25.6 million, partially offset
by new borrowings raised of RMB87.2 million.
INDEBTEDNESS
During the Track Record Period, our indebtedness included borrowings and lease
liabilities. The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
(RMB in thousands)
(Unaudited)
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,015 96,779 573,360 521,793 509,763
Lease liabilities /H1118/H1118/H1118/H1118/H111828,994 86,183 125,151 127,794 119,904
Bank overdrafts /H1118/H1118/H1118/H1118/H11183,144 4,226 4,549 5,976 1,930
Redemption Liabilities /H1118 – – – 664,243 669,128
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,153 187,188 703,060 1,319,806 1,300,725
FINANCIAL INFORMATION
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--- page 286 ---
Our Directors confirmed that there has not been any material change in our indebtedness
since January 31, 2026 to the date of this prospectus. As of the Latest Practicable Date, there
was no material restrictive covenant in our indebtedness which could significantly limit our
ability to obtain future financing, nor was there any material default on our indebtedness or
breach of covenant during the Track Record Period and up to the Latest Practicable Date. As
of the Latest Practicable Date, except for borrowings, we did not have plans for other material
external debt financing.
Except as disclosed in this section, as of January 31, 2026, being the latest practicable
date for determining our indebtedness, we did not have any outstanding mortgages, charges,
debentures, other issued debt capital, bank overdrafts, borrowings, liabilities under acceptance
or other similar indebtedness, hire purchase commitments, guarantees or other material
contingent liabilities.
Borrowings
Our borrowings are all denominated in Renminbi. Our borrowings increased by 22.5%
from RMB79.0 million as of December 31, 2022, to RMB96.8 million as of December 31,
2023, and subsequently increased by 492.4% to RMB573.4 million as of December 31, 2024,
primarily due to the continuous expansion of our business scale, increased capital expenditure
needs, and the advancement of strategic projects, such as the purchase of the Caidian plant,
which required substantial financial support. Our borrowings decreased by 9.0% from
RMB573.4 million as of December 31, 2024 to RMB521.8 million as of September 30, 2025,
primarily due to our repayments conducted in accordance with contractual terms and no new
borrowings were made. Our borrowings remained relatively stable at RMB521.8 million as of
September 30, 2025 and RMB509.8 million as of January 31, 2026. As of January 31, 2026,
all of our borrowings were secured by our owned properties, of which RMB74.2 million were
also guaranteed, while the remaining were unguaranteed.
The effective interest rate on our borrowings ranged from approximately 2.2% to 4.8%
per annum during the Track Record Period. As of the Latest Practicable Date, our unutilized
banking facilities amounted to RMB100.0 million.
Our Directors confirm that, there was no material covenant on any of our outstanding debt
as of the Latest Practicable Date, and there was no breach of any covenants during the Track
Record Period and up to the Latest Practicable Date. Our Directors further confirm that we did
not experience any difficulty in obtaining borrowings, default in payment of borrowings or
breach of covenants during the Track Record Period and up to the Latest Practicable Date.
Lease Liabilities
Our lease liabilities primarily comprise lease contracts in Mainland China, the U.S.,
Germany, Australia, Singapore, U.K. and Japan. Our lease liabilities increased by 197.2% from
RMB29.0 million as of December 31, 2022 to RMB86.2 million as of December 31, 2023,
primary due to the relocation of the old warehouse to a new warehouse in Germany in
FINANCIAL INFORMATION
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--- page 287 ---
December 2023, and the addition of a new warehouse in California in June 2023. Our lease
liabilities subsequently increased by 45.2% to RMB125.2 million as of December 31, 2024,
primary due to the addition of a new warehouse in Singapore in June 2024. Our lease liabilities
remained relatively stable at RMB125.2 million as of December 31, 2024 and RMB127.8
million as of September 30, 2025. Our lease liabilities remained relatively stable at RMB127.8
million as of September 30, 2025 and RMB119.9 million as of January 31, 2026. Our lease
liabilities as of January 31, 2026 were secured by our rental deposits and were unguaranteed.
Redemption Liabilities
As of December 31, 2022, 2023, 2024, September 30, 2025 and January 31, 2026, our
redemption liabilities were nil, nil, nil, RMB664.2 million and RMB669.1 million,
respectively, primarily representing our obligation to purchase our equity instruments, which
is conditional on certain investor’s exercising right to redeem. Our redemption liabilities as of
January 31, 2026 were unsecured and unguaranteed. See Note 33 to the Accountants’ Report
in Appendix I to this prospectus.
Bank Overdraft
Our bank overdraft amounted to RMB3.1 million, RMB4.2 million, RMB4.5 million,
RMB6.0 million and RMB1.9 million as of December 31, 2022, 2023, 2024, September 30,
2025 and January 31, 2026, respectively, primarily due to the use of corporate credit cards for
routine expenses in the U.S. The use of corporate credit card is a common payment method in
the U.S., and the balance fluctuates based on our monthly expenses. Our bank overdrafts as of
January 31, 2026 were unsecured and unguaranteed. We repay the credit card balance monthly,
with no risk of overdue payments.
Contingent Liabilities
We did not have any material contingent liabilities as of December 31, 2022, 2023, 2024,
September 30, 2025 and January 31, 2026, respectively.
Indebtedness Statement
Except as disclosed above, as of January 31, 2026, being the latest practicable date for
determining our indebtedness, we did not have any outstanding mortgages, charges,
debentures, other issued debt capital, bank overdrafts, borrowings, liabilities under acceptance
or other similar indebtedness, hire purchase commitments, guarantees or other material
contingent liabilities. Our Directors have confirmed that there is no material change in our
indebtedness since January 31, 2026 and up to the Latest Practicable Date.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods indicated:
As of/For the Y ear ended December 31,
As of/
For the
Nine months
ended
September 30,
2022 2023 2024 2025
Gross profit margin (%) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111845.4 49.4 50.0 52.6
Net profit margin (%) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.3 20.6 15.2 19.5
Adjusted net profit margin
(non-IFRS measure) (%) (4) /H1118/H1118/H1118/H1118/H111819.5 21.2 15.6 21.2
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.2 3.4 3.7 3.5
Debt ratio (%) (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17.1) (32.6) 6.7 35.0
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin equals profit for the year/period divided by revenue and multiplied by 100%.
(3) Current ratio equals current assets divided by current liabilities.
(4) Adjusted net profit margin (non-IFRS measure) equals adjusted net profit (non-IFRS measure) divided
by revenue and multiplied by 100%. See “— Non-IFRS Financial Measure.”
(5) Debt ratio equals net debt divided by total equity and multiplied by 100%. Net debt equals bank
borrowing plus lease liabilities plus redemption liabilities minus bank balances and cash.
For discussion of our gross profit margin and net profit margin, see “— Description of
Major Components of Our Results of Operations.” For discussion of adjusted net profit margin
(non-IFRS measure), see “Summary — Non-IFRS Measures.”
Current Ratio
Our current ratio increased from 3.2 in 2022 to 3.4 in 2023, primarily due to an increase
in the current assets.
Our current ratio increased from 3.4 in 2023 to 3.7 in 2024, primarily due to an increase
in the current assets and a decrease in the current liabilities.
Our current ratio decreased from 3.7 in 2024 to 3.5 as of September 30, 2025, primarily
due an increase in the current assets.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURES
During the Track Record Period, our capital expenditures primarily consisted of purchase
of property, plant and equipment and purchase of intangible assets. As of December 31, 2022,
2023, 2024 and September 30, 2025, our capital expenditures were RMB137.6 million,
RMB77.3 million, RMB921.9 million and RMB57.6 million, respectively. We funded these
expenditures mainly with cash generated from our operations and bank borrowings.
Following the Global Offering, we will continue to incur capital expenditures to grow our
business. We plan to fund our planned capital expenditures primarily with cash flows generated
from our operations, bank borrowings, and the net proceeds received from the Global Offering.
See “Future Plans and Use of Proceeds.” We may adjust our capital expenditures for any given
year according to our development plans or in light of market conditions and other factors we
believe to be appropriate.
CAPITAL COMMITMENTS
During the Track Record Period, our capital commitments were mainly contracted for
property, plant and equipment. As of December 31, 2022, 2023, 2024 and September 30, 2025,
the total amount of our capital commitments was RMB15.5 million, RMB548.4 million,
RMB27.1 million and RMB27.2 million, respectively. See Note 38 to the Accountants’ Report
in Appendix I to this prospectus.
PROPERTY V ALUATION
Jones Lang LaSalle Corporate Appraisal and Advisory Limited, an independent property
valuer, has valued certain of our property interest as of October 31, 2025 and is of the opinion
that the market value in existing state as at such date was RMB827.9 million. The full text of
the letter and valuation certificate with regard to such property interest is set out in Appendix
III to this prospectus. A reconciliation of the net book value of our properties as of September
30, 2025 as set out in the Accountants’ Report in Appendix I to this prospectus to their fair
value as of October 31, 2025 as stated in the property valuation report set out in Appendix III
to this prospectus is set out below:
(RMB in
thousands)
Net book value as of September 30, 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/H1118751,161
Movement for the period from September 30, 2025 to October 31, 2025
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,372)
Net book value as of October 31, 2025 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118748,789
Net valuation surplus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,111
V aluation of properties owned by our Group as of October 31, 2025 as
set out in the property valuation report in Appendix III to this
prospectus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118827,900
FINANCIAL INFORMATION
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RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. For details about our
related party transactions during the Track Record Period, see Note 44 to the Accountants’
Report in Appendix I to this prospectus.
Our Directors are of the view that each of the related party transactions set out in Note
44 to the Accountants’ Report 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 make our historical results
not reflective of our future performance.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
arrangements. We also have not entered into any financial guarantees or other commitments to
guarantee the payment obligations of third parties. In addition, we have not entered into any
derivative contracts that are indexed to our equity interests and classified as owners’ equity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an
unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We
do not have any variable interest in any unconsolidated entity that provides financing, liquidity,
market risk or credit support to us or that engages in leasing, hedging or research and
development services with us.
FINANCIAL RISKS DISCLOSURE
We are exposed to a variety of financial risks, including 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. See Note 41 of Appendix I to this prospectus.
Market Risk
Currency Risk
Certain bank balances, trade and other receivables, trade and other payables and amount
due from/to subsidiaries are denominated in foreign currency of respective group entities
which exposure us to foreign currency risk. In addition, we have intra-group balances with
several subsidiaries denominated in foreign currency which also expose us to foreign currency
risk. We currently do not have a foreign exchange hedging policy. However, our management
monitors foreign exchange exposure and will consider hedging significant foreign exchange
exposure should the need arise.
Our foreign currency risk is concentrated on the fluctuation of RMB against USD, Euro
and Canadian dollar.
FINANCIAL INFORMATION
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Interest Rate Risk
We are exposed to fair value interest rate risk in relation to restricted bank deposits,
short-term bank deposits and lease liabilities. We are also exposed to cash flow interest rate
risk in relation to variable-rate bank balances and variable-rate borrowings. Our cash flow
interest rate risk is mainly concentrated on the fluctuation of interest rates on borrowings. We
manage our interest rate exposures by assessing the potential impact arising from any interest
rate movements based on interest rate level and outlook.
We consider that the exposure of fair value interest rate risk in relation to restricted bank
deposits and lease liabilities is insignificant and no sensitivity analysis is presented
accordingly. Bank balances are excluded from sensitivity analysis as we consider that the
exposure of cash flow interest rate risk arising from variable-rate bank balances is
insignificant.
Credit Risk
Credit risk refers to the risk that a counterparties default on its contractual obligations
resulting in financial losses to us. Our credit risk exposures are primarily attributable to trade
receivables, other receivables and deposits, restricted bank deposits, short-term bank deposits,
bank balances and amounts due from subsidiaries. We do not hold any collateral or other credit
enhancements to cover our credit risks associated with our financial assets.
Liquidity Risk
In the management of the liquidity risk, we monitor and maintain a level of bank balance
and cash deemed adequate by our management to finance our operations and mitigate the
effects of fluctuations in cash flows. Our management monitors the utilization of bank
borrowings. We rely on bank borrowings as a significant source of liquidity. As of 31
December 2022, 2023, 2024 and September 30, 2025, we had available unutilized overdraft of
nil, RMB100.0 million, RMB130.0 million and RMB30.0 million, respectively.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our listing expenses will be
approximately RMB90.7 million (assuming an Offer Price of HK$38.40 per Offer Share (being
the mid-point of the indicative Offer Price range) and no exercise of the Over-Allotment
Option), representing 6.7% of the gross proceeds (based on the mid-point of our indicative
price range for the Global Offering and assuming that the Over-Allotment Option is not
exercised) of the Global Offering. During the Track Record Period, we incurred listing
expenses of RMB23.6 million, of which approximately RMB19.0 million was charged to the
consolidated statements of profit or loss. We expect to incur additional listing expenses of
approximately RMB67.1 million, of which approximately RMB19.8 million is expected to be
recognized in the consolidated statements of profit or loss and approximately RMB47.3 million
is expected to be recognized as a deduction in equity directly upon the Listing. Our Directors
FINANCIAL INFORMATION
– 280 –


--- page 292 ---
do not expect such expenses to materially impact our results of operations in 2025. By nature,
our listing expenses are composed of (i) underwriting commission of approximately RMB47.6
million, and (ii) non-underwriting related expenses of approximately RMB43.1 million, which
consist of fees and expenses of legal advisors and Reporting Accountant of approximately
RMB24.9 million and other fees and expenses of approximately RMB18.2 million.
DIVIDENDS AND DIVIDEND POLICY
Any declaration and payment, as well as the amount of dividends, will be subject to our
Articles of Association and the relevant PRC laws. We will give priority to distribute dividends
in the form of cash and may conduct interim dividends. Any proposed distribution of dividends
is subject to the discretion of our Board and the approval of our Shareholders. Our Board may
propose a distribution of dividends in the future after taking into account our financial
performance, working capital requirements, capital expenditure requirements, future expansion
plans, liquidity position and any other conditions that our Board may deem relevant. We do not
have any pre-determined dividend payout ratio. No dividend shall be declared or payable
except out of our profits and reserves lawfully available for distribution. We currently do not
have a formal dividend policy.
Our cash dividend distribution plan for 2024 was reviewed and approved at the general
meeting held on May 22, 2025, declaring a cash dividend of RMB5.56 (tax inclusive) per 10
Unlisted Shares to be paid to existing Shareholders. In 2022, 2023, 2024 and the nine months
ended September 30, 2025, we paid dividends of RMB60.0 million, nil, nil and RMB200.0
million, respectively, which were derived from our self-owned funds.
WORKING CAPITAL CONFIRMATION
Our Directors are of the opinion that, taking into account the net proceeds from the Global
Offering and the financial resources available to us, including cash and cash equivalents, we
have sufficient working capital for our present requirements, that is at least 12 months from the
date of this prospectus.
DISTRIBUTABLE RESERVES
As of September 30, 2025, our Company had retained profits of RMB1,392.2 million.
UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
See “Appendix II — Unaudited Pro Forma Financial Information” to this prospectus for
details.
FINANCIAL INFORMATION
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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 or trading position or prospects since September 30,
2025, being the end date of the periods reported in Appendix I to this prospectus, and there is
no event since September 30, 2025 that would materially affect the information as set out in
the Accountants’ Report in Appendix I to this prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors confirm that as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
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--- page 294 ---
Upon Listing, transactions between us and our connected persons will constitute our
connected transactions under Chapter 14A of the Listing Rules.
CONNECTED PERSON
The table below sets forth the connected person of our Company involved in the
connected transaction set out in this section and the nature of its connection with us:
Name of Connected Person Connected Relationship
Cloud V enture LLC
(“Cloud Venture ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Cloud V enture is wholly owned by Ms. Peng Fengli
(ుჾᘆ), the spouse of Mr. Xiang
CONTINUING CONNECTED TRANSACTION
Principal Terms
We entered into a cooperation framework agreement with Cloud V enture on February 26,
2026 (the “ Framework Agreement ”), pursuant to which, Cloud V enture agreed to grant us the
exclusive authorization to market and sublicense certain software products of Cloud V enture
(the “ CV Software ”), including a network switches operating system and its ancillary
intellectual property rights, and in return we agreed to pay Cloud V enture the licensing fee.
Under such authorization from Cloud V enture, we could further license/authorize our own
customers to deploy the CV software. The Framework Agreement shall commence on the
Listing Date until December 31, 2028 and may be renewed as the parties may mutually agree,
subject to the compliance with the requirements under Chapter 14A of the Listing Rules and
all other applicable laws and regulations.
Reasons for and Benefits of the Transaction
The CV Software is a widely recognized operation system for network switches with
stable quality. In our ordinary and usual business, we provide network switches hardware with
or without pre-installed operating system as well as standalone network switches operating
system software to our clients. Despite most of our clients procure our network switches
hardware without pre-installed operating system or with our propriety in-house network
switches operating system, we have obtained such authorization from Cloud V enture since
2023 to offer our client more diversified options. We believe that to continue with the CV
Software authorization is in the best interests of the Group and the Shareholders as a whole.
As advised by Frost & Sullivan, it is in line with industry practice to license in software in
networking solution industry. During the Track Record Period, our sales amount of network
switches hardware (pre-installed with CV software) are nil, nil, approximately RMB16 million,
and RMB13 million, representing nil, nil, approximately 3.7%, and 4.5% of the total sales
amount of network switches hardware, respectively.
CONNECTED TRANSACTIONS
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--- page 295 ---
Pricing Policies
The revenue arising out of sublicensing the CV Software to Group’s clients shall be split
between us and Cloud V enture at a fix rate of 50% and 50%. The revenue sharing percentage
is determined through arm’s length negotiations between the Company and Cloud V enture
taking into consideration the relevant costs incurred by our Company for marketing and
sublicensing the CV Software, and the relevant costs incurred by Cloud V enture for the
maintenance of CV Software. As advised by Frost & Sullivan, it is in line with industry practice
to share future sublicense revenue with the licensee in networking solution industry. As
compared to the upfront fixed licensing fee model, such revenue sharing model lowers the risk
of the Company and ensures flexible sublicense pricing by the Company.
Historical Amounts and Annual Caps
The table below sets out the historical transaction amounts in respect of the Cloud V enture
for the years ended December 31, 2022, 2023, 2024 and the nine months ended September 30,
2025:
For the years ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
(RMB in thousands)
Historical transaction
amounts in respect of the
Cloud V enture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 817 6,767 5,105
The transaction amount in 2023 was relatively lower primarily due to the fact that the
transaction commenced only in late 2023.
The maximum aggregate annual transaction amounts in respect of the Framework
Agreement for the years ending December 31, 2026, 2027 and 2028 shall not exceed the caps
set out below:
For the years ending December 31,
2026 2027 2028
(RMB in thousands)
Transaction Amounts in respect of the
Framework Agreement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,870 4,700 2,768
In arriving at the above annual caps, our Directors have considered the following factors:
(1) the historical transaction amount; and (2) the expected demand for the CV Software, which
is expected to decrease as a result of the launch of our self-developed network switches
operating system.
CONNECTED TRANSACTIONS
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Listing Rules Implications
In respect of the transaction under the Framework Agreement, as our Directors currently
expect, the highest applicable percentage ratio calculated for the purpose of Chapter 14A of the
Listing Rules will be more than 0.1% but less than 5% on an annual basis. Under Rule
14A.76(2) of the Listing Rules, the transaction will be subject to the reporting, annual review
and announcement requirements under Chapter 14A of the Listing Rules but will be exempted
from the independent Shareholders’ approval requirement under Chapter 14A of the Listing
Rules.
APPLICATION FOR W AIVER
Under Rule 14A.76(2) of the Listing Rules, the abovementioned transaction will
constitute our continuing connected transactions subject to the reporting, annual review and
announcement requirements under Chapter 14A of the Listing Rules upon the Listing. As such
transaction is expected to continue on a recurring and continuing basis and has been fully
disclosed in this prospectus, our Directors consider that compliance with the announcement
requirement would be impractical, and such requirement would lead to unnecessary
administrative costs and would be unduly burdensome to us. Accordingly, we have applied to
the Stock Exchange for, and the Stock Exchange has granted, a waiver exempting us from strict
compliance with the announcement requirement under Chapter 14A of the Listing Rules in
respect of the abovementioned continuing connected transaction, subject to the condition that
the aggregate amounts of the continuing connected transaction for each financial year shall not
exceed the relevant amounts set forth in the annual caps (as stated above).
CONFIRMATION FROM OUR DIRECTORS
Our Directors (including our independent non-executive Directors) are of the view that
the non-exempt continuing connected transaction as set out above has been and will continue
to be carried out in the ordinary and usual course of our business and on normal commercial
terms, and is fair and reasonable and in the interests of our Company and our Shareholders as
a whole, and the proposed annual caps for such transaction are fair and reasonable and in the
interests of our Company and our Shareholders as a whole.
CONFIRMATION FROM THE JOINT SPONSORS
Based on due diligence findings, including but not limited to information provided by the
Company, the Joint Sponsors are of the view that the non-exempt continuing connected
transaction as set out above has been and will continue to be carried out in the ordinary and
usual course of business of our Company and on normal commercial terms or better, and is fair
and reasonable and in the interests of our Company and our Shareholders as a whole, and the
proposed annual caps for such transaction are fair and reasonable and in the interests of our
Company and our Shareholders as a whole.
CONNECTED TRANSACTIONS
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INTERNAL CONTROL MEASURES
In order to ensure that the terms under relevant framework agreement for the continuing
connected transaction are fair and reasonable, or no less favorable than terms available to or
from Independent Third Parties, and are carried out under normal commercial terms, we will
adopt the following internal control procedures:
 our securities and investors relationship department, financial department and
internal control and audit department will be responsible for the control and daily
management in respect of the continuing connected transaction;
 our securities and investors relationship department, financial department and
internal control and audit department will be jointly responsible for evaluating the
terms under the framework agreement for the continuing connected transaction, in
particular, the fairness of the pricing policies and annual caps under the transaction;
 our securities and investors relationship department, financial department and
internal control and audit department will regularly monitor the fulfillment status of
the annual caps and the transaction updates under the framework agreement; and
 our independent non-executive Directors and auditors will conduct annual review of
the continuing connected transaction under the framework agreement and provide
annual confirmation to ensure that, in accordance with the Listing Rules, the
transaction is conducted in accordance with the terms of the framework agreement,
on normal commercial terms and in accordance with the relevant pricing policies.
CONNECTED TRANSACTIONS
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OVERVIEW
Our Board consists of seven Directors, including two executive Directors, two non-
executive Directors and three independent non-executive Directors. Our Supervisory
Committee consists of three Supervisors. All our Directors, Supervisors and senior
management meet the qualification requirements under the relevant PRC laws and regulations
and the Hong Kong Listing Rules for their respective positions.
BOARD OF DIRECTORS
Brief information of our Directors is set out below:
Name Age Position
Date of
appointment as
Director
Date of joining
our Group
Principal roles and
responsibilities
Mr. Xiang Wei
(Σਃ) /H1118/H1118/H1118/H1118/H1118
44 Executive Director,
chairperson of the
Board and general
manager
April 9, 2009 April 9, 2009 Responsible for the
strategic planning,
daily operations and
management of our
Group
Mr. Zeng Di
(ಀፍ) /H1118/H1118/H1118/H1118/H1118
40 Executive Director,
deputy general
manager, financial
director and Board
secretary
October 19,
2020
December 2,
2019
Responsible for the
overall financial
management of the
Group
Mr. Peng Chao
(ు൴) /H1118/H1118/H1118/H1118/H1118
42 Non-executive
Director
October 19,
2020
October 19,
2020
Responsible for
participating in
strategic decision
making, supervision
and management
operations through
the Board
Mr. Zhao Pan
(Ⴛᆙ) /H1118/H1118/H1118/H1118/H1118
37 Non-executive
Director
May 23, 2025 May 23, 2025 Responsible for
participating in
strategic decision
making, supervision
and management
operations through
the Board
Mr. Ran Long
(̄Ꮂ) /H1118/H1118/H1118/H1118/H1118
53 Independent
Non-executive
Director
October 19,
2023
October 19,
2023
Responsible for
supervising and
offering independent
judgment to the
Board
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Name Age Position
Date of
appointment as
Director
Date of joining
our Group
Principal roles and
responsibilities
Dr. Guo Fei
(࠭)H1118/H1118/H1118/H1118/H1118
52 Independent
Non-executive
Director
December 11,
2023
December 11,
2023
Responsible for
supervising and
offering independent
judgment to the
Board
Ms. Wang Jing
(ˮẙ) /H1118/H1118/H1118/H1118/H1118
41 Independent
Non-executive
Director
May 23, 2025 May 23, 2025 Responsible for
supervising and
offering independent
judgment to the
Board
Executive Director
Mr. Xiang Wei ( Σਃ), aged 44, is our founder, executive Director, chairperson of the
Board and general manager. Mr. Xiang also holds directorships in various subsidiaries of our
Company, including FS Wuhan, FS HK, FS Germany, FS U.S., and FS Singapore.
Mr. Xiang obtained his bachelor’s degree in civil engineering from Y angtze University
(Ϫɽኪ) in the PRC in June 2004. Mr. Xiang was awarded the Certificate for High-level
Professional in Shenzhen (ࣣby the Human Resources and Social
Security Administration of Shenzhen Municipality in May 2020.
Mr. Zeng Di ( ಀፍ), aged 40, is our executive Director, deputy general manager, financial
director and Board secretary. Mr. Zeng joined our Group in December 2019 and has served as
the financial director of our Company since then. Mr. Zeng was appointed as our executive
Director, deputy general manager and Board secretary in October 2020.
Mr. Zeng has over 17 years of experience in auditing and financial management. Prior to
joining our Group, Mr. Zeng served as deputy financial director at China First Capital Group
Limited (ʮ̡), a company listed on the Main Board of the Stock Exchange
(stock code: 01269), from 2018 to 2019. He previously worked in Deloitte Touche Tohmatsu
Certified Public Accountants LLP Shenzhen Branch (ה(Υྫ)ଉέʱ
הfor over 10 years from 2007 to 2017.
Mr. Zeng obtained his bachelor’s degree in economics from Zhongnan University of
Economics and Law (ɽኪ) in the PRC in June 2007. Mr. Zeng obtained the
certificate of PRC Certified Public Accountant Qualification (ᗇ) from
Shenzhen Institute of Certified Public Accountant (՘ึ) in November 2013
and was admitted as a non-practicing member of China Institute of Certified Public
Accountants since December 2019, and Certificate of Listed Company Board Secretary
Qualification (ࣣfrom Shenzhen Stock Exchange in November
2020.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Non-executive Directors
Mr. Peng Chao ( ు൴), aged 42, is our non-executive Director. Mr. Peng joined our
Group in October 2020 and has served as a Director since then. Mr. Peng was further appointed
as a non-executive Director in May 2025.
Mr. Peng has over 18 years of experience in equity investment and company management.
Mr. Peng worked at Guosen Securities Co., Ltd. (ʮ̡), a company listed on
the Shenzhen Stock Exchange (stock code: 002736), from June 2007 to July 2016, and served
as the general manager at Shenzhen Grandway Capital Management Co., Ltd. ( ଉέ̹ྗჃ༟
ʮ̡) from August 2016 to December 2022. Mr. Peng has served as (i) an executive
director at Hainan Chaoyue V enture Capital Co., Ltd. (ʮ̡) since
September 2021; (ii) the general manager at Hainan Transcend V enture Capital Co., Ltd. since
September 2022; and (iii) a director at Shenzhen Naso Tech Co., Ltd. ( ଉέ̹ॶண౽ঐༀ௪Ϟ
ʮ̡), a semiconductor equipment company, since April 2019.
Mr. Peng obtained his bachelor’s degree in electronic and communications engineering
from University of Nottingham in the U.K. in July 2005, and his master’s degree in financial
mathematics from University of Warwick in the U.K. in December 2006. Mr. Peng also
qualified as a Charted Financial Analyst by CFA Institute in September 2010.
Mr. Zhao Pan ( Ⴛᆙ), aged 37, is our non-executive Director. Mr. Zhao joined our Group
in May 2025 and has served as a non-executive Director since then.
Mr. Zhao has approximately ten years of experience in compliance and risk control. Since
August 2015, Mr. Zhao has consecutively served as risk control manager, risk control director
and head of compliance and risk control at Shenzhen Fupeng Asset Management Co., Ltd. ( ଉ
ʮ̡), which is one of our Shareholder. Mr. Zhao has also served as a
director at Guangdong Huada Internet Co., Ltd. (ʮ̡) since July
2018.
Mr. Zhao obtained his bachelor’s degree in law from Hunan University of Science and
Engineering (Ҧኪ৫) in the PRC in June 2012 and his master’s degree in civil and
commercial laws from Southwest University of Political Science and Law (ɽኪ)i n
the PRC in June 2015. Mr. Zhao obtained Legal Professional Qualification Certificate (ᔖ
ࣸfrom the Ministry of Justice (௅) of the PRC in March 2013, Securities
Qualification Certificate (ࣣfrom the Securities Association of China ( ʕ਷
ᗇՎุ՘ึ) in June 2015, Fund Qualification Certificate (ࣣfrom the Asset
Management Association of China (ุ՘ึ) in December 2018. Mr. Zhao
also obtained Junior Accounting Qualification (ᔖ၈) in May 2018 and Intermediate
Accounting Qualification (ᔖ၈) in September 2021, from the Ministry of Human
Resources and Social Security (ღ௅) and the Ministry of Finance (௅)
of the PRC.
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Independent non-executive Directors
Mr. Ran Long ( ̄Ꮂ), aged 53, is our independent non-executive Director. Mr. Ran
joined our Group in October 2023 and has served as an independent Director since then.
Mr. Ran has served as the legal representative, general manager and financial director at
Zhuhai Zhongzhi Technology Co., Ltd. (ʮ̡) since September 2023. Prior
to that, in 2022 and 2023, Mr. Ran served as senior vice president at Beijing Business Inquiry
Technology Co., Ltd. (ʮ̡). From July 2018 to June 2022, Mr. Ran served
as senior vice president at Deep Glint International Co., Ltd. (ࠢ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 688207). From July 2002
to June 2018, Mr. Ran has taken up positions including senior technical solutions expert and
senior customer director at Microsoft (China) Co. Ltd. ( ฆழ(ʕ਷)ʮ̡), a wholly owned
subsidiary of Microsoft Corporation, whose shares are listed on the Nasdaq (stock ticker:
MSFT).
Mr. Ran obtained his bachelor’s degree in computer application from Beijing Light
Industry School ( ̏ԯჀʈุኪ৫) (currently known as Beijing Technology and Business
University ( ̏ԯʈਠɽኪ)) in the PRC in July 1996. In November 2023, Mr. Ran obtained the
Listed Companies Independent Director Qualification (ࣸfrom Shenzhen
Stock Exchange.
Dr. Guo Fei (࠭)aged 52, is our independent non-executive Director. Dr. Guo joined
our Group in December 2023 and has served as an independent Director since then.
Dr. Guo has over 28 years of experience in accounting. Dr. Guo has successively served
as associate professor, professor and doctoral supervisor at the accounting school of Zhongnan
University of Economics and Law since 2009. Prior to that, Dr. Guo served as an industry
research senior manager at Minsheng Securities Co., Ltd. (ʮ̡) from July
2001 to December 2003. Dr. Guo also has abundant experience as independent director. Dr.
Guo has served as an independent director of Dongshi Automotive Technology Group Co.,
Ltd., (ʮ̡) since April 2022, an independent director of China
Southern Power Grid Digital Power Research Institute Co., Ltd. (ٰ
ʮ̡) since October 2023 and an independent director of Suzhou Jufu Polymer
Materials Co., Ltd. (ʮ̡) since December 2025.
Dr. Guo obtained his bachelor’s degree in accounting from Henan Finance and Economics
College (ৌ຾ኪ৫) (currently known as Henan University of Finance and Economics (ئ
ɽኪ)) in the PRC in June 1996, his master’s degree in business administration from
Kunming University of Science and Technology (ଣʈɽኪ) in the PRC in June 2001, and
his doctor’s degree specializing in professional research of economics and finance from Curtin
University in Australia in May 2009. In December 2015, Dr. Guo obtained the Listed
Companies Independent Director Qualification (ࣸfrom Shenzhen Stock
Exchange. In December 2020, Dr. Guo was admitted as a member of the Chinese Institute of
Certified Public Accountants (՘ึ). Dr. Guo has also served as a member of
the Accounting Standards for Business Enterprises Advisory Committee of the Ministry of
Finance of the PRC (ึ) since September 2025.
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Ms. Wang Jing ( ˮẙ), aged 41, is our independent non-executive Director. Ms. Wang
was appointed as an independent non-executive Director in May 2025.
Ms. Wang has served as the managing director and chief legal officer at Shanghai Hehong
Jinghui Equity Investment Management Co., Ltd. (ʮ̡) since
November 2019. Prior to that, Ms. Wang served as a group senior legal consultant at Kering
(China) Enterprise Management Co., Ltd. ( කථ(ʕ਷)ʮ̡) from December
2014 to October 2019 and as an associate at Fangda Partners (הfrom
September 2007 to November 2014.
Ms. Wang obtained her bachelor’s degree in law from Peking University ( ̏ԯɽኪ)i nt h e
PRC in July 2006 and her master’s degree in law from the University of Hong Kong in
November 2007. Ms. Wang obtained Legal Professional Qualification Certificate (ᔖุ༟
ࣸfrom the Ministry of Justice of the People’s Republic of China (௅)i n
February 2009 and Fund Qualification Certificate (ࣣfrom the Asset
Management Association of China (ุ՘ึ) in March 2024.
SUPERVISORY COMMITTEE
Brief information of our Supervisors is set out below:
Name Age Position
Date of
appointment as
Supervisor
Date of joining
our Group
Principal roles and
responsibilities
Ms. Duan Ting
(ణ) /H1118/H1118/H1118/H1118/H1118
40 Supervisor and
chairperson of the
Supervisory
Committee
October 19,
2020
April 9, 2009 Supervising the
Directors and senior
management
Mr. Zhang
Denghui
(ੵ೮ሾ) /H1118/H1118/H1118
35 Supervisor October 19,
2020
December 5,
2012
Supervising the
Directors and senior
management
Ms. Zhu Y ue
(ٔ)H1118/H1118/H1118/H1118/H1118
38 Supervisor October 19,
2020
April 12,
2010
Supervising the
Directors and senior
management
Ms. Duan Ting (ణ), aged 40, is our Supervisor, chairperson of Supervisory Committee
and head of sales. Ms. Duan joined our Group in April 2009 and has served in the sales
department of our Company since then. Ms. Duan consecutively served as salesperson, senior
salesperson, sales engineer and head of sales at our Company, and was appointed as a
Supervisor and the chairperson of the Supervisory Committee in October 2020.
Ms. Duan obtained her bachelor’s degree in English from Central South University (ی
ɽኪ) in the PRC in June 2008.
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Mr. Zhang Denghui ( ੵ೮ሾ), aged 35, is our Supervisor and senior process director.
Mr. Zhang joined our Group in December 2012 and has consecutively served as warehouse
manager, warehouse and logistics director and senior process director since then. Mr. Zhang
was elected and appointed as our employee representative Supervisor in October 2020.
Mr. Zhang graduated from Wuhan University of Technology (ဏଣʈɽኪ) in the PRC
in July 2021, majoring in business enterprise administration (online program).
Ms. Zhu Yue (ٔ)aged 38, is our Supervisor and government affairs manager. Ms. Zhu
joined our Group in April 2010 and has consecutively served as sales manager, internal control
manager and government affairs manager of our Company since then. Ms. Zhu was appointed
as a Supervisor in October 2020. Ms. Zhu also serves as supervisors at various subsidiaries of
our Company, including FS Wuhan.
Ms. Zhu obtained his bachelor’s degree in English from Business School of Hubei
University of Technology ( ಳ̏ʈุɽኪਠ൱ኪ৫) (currently known as Hubei Business
College ( ಳ̏ਠ൱ኪ৫)) in the PRC in June 2010.
SENIOR MANAGEMENT
Brief information of our senior management is set out below:
Name Age Position
Date of
appointment
as senior
management
Date of joining
our Group
Principal roles and
responsibilities
Mr. Xiang Wei
(Σਃ) /H1118/H1118/H1118/H1118/H1118
44 Executive Director,
chairperson of the
Board and general
manager
April 9, 2009 April 9, 2009 Responsible for the
strategic planning,
daily operations and
management of our
Group
Mr. Zeng Di
(ಀፍ) /H1118/H1118/H1118/H1118/H1118
40 Executive Director,
deputy general
manager, financial
director and board
secretary
October 19,
2020
December 2,
2019
Responsible for the
overall financial
management of the
Group
Mr. Li Y ang
(ݱ)H1118/H1118/H1118/H1118/H1118
34 Deputy general
manager and
senior system
R&D director
October 19,
2020
July 31, 2012 Responsible for the
system optimization,
R&D and team
management
Mr. Qi Jixiang
(ᄁΛୂ) /H1118/H1118/H1118
38 Deputy general
manager and
senior product
R&D director
April 30,
2025
April 17,
2020
Responsible for the
product planning
and R&D
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Mr. Xiang Wei ( Σਃ), is our executive Director, chairperson of the Board and general
manager. See “— Executive Director” in this section for the biographical details of Mr. Xiang.
Mr. Zeng Di ( ಀፍ), is our executive Director, deputy general manager, financial director
and joint company secretary. See “— Executive Director” in this section for the biographical
details of Mr. Zeng.
Mr. Li Y ang (ݱ)aged 34, is our deputy general manager and senior system R&D
director. Mr. Li joined our Group in July 2012 and has consecutively served as head of
development, project manager, system development manager, system development director and
senior system R&D director since then. In October 2020, Mr. Li was appointed as our deputy
general manager.
Mr. Li graduated from Wuhan Railway Branch Party School (ࣧi nt h e
PRC in January 2012, majoring in computer application technology (online program).
Mr. Qi Jixiang ( ᄁΛୂ), aged 38, is our deputy general manager and senior product R&D
director. Mr. Qi joined our Group in April 2020 and has consecutively served as senior
engineer, head of product managers, manager, technology director and senior products R&D
director since then. In May 2025, Mr. Qi was appointed as our deputy general manager.
Prior to joining our Group, Mr. Qi served as an engineer at Huawei Technologies Co., Ltd.
(ʮ̡) from October 2011 to December 2019 and as an engineer at Hongfujin
Precision Industry (Wuhan) Co., Ltd. ( ᒿబᎀၚ੗ʈุ(ဏ)ʮ̡) (a subsidiary of
Foxconn Technology Group) from August 2009 to October 2011.
Mr. Qi obtained his bachelor’s degree in information management and information system
from Wuhan University of Technology (ဏଣʈɽኪ) in the PRC in June 2009.
JOINT COMPANY SECRETARIES
Mr. Zeng Di ( ಀፍ), is the joint company secretary of our Company. See “— Executive
Director” in this section for the biographical details of Mr. Zeng.
Ms. Sham Ying Man ( Ҋᅂ˖) is the joint company secretary of our Company. She is a
senior manager of company secretarial services of Tricor Services Limited, a member of Vistra
Group. She has over 25 years of experience in the corporate secretarial field. Ms. Sham has
been providing professional corporate services to Hong Kong listed companies as well as
multinational, private and offshore companies.
Ms. Sham obtained a bachelor degree of business administration from Lingnan College
(currently known as Lingnan University). She is a Chartered Secretary, a Chartered
Governance Professional and an associate of both The Hong Kong Chartered Governance
Institute and The Chartered Governance Institute in the United Kingdom, respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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BOARD COMMITTEES
Our Company has established four Board Committees in accordance with the relevant
PRC laws and regulations, the Articles and the corporate governance practice under the Listing
Rules, namely the Audit Committee, the Remuneration Committee, the Nomination Committee
and the Strategy Committee.
Audit Committee
The Audit Committee of our Company consists of three members, namely, Dr. Guo Fei,
Mr. Zhao Pan and Ms. Wang Jing. Dr. Guo Fei is the chairperson of the Audit Committee. The
primary responsibilities of the Audit Committee are to review and supervise our financial
reporting process, including:
(a) to make recommendations to the Board on the appointment, replacement and
removal of the external auditor, to consider and approve the remuneration and terms
of engagement of the external auditor, and any questions of its resignation or
dismissal;
(b) to review and monitor the external auditor’s independence and objectivity and the
effectiveness of the audit process in accordance with applicable standards. The
Audit Committee shall discuss with the external auditors the nature and scope of the
audit and reporting obligations before the audit commences;
(c) to develop and implement policy on engaging an external auditor to provide
non-audit services;
(d) to monitor internal audit system of the Company and ensure the implementation of
such systems;
(e) to facilitate communications between the internal audit department and external
auditors;
(f) to review the financial information and relevant disclosures of the Company; and
(g) to monitor the Company in respect of financial reporting system, risk management
and internal controls system.
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Remuneration Committee
The Remuneration Committee of our Company consists of three members, namely Ms.
Wang Jing, Dr. Guo Fei and Mr. Zeng Di. Ms. Wang Jing is the chairperson of the
Remuneration Committee. The primary responsibilities of the Remuneration Committee
include:
(a) to make recommendations to the Board on our Company’s remuneration policy and
structure for all Directors, Supervisors and senior management, and on the
establishment of a formal and transparent procedure for developing the
remuneration policy;
(b) to review and approve the remuneration proposals of senior management with
reference to the Board’s corporate goals and objectives;
(c) to make recommendations to the Board on the remuneration packages of the
executive Director and senior management or to determine, with delegated
responsibility, the remuneration packages of the executive Director and senior
management. The remuneration packages shall include benefits in kind, pension
rights and compensation payments (including compensation for loss or termination
of their office or appointment);
(d) to make recommendations to the Board on the remuneration of non-executive
Directors;
(e) to consider salaries paid by comparable companies, time commitment and
responsibilities and employment conditions elsewhere in our Group;
(f) to review and approve the compensation payable to the executive Director and
senior management for their loss or termination of office or appointment to ensure
that such compensation is consistent with the contractual terms and is otherwise fair
and not excessive;
(g) to review and approve the compensation arrangements relating to dismissal or
removal of the Directors for misconduct to ensure that such compensation is
consistent with the contractual terms and is otherwise fair and not excessive;
(h) to ensure that no Director or any of his associates is involved in deciding his own
remuneration; and
(i) to review and/or approve matters relating to share schemes under Chapter 17 of the
Listing Rules.
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Nomination Committee
The Nomination Committee of our Company consists of three members, namely Mr. Ran
Long, Mr. Xiang Wei and Ms. Wang Jing. Mr. Ran Long is the chairperson of the Nomination
Committee. The primary responsibilities of the Nomination Committee include:
(a) to review the structure, size and composition of the Board (including the skills,
knowledge and experience) at least annually and make recommendations on any
proposed changes to the Board to complement our Company’s corporate strategy;
(b) to identify individuals suitably qualified to become board members and select and
make recommendations to the Board on the selection of individuals nominated for
directorships;
(c) to assess the independence of the independent non-executive Directors; and
(d) to make recommendations to the Board on the appointment or re-appointment of
Directors and succession planning for Directors (in particular the chairperson of the
Board and the chief executive officer).
Strategy Committee
The Strategy Committee of our Company consists of three members, namely Mr. Xiang
Wei, Dr. Guo Fei and Mr. Ran Long. Mr. Xiang Wei is the chairperson of the Strategy
Committee. The primarily responsibilities of the Strategy Committee are to make
recommendations to our Board on the long-term development strategy and major investments
and projects of our Company.
REMUNERATION OF DIRECTORS, SENIOR MANAGEMENT AND SUPERVISORS
The aggregate amount of remuneration paid to our Directors and Supervisors (including
salaries, allowances and benefit in kind, retirement benefit schemes contributions,
discretionary bonus and share-based payment expenses) for the years ended December 31,
2022, 2023, 2024 and the nine months ended September 30, 2025 were approximately RMB7.0
million, RMB6.8 million, RMB8.8 million and RMB11.4 million, respectively. Further
information on the remuneration of each Director and Supervisor during the Track Record
Period is set out in Appendix I to this prospectus.
For each of the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the aggregate amount of salaries, allowances and benefit in kind,
retirement benefit schemes contributions, discretionary bonus and share-based compensation
payment expenses paid to the five highest-paid individuals (excluding one, two, two and two
Directors) of our Group were approximately RMB6.9 million, RMB6.2 million, RMB8.0
million and RMB6.3 million, respectively.
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During the Track Record Period, no remuneration was paid or payable by our Company
to our Directors, Supervisors or the five highest-paid individuals as an inducement to join or
upon joining our Company. During the Track Record Period, no compensation was paid or
payable by our Company to our Directors, former Directors, Supervisors, former Supervisors
or the five highest-paid individuals for the loss of any office in connection with the
management of the affairs of any subsidiary of our Company.
During the Track Record Period, none of our Directors or Supervisors has waived or
agreed to waive any remuneration or benefits in kind. Save as disclosed above, no other
payments were paid or payable by our Company or any of our subsidiaries to our Directors,
Supervisors or the five highest-paid individuals during the Track Record Period.
Under the arrangement currently in force, the aggregate amounts of remuneration payable
by our Company to our Directors and Supervisors for the year ending December 31, 2026 is
estimated to be approximately RMB7.6 million. The actual remuneration of Directors and
Supervisors in 2026 may be different from the expected remuneration.
DIRECTORS’ AND SUPERVISORS’ INTEREST AND CONFIRMATION
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not
have any interest in a business which competes or is likely to compete, directly or indirectly,
with our business, and requires disclosure under Rule 8.10 of the Listing Rules and further
confirms that he or she (i) has obtained the legal advice referred to under Rule 3.09D of the
Listing Rules on May 12, 2025, and (ii) understands his or her obligations as a director of a
listed issuer on the Stock Exchange under the Listing Rules.
Each of the independent non-executive Directors confirms (i) his/her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) that he
or she has no past or present financial or other interest in the business of the Company or its
subsidiaries or any connection with any core connected person of the Company under the
Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors that may
affect his/her independence at the time of his/her appointments.
Save as disclosed in this prospectus, none of our Directors and Supervisors (i) held any
other positions in our Company or any other major members of our Group as of the Latest
Practicable Date; (ii) had any other relationship with any Directors, Supervisors, senior
management or Controlling Shareholders as of the Latest Practicable Date; and (iii) held any
directorship in any other listed companies in the three years immediately prior to the date of
this prospectus.
Save as disclosed below, none of our Directors and Supervisors had any other matters
with respect to his/her appointment that need to be brought to the attention of our Shareholders
or any information that is required to be disclosed pursuant to Rule 13.51(2)(a) to (v) of the
Listing Rules.
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Reference is made to the disclosure under the section headed “History, Development and
Corporate Structure — Previous A Share Listing Attempt.” After our withdrawal of the A Share
Listing Application, Shenzhen Stock Exchange issued a regulatory letter (the “ Regulatory
Letter ”) to our Company and Mr. Xiang on January 10, 2025, pursuant to which, among others,
Mr. Xiang was held to breach Rule 26 of the Rules on the Review of Initial Public Offerings
and Listings of Shares () issued by the Shenzhen Stock Exchange,
that he breached the duty of good faith and trustworthiness failing to procure our Company to
establish an adequate internal control system or to ensure the accuracy and completeness of the
Company’s A share listing application documents.
Considering (i) The nature of issues identified in the Regulatory Letter. The issues
identified in the Regulatory Letter do not relate to any fraudulent conduct of Mr. Xiang. It was
not an intentional breach of the duty of good faith and trustworthiness for the issues identified
in the Regulatory Letter, whose nature does not involve any suggestion of bad faiths; (ii) Mr.
Xiang Wei has the character, experience to act as a Director. He is an industry veteran with
nearly twenty years of experience in the networking solution industry and profound market
insights and strategic foresights. Under the guide of Mr. Xiang and the management he
established, the Company has been focusing on global market opportunities since its inception
and has become the world’s second largest online DTC networking solution provider in terms
of revenue in 2024 with a 6.9% market share as advised by Frost & Sullivan; (iii) Mr. Xiang
actively engaged in the management of the Company as the founder and one of the executive
directors. The Company had established its internal control system where the responsible
employees were assigned with appropriate power to deal with the matters of the Company. The
issues identified in the Regulatory Letter were not specifically submitted for Board’s or Mr.
Xiang’s approval back then. Mr. Xiang was named in the Regulatory Letter mainly because of
his seniority in the Group and supervising responsibility, rather than his personal dishonesty.
However, Mr. Xiang had been taking proactive action in enhancing the Group’s internal control
system, and had been cooperative throughout the process of the previous A Share Listing
Application, the onsite supervision process of the Shenzhen Stock Exchange and the current
Listing process; (iv) The Regulatory Letter did not make any findings of fact suggesting acts
of dishonesty or actions in bad faith by Mr. Xiang himself, and those findings of fact did not
raise any concern on Mr. Xiang’s integrity, character or ability to discharge his duties as a
director including duties to exercise of skill, care and diligence; (v) As advised by the
Company’s PRC Legal Advisor, the Regulatory Letter does not constitute any administrative
penalty in the PRC, and does not affect the qualification of Mr. Xiang as a director or refrain
Mr. Xiang from acting as a director under the PRC laws; and (vi) Save for being addressed in
the Regulatory Letter, Mr. Xiang was not involved in any administrative penalty, convicted,
charged, summoned, penalised or named in any regulatory letter over any offences, violations
or breach of laws or regulations with respect to the A Share Listing Application, our Board is
of the view that the Regulatory Letter does not impact the suitability of Mr. Xiang to act as a
Director under Rules 3.08 and 3.09 of the Listing Rules. Based on the independent due
diligence work performed by the Joint Sponsors and the information and representation given
to the Joint Sponsors, nothing has come to the Joint Sponsors’ attention that would reasonably
cause them to cast doubt on our Board’s views above in any material respect.
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Mr. Zhao Pan, our non-executive Director, was a director at Guangdong Huada Internet
Co., Ltd. (ʮ̡)( “ Huada Internet ”) that had been declared to be
bankrupt by a PRC court on September 30, 2022. He confirmed that, to the best of his
knowledge and belief, there was no wrongful act on his part leading to the declaration of
bankruptcy of Huada Internet and as of the Latest Practicable Date, no claims had been made
against him and he was not aware of any threatened or potential claims made against him.
MANAGEMENT PRESENCE
We have applied for, and the Stock Exchange has granted, a waiver from compliance with
Rule 8.12 of the Listing Rules. For further details, see “Waivers from Strict Compliance with
the Listing Rules” in this prospectus.
BOARD DIVERSITY POLICY
In order to enhance the effectiveness of our Board and to maintain high standard of
corporate governance, the Board has adopted a board diversity policy (the “ Board Diversity
Policy ”). The Board Diversity Policy sets out the criteria in selecting candidates to our Board,
including but not limited to gender, age, cultural and educational background, ethnicity,
professional experience, skills, knowledge and length of service. The ultimate decision will be
based on merit and contribution that the selected candidates will bring to the Board.
Our Board currently consists of six male members and one female member, with two
executive Director, two non-executive Directors and three independent non-executive
Directors, of ages ranging from 36 to 52. We consider that our Board has a balanced mix of
skill-set, experience, expertise, and diversity which enhances decision-making capability and
the overall effectiveness of the Board in achieving sustainable business operation and
enhancing shareholder value. In addition, our Supervisory Committee currently consists of two
female members and one male member.
The Nomination Committee is responsible for reviewing the structure and diversity of the
Board and selecting individuals to be nominated as Directors. After the Listing, the Nomination
Committee will monitor and evaluate the implementation of the Board Diversity Policy from
time to time to ensure its continued effectiveness, and when necessary, make any revisions that
may be required and recommend any such revisions to our Board for consideration and
approval. The Nomination Committee will also include in successive annual reports a summary
of the Board Diversity Policy, including any measurable objectives set for implementing the
Board Diversity Policy and the progress on achieving these objectives.
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
We are committed to achieving high standards of corporate governance which are crucial
to our development and safeguard the interests of our Shareholders. To accomplish this, save
for the deviation disclosed below, we expect to comply with the corporate governance
requirements under the Corporate Governance Code and Corporate Governance Report as set
out in Appendix C1 to the Listing Rules after the Listing.
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Pursuant to code provision C.2.1 of the Corporate Governance Code, companies listed on
the Stock Exchange are expected to comply with, but may choose to deviate from the
requirement that the roles of chairperson of the board and chief executive should be separate
and should not be performed by the same individual. We do not have a separate chairperson of
the Board and chief executive, and Mr. Xiang currently acts as both our chairperson of the
Board and our general manager. Mr. Xiang is our founder and has played an important
leadership role in our Company’s development. The Board believes that vesting the roles of
both chairperson of the Board and general manager in the same person has the benefit of
ensuring consistent leadership within the Group and enables more effective and efficient
overall strategic planning for the Group. The Board considers that the balance of power and
authority for the present arrangement will not be impaired, and this structure will enable our
Company to make and implement decisions promptly and effectively. For further information
relating to our Company’s corporate governance measures, please see “Relationship with the
Controlling Shareholders — Corporate Governance” in this prospectus.
COMPLIANCE ADVISOR
We have appointed Rainbow Capital (HK) Limited as our compliance advisor pursuant to
Rules 3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, we must consult
with and, if necessary, seek advice from our compliance advisor on a timely basis in the
following circumstances:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is
contemplated including but not limited to share issues and share repurchases;
(iii) where our Company proposes to use the proceeds of the Global Offering in a manner
different from that detailed in this prospectus, or where the business activities,
developments or results of our Group deviate from any forecast, estimate or other
information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry of our Company regarding unusual
movements in the price or trading volume of its listed securities or any other matters
under Rule 13.10 of the Listing Rules.
The term of the appointment of our compliance advisor shall commence on the Listing
Date and end on the date when we distribute our annual report in respect of our financial results
for the first full financial year commencing after the Listing Date, and such appointment may
be subject to extension by mutual agreement.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 300 –


--- page 312 ---
SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, immediately following the completion of the Global
Offering, the following persons are expected to have an interest and/or short positions in our
Shares or underlying Shares which would be required 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, directly
or indirectly, be interested in 10% or more of the nominal value of any class of share capital
carrying the rights to vote in all circumstances at general meetings of our Company:
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-Allotment
Option is not exercised) (1)
Name of Substantial
Shareholder Type of Shares Nature of Interest Number of Shares
Approximate
percentage in the
total registered
share capital of
the Company
Number
of Shares
Approximate
percentage of
shareholding in
the relevant type
of Shares
Approximate
percentage in the
total registered
share capital of
the Company
Mr. Xiang (2)(3)(4) /H1118Unlisted Shares Beneficial owner 203,928,528 56.65% – – –
Interest in
controlled
corporation
16,231,373 4.51% – – –
H Shares Beneficial owner – – 203,928,528 50.98% 50.98%
Interest in
controlled
corporation
– – 16,231,373 4.06% 4.06%
Yuxuan
Prudence
(2)/H1118/H1118
Unlisted Shares Beneficial owner 11,489,819 3.19% – – –
H Shares – – 11,489,819 2.87% 2.87%
Yuxuan
Progress (3) /H1118/H1118
Unlisted Shares Beneficial owner 2,650,548 0.74% – – –
H Shares – – 2,650,548 0.66% 0.66%
Yuxuan
Growth (4)/H1118/H1118/H1118
Unlisted Shares Beneficial owner 2,091,006 0.58% – – –
H Shares – – 2,091,006 0.52% 0.52%
Mr. Y ang
Jie(5) /H1118/H1118/H1118/H1118/H1118
Unlisted Shares Beneficial owner 15,850,897 4.40% – – –
Interest in
controlled
corporation
39,405,738 10.95% – – –
H Shares Beneficial owner – – 15,850,897 3.96% 3.96%
Interest in
controlled
corporation
– – 39,405,738 9.85% 9.85%
Fupeng
No. 3
(5) /H1118/H1118/H1118/H1118
Unlisted Shares Beneficial owner 39,405,738 10.95% – – –
H Shares – – 39,405,738 9.85% 9.85%
Fupeng
No. 8 (6) /H1118/H1118/H1118/H1118
Unlisted Shares Beneficial owner 17,514,646 4.87% – – –
H Shares – – 17,514,646 4.38% 4.38%
Mr. Lin
Shiyi (6) ....
Unlisted Shares Interest in
controlled
corporation
21,406,739 5.95% – – –
H Shares – – 21,406,739 5.35% 5.35%
SUBSTANTIAL SHAREHOLDERS
– 301 –


--- page 313 ---
Notes:
(1) The calculation is based on the assumption that immediately following the completion of the Global Offering,
there will be a total number of 400,000,000 H Shares (including 360,000,000 H Shares converted from
Unlisted Shares without taking into consideration the exercise of Over-allotment Option) in issue.
(2) The general partner of Y uxuan Prudence is Mr. Xiang. As such, Mr. Xiang is deemed to be interested in the
Shares held by Y uxuan Prudence.
(3) The general partner of Y uxuan Progress is Mr. Xiang. As such, Mr. Xiang is deemed to be interested in the
Shares held by Y uxuan Progress.
(4) The general partner of Y uxuan Growth is Mr. Xiang. As such, Mr. Xiang is deemed to be interested in the
Shares held by Y uxuan Growth.
(5) The general partner of Gongqingcheng Fupeng Hongxiang No. 3 V enture Capital Partnership (Limited
Partnership) (၅ᘄ҃ୂ䂋໮௴ุҳ༟ΥྫΆุ(Υྫ), “ Fupeng No. 3 ”) is Shenzhen Jiwang
Enterprise Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(Υྫ), “Jiwang
Enterprise ”). Mr. Y ang Jie holds 99.92% partnership interests in Jiwang Enterprise. The general partner of
Jiwang Enterprise is Shenzhen Fupeng Asset Management Co., Ltd. (ʮ̡,“ Fupeng
Asset ”) which is in turn wholly owned by Mr. Chen Baogan ( ௓ᘒ଑). As such, each of Mr. Y ang Jie, Jiwang
Enterprise, Fupeng Asset and Mr. Chen Baogan is deemed to be interested in the Shares held by Fupeng No. 3.
(6) The general partner of Ningbo Meishan Bonded Port Area Fupeng Hongxiang No. 8 Equity Investment
Management Centre (Limited Partnership) (ᛆҳ༟၍ଣʕː(Υྫ),
“Fupeng No. 8 ”) is Fupeng Asset. The largest limited partner of Fupeng No. 8 is Mr. Lin Shiyi (ۯwho
holds approximately 88.87% partnership interests therein. As such, each of Fupeng Asset, Mr. Chen Baogan
and Mr. Lin Shiyi is deemed to be interested in the Shares held by Fupeng No. 8. The general partner of
Xiamen Taiya Phase I V enture Capital Partnership (Limited Partnership) (इԭɓಂ௴ุҳ༟ΥྫΆุ(Ϟ
Υྫ)) (“ Taiya Investment ”) is Xiamen Taiya Dingfu Investment Management Co., Ltd. (इԭཻబҳ
ʮ̡)( “ Taiya Dingfu ”) which is owned as to 50% by Mr. Lin Shiyi. Therefore, Mr. Lin Shiyi is
deemed to be interested in Shares held by Taiya Investment.
Save as disclosed above and the section headed “Statutory and General Information — 4.
Disclosure of Interest — A. Substantial Shareholders” in Appendix V to this prospectus, our
Directors are not aware of any other person who will have any interest and/or short positions
in our Shares or underlying Shares which would be required 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,
directly or indirectly, be interested in 10% or more of the nominal value of any class of share
capital carrying the rights to vote in all circumstances at general meetings of our Company or
any other member of our Group. Our Directors are not aware of any arrangement which may
at a subsequent date result in a change of control of our Company.
SUBSTANTIAL SHAREHOLDERS
– 302 –


--- page 314 ---
OUR SHARE CAPITAL
Immediately before the Global Offering
As of the Latest Practicable Date, the registered share capital of our Company was
RMB360,000,000, consisting of 360,000,000 Shares, with a nominal value of RMB1.00 each.
Upon the Completion of the Global Offering
Immediately after the Global Offering and Conversion of Unlisted Shares into H Shares
(assuming the Over-allotment Option is not exercised), the share capital of our Company will
be as follows:
Description of Shares Number of Shares
Approximate %
of the enlarged
issued share
capital after the
Global Offering
Unlisted Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
H Shares to be converted from Unlisted Shares /H1118/H1118/H1118360,000,000 90.00%
H Shares to be issued pursuant to the
Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,000,000 10.00%
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/H1118400,000,000 100%
Assuming the Over-allotment Option is exercised in full, the share capital of our
Company immediately following the Global Offering and Conversion of Unlisted Shares into
H Shares will be as follows:
Description of Shares Number of Shares
Approximate %
of the enlarged
issued share
capital after the
Global Offering
Unlisted Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
H Shares to be converted from Unlisted Shares /H1118/H1118/H1118360,000,000 88.67%
H Shares to be issued pursuant to the
Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,000,000 11.33%
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/H1118406,000,000 100%
SHARE CAPITAL
– 303 –


--- page 315 ---
OUR SHARES
Upon completion of the Global Offering, all the 360,000,000 Shares held by all of our
existing Shareholders will be converted into H Shares, our Shares will consist of H Shares only.
Our H Shares may only be subscribed for and traded in Hong Kong dollars. Apart from
certain qualified domestic institutional investors in the PRC, through Shanghai-Hong Kong
Stock Connect, or through Shenzhen-Hong Kong Stock Connect or other persons who are
entitled to hold our H Shares pursuant to relevant PRC laws and regulations or upon approvals
of any competent authorities, our H Shares generally cannot be subscribed for by or traded
between legal or natural persons of the PRC.
We shall pay all dividends in respect of H Shares in Hong Kong dollars. See “Summary
of Articles of Association of the Company” in Appendix IV to this prospectus for details of the
circumstances under which general meetings of our Company are required. In addition to cash,
dividends may be distributed in the form of Shares. For holders of H Shares, dividends in the
form of Shares will be distributed in the form of additional H Shares.
The Offer Shares will rank pari passu in all respects with all Shares currently in issue or
to be issued as mentioned in this prospectus and will qualify and rank equally for all dividends
or other distributions declared, made or paid on the Shares on a record date which falls after
the date of this prospectus.
CONVERSION OF UNLISTED SHARES INTO H SHARES
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the
Hong Kong Stock Exchange, such conversion, listing and trading will need to be filed with the
relevant PRC regulatory authorities, including the CSRC, and the approval of the Hong Kong
Stock Exchange.
Filing with the CSRC for Full Circulation
In accordance with the Overseas Listing Trial Measures and related guidelines, H-share
listed companies which apply for the conversion of unlisted shares into H shares for listing and
circulation on the Hong Kong Stock Exchange shall file with the CSRC by filing materials on
key compliance issues. An unlisted domestic joint stock company may apply for “full
circulation” when applying for an overseas initial public offering.
We applied for a “full circulation” filing when filing with the CSRC for an overseas
listing, and submitted the filing reports, authorization documents of the shareholders of
Unlisted Shares which applied for the H-share “full circulation”, undertaking on the
compliance of share acquisition and other documents in accordance with the requirements of
the CSRC.
SHARE CAPITAL
– 304 –


--- page 316 ---
We have received the filing notice from the CSRC dated January 23, 2026 in relation to
the overseas listing and “full circulation”, pursuant to which certain Shareholders (“ Full
Circulation Participating Shareholders ”) could convert 360,000,000 Unlisted Shares into H
Shares on a one-for-one basis upon the completion of the Global Offering (“ Full Circulation
Application of the Company ”).
Listing Approval by the Hong Kong Stock Exchange
We have applied to the Listing Committee of the Hong Kong Stock Exchange for the
granting of listing of, and permission to deal in, our H Shares to be issued pursuant to the
Global Offering, and the H Shares to be converted from 360,000,000 Unlisted Shares on the
Hong Kong Stock Exchange, which is subject to the approval by the Hong Kong Stock
Exchange.
We will perform the following procedures for the Conversion of Unlisted Shares into H
Shares after receiving the approval of the Hong Kong Stock Exchange: (1) giving instructions
to our H Share Registrar regarding relevant share certificates of the converted H Shares; and
(2) enabling the converted H Shares to be accepted as eligible securities by HKSCC for
deposit, clearance and settlement in the CCASS.
Domestic Procedures
The Full Circulation Participating Shareholders may only deal the Shares upon
completion of the below arrangement procedures for the registration, deposit and transaction
settlement in relation to the conversion and listing:
i. We will appoint China Securities Depository and Clearing Corporation Limited
(“CSDC ”) as the nominal holder to deposit the relevant securities at CSDC (Hong
Kong), which will then deposit the securities at HKSCC in its own name. CSDC, as
the nominal holder of the Full Circulation Participating Shareholders, shall handle
all custody, maintenance of detailed records, cross-border settlement and corporate
actions, etc. relating to the converted H Shares for the Full Circulation Participating
Shareholders;
ii. We will engage a domestic securities company (“ Domestic Securities Company ”)
to provide services such as sending orders for trading of the converted H Shares and
receipt of transaction returns. The Domestic Securities Company will engage a Hong
Kong securities company (“ Hong Kong Securities Company ”) for settlement of
share transactions. We will make an application to CSDC, Shenzhen Branch for the
maintenance of a detailed record of the initial holding of the converted H Shares
held by our Shareholders. Meanwhile, we will submit applications for a domestic
transaction commission code and abbreviation, which shall be confirmed by CSDC,
Shenzhen Branch as authorized by Shenzhen Stock Exchange;
SHARE CAPITAL
– 305 –


--- page 317 ---
iii. The Shenzhen Stock Exchange shall authorize Shenzhen Securities Communication
Co., Ltd. to provide services relating to transmission of trading orders and
transaction returns in respect of the converted H Shares between the Domestic
Securities Company and the Hong Kong Securities Company, and the real-time
market forwarding services of the H Shares;
iv. According to the Notice of SAFE on Issues Concerning the Foreign Exchange
Administration of Overseas Listing (ྤ̮ɪ̹̮ි၍ଣϞᗫ
), the Full Circulation Participating Shareholders shall complete the
overseas shareholding registration with the local foreign exchange administration
bureau before the Shares are sold, and after the overseas shareholding registration,
open a specified bank account for the holding of overseas shares by domestic
investors at a domestic bank with relevant qualifications and open a fund account for
the H Share “Full circulation” at the Domestic Securities Company. The Domestic
Securities Company shall open a securities trading account for the H Share “Full
circulation” at the Hong Kong Securities Company; and
v. The Full Circulation Participating Shareholders shall submit trading orders of the
converted H Shares through the Domestic Securities Company. Trading orders of the
Full Circulation Participating Shareholders for the relevant Shares will be submitted
to the Stock Exchange through the securities trading account opened by the
Domestic Securities Company at the Hong Kong Securities Company. Upon
completion of the transaction, settlements between each of the Hong Kong
Securities Company and CSDC (Hong Kong), CSDC (Hong Kong) and CSDC,
CSDC and the Domestic Securities Company, and the Domestic Securities Company
and the Full Circulation Participating Shareholders, will all be conducted separately.
LOCK-UP PERIODS
In accordance with Article 160 of the PRC Company Law, the shares issued prior to any
public offering of shares by a company cannot be transferred within one year from the date on
which such publicly offered shares are listed and traded on the relevant stock exchange. As
such, the Shares issued by the Company prior to the Global Offering will be subject to such
statutory restriction on transfer within a period of one year from the Listing Date.
The Company will work with the Domestic Securities Company to be engaged by the
Company to restrict the trading of the H Shares converted from Unlisted Shares technically
within one year after the Listing.
Our Directors, Supervisors and members of senior management shall declare their
shareholdings in the Company and any changes in their shareholdings. Shares transferred by
our Directors, Supervisors and members of the senior management each year during their term
of office shall not exceed 25% of their total respective shareholdings in the Company. The
Shares that the aforementioned persons held in the Company cannot be transferred within one
SHARE CAPITAL
– 306 –


--- page 318 ---
year from the date on which the shares are listed and traded, nor within half a year after they
leave their positions in the Company. The Articles of Association may contain other restrictions
on the transfer of our Shares held by our Directors, Supervisors and members of senior
management.
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines for the “Full Circulation” Program for Domestic Unlisted
Shares of H-share Listed Companies (H΅͡ሗ“ஷ”ˏ)
announced by the CSRC, the domestic shareholders of unlisted shares shall handle share
transfer registration in accordance with the relevant business rules of CSDC. And H-share
companies should submit relevant status reports to the CSRC within 15 days after the shares
involved in the application completing the transfer registration in CSDC.
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Pursuant to the PRC Company Law and the terms of the Articles of Association, our
Company may from time to time by special resolution of shareholders (i) increase its capital
or decrease its capital or capital redemption reserve; (ii) consolidate our shares; (iii) divide its
shares into several classes; (iv) subdivide our shares; and (v) cancel any shares which have not
been taken up. See “Appendix IV — Summary of Articles of Association of the Company.”
SHAREHOLDERS’ GENERAL MEETINGS
For details of circumstances under which our Shareholders’ general meeting and
Shareholders’ class meeting are required, see “Appendix IV — Summary of Articles of
Association of the Company — General Meeting.”
SHARE CAPITAL
– 307 –


--- page 319 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone 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 approximately US$90.22
million (or approximately HK$704.02 million, calculated based on an exchange rate of
US$1.00 to HK$7.8041) and exclusive of brokerage fee, the SFC transaction levy, the AFRC
transaction levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Based on the Offer Price of HK$41.60 per Offer Share, being the high-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 16,923,000. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
42.31% 4.23% 36.79% 4.17%
Based on the Offer Price of HK$38.40 per Offer Share, being the mid-point of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 18,333,300. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
45.83% 4.58% 39.86% 4.52%
Based on the Offer Price of HK$35.20 per Offer Share, being the low-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 20,000,000. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
CORNERSTONE INVESTORS
– 308 –


--- page 320 ---
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
Approximate %
of the Offer Shares
Approximate %
of the total issued
share capital
50.00% 5.00% 43.48% 4.93%
We believe that the Cornerstone Placing demonstrates our Cornerstone Investors’
confidence in our Company and our business prospect, and that leveraging on the Cornerstone
Investors’ investment or industry experience, the Cornerstone Placing will help to raise the
profile of our Company. Our Company became acquainted with each of the Cornerstone
Investors in its ordinary course of operation through the Group’s business network or through
introduction by the Company’s Overall Coordinators.
The Cornerstone Placing will form part of the International Offering, and, save as
otherwise obtained consent from the Stock Exchange, the Cornerstone Investors and their
respective close associates will not subscribe for any Offer Shares under the Global Offering
(other than pursuant to the Cornerstone Investment Agreements). The Offer Shares to be
subscribed by the Cornerstone Investors will rank pari passu in all respects with the fully paid
H Shares in issue following the Global Offering of the Company and will be counted towards
the public float of our Company under Rule 19A.13A of the Listing Rules. Immediately
following the completion of the Global Offering, the Cornerstone Investors or their close
associates will not, by virtue of their cornerstone investments, have any Board representation
in our Company; and none of the Cornerstone Investors and their close associates will become
a substantial Shareholder of our Company. Other than a guaranteed allocation of the relevant
Offer Shares at the final Offer Price, the Cornerstone Investors do not have any preferential
rights under each of their respective Cornerstone Investment Agreements, as compared with
other public Shareholders. 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.
To the best knowledge of the Company, among the Cornerstone Investors, Aether and
SCGC Capital are close associates of our existing Shareholders. 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 14 of Chapter 4.15
of the Guide for New Listing Applicants to permit H Shares in the International Offering to be
placed to such Cornerstone Investors. For further details, see “Waivers and Exemption from
Strict Compliance with the Listing Rules and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance” in this prospectus.
CORNERSTONE INVESTORS
– 309 –


--- page 321 ---
Save as disclosed in this section, to the best knowledge of our Company, each of the
Cornerstone Investors is (i) not accustomed to take instructions from our Company or any of
our Directors, Supervisors, chief executive, our Controlling Shareholders, substantial
Shareholders or existing Shareholders or any of its subsidiaries or their respective close
associates in relation to the acquisition, disposal, voting or other disposition of the Shares
registered in their name or otherwise held by them; (ii) not financed by our Company or any
of our Directors, Supervisors, chief executive of our Company, our Controlling Shareholders,
substantial Shareholders, existing Shareholders or any of its subsidiaries or their respective
close associates; and (iii) independent of the other Cornerstone Investors, our Group, our
connected persons and their respective associates, and is not an existing Shareholder or a close
associate of our Group.
To the best knowledge of the Company and Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as
of the date of this prospectus, certain 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 are uncertain and will be subject to the final investment decisions of such investors
and the terms and conditions of the Global Offering.
Save as otherwise disclosed, to the best knowledge of our Company and as confirmed by
each of the Cornerstone Investors, (i) each of the Cornerstone Investors is independent from
each other and make independent investment decisions; (ii) their subscription under the
Cornerstone Placing would be financed by its own internal financial resources or the assets
managed for its investors (in the case of Cornerstone Investors which are funds or investment
managers) and it has sufficient funds to settle its respective investment under the Cornerstone
Placing; (iii) all necessary approvals have been obtained with respect to the Cornerstone
Placing and no specific approval from any stock exchange (if relevant) is required for the
relevant Cornerstone Placing and (iv) each of the Cornerstone Investors and their respective
ultimate beneficial owners is an Independent Third Party.
The Cornerstone Investors have agreed to fully pay for the relevant Offer Shares that they
have subscribed before dealings in the Company’s H Shares commence on the Stock Exchange.
Some of the Cornerstone Investors have agreed that our Company and Overall Coordinators in
their sole discretion may defer the delivery of all or part of the Offer Shares such Cornerstone
Investors will subscribe to on a date later than the Listing Date. Where delayed delivery takes
place, each of such Cornerstone Investors that may be affected by such delayed delivery has
agreed that it shall nevertheless fully pay for the relevant Offer Shares before the Listing.
The total number of Offer Shares to be subscribed by the Cornerstone Investors may be
affected by reallocation of the Offer Shares between the International Offering and the Hong
Kong Public Offering as described in the paragraph headed “Structure of the Global Offering
CORNERSTONE INVESTORS
– 310 –


--- page 322 ---
— The Hong Kong Public Offering — Reallocation” in this prospectus. The number of Offer
Shares to be acquired by each Cornerstone Investor may be reduced on a pro rata basis in
accordance with the terms of the Cornerstone Investment Agreement to satisfy the short fall,
after taking into account the requirements under Practice Note 18 and Appendix F1 to the
Listing Rules as well as the discretion of the Overall Coordinators (for themselves and on
behalf of the International Underwriters) to exercise the Over-allotment Option. Further,
certain Cornerstone Investors have agreed that in the event (1) that the requirements under Rule
8.08(3) of the Listing Rules, which stipulates that no more than 50% of the Shares in public
hands can be beneficially owned by the three largest public shareholders of the Company, or
(2) that the minimum allocation to investors in the placing tranche (other than Cornerstone
Investors) under paragraph 3.2 of Practice Note 18 to the Listing Rules, may not be complied
with on the Listing Date, the number of the H Shares to be subscribed for by the Cornerstone
Investors may be adjusted to ensure compliance with such rules. Details of the actual number
of Offer Shares to be allocated to the Cornerstone Investors will be disclosed in the allotment
results announcement of our Company to be published on or around March 20, 2026.
THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Assuming an Offer Price of HK$35.20 per H Share
(being the low-end of the Offer Price range)
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Cornerstone Investor
Subscription
Amount (1)
Number of Offer
Shares (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
(USD in millions)
Hao Fund /H1118/H1118/H1118/H1118/H1118/H111820.00 4,434,100 11.09% 1.11% 9.64% 1.09%
Great Holding /H1118/H1118/H1118/H1118 14.47 3,207,300 8.02% 0.80% 6.97% 0.79%
WT Asset
Management /H1118/H1118/H1118/H1118 10.00 2,217,000 5.54% 0.55% 4.82% 0.55%
Caitong SEIII /H1118/H1118/H1118/H1118 9.61 2,130,600 5.33% 0.53% 4.63% 0.52%
Intewise Ultimate
Clients and CICC
FT (in connection
with the Intewise
OTC Swaps) /H1118/H1118/H1118 7.18 1,590,900 3.98% 0.40% 3.46% 0.39%
Foresight /H1118/H1118/H1118/H1118/H1118/H11186.41 1,420,400 3.55% 0.36% 3.09% 0.35%
SCGC Capital /H1118/H1118/H1118/H1118 6.41 1,420,400 3.55% 0.36% 3.09% 0.35%
Aether /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.00 1,330,200 3.33% 0.33% 2.89% 0.33%
GF Fund HK /H1118/H1118/H1118/H1118 5.00 1,108,500 2.77% 0.28% 2.41% 0.27%
CORNERSTONE INVESTORS
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Assuming an Offer Price of HK$35.20 per H Share
(being the low-end of the Offer Price range)
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Cornerstone Investor
Subscription
Amount (1)
Number of Offer
Shares (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
(USD in millions)
Kaifeng Ultimate
Clients and CICC
FT (in connection
with the Kaifeng
OTC Swaps) /H1118/H1118/H1118/H1118 3.84 852,100 2.13% 0.21% 1.85% 0.21%
Wider Huge /H1118/H1118/H1118/H1118/H11181.30 288,500 0.72% 0.07% 0.63% 0.07%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890.22 20,000,000 50.00% 5.00% 43.48% 4.93%
Assuming an Offer Price of HK$38.40 per H Share
(being the mid-point of the Offer Price range)
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Cornerstone Investor
Subscription
Amount (1)
Number of Offer
Shares (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
(USD in millions)
Hao Fund /H1118/H1118/H1118/H1118/H1118/H111820.00 4,064,600 10.16% 1.02% 8.84% 1.00%
Great Holding /H1118/H1118/H1118/H1118 14.47 2,940,100 7.35% 0.74% 6.39% 0.72%
WT Asset
Management /H1118/H1118/H1118/H1118 10.00 2,032,300 5.08% 0.51% 4.42% 0.50%
Caitong SEIII /H1118/H1118/H1118/H1118 9.61 1,953,100 4.88% 0.49% 4.25% 0.48%
Intewise Ultimate
Clients and CICC
FT (in connection
with the Intewise
OTC Swaps) /H1118/H1118/H1118 7.18 1,458,300 3.65% 0.36% 3.17% 0.36%
Foresight /H1118/H1118/H1118/H1118/H1118/H11186.41 1,302,000 3.26% 0.33% 2.83% 0.32%
SCGC Capital /H1118/H1118/H1118/H1118 6.41 1,302,000 3.26% 0.33% 2.83% 0.32%
Aether /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.00 1,219,300 3.05% 0.30% 2.65% 0.30%
GF Fund HK /H1118/H1118/H1118/H1118 5.00 1,016,100 2.54% 0.25% 2.21% 0.25%
Kaifeng Ultimate
Clients and CICC
FT (in connection
with the Kaifeng
OTC Swaps) /H1118/H1118/H1118 3.84 781,200 1.95% 0.20% 1.70% 0.19%
Wider Huge /H1118/H1118/H1118/H1118/H11181.30 264,400 0.66% 0.07% 0.57% 0.07%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890.22 18,333,300 45.83% 4.58% 39.86% 4.52%
CORNERSTONE INVESTORS
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Assuming an Offer Price of HK$41.60 per H Share
(being the high-end of the Offer Price range)
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Cornerstone Investor
Subscription
Amount (1)
Number of Offer
Shares (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
(USD in millions)
Hao Fund /H1118/H1118/H1118/H1118/H1118/H111820.00 3,751,900 9.38% 0.94% 8.16% 0.92%
Great Holding /H1118/H1118/H1118/H1118 14.47 2,713,900 6.78% 0.68% 5.90% 0.67%
WT Asset
Management /H1118/H1118/H1118/H1118 10.00 1,875,900 4.69% 0.47% 4.08% 0.46%
Caitong SEIII /H1118/H1118/H1118/H1118 9.61 1,802,800 4.51% 0.45% 3.92% 0.44%
Intewise Ultimate
Clients and CICC
FT (in connection
with the Intewise
OTC Swaps) /H1118/H1118/H1118 7.18 1,346,100 3.37% 0.34% 2.93% 0.33%
Foresight /H1118/H1118/H1118/H1118/H1118/H11186.41 1,201,900 3.00% 0.30% 2.61% 0.30%
SCGC Capital /H1118/H1118/H1118/H1118 6.41 1,201,900 3.00% 0.30% 2.61% 0.30%
Aether /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.00 1,125,500 2.81% 0.28% 2.45% 0.28%
GF Fund HK /H1118/H1118/H1118/H1118 5.00 937,900 2.34% 0.23% 2.04% 0.23%
Kaifeng Ultimate
Clients and CICC
FT (in connection
with the Kaifeng
OTC Swaps) /H1118/H1118/H1118 3.84 721,100 1.80% 0.18% 1.57% 0.18%
Wider Huge /H1118/H1118/H1118/H1118/H11181.30 244,100 0.61% 0.06% 0.53% 0.06%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890.22 16,923,000 42.31% 4.23% 36.79% 4.17%
Notes:
(1) Calculated and to be converted to Hong Kong dollars based on the exchange rate as disclosed in this
prospectus, and exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and
the AFRC transaction levy.
(2) Subject to rounding down to the nearest whole board lot of 100 Offer Shares.
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
CORNERSTONE INVESTORS
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Hao Fund
Hao Great China Focus Fund (“ Hao Fund ”) is a fund established in the Cayman Islands
and managed by Hao Capital Management Limited (“ Hao Capital ”) and Hao Advisors
Management Limited (“ Hao Advisors ”). Hao Capital was incorporated and registered with the
Cayman Island Monetary Authority in April 2014 and serves as Hao Fund’s investment
manager. Hao Advisors was incorporated in October 2014 in Hong Kong and holds a Type 9
(Asset Management) license from the Hong Kong Securities and Futures Commission and
serves as Hao Fund’s investment advisor. Hao Advisors manages assets on behalf of a global
institutional investor base covering single and multi-family offices to insurance companies.
Hao Capital holds all management shares in Hao Fund. Hao Capital and Hao Advisors are
ultimately wholly owned by Mr. Zhang Hao, an Independent Third Party. No single investor
holds 30% or more interests in Hao Fund.
Great Holding
Great Holding Development Limited (“ Great Holding ”) is a company incorporated in the
British Virgin Islands principally engaged in the business of investment, which is wholly
owned by Mr. Y uan Y onggang (࡝its sole director and ultimate beneficial owner. Each
of Great Holding and Mr. Y uan Y onggang is an Independent Third Party.
WT Asset Management
WT Asset Management Limited (“ WT Asset Management ”) is a company incorporated
in Hong Kong with limited liability and licensed by the SFC to carry on type 9 (asset
management) regulated activity. WT Asset Management is beneficially owned as to 100% by
Mr. Tongshu Wang (ࣣwho is an Independent Third Party. WT Asset Management has
agreed to procure certain investors, namely WT China Fund Limited, WT China Focus Fund,
WT Growth Fund and a segregated management account (investment portfolio professionally
managed by WT Asset Management (as investment manager) where the investor owns the
underlying investments directly) (collectively, the “ Funds ”), that WT Asset Management has
discretionary investment management power over, to subscribe for such number of the Offer
Shares. The Funds are managed by WT Asset Management as investment manager. The Funds
pursue to achieve absolute return and long-term capital appreciation by investing primarily in
the listed securities of companies which have great exposure or material impact by the PRC.
Investors of the Funds include but are not limited to pension funds, fund of funds, family
offices and other sophisticated institutional investors. Save for Mr. Tongshu Wang (ࣣ)
who hold over 30% interests in WT Growth Fund and WT China Focus Fund, and the single
ultimate beneficial owner of the segregated management account which is a pension fund based
in North America respectively, no other single ultimate beneficial owner holds 30% or more
interests in the Funds. Each of the Funds is an Independent Third Party. As of January 31, 2026,
the total AUM of the Funds is approximately US$5.77 billion.
CORNERSTONE INVESTORS
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Caitong SEIII
Caitong Funds SPC — Strategic Equity Fund III SP (“ Caitong SEIII ”) is an exempted
company incorporated with limited liability and registered as a segregated portfolio company
under the Companies Act in the Cayman Islands. There is no ultimate beneficial owner holding
30% or more of the shares in Caitong SEIII. Caitong SEIII is managed by Caitong International
Asset Management Co., Limited (“ Caitong Asset Management ”) on a discretionary basis.
Caitong Asset Management is licenced by the SFC to conduct Type 1 (dealing in securities),
Type 4 (advising on securities) and Type 9 (asset management) regulated activities in Hong
Kong. Caitong Asset Management is a wholly-owned subsidiary of Caitong Securities (Hong
Kong) Co., Limited, which is in turn wholly owned by Caitong Securities Co., Ltd. ( ৌஷᗇՎ
ʮ̡), a securities company listed on the Shanghai Stock Exchange (stock code:
601108).
Intewise Ultimate Clients and CICC FT (in connection with the Intewise OTC Swaps)
CICC Financial Trading Limited (“ CICC FT ”) and China International Capital
Corporation Limited (“ CICC ”) will enter into a series of cross border over-the-counter swap
transactions (collectively, the “ Intewise OTC Swaps ”) with each other, and with Shanghai
Intewise Capital Investment Limited (ʮ̡)( “ Shanghai Intewise ”)
acting in its capacity as investment manager for and on behalf of Intewise Jinghong Electronic
Technology Private Securities Investment Fund (ږ)
“(Intewise Jinghong ”), Intewise Jiangchuan No. 3 Private Securities Investment Fund ( ၳჼ
Θෂ3ږ“() Intewise Jiangchuan No. 3 ”) and Intewise Jiangchuan No. 6
Private Securities Investment Fund ( ၳჼΘෂ6ږ“() Intewise Jiangchuan
No. 6 ”, collectively with Intewise Jinghong and Interwise Jiangchuan No. 3, the “ Intewise
Ultimate Clients ”), pursuant to which CICC FT will hold the Offer Shares on a non-
discretionary basis to hedge the Intewise OTC Swaps while the economic risks and returns of
the underlying Offer Shares are passed to the Intewise Ultimate Clients, subject to customary
fees and commissions. The Intewise OTC Swaps will be fully funded by the Intewise Ultimate
Clients.
During the terms of the Intewise OTC Swaps, all economic returns of the Offer Shares
subscribed by CICC FT will be passed to the Intewise Ultimate Clients and all economic loss
shall be borne by the Intewise Ultimate Clients through the Intewise OTC Swaps, and CICC
FT will not take part in any economic return or bear any economic loss in relation to the Offer
Shares. The Intewise OTC Swaps are linked to the Offer Shares and the Intewise Ultimate
Clients may, after expiration of the lock-up period beginning from the date of the cornerstone
agreement entered into between CICC FT and the Company and ending on the date which is
six months from the Listing Date, request to early terminate the Intewise OTC Swaps at their
own discretion, upon which CICC FT may dispose of the Offer Shares and settle the Intewise
OTC Swaps in cash in accordance with the terms and conditions of the Intewise OTC Swaps.
Despite that CICC FT 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 Intewise OTC
CORNERSTONE INVESTORS
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--- page 327 ---
Swaps according to its internal policy. To the best of CICC FT’s knowledge having made all
reasonable inquiries, each of the Intewise Ultimate Clients is an independent third party of
CICC FT, CICC and the companies which are members of the same group of CICC.
CICC FT is a wholly-owned subsidiary of CICC, of which its shares are listed on the
Shanghai Stock Exchange (stock code: 601995) and the Stock Exchange (stock code: 3908).
China International Capital Corporation Hong Kong Securities Limited (“ CICCHKS ”), one of
the Overall Coordinators, Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries, is a wholly-owned subsidiary of CICC. Therefore, CICC FT
and CICCHKS are members of the same group of companies. Accordingly, CICC FT is a
“connected client” (as defined under Appendix F1 to the Listing Rules) of CICCHKS. We have
applied to the Stock Exchange for, the Stock Exchange has granted us, its consent under
paragraph 1C(1) of the Appendix F1 to the Listing Rules to permit CICC FT to participate in
the Global Offering as cornerstone investors subject to certain conditions. For further details,
see “Waivers and Exemption from Strict Compliance with the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance” in this prospectus.
Intewise Jinghong, Interwise Jiangchuan No. 3 and Interwise Jiangchuan No. 6 are
investment funds managed by Shanghai Intewise. Except for Liu Y an ( ᄎᝣ), an Independent
Third Party holding 57.7% interest in Interwise Jinghong, no other investors hold more than
30% interest in Intewise Jinghong, Interwise Jiangchuan No. 3 and Interwise Jiangchuan No.
6. Shanghai Intewise is a private fund management company with registration under the Asset
Management Association of China. Shanghai Intewise is committed to achieving absolute
returns through diverse investment strategies and ultimately strives for a stable increase in
asset value for its clients. Liu Xiaolong ( ᄎወᎲ), an Independent Third Party, is the chairman
and ultimate beneficial owner of Shanghai Intewise.
Foresight
Foresight Capital Steady Growth LPF (“ Foresight ”) is positioned to provide high-net-
worth individuals with premium, stable asset appreciation services for their overseas holdings,
and ensure steady growth of fund assets, following the principles of precision investing,
professional risk management and mutually beneficial cooperation. Foresight focuses on
investments in AI, space assets, next-generation information technology, and
biopharmaceutical sectors. Foresight is registered in Hong Kong and managed by Kam Luen
Securities Limited as its investment manager and Custodian with authority to make investment
decisions, which is licensed by the SFC to conduct to conduct Type 1 (dealing in securities),
Type 4 (advising on securities) and Type 9 (asset management) regulated activities. Kam Luen
Securities Limited is a wholly-owned subsidiary of Profit Maxim Enterprises Limited, which
is owned as to 49.99% by KOT Mui, an Independent Third Party. No other shareholders of
Profit Maxim Enterprises Limited holds 30% or more interests therein. The general partner of
Foresight is Foresight Capital International Limited, whose beneficial owners are Mr. Zhan
Guifeng (ࢤ࣭and Ms. Yin Jiafang (ٹ࢕each an Independent Third Party. No limited
partner of Foresight holds 30% or more interest in Foresight. Mr. Zhan’s has invested in a range
of companies throughout his career, including Moore Threads Technology Co., Ltd. ( ᅙဧᇞ೻
CORNERSTONE INVESTORS
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Ҧ(̏ԯ)ʮ̡), Ruili Integrated Circuit Co., Ltd. (ʮ̡ ),
DapuStor Corporation (ʮ̡), CIQTEK Co., Ltd. ( ਷ᄃඎɿ(٭)ٰ
ʮ̡) and Anhui XDLK Microelectronics Corporation Limited (ٰ
ʮ̡).
SCGC Capital
SCGC Capital Holding Company Limited (“ SCGC Capital ”) is a limited liability
company incorporated in the British Virgin Islands and is a wholly-owned subsidiary of
Shenzhen Capital Group Co., Ltd. (ʮ̡)( “ SCGC ”).
SCGC is an existing Shareholder of our Company. As of the Latest Practicable Date,
SCGC, together with entities ultimately controlled by it which are also existing Shareholders
of our Company, held 3.79% of our total issued share capital. For further details of SCGC and
entities ultimately controlled by it which are existing Shareholders of our Company, see
“History, Development and Corporate Structure — Pre-IPO Investments — Information
regarding Our Pre-IPO Investors” in this prospectus.
Aether
Aether Wave Fund L.P . (“ Aether ”) is an exempted limited partnership incorporated in the
Cayman Islands principally engaged in the business of investment, with a focus on the equity
and securities investment on Chinese enterprises going overseas. Aether is owned as to 66.7%
by Sacrocapital General Partner Limited, and no limited partner of Aether holds 30% or more
interests in Aether. Sacrocapital General Partner Limited is owned as to 85% by Mr. HO CHUN
YU (ρ).
Mr. HO CHUN YU ultimately controls and is a close associate of Hainan Orcas Private
Equity Investment Fund Partnership (Limited Partnership) (Υྫ
Άุ(Υྫ)), an existing Shareholder of our Company which held 1.26% of our total issued
share capital as of the Latest Practicable Date. For further details, see “History, Development
and Corporate Structure — Pre-IPO Investments — Information regarding Our Pre-IPO
Investors” in this prospectus.
GF Fund HK
GF Management Co., Ltd. (ʮ̡)( “ GF Fund Management ”) was
established on August 5, 2003. As of December 31, 2025, the assets under management of GF
Fund Management exceeded RMB2 trillion with comprehensive product lines, and covering
active equity, bonds, currencies, overseas investment, passive investments, FOF, quantitative
hedging, etc., in order to meet the diversified investment needs of domestic and foreign clients.
The controlling shareholder of GF Fund Management is GF Securities Co., Ltd. (ٰ
ʮ̡)( “ GF Securities ”), a limited company listed on the Stock Exchange (stock code:
CORNERSTONE INVESTORS
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--- page 329 ---
1776) and the 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 (ʮ̡)( “ 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
HK in their capacity as the discretionary investment manager of certain funds under their
management. Based on the best knowledge of GF Fund HK, each fund is an independent third
party, and no ultimate beneficial owner holds more than 30% interest.
Kaifeng Ultimate Clients and CICC FT (in connection with the Kaifeng OTC Swaps)
CICC FT and CICC will enter into a series of cross border over-the-counter swap
transactions (collectively, the “ Kaifeng OTC Swaps ”) with each other, and with (i) Shenzhen
Kaifeng Investment Management Co., Ltd. (ʮ̡)( “ Shenzhen
Kaifeng ”) acting in its capacity as investment manager for and on behalf of Kaifeng Xingrui
Equity Strategy No. 1 Securities Investment Private Fund (ୃഄଫ1໮ᗇՎҳ༟ӷ෍
ږ“() Kaifeng Xingrui No. 1 ”) and Kaifeng Macro Strategy No. 10 Securities Investment
Private Fund ( ௱ᔮ҃ᝈഄଫ10ږ“() Kaifeng Strategy No. 10 ”), and (ii)
Changdu Kaifeng Investment Management Co., Ltd. (ʮ̡)
(“Changdu Kaifeng ”) acting in its capacity as investment manager for and on behalf of
Kaifeng Macro Hedge No. 11 Private Fund ( ௱ᔮ҃ᝈ࿁ә11ږ“() Kaifeng Hedge
No. 11 ”, collectively with Kaifeng Xingrui No. 1 and Kaifeng Strategy No. 10, the “ Kaifeng
Ultimate Clients ”), pursuant to which CICC FT will hold the Offer Shares on a non-
discretionary basis to hedge the Kaifeng OTC Swaps while the economic risks and returns of
the underlying Offer Shares are passed to the Kaifeng Ultimate Clients, subject to customary
fees and commissions. The Kaifeng OTC Swaps will be fully funded by the Kaifeng Ultimate
Clients.
During the terms of the Kaifeng OTC Swaps, all economic returns of the Offer Shares
subscribed by CICC FT will be passed to the Kaifeng Ultimate Clients and all economic loss
shall be borne by the Kaifeng Ultimate Clients through the Kaifeng OTC Swaps, and CICC FT
will not take part in any economic return or bear any economic loss in relation to the Offer
Shares. The Kaifeng OTC Swaps are linked to the Offer Shares and the Kaifeng Ultimate
CORNERSTONE INVESTORS
– 318 –


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Clients may, after expiration of the lock-up period beginning from the date of the cornerstone
agreement entered into between CICC FT and the Company and ending on the date which is
six months from the Listing Date, request to early terminate the Kaifeng OTC Swaps at their
own discretion, upon which CICC FT may dispose of the Offer Shares and settle the Kaifeng
OTC Swaps in cash in accordance with the terms and conditions of the Kaifeng OTC Swaps.
Despite that CICC FT 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 Kaifeng OTC
Swaps according to its internal policy. To the best of CICC FT’s knowledge having made all
reasonable inquiries, each of the Kaifeng Ultimate Clients is an independent third party of
CICC FT, CICC and the companies which are members of the same group of CICC.
CICC FT is a wholly-owned subsidiary of CICC, of which its shares are listed on the
Shanghai Stock Exchange (stock code: 601995) and the Stock Exchange (stock code: 3908).
CICCHKS, one of the Overall Coordinators, Joint Global Coordinators, Joint Bookrunners,
Joint Lead Managers and Capital Market Intermediaries, is a wholly-owned subsidiary of
CICC. Therefore, CICC FT and CICCHKS are members of the same group of companies.
Accordingly, CICC FT is a “connected client” (as defined under Appendix F1 to the Listing
Rules) of CICCHKS. We have applied to the Stock Exchange for, the Stock Exchange has
granted us, its consent under paragraph 1C(1) of the Appendix F1 to the Listing Rules to permit
CICC FT to participate in the Global Offering as cornerstone investors subject to certain
conditions. For further details, see “Waivers and Exemption from Strict Compliance with the
Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance” in
this prospectus.
Kaifeng Xingrui No. 1 and Kaifeng Strategy No. 10 are investment funds managed by
Shenzhen Kaifeng, and Kaifeng Hedge No. 11 is an investment fund managed by Changdu
Kaifeng. Except for Wu Xing (݋and Feng Wei ( ᔮਃ), Independent Third Parties, holding
53.85% and 46.15% interest in Kaifeng Xingrui No. 1, no other investors hold more than 30%
interest in Kaifeng Xingrui No. 1, Kaifeng Strategy No. 10 and Kaifeng Hedge No. 11. Each
of Shenzhen Kaifeng and Changdu Kaifeng is a private fund management company with
registration under the Asset Management Association of China. Shenzhen Kaifeng is a Chinese
asset management firm focusing on macro strategies. Shenzhen Kaifeng is committed to
building diversified portfolios across multiple asset classes, markets and instruments. Wu Xing
directly holds 32% interest in Shenzhen Kaifeng and 57.1% interest in Shanghai Angyu
Enterprise Management Consulting Partnership (Limited Partnership) (๎Άุ၍ଣፔ༔
ΥྫΆุ(Υྫ)), which in turn holds 20% interest in Shenzhen Kaifeng. Wu Xing also
holds 50% interest in Changdu Kaifeng. No other shareholder holds 30% or more interest in
Shenzhen Kaifeng or Changdu Kaifeng. Changdu Kaifeng is a limited partner of and holds
33.3% partnership interest in Shenzhen Chaoyue Future V enture Capital Partnership (Limited
Partnership) ( ଉέ̹൴൳͊Ը௴ุҳ༟ΥྫΆุ(Υྫ)), an existing Shareholder of our
Company.
CORNERSTONE INVESTORS
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Wider Huge
Wider Huge Group Limited (“ Wide Huge ”) is a company registered at British Virgin
Islands, which is wholly owned by Ms. Laurena Wu, an Independent Third Party.
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things and as
applicable, the following closing conditions:
(a) the Underwriting Agreements being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither of the aforesaid
Underwriting Agreements having been terminated;
(b) the Offer Price having been agreed upon between our Company and Overall
Coordinators (for themselves and on behalf of the Underwriters);
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the H Shares (including the H Shares subscribed
for by the Cornerstone Investors) as well as other applicable waivers and approvals,
and such approval, permission or waiver having not been revoked prior to the
commencement of dealings in the H Shares on the Stock Exchange;
(d) the CSRC having accepted the CSRC Filings (as defined in the respective
Cornerstone Investment Agreement) and published the filing results in respect of the
CSRC Filings on its website, and such notice of acceptance and/or filing results
published not having otherwise been rejected, withdrawn, revoked or invalidated
prior to the commencement of dealings in the H Shares on the Stock Exchange;
(e) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the respective Cornerstone Investment Agreements and there shall be
no orders or injunctions from a court of competent jurisdiction in effect precluding
or prohibiting consummation of such transactions; and
(f) the respective agreements, representations, warranties, undertakings and
acknowledgements of relevant Cornerstone Investor under the respective
Cornerstone Investment Agreement are accurate and true in all respects and not
misleading and that there is no breach of the Cornerstone Investment Agreement on
the part of the relevant Cornerstone Investor.
CORNERSTONE INVESTORS
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RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that it will not, whether directly or indirectly, at any
time during the period of six months from (and inclusive of) the Listing Date (the “ Lock-up
Period ”), dispose of, in any way, any of the Offer Shares or any interest in any company or
entity holding such Offer Shares that they have purchased pursuant to the relevant Cornerstone
Investment 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 such Cornerstone
Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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FUTURE PLANS
See “Business — Our Strategies” for a detailed discussion of our future plans.
USE OF PROCEEDS
Assuming an Offer Price of HK$38.40 per Offer Share (being the mid-point of the stated
range of the Offer Price between HK$35.20 and HK$41.60 per Offer Share), we estimate that
we will receive net proceeds of approximately HK$1,433.6 million from the Global Offering
after deducting the underwriting commissions, fees and other estimated expenses in connection
with the Global Offering and assuming that the Over-allotment Option is not exercised or
HK$1,655.7 million if the Over-allotment Option is exercised in full. In line with our
strategies, we intend to use our proceeds from the Global Offering for the following purposes:
 Approximately 40.0% of the net proceeds, or approximately HK$573.5 million, will
be used for research and development of digital intelligence enhancement of our
technology platform in next five years, with a strategic focus on (i) enhancing our
product and solution development capabilities; (ii) advancing the underlying system
architecture; and (iii) developing new protocol functionalities. This initiative is
designed to drive continuous innovation, strengthen our technological foundation
and support the evolving needs of our customers and business expansion. To
establish our full-stack technology platform and to steadily advance the
implementation of our strategic plan, we plan to further mobilize existing R&D
personnel and recruit approximately 390 specialist talents to expand our R&D team.
To better accommodate our strategic R&D objectives, we plan to renovate our
self-owned properties to serve as laboratories for future research and development
activities and to procure supporting hardware and software. In particular:
(i) Approximately 15.0% of the net proceeds, or approximately HK$215.0
million, will be used for enhancing our product and solution development
capacities. According to our five-year plan, we expect to invest approximately
HK$38.9 million, HK$44.4 million, HK$41.6 million, HK$44.0 million and
HK$46.1 million for each year, respectively, primarily for laboratory
renovation, hardware upgrades and talent recruitment.
The renovation and upgrade of our R&D laboratory will be carried out in the
first year and is expected to be completed within the same year, with an
estimated cost of approximately HK$1.6 million.
We plan to gradually build and strengthen our hardware development and
product testing teams. We expect to invest approximately HK$2.8 million,
HK$7.8 million, HK$11.5 million, HK$14.2 million and HK$16.6 million over
the next five years, respectively. In particular, we plan to recruit approximately
40, 50, 30, 20 and 20 employees over the next five years, totaling around 160
FUTURE PLANS AND USE OF PROCEEDS
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R&D employees to support product development and operations of six product
business units, primarily focusing on the research of upgrading switches,
wireless transmission equipment and optical modules.
Hardware procurement is also a key component to enhance our technical
infrastructure. We expect to invest approximately HK$34.6 million, HK$36.6
million, HK$30.1 million, HK$29.9 million and HK$29.5 million over the next
five years, respectively. We plan to progressively procure equipment for
optical and image testing, mechanical and environmental testing, terminal and
platform testing, among others, in line with project milestones. This will
support a wide range of R&D functions such as image quality analysis,
environmental reliability assessment, terminal compatibility verification,
among others; software systems to support our functional validation and
various testing procedures throughout our product design and development
processes; and office and other equipment to support our ongoing research and
development activities.
(ii) Approximately 12.5% of the net proceeds, or approximately HK$179.2
million, will be used for developing the underlying architecture of our
networking equipment operating system and cloud-based network management
platform to enhance their compatibility, reliability and security. According to
our five-year plan, we expect to invest approximately HK$15.6 million,
HK$47.8 million, HK$38.9 million, HK$41.7 million and HK$35.2 million
over the next five years, respectively, primarily for software upgrades and
talent recruitment.
We plan to develop our software innovation team. In particular, we plan to
recruit approximately 40, 30, 30, 30 and 30 R&D employees, respectively,
totaling around 160 R&D staffs for our Ampcon development department,
software product development department and software platform R&D
department in the next five years. It is expected to cost approximately HK$2.9
million, HK$8.0 million, HK$12.3 million, HK$18.2 million and HK$26.6
million over the next five years, respectively.
We also plan to procure devices and software licenses to ensure a stable
operating environment for software development, testing, deployment and
maintenance. We expect to invest approximately HK$12.7 million, HK$39.8
million, HK$26.5 million, HK$23.6 million and HK$8.6 million over the next
five years, respectively.
(iii) Approximately 12.5% of the net proceeds, or approximately HK$179.2
million, will be used for developing more functions and applications of our
networking equipment operating system and cloud-based management
FUTURE PLANS AND USE OF PROCEEDS
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platform. According to our five-year plan, we expect to invest approximately
nil, HK$43.6 million, HK$46.2 million, HK$44.8 million and HK$44.5 million
for each year, respectively, primarily for hardware upgrades and talent
recruitment.
In the first year, during the renovation of our R&D laboratory, our primary
focus will be on the comprehensive development of both hardware and
software platforms. Once these foundational facilities are established, we will
intensify our efforts in the technical exploration and development of protocol
functionalities. We plan to continue researching advanced technologies in the
field of high-speed network connectivity and expanding our product and
solution portfolio to meet evolving customer demands from the second year of
our five-year plan.
We plan to establish a protocol-AI integration team, consisting of the software
platform R&D department and the AI algorithm team. Over the next five years,
we expect to recruit approximately nil, 25, 20, 20 and 5 employees,
respectively, totaling around 70 R&D employees. We expect to invest
approximately nil, HK$3.9 million, HK$7.7 million, HK$11.6 million and
HK$12.7 million over the next five years, respectively.
Software configuration, hardware procurement and infrastructure maintenance
will constitute the primary expenditure. We plan to procure hardware,
infrastructure and protocol software required for technical exploration,
including servers, network and storage equipment, among others, to support
technical exploration and the development, testing, and validation of advanced
communication protocol functionalities. We expect to invest approximately nil,
HK$39.7 million, HK$38.5 million, HK$33.2 million and HK$31.9 million
over the next five years, respectively.
 Approximately 30.0% of the net proceeds, or approximately HK$430.1 million, will
be used for enhancing our delivery capabilities in major overseas markets. We plan
to establish our regional headquarter in Singapore, which will serve as the central
hub of our global supply chain. This strategic initiative is designed to build an
integrated and closed-loop hub with capability in overseas direct sourcing, localized
manufacturing, intelligent global delivery and comprehensive end-to-end customer
service, and is aligned with our business strategy, as we have increased procurement
from Southeast Asia suppliers to mitigate the impact of tariff changes.
Operating in Singapore enables us to implement multi-regional sourcing and
localized manufacturing, which helps mitigate geopolitical risks and reduce reliance
on supply chains concentrated in a single country.
FUTURE PLANS AND USE OF PROCEEDS
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Singapore’s advanced logistics infrastructure, including world-class ports and
airports, facilitates faster global distribution and shorter delivery lead times,
supporting service standards such as “Global 5-Day Delivery” and enhancing
overall customer satisfaction.
By shifting inventory forward to regional warehouses, we are able to respond more
efficiently to local order demands, particularly for high-volume products such as
optical modules and switches.
We are also strengthening our supply chain capabilities by building end-to-end
autonomy across procurement, testing, manufacturing, warehousing and shipping.
The establishment of our regional headquarter in Singapore will facilitate the
development of a global 24/7 FS Care after-sales service system, which is expected
to cover approximately 30% to 50% of the global enterprise networking market,
serving as a regional business supplementary to our current headquarter in China.
As of the Latest Practicable Date, we leased an approximately 4,000 square meters
warehouse in Singapore as the initial phase of our global delivery center. Over the
next five years, we will gradually enhance our multi-tier warehousing system,
upgrade the level of automation of the workflow and expand our service network to
continuously improve global supply chain management and customer service
capabilities. We also plan to establish an international management team at our
Singapore headquarters, responsible for the overall coordination of key business
functions including global procurement, operations, logistics and customer service.
By leveraging Singapore’s geographic and infrastructural advantages, we aim to
enhance our operational resilience, improve delivery efficiency, and strengthen
customer experience across key international markets. In particular:
(i) Approximately 20.0% of the net proceeds, or approximately HK$286.7
million, will be used for enhancing our global supply chain and delivery
capabilities. According to our five-year plan, we expect to invest
approximately HK$43.1 million, HK$50.7 million, HK$63.9 million, HK$66.0
million and HK$63.1 million for each year, respectively. We plan to establish
a multi-tier warehousing system worldwide and strengthen our supply chain
management by expanding our delivery center network worldwide. As part of
our multi-tier warehousing system, we leased an approximately 4,000 square
meters warehouse in Singapore in the fourth quarter of 2024, marking the
initial phase of our global delivery center, with an annual rental cost for
approximately HK$21.1 million. We are also enhancing such global delivery
center and establishing other overseas warehouses in emerging markets.
To support our global delivery strategy, we plan to roll out FS Care services in
Singapore, the United Kingdom, Japan, Germany and the United States, with
coverage expected to expand to eight cities by the end of 2026 and 22 cities by
FUTURE PLANS AND USE OF PROCEEDS
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the end of 2027. Renovation expenses are expected to be approximately
HK$0.8 million, HK$7.2 million, HK$23.9 million, HK$23.9 million and
HK$23.9 million over the next five years. Hardware and software procurement
is expected to be approximately HK$0.3 million, HK$3.0 million, HK$2.5
million, HK$2.4 million and HK$2.0 million per year, respectively. Upon the
completion of our global multi-tier warehousing system, we expect a
substantial enhancement in our delivery capabilities across key product and
service categories. For optical modules, our global monthly delivery capacity
is expected to increase from approximately 30,000 units to 120,000 units. For
networking equipment, our monthly delivery capacity is expected to increase
from approximately 5,000 units to 12,000 units. In addition, our on-site
delivery and installation service capacity is expected to increase from
approximately 100 sets per month to 350 sets per month, reflecting the
enhanced responsiveness and operational efficiency of our global service
network.
Furthermore, we plan to enhance localized customer service capabilities by
recruiting supporting personnel in overseas markets to deliver multilingual
customer support including order tracking, online training, technical support,
equipment delivery and installation and after-sales service.
Over the next five years, we expect to recruit approximately 70, 60, 40, 50 and
40 employees, respectively, across various departments and levels, from team
members to directors, totaling around 260 employees. The estimated
personnel-related expenses over the next five years are approximately
HK$20.8 million, HK$19.3 million, HK$16.3 million, HK$18.6 million, and
HK$16.0 million, respectively.
(ii) Approximately 10.0% of the net proceeds, or approximately HK$143.4
million, will be used for enhancing manufacturing capabilities of our delivery
center in Singapore.
We plan to improve the level of automation of the workflow and strengthen our
operations management capabilities through procurement of hardware and
software, including equipment for processing, coding, packaging, warehousing
and logistics and necessary software systems. We expect to invest
approximately HK$0.1 million, HK$42.7 million, HK$35.6 million, HK$21.4
million and HK$42.6 million over the next five years, respectively. The
investment in hardware and software is expected to upgrade our existing
automated lines for optical modules and intelligent assembly lines for
switches. We believe that the introduction of new hardware and software will
further enhance the level of process automation, consistency in product quality,
and precision control capabilities, enabling our delivery center to fully support
high-end manufacturing.
FUTURE PLANS AND USE OF PROCEEDS
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We also plan to invest in R&D and testing hardware and software, which will
be used to upgrade our 400G/800G optical module testing systems and expand
our reliability laboratories. These upgrades are expected to shorten our product
development cycle by approximately 20%. Through enhanced automation and
standardization of our R&D processes, we aim to refine the configuration of
workflow equipment, optimize process design, and strengthen personnel
deployment, thereby accelerating our technology validation capabilities. We
expect to invest approximately HK$0.0 million, HK$0.3 million, HK$0.2
million, HK$0.1 million and HK$0.3 million over the next five years,
respectively.
 Approximately 20.0% of the net proceeds, or approximately HK$286.7 million, will
be used for digitalizing our business platform for networking solutions and services.
In particular:
(i) Approximately 13.0% of the net proceeds, or approximately HK$186.4 million
will be invested in developing our online sales platform. We will enhance our
order processing capabilities and optimize our operational efficiency to
provide convenient and efficient services to our global customers. We plan to
allocate the proceeds to platform marketing and promotion expenses, platform
upgrade development and operational personnel costs, office renovation
expenses, and the procurement and installation of hardware and software.
Platform marketing and promotion are essential in expanding our customer
base and enhancing our brand awareness. We plan to allocate approximately
7.0% of the net proceeds, representing HK$100.5 million on advertising and
promotion of online sales platform over the next five years. With respect to
personnel, we plan to recruit approximately 230 new employees for our online
sales platform development in the next five years, in line with our business
development needs. The procurement and installation of hardware and
software will primarily be used for the procurement of basic office equipment
and operational software systems.
(ii) Approximately 7.0% of the net proceeds, or approximately HK$100.4 million
will be invested in upgrading our existing digitalized infrastructure. We plan to
refine and further promote the digital process across our product development,
supply chain management, order processing, warehousing and logistics. We
also plan to invest in our technical infrastructure, enhancing our technology
capabilities such as data analytics and database capabilities as well as
improving the stability and reliability of our data management systems. We
plan to allocate the proceeds on office premises renovation, equipment
procurement and installation expenses, software procurement and
commissioning expenses, and personnel allocation expenses. In particular, we
plan to recruit approximately 50 employees each year since the second year for
FUTURE PLANS AND USE OF PROCEEDS
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next five years, functions primarily covering product management, software
engineering, user experience and interface design, quality assurance,
cybersecurity and data engineering.
 Approximately 10.0% of the net proceeds, or approximately HK$143.4 million, will
be used for working capital and general corporate purposes.
In the event that the Offer Price is set at the maximum Offer Price or the minimum Offer
Price of the indicative Offer Price range, the net proceeds of the Global Offering will increase
or decrease by approximately HK$123.4 million, respectively. To the extent that the net
proceeds from the Global Offering (including the net proceeds from the exercise of the
Over-allotment Option) are either more or less than expected, we will adjust our allocation of
the net proceeds for the above purposes on a pro rata basis.
If any part of our development plan does not proceed as planned for reasons such as
changes in government policies that would render the development of any of our projects not
viable, or the occurrence of force majeure events, we will carefully evaluate the situation and
may reallocate the net proceeds from the Global Offering.
To the extent that the net proceeds of the Global Offering are not immediately used for
the above purposes, we will only deposit those net proceeds into 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). In such event,
we will comply with the appropriate disclosure requirements under the Listing Rules.
To the extent that our net proceeds of the Global Offering are insufficient to fund our
proposed projects, we intend to fund the shortfall through our internal resources, including
cash generated from our operations and cash on hand.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
China Securities (International) Corporate Finance Company Limited
China Merchants Securities (HK) Co., Limited
BOCI Asia Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters. 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 on or before
12:00 noon on Thursday, March 19, 2026, the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 4,000,000
Hong Kong Offer Shares and the International Offering of initially 36,000,000 International
Offer Shares, subject, in each case, to reallocation on the basis as described in the section
headed “Structure of the Global Offering” in this prospectus as well as to the Over-allotment
Option in the case of the International Offering.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
The Hong Kong Underwriting Agreement was entered into on Wednesday, March 11,
2026. Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong
Offer Shares for subscription by the public in Hong Kong on the terms and conditions set out
in this prospectus and the Hong Kong Underwriting Agreement at the Offer Price.
Subject to (i) the Listing Committee granting approval for the listing of, and permission
to deal in the H Shares in issue and to be issued pursuant to the Global Offering (including any
additional H Shares that may be issued pursuant to the exercise of the Over-allotment Option),
and such approval not having been withdrawn and (ii) certain other conditions set out in the
Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally, but
not jointly, to subscribe or procure subscribers for their respective applicable proportions of the
Hong Kong Offer Shares being offered which are not taken up under the Hong Kong Public
Offering on the terms and conditions set out in this prospectus and the Hong Kong
Underwriting Agreement.
UNDERWRITING
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The Hong Kong Underwriting Agreement is conditional on, 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
If any of the events set out below shall occur at any time prior to 8:00 a.m. on the Listing
Date, the Overall Coordinators (for themselves and on behalf of the other Hong Kong
Underwriters) in their sole and absolute discretion may, by giving a written notice to our
Company, terminate the Hong Kong Underwriting Agreement with immediate effect:
a. there develops, occurs, exists or comes into force:
i. any new law or regulation or any change or development involving a
prospective change or any event or series of events or circumstances likely to
result in a change or a development involving a prospective change in existing
laws or regulations, or the interpretation or application thereof by any court or
any competent Authority (as defined in the Hong Kong Underwriting
Agreement) in or affecting Hong Kong, the PRC, the United States, the United
Kingdom, the European Union (or any member thereof), Australia, Japan,
Singapore, or other jurisdictions relevant to the Group or the Global Offering
(each a “ Relevant Jurisdiction ” and collectively, the “ Relevant
Jurisdictions ”); or
ii. any change or development involving a prospective change, or any event or
series of events or circumstances likely to result in a change or prospective
change, in any local, national, regional or international financial, political,
military, industrial, economic, fiscal, legal, regulatory, currency, credit or
market conditions or sentiments, Taxation, equity securities or currency
exchange rate or controls or any monetary or trading settlement system, or
foreign investment regulations (including, without limitation, a devaluation of
the Hong Kong dollar, United States dollar or Renminbi against any foreign
currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to
any foreign currency or currencies) or other financial markets (including,
without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the inter-bank markets and credit
markets) in or affecting any Relevant Jurisdictions, or affecting an investment
in the Offer Shares; or
iii. any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire,
explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion,
riots, rebellion, public disorder, paralysis in government operations, acts of
war, epidemic, pandemic, outbreak or escalation, mutation or aggravation of
UNDERWRITING
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--- page 342 ---
diseases, accident or interruption or delay in transportation, local, national,
regional or international outbreak or escalation of hostilities (whether or not
war is or has been declared), act of God or act of terrorism (whether or not
responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
iv. the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on (i) the trading in shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange,
the Shenzhen Stock Exchange, the Singapore Stock Exchange, the New Y ork
Stock Exchange or the NASDAQ Global Market; or (ii) the trading in any
securities of the Company listed or quoted on a stock exchange or an
over-the-counter market; or
v. the imposition or declaration of any general moratorium on banking activities
in or affecting any of the Relevant Jurisdictions or any disruption in
commercial banking or foreign exchange trading or securities settlement or
clearing services, procedures or matters in or affecting any of the Relevant
Jurisdictions; or
vi. 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 or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC; or
vii. the commencement by any Authority (as defined in the Hong Kong
Underwriting Agreement) or other regulatory or political body or organization
of any public action or investigation against a member of the Group or a
Director, a Supervisor or a senior management member of any member of the
Group or announcing an intention to take any such action; or
viii. the imposition of sanctions or export controls in whatever form, directly or
indirectly, on any member of the Group or any of the Controlling Shareholders
or by or on any Relevant Jurisdiction, or the withdrawal of trading privileges
which existed on the date of the Hong Kong Underwriting Agreement, in
whatever form, directly or indirectly, by, or for, any Relevant Jurisdiction; or
ix. any valid demand by creditors for payment or repayment of indebtedness of
any member of the Group or in respect of which any member of the Group is
liable prior to its stated maturity; or
UNDERWRITING
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x. any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of any of the Offer Shares), the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) or any aspect of the Global Offering with the
Listing Rules or any other applicable Laws; or
xi. any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of the Group or any Controlling Shareholder or any Director or senior
management members as named in this prospectus; or
xii. any contravention by any member of the Group or any Director of the Listing
Rules or applicable Laws; or
xiii. that the chairman of the Board, any Director or any member of senior
management of the Company named in this prospectus seeks to retire, or is
removed from office or vacating his/her office; or
xiv. any Director or any member of senior management of the Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
or taking directorship of a company; or
xv. any change or prospective change, or a materialization of, any of the risks set
out in the section headed “Risk Factors” in this prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters): (1) has or will or may have a material
adverse effect, whether directly or indirectly, on the assets, liabilities, business,
general affairs, management, prospects, shareholders’ equity, profits, losses, results
of operations, position or condition, financial or otherwise, or performance of the
Company or the Group as a whole; (2) has or will or may have a material adverse
effect on the success of the Global Offering or the level of applications under the
Hong Kong Public Offering or the level of indications of interest under the
International Offering; or (3) makes or will make or may make it impracticable,
inadvisable, inexpedient or incapable for any material part of the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering or the Global Offering to
be performed or implemented as envisaged, or for the Hong Kong Public Offering
and/or the Global Offering to proceed, or to market the Global Offering or the
delivery or distribution of the Offer Shares on the terms and in the manner
contemplated by the Offering Documents (as defined in the Hong Kong
Underwriting Agreement); or (4) has or will or may have the effect of making any
part of the Hong Kong Underwriting Agreement (including underwriting) incapable
of performance in accordance with its terms or preventing the processing of
applications and/or payments pursuant to the Global Offering or pursuant to the
underwriting thereof; or
UNDERWRITING
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b. there has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
i. any statement contained in any of the Offering Documents, the CSRC Filings
and/or any notices, announcements, advertisements, communications or other
documents issued or used by or on behalf of the Company in connection with
the Hong Kong Public Offering (including any supplement or amendment
thereto) (the “ Global Offering Documents ”) was, when it was issued, or has
become untrue, incorrect, inaccurate in any material respect or misleading; or
that any estimate, forecast, expression of opinion, intention or expectation
contained in any such documents, was, when it was issued, or has become
unfair or misleading in any respect or based on untrue, dishonest or
unreasonable assumptions or given in bad faith; or
ii. any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
iii. any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and
undertakings given by the Company or Mr. Xiang in the Hong Kong
Underwriting Agreement or the International Underwriting Agreement; or
iv. any event, act or omission which gives rise or is likely to give rise to any
liability of any of the Indemnifying Parties (as defined in the Hong Kong
Underwriting Agreement) pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
v. any breach of any of the obligations or undertakings imposed upon the
Company or Mr. Xiang or any cornerstone investor (as applicable) to the Hong
Kong Underwriting Agreement, the International Underwriting Agreement or
the Cornerstone Investment Agreements (as defined in the Hong Kong
Underwriting Agreement); or
vi. there is any change or development involving a prospective change,
constituting or having a Material Adverse Effect (as defined in the Hong Kong
Underwriting Agreement); or
vii. the Company withdraws this prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to
the Global Offering) or the Global Offering; or
viii. that the approval by the Listing Committee of the listing of, and permission to
deal in, the H Shares in issue and to be issued pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option) is refused or
not granted, other than subject to customary conditions, on or before the
Listing Date, or if granted, the approval is subsequently withdrawn, cancelled,
qualified (other than by customary conditions), revoked or withheld; or
UNDERWRITING
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ix. any expert (other than any of the Joint Sponsors) has withdrawn its consent to
the issue of this prospectus with the inclusion of its reports, letters and/or legal
opinions (as the case may be) and references to its name included in the form
and context in which it respectively appears; or
x. any prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
xi. an order or petition is presented for the winding-up or liquidation of any
member of the Group, or any member of the Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement or any
resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is 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
xii. (A) the notice of acceptance of the CSRC Filings (as defined in the Hong Kong
Underwriting Agreement) issued by the CSRC and/or the results of the CSRC
Filings published on the website of the CSRC is rejected, withdrawn, revoked
or invalidated; or (B) 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 the CSRC Filings pursuant to the CSRC Rules or
upon any requirement or request of the CSRC; or (C) any non-compliance of
the CSRC Filings with the CSRC Rules or any other applicable Laws; or
xiii. that (i) a material portion of the orders placed or confirmed in the bookbuilding
process or (ii) any investment commitment made by any cornerstone investors
under the Cornerstone Investment Agreements signed with such cornerstone
investors, have been withdrawn, terminated or cancelled, as a result of the
payment of the relevant investment amount not being received or settled in the
stipulated time and manner or otherwise.
Undertakings to the Stock Exchange pursuant to the Listing Rules
(A) Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that we will not, at any time within six months from the Listing Date, issue any H Shares or
other securities convertible into equity securities in us (whether or not of a class already listed)
or enter into any agreement or arrangement to issue any H Shares or such other securities
(whether or not such issue of the H Shares or such other securities will be completed within
six months from the Listing Date), except pursuant to the Global Offering (including the
exercise of the Over-allotment Option) or under any of the circumstances provided under Rule
10.08 of the Listing Rules.
UNDERWRITING
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(B) Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of our Controlling Shareholders has
undertaken to the Stock Exchange and to us that, except pursuant to the Global Offering, he/it
will not (and will procure that the relevant registered holder(s) will not):
(i) in the period commencing on the date by reference to which disclosure of his or its
shareholding in our Company is made in this prospectus and ending on the date
which is six months from the Listing Date, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the H Shares in respect of which he/it is shown by this prospectus
to be the beneficial owner (as defined in Rule 10.07(2) of the Listing Rules); and
(ii) during the period of six months commencing on the date on which the period
referred to in paragraph (i) above expires, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the H Shares or securities referred to in the immediately preceding
paragraph (i) above if, immediately following such disposal or upon the exercise or
enforcement of such options, rights, interests or encumbrances, he/it would cease to
be a Controlling Shareholder of our Company,
in each case, save as permitted under the Listing Rules.
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of our Controlling
Shareholders has undertaken to the Stock Exchange and to us that, within the period
commencing on the date by reference to which disclosure of his/its shareholding in us is made
in this prospectus and ending on the date which is 12 months from the date on which dealings
in the H Shares commence on the Stock Exchange, he/it will:
(a) when he/it pledges or charges any H Shares or other securities beneficially owned
by him/it in favor of an authorized institution (as defined in the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong)) pursuant to Note 2 to Rule 10.07(2) of
the Listing Rules for a bona fide commercial loan, immediately inform us of such
pledge or charge together with the number of the H Shares or securities so pledged
or charged; and
(b) when he/it receives indications, either verbal or written, from the pledgee or charge
of any H Shares that any of the pledged or charged H Shares or securities will be
disposed of, immediately inform us of such indications.
UNDERWRITING
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Undertakings Pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Lock-up on our Company
Our Company has undertaken to each of the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters (as defined in the Hong Kong Underwriting
Agreement) that except pursuant to the Global Offering (including pursuant to the Over-
allotment Option), at any time after the date of the Hong Kong Underwriting Agreement up to
and including the date falling six months after the Listing Date (the “ First Six Month
Period” ), it will not, without the prior written consent of the Joint Sponsors and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in
compliance with the requirements of the Listing Rules, with respect to shares or securities
convertible into equity securities of our Company (whether or not of a class already listed):
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create an Encumbrance over, or agree to transfer or dispose
of or create an Encumbrance (as defined in the Hong Kong Underwriting
Agreement) over, either directly or indirectly, conditionally or unconditionally, or
repurchase, any legal or beneficial interest in the share capital or any other securities
of our Company or any interest in any of the foregoing (including, without
limitation, any securities convertible into or exchangeable or exercisable for or that
represent the right to receive, or any warrants or other rights to purchase any share
capital or other securities of our Company, as applicable), or deposit any share
capital or other securities of our Company, as applicable, with a depositary in
connection with the issue of depositary receipts; or
(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 our Company, or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any H Shares); or
(iii) enter into any transaction with the same economic effect as any transaction
described in (i) or (ii) above; or
(iv) offer to or agree to do any of the foregoing specified in (i), (ii) or (ii) above or
announce any intention to do so,
UNDERWRITING
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in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other securities, in cash or otherwise (whether or not the issue of such share
capital or other securities will be completed within the First Six Month Period). Our Company
further agrees that, in the event our Company is allowed to enter into any of the transactions
described in (i), (ii) or (iii) above or offers to or agrees to or announces any intention to effect
any such transaction during the period of six months commencing on the date on which the
First Six Month Period expires (the “ Second Six Month Period ”), it will take all reasonable
steps to ensure that such an issue or disposal will not, and no other act of our Company will,
create a disorderly or false market for any H Shares or other securities of our Company.
Maintenance of public float and free float
Our Company has undertaken to each of the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters (as defined in the Hong Kong Underwriting
Agreement) that it will, and Mr. Xiang undertakes to procure that our Company will, comply
with the minimum public float and free float requirements specified in the Listing Rules (the
“Minimum Public Float and Free Float Requirements ”), and it will not effect any purchase
of the H Shares, or agree to do so, which may reduce the holdings of the H Shares held by the
public (as defined in Rule 8.24 of the Listing Rules) to below the Minimum Public Float and
Free Float Requirements or any waiver granted and not revoked by the Stock Exchange prior
to the expiration of the Second Six Month Period without first having obtained the prior written
consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of
the Hong Kong Underwriters).
Undertakings by Mr . Xiang
Mr. Xiang has undertaken to each of our Company, the Joint Sponsors, the Sponsor-OCs,
the Overall Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the
Joint Lead Managers and the Hong Kong Underwriters (as defined in the Hong Kong
Underwriting Agreement) that, and undertakes to procure each of the Controlling Shareholders
that, without the prior written consent of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and unless in compliance with the
requirements of the Listing Rules, with respect to any of the securities in respect of which he/it
is shown by this prospectus to be the beneficial owner:
(i) it/he/she will not, and will procure that the relevant registered holder(s), any
nominee or trustee holding on trust for it/him/her and the companies controlled by
it/him/her will not, at any time during the First Six Month Period, (i) sell, offer to
sell, accept subscription for, contract or agree to allot, issue or sell, mortgage,
charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or right
to purchase, grant or purchase any option, warrant, contract or right to 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,
UNDERWRITING
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any H Shares or other securities of our Company or any interest therein (including,
without limitation, any securities convertible into or exchangeable or exercisable for
or that represent the right to receive, or any warrants or other rights to purchase, any
H Shares or any such other securities, as applicable or any interest in any of the
foregoing), or deposit any H Shares or other securities of our Company 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 any H Shares or other
securities of our Company or any interest therein (including, without limitation, any
securities convertible into or exchangeable or exercisable for or that represent the
right to receive, or any warrants or other rights to purchase, any H Shares or any
such other securities, as applicable or any interest in any of the foregoing), or (iii)
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, 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 our Company or in cash or otherwise, and whether or not the
transactions will be completed within the First Six Month Period; and
(ii) it/he/she will not, during the Second Six Month Period, enter into any of the
transactions specified in (i), (ii) or (iii) above or offer to or agree to contract to or
publicly announce any intention to effect any such transaction if, immediately
following any sale, transfer or disposal or upon the exercise or enforcement of any
option, right, interest or Encumbrance pursuant to such transaction, it will cease to
be a Controlling Shareholder of our Company or a member of a group of the
Controlling Shareholders of our Company or would together with the other
Controlling Shareholders cease to be “Controlling Shareholders” of our Company;
and
(iii) until the expiry of the Second Six Month Period, in the event that it enters into any
of the transactions specified in (i), (ii) or (iii) or offer to or agrees to or contract to
or publicly announce any intention to effect any such transaction, it/he/she will take
all reasonable steps to ensure that such a disposal will not create a disorderly or false
market in the securities of our Company.
Our Company has undertaken to the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters (as defined in the Hong Kong Underwriting
Agreement) that upon receiving such information in writing from the Controlling Shareholders,
it will, as soon as practicable and if required pursuant to the Listing Rules, the SFO and/or any
other applicable law, notify the Stock Exchange and/or other relevant Authorities, and make a
public disclosure in relation to such information by way of an announcement.
UNDERWRITING
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Mr. Xiang has undertaken to each of the Overall Coordinators, the Joint Global
Coordinators, the Joint Sponsors, the Joint Bookrunners, the Joint Lead Managers, the Hong
Kong Underwriters and the Capital Market Intermediaries to procure our Company to comply
with its obligations above.
Our Company agrees to procure that none of our directors nor their respective close
associates will apply for any of the Offer Shares pursuant to the Global Offering, either directly
or indirectly, whether in their own name or through nominee, unless permitted to do so under
the Listing Rules.
Joint Sponsors’ and Hong Kong Underwriters’ Interests in our Company
China Merchants Securities (HK) Co., Limited is a subsidiary of China Merchants
Securities Co., Ltd., which indirectly held approximately 0.0091% of the total number of
Shares as of the Latest Practicable Date.
Save as disclosed above and save for their respective obligations under the Hong Kong
Underwriting Agreement and/or the International Underwriting Agreement, and the sponsor fee
payable to each of the Joint Sponsors in connection with the Listing, as of the Latest
Practicable Date, none of the Joint Sponsors and the Hong Kong Underwriters was interested
legally or beneficially, directly or indirectly, in any Shares or other securities of our Company
or any other member of our Group or had any right or option (whether legally enforceable or
not) to subscribe for or purchase, or to nominate persons to subscribe for or purchase, any
Shares or other securities of our Company or any other member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement and/or the International
Underwriting Agreement.
Joint Sponsors’ Independence
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules.
The Joint Sponsors will receive an aggregate fee of US$1,000,000 in total for acting as
the sponsors for the Listing.
UNDERWRITING
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International Offering
International Underwriting Agreement
In connection with the International Offering, we and Mr. Xiang expect to enter into the
International Underwriting Agreement with, among others, the International Underwriters on
the Price Determination Date. Under the International Underwriting Agreement and subject to
the Over-allotment Option, the International Underwriters would, subject to certain conditions
set out therein, agree severally and not jointly to procure purchasers for, or themselves
purchase, their respective proportions of the International Offer Shares being offered pursuant
to the International Offering. It is expected that the International Underwriting Agreement may
be terminated on similar grounds as the Hong Kong Underwriting Agreement. Potential
investors should note that in the event that the International Underwriting Agreement is not
entered into or is terminated, the Global Offering will not proceed. Please refer to the section
headed “Structure of the Global Offering — The International Offering.”
Over-allotment Option
We are expected to grant to the International Underwriters the Over-allotment Option,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the date of the International Underwriting Agreement until 30
days after the last date for the lodging of applications under the Hong Kong Public Offering,
pursuant to which we may be required to allot and issue up to an aggregate of 6,000,000
additional H Shares representing no more than 15% of the initial number of the Offer Shares,
at the same price per Offer Share under the International Offering to cover, among other things,
over-allocations (if any) in the International Offering.
Commissions and Expenses
Our Company will pay an underwriting commission of 2.3% of the aggregate Offer Price
of all the Offer Shares, including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option. For unsubscribed Hong Kong Offer Shares reallocated to the
International Offering, we will pay an underwriting commission at the rate applicable to the
International Offering and such commission will be paid to the International Underwriters and
not the Hong Kong Underwriters. Additionally, the Company, may, at its sole discretion, pay
to all Syndicate Capital Market Intermediaries an additional discretionary incentive fee of up
to 1.2% of the aggregate Offer Price of all the Offer Shares (including any Offer Shares to be
issued pursuant to the exercise of the Over-allotment Option), the allocations of which shall be
determined by the Company before the Listing. Assuming the discretionary portion of the
underwriting commission is paid in full, the ratio of fixed fee and discretionary fee payable by
our Company to all Capital Market Intermediaries is expected to be 39:61. The commissions
payable to the Underwriters will be borne by our Company with respect to the new Offer Shares
to be issued by our Company under the Global Offering (including any additional H Shares to
be issued pursuant to the exercise of the Over-allotment Option).
UNDERWRITING
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The aggregate underwriting commissions and fees payable to the Underwriters, together
with the Stock Exchange listing fees, the SFC transaction levy, the Stock Exchange trading fee
and the AFRC transaction levy, legal and other professional fees and printing and all other
expenses in relation to the Global Offering are estimated to be approximately HK$102.4
million (assuming an Offer Price of HK$38.40 per Offer Share (which is the mid-point of the
indicative Offer Price range) and the Over-allotment Option is not exercised at all) and will be
paid by us.
Indemnity
We and Mr. Xiang have agreed to indemnify, among others, the Overall Coordinators, the
Joint Sponsors, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Hong Kong Underwriters and the Capital Market Intermediaries for certain losses which
they may suffer or incur, including, among others, losses arising from their performance of
their obligations under the Hong Kong Underwriting Agreement.
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 or
stabilizing process.
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 us and/or
persons and entities with relationships with our Company and may also include swaps and
other financial instruments entered into for hedging purposes in connection with our loans and
other debts.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, including as a lender to initial purchasers
of the H Shares (which financing may be secured by the H Shares) in the Global Offering,
proprietary trading in the H Shares, and entering into over the counter or listed derivative
transactions or listed or 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
UNDERWRITING
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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 activities could occur in Hong
Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the H Shares, in baskets of securities or indices including
the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any
of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the stock exchange may require the issuer of those securities
(or one of its affiliates or agents) to act as a market maker or liquidity provider in the security,
and this will also result in hedging activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in “Structure of the Global Offering.” 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:
 the Syndicate Members (other than the Stabilizing Manager or any person acting for
it) 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
 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, loan financing and other
services to the Company and certain of its affiliates for which such Syndicate Members or their
respective affiliates have received or will receive customary fees and commissions. In addition,
the Syndicate Members or their respective affiliates may provide financing to investors to
finance their subscriptions of the Offer Shares in the Global Offering.
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,
China Securities (International) Corporate Finance Company Limited and China Merchants
Securities (HK) Co., Limited are the Overall Coordinators of the Global Offering.
The listing of the H Shares on the Stock Exchange is sponsored by the Joint Sponsors. The
Joint Sponsors have made an application on behalf of our Company to the Listing Committee
of the Stock Exchange for the listing of, and permission to deal in, the H Shares in issue and
to be issued pursuant to the Global Offering (including the additional Shares which may be
issued pursuant to the exercise of the Over-allotment Option).
The Global Offering comprises:
(i) the Hong Kong Public Offering of initially 4,000,000 Offer Shares (subject to
reallocation) in Hong Kong as described in the subsection headed “— The Hong
Kong Public Offering” below; and
(ii) the International Offering of initially 36,000,000 Offer Shares (subject to
reallocation and the Over-allotment Option) outside the United States (including to
professional and institutional investors within Hong Kong) in offshore transactions
in accordance with Regulation S, as described in the subsection headed “— The
International Offering” 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 10% of the enlarged issued share capital of our Company
immediately following the completion of the Global Offering, assuming that the Over-
allotment Option is not exercised. If the Over-allotment Option is exercised in full, the Offer
Shares will represent approximately 11.3% of the enlarged issued share capital of our Company
immediately following the completion of the Global Offering and the exercise of the
Over-allotment Option.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in the subsection headed “—
The Hong Kong Public Offering — Reallocation” below.
STRUCTURE OF THE GLOBAL OFFERING
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References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
We are initially offering 4,000,000 Shares for subscription by the public in Hong Kong
at the Offer Price, representing 10% of the total number of Offer Shares initially available
under the Global Offering. The Hong Kong 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 1% of the enlarged issued share capital of
our Company immediately following the completion of the Global Offering (assuming that the
Over-allotment Option is not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities that regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in the
subsection headed “— Conditions of the Global Offering” below.
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 Share.
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 (to the nearest board lot) into two pools: pool A and pool B (with any
odd lot being allocated to pool A). The Hong Kong Offer Shares in pool A will be allocated
on an equitable basis to valid 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 Stock Exchange trading fee and the AFRC transaction levy payable) or less. The Hong
Kong Offer Shares in pool B will be allocated on an equitable basis to valid 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 Stock Exchange trading
fee and the AFRC transaction levy 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 undersubscribed, such undersubscribed 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 2,000,000 Hong Kong Offer
Shares (being 50% of the 4,000,000 Hong Kong Offer Shares initially available under the Hong
Kong Public Offering) are liable to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not
fully subscribed, the Overall 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 2,000,000 Offer Shares may be reallocated to
the Hong Kong Public Offering from the International Offering, so that the total number of
Offer Shares available for subscription under the Hong Kong Public Offering will be increased
up to 6,000,000 Offer Shares, representing 15% of the number of Offer Shares initially
available under the Global Offering (before any exercise of the Over-allotment Option) in
accordance with Chapter 4.14 of the Guide for New Listing Applicants; and the final Offer
Price shall be fixed at the bottom end of the indicative Offer Price range (i.e. HK$35.20 per
Offer Share).
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 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 allotment results announcement of the Global
Offering, which is expected to be published on Friday, March 20, 2026.
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/she/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 under
the International Offering is liable to be rejected if such undertaking and/or confirmation is
breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$41.60 per Offer Share in
addition to the brokerage, the SFC transaction levy, the Stock Exchange trading fee and the
AFRC transaction levy payable on each Offer Share, amounting to a total of HK$4,201.96 for
one board lot of 100 H Shares. If the Offer Price, as finally determined in the manner described
in the subsection headed “— Pricing and Allocation” below, is less than the maximum Offer
Price of HK$41.60 per Offer Share, appropriate refund payments (including the brokerage, the
SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy
attributable to the surplus application monies) will be made to successful applicants (subject
to application channels), without interest. For further details, see “How to Apply for Hong
Kong Offer Shares.”
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
Subject to reallocation as described above and the Over-allotment Option, the
International Offering will consist of an offering of initially 36,000,000 Offer Shares,
representing 90% of the total number of Offer Shares initially available under the Global
Offering. 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 9% of the enlarged issued share capital of our Company
immediately after completion of the Global Offering (assuming that the Over-allotment Option
is not exercised).
STRUCTURE OF THE GLOBAL OFFERING
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Allocation
The International Offering will include selective marketing of Offer Shares to
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 the subsection headed “— Pricing and
Allocation” below 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 Offer Shares,
and/or hold or sell its Offer Shares, after the Listing. Such allocation is intended to result in
a distribution of the Offer Shares on a basis which would lead to the establishment of a solid
professional and institutional shareholder base to the benefit of our Company and 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 Hong
Kong Offer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the exercise of the Over-allotment Option in whole or in part and/or any
reallocation of unsubscribed Offer Shares originally included in the Hong Kong Public
Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, we are 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 date of the International Underwriting Agreement until 30
days after the last day for lodging applications under the Hong Kong Public Offering, to require
us to issue up to an aggregate of 6,000,000 additional Offer Shares, representing not more than
15% of the total number of Offer Shares initially available under the Global Offering, at the
Offer Price under the International Offering to cover, among other things, over-allocations in
the International Offering, if any.
STRUCTURE OF THE GLOBAL OFFERING
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If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto will represent approximately 1.5% of the enlarged issued share capital of our
Company immediately following the completion of the Global Offering and the exercise of the
Over-allotment Option. If the Over-allotment Option is exercised, an announcement will be
made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market, during a specified period of time, to retard and, if possible, prevent
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, its affiliates or any
person acting for it, on behalf of the Underwriters, may 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 on and after the Listing Date. However, there is
no obligation on the Stabilizing Manager, its affiliates or any person acting for it, to conduct
any such stabilizing action. Such stabilizing action, if taken, (i) will be conducted at the sole
and absolute discretion of the Stabilizing Manager, its affiliates or any person acting for it and
in what the Stabilizing Manager reasonably regards as the best interest of us, (ii) may be
discontinued at any time and (iii) 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 (i) over-allocating for the purpose of preventing or
minimising any reduction in the market price of the H Shares, (ii) 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, (iii) purchasing, or agreeing to
purchase, the Shares pursuant to the Over-allotment Option in order to close out any position
established under (i) or (ii) above, (iv) purchasing, or agreeing to purchase, any of the H Shares
for the sole purpose of preventing or minimizing any reduction in the market price of the H
Shares, (v) selling or agreeing to sell any Shares in order to liquidate any position established
as a result of those purchases and (vi) offering or attempting to do anything as described in (ii),
(iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
 the Stabilizing Manager (or any person acting for it) may, in connection with the
stabilizing action, maintain a long position in the H Shares;
STRUCTURE OF THE GLOBAL OFFERING
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 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or any person acting for it) will maintain such a long position;
 liquidation of any such long position by the Stabilizing Manager (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;
 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;
 the price of the H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
 stabilizing bids the price 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.
We 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 the H Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by exercising
the Over-allotment Option in full or in part, by using Shares purchased by the Stabilizing
Manager (or any person acting for it) in the secondary market at prices that do not exceed the
Offer Price or a combination of these means.
PRICING AND ALLOCATION
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 around
Thursday, March 19, 2026 and, in any event, not later than 12:00 noon on Thursday, March 19,
2026 by agreement between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and us, and the number of Offer Shares to be allocated under the various
offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$41.60 per Offer Share and is expected to be
not less than HK$35.20 per Offer Share unless otherwise announced, as further explained
below. Applicants under the Hong Kong Public Offering may be required to pay, on application
STRUCTURE OF THE GLOBAL OFFERING
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(subject to application channels), the maximum Offer Price of HK$41.60 per Offer Share plus
brokerage of 1%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565%
and AFRC transaction levy of 0.00015%, amounting to a total of HK$4,201.96 for one board
lot of 100 H Shares. Prospective investors should be aware that the Offer Price to be
determined on the Price Determination Date may be, but is not expected to be, lower than
the indicative Offer Price range stated in this prospectus.
The International Underwriters will be soliciting indications of interest in acquiring
International Offer Shares in the International Offering from prospective investors. 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 around, the last day for lodging applications under the Hong Kong Public
Offering.
Reduction in Number of Offer Shares and/or Indicative Offer Price Range
The Overall Coordinators (for themselves and on behalf of the Underwriters), may, where
they deem appropriate, based on the level of interest expressed by prospective institutional,
professional and other investors during the book-building process in respect of the
International Offering, and with the consent of us, reduce the number of Offer Shares offered
and/or the indicative Offer Price range below that stated in this prospectus at any time on or
prior to the morning of the last day for lodging applications under the Hong Kong Public
Offering. In such case, we will, as soon as practicable following the decision to make such
reduction, and in any event not later than the morning of the last day for lodging applications
under the Hong Kong Public Offering, cause to be published on the websites of our Company
and the Stock Exchange at https://www.fs.com and www.hkexnews.hk , respectively, notices
of the reduction of the Offer Shares and/or the indicative Offer Price range.
Supplemental listing prospectus will also be issued by the Company in the event of a
reduction in the number of Offer Shares or the indicative Offer Price range. Such supplemental
listing prospectus 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. The Global
Offering must first be cancelled and subsequently relaunched on FINI pursuant to the
supplemental prospectus. In the absence of any such notice so published, the number of Offer
Shares and/or the indicative Offer Price range will not be reduced.
In the absence of any such notice and supplemental prospectus so published, the number
of Offer Shares will not be reduced and/or the Offer Price, if agreed upon between our
Company and the Overall Coordinators (on behalf of the Underwriters), will under no
circumstances be set outside the indicative Offer Price range stated in this 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 indicative Offer Price range may not be made until the last day for lodging
applications under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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If there is any change to the offer size due to change in the number of Offer Shares offered
in the Global Offering (other than pursuant to the exercise of the Over-allotment Option and/or
the reallocation mechanism as disclosed in this prospectus), or change to the Offer Price which
leads to the resulting price falling outside the indicative Offer Price range as stated in this
prospectus, or if the Company becomes aware that there has been a significant change affecting
any matter contained in this prospectus or a significant new matter has arisen, the inclusion of
information in respect of which would have been required to be in this prospectus if it had
arisen before this prospectus was issued, after the issue of this prospectus and before the
commencement of dealings in our Shares as prescribed under Rule 11.13 of the Listing Rules,
we are required to cancel the Global Offering and relaunch the offer on FINI and issue a
supplemental prospectus or a new prospectus.
In the event of a reduction in the number of Offer Shares being offered under the Global
Offering, the Overall Coordinators may at their discretion reallocate the number of Offer
Shares to be offered under the Hong Kong Public Offering and the International Offering. The
International Offer Shares to be offered in the International Offering and the Offer Shares to
be offered in the Hong Kong Public Offering may, in certain circumstances, be reallocated as
between these offerings at the discretion of the Overall Coordinators.
The final Offer Price, an indication of the level of interest in the International Offering,
the level of applications in the Hong Kong Public Offering, the basis of allocation 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 — Publication of Results” in this
prospectus.
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 conditional
upon the International Underwriting Agreement being signed and becoming unconditional and
is subject to, among other things, the Overall Coordinators (for themselves and on behalf of the
Underwriters) and us agreeing on the Offer Price.
We expect 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.
STRUCTURE OF THE GLOBAL OFFERING
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CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(i) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering (including the
additional Shares which may be issued pursuant to the exercise of the Over-
allotment Option) on the Main Board of the Stock Exchange, and such listing and
permission not subsequently having been withdrawn or revoked prior to the
commencement of dealings in the H Shares on the Stock Exchange;
(ii) the Offer Price having been agreed between us, the Overall Coordinators (for
themselves and on behalf of the Underwriters) on or around the Price Determination
Date;
(iii) the execution and delivery of the International Underwriting Agreement on or
around the Price Determination Date; and
(iv) the obligations of the Underwriters under each of the Hong Kong Underwriting
Agreement and 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,
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) and, in any event, not later than the date which is 30 days after the date of
this prospectus.
If, for any reason, the Offer Price is not agreed between us, the Overall Coordinators (for
themselves and on behalf of the Underwriters) on or before 12:00 noon on Thursday, March 19,
2026, 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, amongst other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of
the lapse of the Hong Kong Public Offering will be published by us on the websites of the
Stock Exchange at www.hkexnews.hk and us at https://www.fs.com 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.
Dispatch/Collection of H Share Certificates and Refund of Application Monies” in this
STRUCTURE OF THE GLOBAL OFFERING
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prospectus. In the meantime, all application monies will be held in separate bank account(s)
with the receiving bank 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 evidence of title at 8:00
a.m. on Monday, March 23, 2026 provided that the Global Offering has become unconditional
in all respects and the right of termination described in the section headed “Underwriting” in
this prospectus has not been exercised.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Monday, March 23, 2026, it is expected that dealings in the H Shares
on the Stock Exchange will commence at 9:00 a.m. on Monday, March 23, 2026.
The H Shares will be traded in board lots of 100 H Shares each and the stock code of the
H Shares will be 3355.
STRUCTURE OF THE GLOBAL OFFERING
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IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering and below are the procedures for application. We will not provide any printed
copies of this prospectus for use by the public.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”
section, and our website at https://www.fs.com . If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
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.
Set out below are procedures through which you can apply for the Hong Kong Offer
Shares electronically. We will not provide any physical channels to accept any
application for the Hong Kong Offer Shares by the public.
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.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 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).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange, you cannot apply for any Hong Kong Offer Shares if you or the person(s) for
whose benefit you are applying for:
 are an existing shareholder of our Company and/or any of our subsidiaries;
 are a Director, supervisor or chief executive of our Company and/or any of our
subsidiaries;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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 are a close associate (as defined in the Listing Rules) of any of the above; or
 have been allocated or have applied for any International Offer Shares or otherwise
participate in the International Offering.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Friday, March 13, 2026
and end at 12:00 noon on Wednesday, March 18, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.hkeipo.hk Investors who would
like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Friday, March 13,
2026 to 11:30 a.m.
on Wednesday,
March 18, 2026,
Hong Kong time.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Wednesday,
March 18, 2026,
Hong Kong time.
HKSCC EIPO
channel /H1118/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 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.
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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 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 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 application reference numbers without
effecting full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the 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 Offer Shares on your
behalf through the HKSCC EIPO channel , you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel , an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
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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) as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. Hong Kong identity (“ HKID ”)
card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s) as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. Legal entity identifier (“ 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.
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5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity), the
identity document’s issuing country or jurisdiction, the identity document type; and (ii), the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each
joint beneficial owner. If you do not include this information, the application will be treated as being
made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the 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 Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 100 H Shares
Permitted number of
Hong Kong Offer Shares
for application and amount
payable on application/
successful allotment /H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The maximum Offer Price is HK$41.60 per H
Share.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require you
to pre-fund your application, in such amount as
determined by the broker or custodian, based on
the applicable laws and regulations in Hong Kong.
Y ou are responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Offer
Shares you applied for.
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By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the final Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank
account at the designated bank for your broker or
custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of H Shares
you have selected. Y ou must pay the respective
maximum amount payable on application in full
upon application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 4,201.96 2,500 105,048.85 30,000 1,260,586.08 600,000 25,211,721.60
200 8,403.90 3,000 126,058.61 40,000 1,680,781.45 700,000 29,413,675.20
300 12,605.87 3,500 147,068.38 50,000 2,100,976.80 800,000 33,615,628.80
400 16,807.81 4,000 168,078.14 60,000 2,521,172.15 900,000 37,817,582.40
500 21,009.77 4,500 189,087.91 70,000 2,941,367.52 1,000,000 42,019,536.00
600 25,211.72 5,000 210,097.68 80,000 3,361,562.88 2,000,000
(1) 84,039,072.00
700 29,413.68 6,000 252,117.21 90,000 3,781,758.25
800 33,615.63 7,000 294,136.75 100,000 4,201,953.60
900 37,817.59 8,000 336,156.29 200,000 8,403,907.20
1,000 42,019.53 9,000 378,175.82 300,000 12,605,860.80
1,500 63,029.30 10,000 420,195.35 400,000 16,807,814.40
2,000 84,039.07 20,000 840,390.72 500,000 21,009,768.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 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.
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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. Applications for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the 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 Offer Shares in the International Offering.
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 application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channels, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Overall Coordinators, as our agent, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the 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;
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(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Joint Sponsors, the authorized representatives, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters, any of their or the Company’s respective directors,
supervisors, officers, employees, partners, agents, advisers and any other parties
involved in the Global Offering (the “ Relevant Persons ”), the H Share Registrar
and HKSCC will not be liable for any information and representations not in this
prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes” and “Personal Data — 4. Transfer of Personal Data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it 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 Offer Shares” in
this section;
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(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, 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 Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the 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 or 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
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B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118From the “Allotment Results”
page in the designated results
of allocation at
www.tricor.com.hk/ipo/result
or www.hkeipo.hk/IPOResult with a
“search by ID” function.
24 hours, from 11:00
p.m. on Friday,
March 20, 2026 to
12:00 midnight
on Thursday,
March 26, 2026
(Hong Kong time)
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.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult .
The Stock Exchange’s website at
www.hkexnews.hk and our website at
https://www.fs.com which will provide
links to the above mentioned websites
of the H Share Registrar.
No later than 11:00 p.m.
on Friday, March 20,
2026 (Hong Kong
time)
Telephone /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
Monday, March 23,
2026 to Thursday,
March 26, 2026
(Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Thursday, March 19, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, March 19, 2026 (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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Allocation Announcement
We expect to announce the results of the final Offer Price, an indication of the level of
interest in the Global Offering, the level of applications in the Hong Kong Public Offering and
the basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at https://www.fs.com by no later than 11:00 p.m. on
Friday, March 20, 2026 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
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:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated; or
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 376 ---
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
designated bank before balloting. After balloting of Hong Kong Offer Shares, the receiving
bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their designated bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its designated bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its designated bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DISPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary 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 Monday, March 23, 2026
(Hong Kong time), provided that the Global Offering has become unconditional and the right
of termination described in the section headed “Underwriting” in this prospectus has not been
exercised. Investors who trade H Shares prior to the receipt of H Share certificates or the H
Share certificates becoming valid evidence of title 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.
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--- page 377 ---
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Dispatch/collection of H Share certificate 1
For application of
1,000,000
Hong Kong Offer
Shares or more /H1118/H1118/H1118/H1118
Collection in person at the
H Share Registrar, Tricor
Investor Services Limited,
at 17/F, Far East Finance
Centre, 16 Harcourt Road,
Hong Kong
Time : from 9:00 a.m. to
1:00 p.m. on Monday,
March 23, 2026 (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 authorised
representative must bear a
letter of authorization
from your corporation
stamped with your
corporation’s chop
Both individuals and
authorised representatives
must produce, at the time
of collection, evidence of
identity acceptable to the
H Share Registrar
H Share certificate(s) will
be issued in the name
of HKSCC Nominees,
deposited into CCASS
and credited to your
designated HKSCC
Participant’s stock
account
No action by you is
required
1 Except in the event of any Bad Weather Signals (as defined under the paragraph headed “— E. Severe Weather
Arrangements” in this section) in force in Hong Kong in the morning on Friday, March 20, 2026 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.
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--- page 378 ---
HK eIPO White Form service HKSCC EIPO channel
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
For application of less
than 1,000,000
Hong Kong
Offer Shares /H1118/H1118/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 : Friday, March 20,
2026
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, March 23, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118H Share Registrar Y our broker or custodian
Application monies
paid through single
bank account /H1118/H1118/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/H1118/H1118
Refund check(s) will be
dispatched to the address
as specified in your
application instructions by
ordinary post at your own
risk
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E. SEVERE WEATHER ARRANGEMENTS
Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, March 18, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions
(collectively, “ Bad Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, March 18,
2026.
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 Bad Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at https://www.fs.com of the revised timetable.
If a Bad Weather Signal is hoisted on Friday, March 20, 2026, 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 Monday, March 23,
2026.
If a Bad Weather Signal is hoisted on Friday, March 20, 2026, 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 Bad Weather Signal is lowered
or canceled (e.g. in the afternoon of Friday, March 20, 2026 or on Monday, March 23, 2026).
If a Bad Weather Signal is hoisted on Monday, March 23, 2026, 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 Bad Weather Signal is
lowered or canceled (e.g. in the afternoon of Monday, March 23, 2026 or on Tuesday,
March 24, 2026).
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.
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F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
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 bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
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Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the dispatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund check 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 Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
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4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the 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
– 371 –


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The following is the text of a report set out on pages I-1 to I-73 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 FS.COM LIMITED (ʮ̡), CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED,
CHINA SECURITIES (INTERNATIONAL) CORPORATE FINANCE COMPANY
LIMITED AND CHINA MERCHANTS SECURITIES (HK) CO., LIMITED
Introduction
We report on the historical financial information of FS.COM Limited (஺௴อҦ
ʮ̡) (the “Company”) and its subsidiaries (collectively referred to the “Group”)
set out on pages I-4 to I-73, which comprises the consolidated statements of financial position
of the Group as at December 31, 2022, 2023 and 2024 and September 30, 2025, the statements
of financial position of the Company as at December 31, 2022, 2023 and 2024 and September
30, 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 December 31, 2024 and the nine months ended
September 30, 2025 (the “Track Record Period”) and material accounting policy information
and other explanatory information (the “Historical Financial Information”). The Historical
Financial Information set out on pages I-4 to I-73 forms an integral part of this report, which
has been prepared for inclusion in the prospectus of the Company dated March 13, 2026 (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 1 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
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 384 ---
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.
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 1 to the Historical Financial Information in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors 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 and the Company’s financial position
as at December 31, 2022, 2023 and 2024 and September 30, 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 1 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 for
the nine months ended September 30, 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 1 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 International Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” issued by International Auditing and Assurance Standards Board
(“IAASB”). 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 International
Standards on Auditing (“ISAs”) and consequently does not enable us to obtain assurance that
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 385 ---
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 1 to the Historical Financial Information.
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 14 to the Historical Financial Information which contains information
about dividends declared or paid by the Company in respect of the Track Record Period.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
March 13, 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 386 ---
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 the IFRS Accounting Standards as issued by
International Accounting Standards Board (the “IASB”) and were audited by us in accordance
with ISAs issued by IAASB (“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
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--- page 387 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended December 31,
Nine months ended
September 30,
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/H11185 1,988,244 2,212,851 2,611,793 1,953,701 2,174,718
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,085,386) (1,120,379) (1,305,484) (958,042) (1,031,899)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902,858 1,092,472 1,306,309 995,659 1,142,819
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 18,241 12,989 12,811 9,984 6,375
Impairment losses under expected
credit loss model, net of reversal /H1118/H1118 7 272 (1,659) (1,008) (485) (1,638)
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 42,704 38,682 (948) 8,746 49,761
Selling and distribution expenses /H1118/H1118/H1118/H1118 (270,490) (338,941) (487,665) (353,373) (390,154)
General and administrative expenses /H1118/H1118 (170,373) (175,156) (209,777) (140,110) (161,835)
Research and development expenses /H1118/H1118 (99,824) (110,482) (143,710) (99,824) (124,273)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 (4,511) (4,655) (18,544) (12,823) (19,997)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (893) – (18,110)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418,877 513,250 456,575 407,774 482,948
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 (54,370) (56,503) (59,318) (56,967) (59,774)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111811 364,507 456,747 397,257 350,807 423,174
Other comprehensive income
(expense)
Item that may be reclassified
subsequently to profit or loss:
Exchange differences arising on
translation of foreign operations /H1118/H1118/H1118 6,606 2,446 (247) (1,507) 5,595
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,113 459,193 397,010 349,300 428,769
Earnings per share 15
– Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.06 1.33 1.16 1.02 1.23
– Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.03 1.29 1.12 0.99 1.19
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 388 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF THE GROUP
At December 31,
At
September 30,
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H111816a 311,669 346,866 1,194,069 1,171,163
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 30,651 87,511 119,041 118,413
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816b – – – 11,037
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 25,017 20,917 18,375 14,619
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 61,610 90,865 110,536 122,677
Other receivables, deposits and
prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 8,265 16,154 88,296 67,375
Deposits for the acquisition of
property, plant and equipment /H1118/H1118/H1118 4,320 268,180 4,511 3,067
441,532 830,493 1,534,828 1,508,351
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 659,077 606,115 572,271 484,835
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 103,007 122,599 154,616 218,364
Other receivables, deposits and
prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 148,701 115,885 120,304 125,828
Right to returned goods asset /H1118/H1118/H1118/H1118/H1118 5,382 2,962 3,392 3,658
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,559 13,045 10,606 11,798
Financial assets at fair value through
profit or loss (“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H111824 390,038 180,347 506,444 694,046
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 16,799 14,662 17,363 32,011
Short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H111825 – – 93,000 23,400
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 370,720 833,308 537,575 619,329
1,712,283 1,888,923 2,015,571 2,213,269
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 345,630 278,330 251,449 217,423
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H111827 81,555 112,718 139,283 130,058
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 9,711 6,000 6,987 7,555
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 44,560 109,499 40,692 46,219
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,674 24,062 8,191 16,047
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 8,716 11,364 63,787 176,245
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 14,897 16,866 24,371 26,462
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 3,144 4,226 4,549 5,976
529,887 563,065 539,309 625,985
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,182,396 1,325,858 1,476,262 1,587,284
Total assets less current liabilities /H1118 1,623,928 2,156,351 3,011,090 3,095,635
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 70,299 85,415 509,573 345,548
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 14,097 69,317 100,780 101,332
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H111827 7,116 3,637 – –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 – – – 664,243
91,512 158,369 610,353 1,111,123
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
Capital and reserves
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 360,000 360,000 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,416 1,637,982 2,040,737 1,624,512
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,532,416 1,997,982 2,400,737 1,984,512
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 389 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
At December 31,
At
September 30,
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H111816a 32,437 17,835 753,364 544,513
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 15,192 9,125 9,046 5,399
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816b – – 46,770 248,293
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 12,319 10,688 9,503 8,619
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 3,735 6,712 7,366 8,222
Other receivables, deposits and
prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 4,534 4,255 70,813 48,736
Deposits for the acquisition of
property, plant and equipment /H1118/H1118/H1118 2,353 229,485 4,511 44
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H111839 42,885 140,085 150,085 140,085
113,455 418,185 1,051,458 1,003,911
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 173,295 67,019 7,106 1,070
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 12,215 12,008 15,169 4,410
Other receivables, deposits and
prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 69,067 45,567 54,989 36,004
Amounts due from subsidiaries /H1118/H1118/H1118/H111823 898,530 872,935 1,222,072 1,288,225
Right to returned goods asset /H1118/H1118/H1118/H1118/H1118 240 395 323 61
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,882 –
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H111824 390,038 180,347 506,444 694,046
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 800 800 800 800
Short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H111825 – – 93,000 23,400
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 211,736 602,512 212,146 114,181
1,755,921 1,781,583 2,118,931 2,162,197
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 147,263 2,474 82 45
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H111827 37,260 38,481 37,800 27,663
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H111828 33,959 77,202 259,301 169,444
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 434 800 666 126
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 1,980 18,335 1,283 967
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 9,381 6,168 5,108 4,313
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,174 21,271 1,541 3,644
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 – – 52,336 164,836
251,451 164,731 358,117 371,038
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,504,470 1,616,852 1,760,814 1,791,159
Total assets less current liabilities /H1118 1,617,925 2,035,037 2,812,272 2,795,070
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 4,005 1,821 4,302 1,424
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 – – 435,522 280,020
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 – – – 664,243
4,005 1,821 439,824 945,687
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,613,920 2,033,216 2,372,448 1,849,383
Capital and reserves
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 360,000 360,000 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 1,253,920 1,673,216 2,012,448 1,489,383
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,613,920 2,033,216 2,372,448 1,849,383
APPENDIX I ACCOUNTANTS’ REPORT
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share
capital
Share
premium
Shares
issued for
Employee
Incentive
Scheme
Share-
based
payment
reserve
Other
reserve
Statutory
surplus
reserve
Translation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note ii) (note ii) (note i)
At January 1, 2022 /H1118/H1118/H1118/H1118360,000 562,045 (47,799) 10,740 47,799 34,369 (5,645) 249,199 1,210,708
Profit for the year /H1118/H1118/H1118/H1118/H1118–––––– – 364,507 364,507
Exchange differences
arising on translation of
foreign operations /H1118/H1118/H1118/H1118–––––– 6,606 – 6,606
Total comprehensive
income for the year /H1118/H1118 –––––– 6,606 364,507 371,113
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 37,714 – (37,714) –
Dividends recognized as
distribution (Note 14) /H1118/H1118 –––––– – (60,000) (60,000)
Recognition of share-based
payment expenses (Note
35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,595 – – – – 10,595
At December 31, 2022 /H1118/H1118/H1118360,000 562,045 (47,799) 21,335 47,799 72,083 961 515,992 1,532,416
Profit for the year /H1118/H1118/H1118/H1118/H1118–––––– – 456,747 456,747
Exchange differences
arising on translation of
foreign operations /H1118/H1118/H1118/H1118–––––– 2,446 – 2,446
Total comprehensive
income for the year /H1118/H1118 –––––– 2,446 456,747 459,193
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 41,292 – (41,292) –
Recognition of share-based
payment expenses (Note
35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,373 – – – – 6,373
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 391 ---
Share
capital
Share
premium
Shares
issued for
Employee
Incentive
Scheme
Share-
based
payment
reserve
Other
reserve
Statutory
surplus
reserve
Translation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note ii) (note ii) (note i)
At December 31, 2023 /H1118/H1118/H1118360,000 562,045 (47,799) 27,708 47,799 113,375 3,407 931,447 1,997,982
Profit for the year /H1118/H1118/H1118/H1118/H1118–––––– – 397,257 397,257
Exchange differences
arising on translation of
foreign operations /H1118/H1118/H1118/H1118–––––– (247) – (247)
Total comprehensive
(expense) income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (247) 397,257 397,010
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 33,349 – (33,349) –
Recognition of share-based
payment expenses (Note
35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,745 – – – – 5,745
At December 31, 2024 /H1118/H1118/H1118360,000 562,045 (47,799) 33,453 47,799 146,724 3,160 1,295,355 2,400,737
Profit for the period /H1118/H1118/H1118/H1118–––––– – 423,174 423,174
Exchange differences
arising on translation of
foreign operations /H1118/H1118/H1118/H1118–––––– 5,595 – 5,595
Total comprehensive
income for the period /H1118/H1118 –––––– 5,595 423,174 428,769
Dividends recognized as
distribution (Note 14) /H1118/H1118 –––––– – (200,000) (200,000)
Recognition of share-based
payment expenses (Note
35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 14,401 – – – – 14,401
Recognition of redemption
liabilities (Note 33) /H1118/H1118/H1118 –––– (659,395) – – – (659,395)
At September 30, 2025 /H1118/H1118360,000 562,045 (47,799) 47,854 (611,596) 146,724 8,755 1,518,529 1,984,512
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 392 ---
Share
capital
Share
premium
Shares
issued for
Employee
Incentive
Scheme
Share-
based
payment
reserve
Other
reserve
Statutory
surplus
reserve
Translation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note ii) (note ii) (note i)
At January 1, 2024 /H1118/H1118/H1118/H1118360,000 562,045 (47,799) 27,708 47,799 113,375 3,407 931,447 1,997,982
Profit for the period /H1118/H1118/H1118/H1118–––––– – 350,807 350,807
Exchange differences
arising on translation of
foreign operations /H1118/H1118/H1118/H1118–––––– (1,507) – (1,507)
Total comprehensive
(expense) income for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (1,507) 350,807 349,300
Recognition of share-based
payment expenses (Note
35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,291 – – – – 4,291
At September 30, 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000 562,045 (47,799) 31,999 47,799 113,375 1,900 1,282,254 2,351,573
Notes:
i. It represents the statutory surplus reserves of the Company in the People’s Republic of China (“PRC”).
Pursuant to the applicable PRC regulation, a company established in the PRC with limited liability is required
to transfer at least 10% of its net profit after tax to the statutory surplus reserve. The statutory surplus reserve
is discretionary until the reserve balance reaches 50% of the registered capital of the Company and can be used
to make up for previous years’ losses or, expand the existing operations or can be converted into additional
capital of the Company.
ii. The shares issued to and held by Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth under the Employee
Incentive Scheme, as defined and detailed in Note 35, were recognized as treasury shares by the Company and
had been deducted from shareholders’ equity as shown in the consolidated statements of changes in equity
under “Shares issued for Employee Incentive Scheme” reserve. The cash consideration received by the
Company amounted to RMB47,799,000 has been recognized as capital reserve included in other reserve of
equity, as the Company does not have any obligation to repurchase any granted shares if they were
subsequently forfeited or not vested.
For details regarding the recognition of redemption liabilities during the nine months ended September 30,
2025, please refer to Note 33.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 393 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
OPERA TING ACTIVITIES
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418,877 513,250 456,575 407,774 482,948
Adjustments for:
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,511 4,655 18,544 12,823 19,997
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,725) (4,725) (6,651) (5,130) (4,149)
Depreciation of property, plant and equipment /H1118/H1118/H111826,749 40,325 69,318 51,977 69,481
Depreciation of investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 3 1
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,876 22,122 29,269 21,215 23,176
Amortization of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,923 5,878 6,882 4,060 4,910
Allowance on inventories, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,024 25,198 38,854 19,240 (12,102)
Impairment losses under expected credit loss
model, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(272) 1,659 1,008 485 1,638
(Gain) loss on disposal of 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(222) 156 97 11 10
Written-off of property, plant and equipment /H1118/H1118/H1118/H1118– – 389 2 36
Gain on early termination of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (53) (33) (33) (363)
Fair value changes of financial assets at FVTPL /H1118/H1118(14,113) (12,993) (8,731) (6,378) (9,116)
Share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,595 6,373 5,745 4,291 14,401
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/H1118/H1118/H1118475,223 601,845 611,266 510,337 590,998
(Increase) decrease in inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(370,062) 26,375 (5,009) (31,337) 97,582
Increase in trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,394) (21,180) (33,090) (32,775) (65,275)
(Increase) decrease in other receivables, deposits
and prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,293) 37,407 4,140 (51,025) 18,381
(Increase) decrease in right to returned goods asset /H1118 (3,073) 2,420 (431) (906) (266)
Increase (decrease) in trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,767 (67,300) (26,881) (11,268) (34,026)
Increase (decrease) in other payables and accruals /H1118/H1118 41,618 22,901 20,098 (13,553) (5,591)
Increase (decrease) in refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,319 (3,711) 987 1,959 568
Increase (decrease) in contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11188,257 64,939 (68,807) (40,134) 5,527
Cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,362 663,696 502,273 331,298 607,898
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,530) (77,686) (93,432) (81,807) (65,251)
NET CASH FROM OPERATING ACTIVITIES /H1118/H1118170,832 586,010 408,841 249,491 542,647
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 394 ---
Y ear ended December 31,
Nine months ended
September 30,
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/H1118/H1118/H1118/H11183,725 4,725 6,651 5,130 4,149
Purchase and deposits paid for property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(208,813) (339,481) (725,337) (655,385) (59,893)
Purchase of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,975) (1,639) (4,239) (3,687) (1,210)
Purchases of financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,728,000) (2,509,500) (1,805,000) (1,440,000) (1,190,000)
Payments for rental deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,742) (8,656) (10,253) (7,081) (2,230)
Withdrawal of rental deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,049 671 5,106 1,512 3,337
Proceeds from disposal of 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/H1118841 123 378 355 145
Proceeds from redemption of financial assets
at FVTPL upon maturity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,672,922 2,732,184 1,487,634 1,195,934 1,011,514
Withdrawal of short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 93,000
Placement of short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (93,000) (93,000) (23,400)
Withdrawal of restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118784 4,495 2,133 2,100 15,283
Placement of restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,114) (2,358) (4,834) (2,006) (29,931)
NET CASH USED IN INVESTING ACTIVITIES /H1118 (274,323) (119,436) (1,140,761) (996,128) (179,236)
FINANCING ACTIVITIES
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(4,511) (4,655) (18,457) (12,759) (15,192)
Dividend paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(60,000) – – – (200,000)
Payment of share issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (3,362)
Repayments of borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,101) (8,716) (46,866) (34,691) (51,524)
Repayments of lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,589) (20,393) (20,876) (13,937) (19,048)
New borrowings raised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,160 26,480 523,360 523,360 –
NET CASH (USED IN) FROM FINANCING
ACTIVITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,041) (7,284) 437,161 461,973 (289,126)
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,532) 459,290 (294,759) (284,664) 74,285
CASH AND CASH EQUIV ALENTS AT
JANUARY 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,939 367,576 829,082 829,082 533,026
Effect of foreign exchange rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169 2,216 (1,297) (1,974) 6,042
TOTAL CASH AND CASH EQUIV ALENTS AT
THE END OF YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118367,576 829,082 533,026 542,444 613,353
Represented by:
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118370,720 833,308 537,575 547,408 619,329
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,144) (4,226) (4,549) (4,964) (5,976)
367,576 829,082 533,026 542,444 613,353
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 395 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION AND BASIS OF PREPARATION OF HISTORICAL FINANCIAL
INFORMATION
The Company was incorporated in the PRC on April 9, 2009 as a limited liability company under the Company
Law of the PRC. On September 29, 2020, the Company was converted from a limited liability company into a joint
stock company. The respective addresses of the registered office and the principal place of business of the Company
are stated in the section headed “Corporate Information” of the Prospectus.
The Company is a trading and investment holding company. The Group is principally engaged in the sales of
optical communication product globally. Mr. Xiang Wei (“Mr. Xiang”) is the founder and ultimate controlling
shareholder of the Company.
The Historical Financial Information has been prepared based on the accounting policies which conform with
IFRS Accounting Standards issued by the IASB.
The Historical Financial Information is presented in RMB, which is also the functional currency of the
Company.
The statutory financial statements of the Company for the years ended December 31, 2022, 2023 and 2024
prepared in accordance with the relevant accounting principles and regulations in the PRC were audited by Shenzhen
Donghai Certified Public Accountants (Special General Partnership) (ה(౷ஷΥྫ)),
certified public accountants registered in the PRC.
2. APPLICATION OF IFRS ACCOUNTING STANDARDS
For the purpose of preparing the Historical Financial Information for the Track Record Period, the Group has
consistently applied the accounting policies which conform with IFRS Accounting Standards issued by the IASB
which are effective for the accounting period beginning on January 1, 2025 throughout the Track Record Period.
New and amendments to IFRS Accounting Standards in issue but not yet effective
The Group has not early applied the following new 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 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 2
Amendments to IFRS 10 and IAS 28 /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 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
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation
Currency 3
1 Effective for annual periods beginning on or after a date to be determined.
2 Effective for annual periods beginning on or after January 1, 2026.
3 Effective for annual periods beginning on or after January 1, 2027.
Except for 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 Group’s financial
position and performance in the foreseeable future.
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IFRS 18 Presentation and Disclosure in Financial Statements sets out requirements on presentation and
disclosures in financial statements and will replace IAS 1 Presentation of Financial Statements . This new IFRS
Accounting Standard, while carrying forward many of the requirements in IAS 1, 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. In addition, some IAS 1 paragraphs have
been moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial
Instruments: Disclosures. Minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share are
also made.
IFRS 18, and amendments to other standards, will be effective for annual periods beginning on or after January
1, 2027, with early application permitted. The directors of the Company anticipate that the application of IFRS 18
will affect the structure and presentation of the consolidated statement of profit or loss and disclosures in future
consolidated financial statements, but will have no material impact on the financial position and performance of the
Group given it will not impact the recognition or measurement of items in the consolidated financial statements.
3. MATERIAL ACCOUNTING POLICY INFORMATION
The Historical Financial Information has been prepared in accordance with the accounting policies which
conform with IFRS Accounting Standards issued by the IASB. For the purpose of preparation of the Historical
Financial Information, information is considered material if such information is reasonably expected to influence
decisions made by primary users. In addition, the Historical Financial Information includes applicable disclosures
required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the
“Listing Rules”) and by the Hong Kong Companies Ordinance (the “CO”).
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 when 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.
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 intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
Investments in subsidiaries
Investments in subsidiaries are stated in the statements of financial position of the Company at cost less any
identified impairment loss.
Revenue from contracts with customers
Details about the Group’s accounting policies relating to contracts with customers is provided in Notes 5, 29
and 30.
Leases
Definition of a lease
The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 Lease at
inception of the contract. Such contract will not be reassessed unless the terms and conditions of the contract are
subsequently changed.
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The Group as a lessee
Short-term leases
The Group applies the short-term lease recognition exemption to leases of offices, motor vehicles, machinery,
warehouse and office equipment that have a lease term of 12 months or less from the commencement date and do
not contain a purchase option. Lease payments on short-term leases are recognized as expense on a straight-line basis
or another systematic basis over the lease term.
Right-of-use assets
The cost of right-of-use assets includes the amount of the initial measurement of the lease liability.
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 lease term.
The Group presents right-of-use assets as a separate line item on the consolidated statements of financial
position.
Refundable rental deposits
Refundable rental deposits paid are accounted under IFRS 9 Financial Instruments 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 recognizes 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 less any lease incentives receivable.
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use
assets) when the lease term has changed, in which case the related lease liability is remeasured by discounting the
revised lease payments using a revised discount rate at the date of reassessment.
The Group presents lease liabilities as a separate line item on the consolidated statements of financial position.
Lease modifications
The Group accounts for a lease modification as a separate lease if:
 the modification increases the scope of the lease by adding the right to use one or more underlying
assets; and
 the consideration for the leases increases by an amount commensurate with the stand-alone price for the
increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances
of the particular contract.
For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease liability
based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification.
The Group accounts for the remeasurement of lease liabilities by making corresponding adjustments to the
relevant right-of-use assets.
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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.
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the
relevant lease.
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 recognized 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 carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items,
are recognized 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 recognized in other comprehensive income and
accumulated in equity under the heading of translation reserve.
Government grants
Government grants are not recognized 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 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
recognized in profit or loss in the period in which they become receivable. Such grants are presented under “other
income.”
Share-based payments
Equity-settled share-based payment transactions
Shares granted to employees
Equity-settled share-based payments to employees 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
(share-based payment 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 recognized in profit or loss such that the cumulative expense
reflects the revised estimate, with a corresponding adjustment to the share-based payment reserve.
The Group recognizes the cash received from the grantees as a capital contribution from the controlling
shareholder(s) of the Company in capital reserve included in other reserves. When shares granted are vested, the
amounts previously recognized in share-based payments reserve will be transferred to other reserve. If the grantee
leaves the Group before end of the vesting period, the amount previously recognized as capital contribution will
remain in the same reserve.
APPENDIX I ACCOUNTANTS’ REPORT
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Modification to the terms and conditions and cancellation of the share-based payment arrangements
When the terms and conditions of an equity-settled share-based payment arrangement are modified, the Group
recognizes, as a minimum, the services received measured at the grant date fair value of the equity instruments
granted, unless those equity instruments do not vest because of failure to satisfy a vesting condition (other than a
market condition) that was specified at grant date. In addition, if the Group modifies the vesting conditions (other
than a market condition) in a manner that is beneficial to the employees, for example, by reducing the vesting period,
the Group takes the modified vesting conditions into consideration over the remaining vesting period.
The incremental fair value granted, if any, is the difference between the fair value of the modified equity
instruments and that of the original equity instruments, both estimated as at the date of modification.
If the modification occurs during the vesting period, the incremental fair value granted is included in the
measurement of the amount recognized for services received over the period from modification date until the date
when the modified equity instruments are vested, in addition to the amount based on the grant date fair value of the
original equity instruments, which is recognized over the remainder of the original vesting period.
If the modification reduces the total fair value of the share-based arrangement, or is not otherwise beneficial
to the employee, the Group continues to account for the original equity instruments granted as if that modification
had not occurred.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognized for the award is recognized.
Employee benefit
Retirement benefits costs
Payments to the defined contribution retirement benefit schemes are recognized as an expense when employees
have rendered service entitling them to the contributions.
Short-term employee benefits
Short-term employee benefits are recognized at the undiscounted amount of the benefits expected to be paid
as and when employees rendered the services. All short-term employee benefits are recognized 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 recognized for benefits accruing to employees (such as wages and salaries) after deducting any
amount already paid.
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 profit
before tax because of income or expense that are taxable or deductible in other years/periods 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 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.
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.
APPENDIX I ACCOUNTANTS’ REPORT
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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 realized, based on tax rate (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.
For the purposes of measuring deferred tax for leasing transactions in which the Group recognizes the right-of
use assets and the related lease liabilities, the Group first determines whether the tax deductions are attributable to
the right-of-use assets or the lease liabilities.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group applies
IAS 12 Income Taxes requirements to the lease liabilities and the related assets separately. The Group recognizes 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 utilized and a deferred tax liability for all taxable temporary
differences.
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.
Current and deferred tax are recognized 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 (other than construction in progress). 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.
Property, plant and equipment in the course of construction for production, supply or administrative purposes
are carried at cost, less any recognized impairment loss. Costs include any costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for
their intended use.
When the Group makes payments for ownership interests of properties which includes both leasehold land and
building elements, the entire consideration is allocated between the leasehold land and the building elements in
proportion to the relative fair values at initial recognition. To the extent the allocation of the relevant payments can
be made reliably, interest in leasehold land is presented as “right-of-use assets” in the consolidated statements of
financial position. When the consideration cannot be allocated reliably between non-lease building element and
undivided interest in the underlying leasehold land, the entire properties are classified as property, plant and
equipment.
Depreciation is recognized 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.
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 property, 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.
Investment properties
Investment properties are properties held to earn rentals.
Investment properties are initially measured at cost, including any directly attributable expenditure.
Subsequent to initial recognition, investment properties are stated at cost less subsequent accumulated depreciation
and any accumulated impairment losses. Depreciation is recognized so as to write off the cost of investment
properties over their estimated useful lives and after taking into account of their estimated residual value, using the
straight line method.
APPENDIX I ACCOUNTANTS’ REPORT
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Intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at costs less accumulated
amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is
recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization
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.
Research and development expenditure
Expenditure on research activities is recognized as an expense in the period in which it is incurred. Where no
internally generated intangible asset can be recognized, development expenditure is recognized in profit or loss in
the period in which it is incurred.
Inventories
Inventories are stated at the lower of cost and net realizable value. Costs of inventories are determined on a
weighted average method. Net realizable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale. Costs necessary to make the sale include incremental costs
directly attributable to the sale and non-incremental costs which the Group must incur to make the sale.
Financial instruments
Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual
provisions of the instrument. All regular way purchases or sales of financial assets are recognized and derecognized
on a trade date. 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 Revenue from Contract with
Customers . Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets at FVTPL) are added to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
of financial assets at FVTPL are recognized immediately in profit or loss.
The effective interest method is a method of calculating the amortized 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 amortized 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.
All other financial assets are subsequently measured at fair value.
Amortized cost and interest income
Interest income is recognized using the effective interest method for financial assets measured subsequently
at amortized 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 (see below). For
financial assets that have subsequently become credit-impaired, interest income is recognized by applying the
effective interest rate to the amortized cost of the financial asset from the next reporting period. If the credit risk on
APPENDIX I ACCOUNTANTS’ REPORT
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the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest
income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset from
the beginning of the reporting period following the determination that the asset is no longer credit-impaired.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortized cost 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 recognized in profit or loss. The net gain or loss recognized in profit or loss includes any dividend
or interest earned on the financial asset and is included in the “other gains and losses” line item.
Impairment of financial assets subject to impairment assessment under IFRS 9
The Group and the Company perform impairment assessment under expected credit loss (“ECL”) model on
financial assets (including trade receivables, other receivables and deposits, restricted bank deposits, short-term bank
deposits, bank balances and amounts due from subsidiaries) which are subject to impairment assessment under IFRS
9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the
relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected
to result from default events that are possible within 12 months after the reporting date. Assessments 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 reporting date as well as the forecast of future
conditions.
The Group always recognizes lifetime ECL for trade receivables. The ECL on these assets are assessed
individually for debtors with significant increase in credit risk or credit-impaired, and collectively for the remaining
balances of debtors using provision matrix based on aging.
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 recognizes lifetime ECL.
The assessment of whether lifetime ECL should be recognized 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 reporting date with the risk of
a default occurring on the financial instrument as at the date of initial recognition. In making this assessment,
the Group considers both quantitative and qualitative information that is reasonable and supportable, including
historical experience and forward-looking information that is available without undue cost or effort.
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; or
 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.
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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 asset 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; or
(d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganization.
(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, for example, when the counterparty
has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may
still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal
advice where appropriate. A write-off constitutes a derecognition event. Any subsequent recoveries are
recognized 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 and 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. The Group uses a practical expedient in estimating ECL on trade receivables using
a provision matrix taking into consideration historical credit loss experience, adjusted for forward looking
information that is available without undue cost or effort.
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 trade receivables are considered on a collective basis taking into consideration past
due information and relevant credit information such as forward looking macroeconomic information.
APPENDIX I ACCOUNTANTS’ REPORT
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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 amortized cost of the financial asset.
The Group recognizes 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 other receivables where the corresponding
adjustment is recognized through a loss allowance account.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end of each reporting period. Specifically for financial assets measured
at amortized cost, exchange differences are recognized in profit or loss in the “other gains and losses” line item.
Derecognition of financial assets
The Group derecognizes 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 measured at amortized cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognized in profit or loss.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
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 Company are recognized at the proceeds received, net of direct
issue costs.
The Company’s own equity instruments held by consolidated entities are recognized and deducted directly in
equity and recognized as treasury shares. No gain or loss is recognized in profit or loss on the purchase, sale, issue
or cancellation of the Company’s own equity instrument.
Financial liabilities at amortized cost
Financial liabilities including bank overdrafts, trade payables, other payables and accruals, amounts due to
subsidiaries, borrowings and redemption liabilities are subsequently measured at amortized cost, using the effective
interest method.
A contract that contains an obligation to purchase the Group’s equity instruments for cash gives rise to a
financial liability for the present value of the redemption amount, even if the Group’s obligation to purchase is
conditional on the counterparty exercising a right to redeem. The Company undertakes such redemption obligation
previously borne by the controlling shareholder upon the amendments to the terms of financial instruments. On the
APPENDIX I ACCOUNTANTS’ REPORT
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date of modification, the redemption liabilities are recognized as financial liabilities initially at its fair value, with
the amount charged against other reserve within equity. Subsequently, the redemption liabilities are measured at
amortized cost with interest charged in finance costs.
Derecognition of financial liabilities
The Group derecognizes 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 derecognized and the
consideration paid and payable is recognized in profit or loss. For redemption liabilities, when the preferred rights
are lapsed upon listing, the carrying amount of the redemption liabilities is reclassified to equity.
4. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, the directors of the Company are required to make
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 recognized 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 each reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next twelve months.
Net realizable value of inventories
As at December 31, 2022, 2023 and 2024 and September 30, 2025, the carrying amount of the Group’s
inventories is RMB659,077,000, RMB606,115,000, RMB572,271,000 and RMB484,835,000 respectively. During the
years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2024, an allowance of
inventories of RMB1,024,000, RMB25,198,000, RMB38,854,000 and RMB19,240,000 (unaudited) was recognized
in profit or loss, respectively. During the nine months ended September 30, 2025, a reversal of allowance on
inventories of RMB12,102,000 was recognized in profit or loss.
Net realizable value of inventories is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and costs necessary to make the sale.
The Group assesses the net realizable value of inventories as well as the required amount of allowance on
inventories at the end of each reporting period, which involves significant judgment on determination of the estimated
selling prices, costs to completion and costs necessary to make the sale. Change to these estimation could have
significant impact on the net realizable value of inventories and the amount of write-down of inventories.
Provision of ECL for trade receivables
The Group uses practical expedient in estimating ECL on trade receivables which are not assessed individually
using a provision matrix. The provision rates are estimated based on aging of debtors as groupings of various debtors
taking into consideration the Group’s historical default rates and forward-looking information that is reasonable and
supportable available without undue costs or effort, which are key sources of estimation uncertainty. At each
reporting date, the historical observed default rates are reassessed and changes in the forward-looking information
are considered.
Details about the carrying amounts of trade receivables and allowance for credit losses are provided in Note 21.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 406 ---
5. REVENUE AND SEGMENT INFORMATION
Revenue
(i) Disaggregation of revenue from contracts with customers
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Type of products
High-performance
networking solutions /H1118/H1118/H1118472,910 577,368 831,107 618,512 788,004
General networking
solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,290,865 1,388,641 1,497,508 1,125,942 1,139,408
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,469 246,842 283,178 209,247 247,306
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 2,212,851 2,611,793 1,953,701 2,174,718
Timing of revenue
recognition
At a point in time /H1118/H1118/H1118/H1118/H1118/H11181,988,244 2,212,851 2,611,793 1,953,701 2,174,718
(ii) Performance obligations for contracts with customers
The Group sells its products to customers through its self-developed e-commerce platforms. Revenue from the
sale of products is recognized at the point in time when control of the products is transferred to the customer,
generally on the receipt of products by customers.
Majority contracts of the Group provide customers with rights of return, which give rise to variable
consideration.
For contracts which provide a customer with a right to return the goods within 30 days, the expected value
method is used to estimate the goods that will not be returned because this method best predicts the amount of
variable consideration to which the Group will be entitled. The requirements in IFRS 15 on constraining estimates
of variable consideration are applied in order to determine the amount of variable consideration that can be included
in the transaction price. For goods that are expected to be returned, instead of revenue, a refund liability is
recognized. A right-of-return asset (and the corresponding adjustment to cost of sales) is also recognized for the right
to recover products from a customer.
The Group grants credit period ranging from 14 days to 90 days to certain customers. For the rest of the
customers, payment was required before the Group delivers the products.
(iii) Transaction price allocated to the remaining performance obligation for contracts with customers
All contracts with customers of the Group are for periods of one year or less. As permitted under IFRS 15, the
transaction price allocated to these unsatisfied contracts is not disclosed.
Segment information
Information reported to the Mr. Xiang, being the chief operating decision maker, for the purposes of resource
allocation and performance assessment focuses on revenue analysis by products. No other discrete financial
information is provided other than the Group’s results and financial position as a whole. Accordingly, only
entity-wide disclosures, major geographic information and customers are presented.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 407 ---
(i) Geographical information
Information about the Group’s revenue from external customers is presented based on the location of
customers. Information about non-current assets (excluding deferred tax assets and financial assets) is presented
based on the geographical location of the assets.
Revenue from external customers
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
The United States of
America (“USA”) /H1118/H1118/H1118/H1118/H1118919,625 1,027,025 1,223,166 920,822 1,178,357
Europe 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,707 767,381 898,048 674,979 617,744
Asia 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,019 183,221 228,118 167,288 200,329
Americas (excluding the
USA) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,640 123,219 143,927 105,088 97,882
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,939 91,658 95,845 68,516 67,629
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,314 20,347 22,689 17,008 12,777
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,244 2,212,851 2,611,793 1,953,701 2,174,718
Non-current assets
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The USA /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,150 30,351 22,286 15,421
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,656 60,286 52,865 56,280
Asia 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118347,766 631,899 1,258,394 1,244,380
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,085 938 2,451 2,218
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,657 723,474 1,335,996 1,318,299
1 Revenue from Europe mainly derived from Germany (“DEU”), the United Kingdom (“GBR”) and
France.
2 Revenue from Asia mainly derived from Japan (“JPN”), Singapore (“SGP”), India and the PRC.
3 Non-current assets from Asia mainly located in the PRC.
(ii) Information about major customers
During the Track Record Period, no customer contributed over 10% of the total revenue of the Group.
6. OTHER INCOME
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Government grants (Note) /H1118 11,928 7,468 5,646 4,475 1,486
Bank interest income /H1118/H1118/H1118/H11183,725 4,725 6,651 5,130 4,149
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,588 796 514 379 740
18,241 12,989 12,811 9,984 6,375
Note: Government grants represented subsidies received from relevant government authorities, mainly
including subsidy for steady growth in software and information technology service industry, subsidy
for cross-border E-commerce enterprise and high-tech enterprise subsidy. There are no unfulfilled
conditions and contingencies attached to these grants.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 408 ---
7. IMPAIRMENT LOSSES UNDER EXPECTED CREDIT LOSS MODEL, NET OF REVERSAL
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Impairment losses reversed
(recognized) on:
– trade receivables /H1118/H1118/H1118/H1118/H1118266 (1,558) (1,086) (496) (1,527)
– other receivables /H1118/H1118/H1118/H1118/H11186 (101) 78 11 (111)
272 (1,659) (1,008) (485) (1,638)
8. OTHER GAINS AND LOSSES
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fair value changes of
financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,113 12,993 8,731 6,378 9,116
Foreign exchange gains
(losses), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,369 25,792 (9,615) 2,346 40,292
Gain (loss) on disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222 (156) (97) (11) (10)
Gain on early termination
of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 33 33 3 3 6 3
42,704 38,682 (948) 8,746 49,761
9. FINANCE COSTS
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interests on:
– bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,402 3,357 13,631 9,655 10,078
– lease liabilities /H1118/H1118/H1118/H1118/H1118/H11181,109 1,298 4,913 3,168 5,071
– redemption liabilities /H1118/H1118/H1118 –––– 4,848
4,511 4,655 18,544 12,823 19,997
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 409 ---
10. INCOME TAX EXPENSE
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax:
PRC Enterprise Income
Tax (“EIT”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,361 63,415 49,631 51,291 61,367
Hong Kong profits tax /H1118/H1118/H1118 1,149 2,517 4,471 2,434 1,553
USA profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H111810,507 14,331 14,334 12,898 2,580
DEU profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H11182,254 5,919 7,829 8,929 –
Other jurisdictions (Note) /H1118 490 2,226 2,917 2,576 5,338
68,761 88,408 79,182 78,128 70,838
Under (over) provision in
prior years/periods /H1118/H1118/H1118 4,393 (2,826) 10 10 933
73,154 85,582 79,192 78,138 71,771
Deferred tax credit (Note
19) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,784) (29,079) (19,874) (21,171) (11,997)
54,370 56,503 59,318 56,967 59,774
Note: Other jurisdictions included profits tax in Australia (“AUS”), SGP , the GBR and JPN.
The Company, which operates in the PRC, was qualified as a “High and New Technology Enterprise” in 2019,
with a valid period of three years and entitled to a preferential income tax rate of 15%. The qualification was
subsequently renewed in 2022 for a further three years. Wuhan FS.COM Technology Co., Ltd.* (ڦ
ʮ̡), a subsidiary of the Company, was also qualified as a “High and New Technology Enterprise” in
December 2024, with a valid period of three years from December 2024, and entitled to a preferential income tax rate
of 15%.
During the Track Record Period, several subsidiaries in PRC were qualified as small and micro enterprises
under the PRC EIT regime, which enjoyed an EIT rate of 5%, the tax rate of the remaining PRC subsidiaries is 25%
under the Law of the PRC on EIT and Implementation Regulation of EIT Law.
According to a policy promulgated by the State Taxation Administration of the PRC and effective from 2018
onwards, enterprises engaged in research and development activities are entitled to claim 75% of the research and
development expenses incurred in a year as extra tax deductible expenses in determining the taxable income for that
year (“Super Deduction”). The Super Deduction rate was increased to 100% since October 2022. The Company and
Wuhan FS.COM Technology Co., Ltd.* (ʮ̡) claimed such Super Deduction in
determining its tax assessable profits for the Track Record Period.
The tax rate of the overseas subsidiaries was subject to the law on income tax in the countries they operated.
Under the two-tiered profits tax rates regime of Hong Kong Profits Tax, a subsidiary in Hong Kong was entitled to
the preferential EIT rate of 8.25% for the first HKD2 million of estimated assessable profits and at 16.5% on the
estimated assessable profits above HKD2 million. A subsidiary in United States was taxed at the federal tax rate of
21% and state tax rate ranging from nil to 9.99% during the Track Record Period. The subsidiaries in DEU, AUS,
SGP and JPN was taxed at the tax rate of 28.08%, 30%, 17% or 5% (17% during January 1, 2022 to March 31, 2025
and 5% from April 1, 2025 onwards) and 36.80% respectively during the Track Record Period. A subsidiary in GBR
was taxed at the tax rate of ranging from 19% to 25% during the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 410 ---
The income tax expense can be reconciled to the profit before tax per the consolidated statements of profit or
loss and other comprehensive income as follows:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118418,877 513,250 456,575 407,774 482,948
Tax at PRC EIT rate of
15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,832 76,988 68,486 61,166 72,442
Effect of different tax rates
of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118229 986 405 315 (4,299)
Tax effect of expenses not
deductible for
tax purpose /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236 56 326 17 44
Tax effect of income not
taxable for tax purpose /H1118 (13) (49) (378) (58) (631)
Tax effect of Super
Deduction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,922) (16,806) (16,730) (12,948) (13,914)
Effect of changes in tax
rates on deferred tax /H1118/H1118/H1118 – – 9,877 9,877 4,592
Under (over) provision in
prior years/periods /H1118/H1118/H1118/H11184,393 (2,826) 10 10 933
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(385) (1,846) (2,678) (1,412) 607
54,370 56,503 59,318 56,967 59,774
* The English translation of the name of the above domestic subsidiary is for reference only. The official
name of this subsidiary is in Chinese.
11. PROFIT FOR THE YEAR/PERIOD
Profit for the year/period has been arrived at after charging (crediting):
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation of property,
plant and equipment /H1118/H1118/H111826,749 40,325 69,318 51,977 69,481
Depreciation of investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 3 1
Depreciation of right-of-
use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,876 22,122 29,269 21,215 23,176
Amortization of intangible
assets
– Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,326 3,495 3,525 1,650 1,777
– Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 144 77 28 163
– General and
administrative expenses /H1118 1,986 1,755 2,049 1,441 1,970
– Research and
development expenses /H1118/H1118 599 484 1,231 941 1,000
5,923 5,878 6,882 4,060 4,910
Total depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,548 68,325 105,469 77,252 97,698
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 411 ---
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Auditor’s remuneration /H1118/H1118/H1118 48 24 24 24 40
Cost of inventories
recognized as cost of
sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,084,362 1,095,181 1,266,630 938,802 1,044,001
Allowance on (reversal of
allowance on)
inventories included in
cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,024 25,198 38,854 19,240 (12,102)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 893 – 18,110
Directors’, chief
executive’s and
supervisors’ emoluments
(Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,988 6,802 8,835 5,648 11,493
Other staff costs:
Salaries and allowances /H1118 267,360 312,165 400,614 247,402 307,039
Retirement benefit
scheme contributions /H1118 15,846 18,506 23,762 16,285 20,447
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,328 4,716 3,992 2,557 7,547
Total staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118298,522 342,189 437,203 271,892 346,526
12. DIRECTORS’, CHIEF EXECUTIVE’S AND SUPERVISORS’ EMOLUMENTS
Directors’, chief executive’s and supervisors’ emoluments for the Track Record Period, disclosed pursuant to
applicable Listing Rules and the CO, are as follows:
Y ear ended December 31, 2022
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
Mr. Xiang (Chairman and
chief executive) /H1118/H1118/H1118/H1118/H1118391 24 727 5 1,147
Mr. Zeng Di /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,283 45 326 1,975 3,629
1,674 69 1,053 1,980 4,776
Non-executive directors
Mr. Peng Chao /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhu Chunlin /H1118/H1118/H1118/H1118/H1118/H1118–––––
–––––
Independent
non-executive directors
Ms. Zhang Jin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Ms. Xiao Xiao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Mr. Chen Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
1 8 0––– 1 8 0
Supervisors
Mr. Zhang Denghui /H1118/H1118/H1118/H1118/H1118487 33 45 113 678
Ms. Duan Ting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118771 13 14 80 878
Ms. Zhu Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118330 26 26 94 476
1,588 72 85 287 2,032
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,442 141 1,138 2,267 6,988
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 412 ---
Y ear ended December 31, 2023
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
Mr. Xiang (Chairman and
chief executive) /H1118/H1118/H1118/H1118/H1118/H1118391 23 727 271 1,412
Mr. Zeng Di /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,349 46 450 1,343 3,188
1,740 69 1,177 1,614 4,600
Non-executive directors
Mr. Peng Chao /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhu Chunlin /H1118/H1118/H1118/H1118/H1118/H1118–––––
–––––
Independent
non-executive directors
Ms. Zhang Jin (Note i) /H1118/H1118/H1118 6 0––– 6 0
Ms. Xiao Xiao (Note i) /H1118/H1118/H1118 6 0––– 6 0
Mr. Chen Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Mr. Ran Long (Note ii) /H1118/H1118/H1118 –––––
Mr. Guo Fei (Note ii) /H1118/H1118/H1118/H1118 –––––
1 8 0––– 1 8 0
Supervisors
Mr. Zhang Denghui /H1118/H1118/H1118/H1118/H1118583 43 140 29 795
Ms. Duan Ting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118782 14 14 14 824
Ms. Zhu Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337 40 26 – 403
1,702 97 180 43 2,022
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,622 166 1,357 1,657 6,802
Y ear ended December 31, 2024
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
Mr. Xiang (Chairman and
chief executive) /H1118/H1118/H1118/H1118/H1118/H11181,980 22 867 541 3,410
Mr. Zeng Di /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,375 54 450 1,120 2,999
3,355 76 1,317 1,661 6,409
Non-executive directors
Mr. Peng Chao /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhu Chunlin /H1118/H1118/H1118/H1118/H1118/H1118–––––
–––––
Independent
non-executive directors
Mr. Ran Long /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 2 0––– 1 2 0
Mr. Guo Fei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 3––– 1 0 3
Mr. Chen Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 2 0––– 1 2 0
3 4 3––– 3 4 3
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 413 ---
Y ear ended December 31, 2024
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Supervisors
Mr. Zhang Denghui /H1118/H1118/H1118/H1118/H1118585 51 140 38 814
Ms. Duan Ting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118770 15 14 26 825
Ms. Zhu Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118349 41 26 28 444
1,704 107 180 92 2,083
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,402 183 1,497 1,753 8,835
Nine months ended September 30, 2024 (unaudited)
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
Mr. Xiang (Chairman and
chief executive) /H1118/H1118/H1118/H1118/H11181,313 16 – 523 1,852
Mr. Zeng Di /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,031 40 – 1,119 2,190
2,344 56 – 1,642 4,042
Non-executive directors
Mr. Peng Chao /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhu Chunlin /H1118/H1118/H1118/H1118/H1118/H1118–––––
–––––
Independent
non-executive directors
Mr. Ran Long /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Mr. Guo Fei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 3––– 4 3
Mr. Chen Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
1 6 3––– 1 6 3
Supervisors
Mr. Zhang Denghui /H1118/H1118/H1118/H1118439 38 – 38 515
Ms. Duan Ting /H1118/H1118/H1118/H1118/H1118/H1118/H1118570 11 – 26 607
Ms. Zhu Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118262 31 – 28 321
1,271 80 – 92 1,443
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778 136 – 1,734 5,648
Nine months ended September 30, 2025
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
Mr. Xiang (Chairman and
chief executive)
(Note iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,019 16 – 4,676 6,711
Mr. Zeng Di /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,032 46 – 1,995 3,073
3,051 62 – 6,671 9,784
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 414 ---
Nine months ended September 30, 2025
Salaries and
allowances
Retirement
benefit scheme
contributions
Discretionary
bonus*
Shared-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Non-executive directors
Mr. Peng Chao /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhu Chunlin
(Note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhao Pan (Note iii) /H1118/H1118 –––––
–––––
Independent
non-executive directors
Mr. Ran Long /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Mr. Guo Fei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0––– 6 0
Mr. Chen Lin (Note iii) /H1118/H1118 6 0––– 6 0
Ms. Wang Jing (Note iii) /H1118/H1118 –––––
1 8 0––– 1 8 0
Supervisors
Mr. Zhang Denghui /H1118/H1118/H1118/H1118434 44 – 71 549
Ms. Duan Ting /H1118/H1118/H1118/H1118/H1118/H1118/H1118564 12 – 49 625
Ms. Zhu Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261 31 – 63 355
1,259 87 – 183 1,529
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,490 149 – 6,854 11,493
* The discretionary bonus is based on the performance of the directors and supervisors of the Company
and the Group.
Notes:
(i) Ms. Xiao Xiao and Ms. Zhang Jin resigned from their roles on October 19, 2023 and December 11, 2023
respectively.
(ii) Mr. Ran Long and Mr. Guo Fei have been appointed as independent non-executive directors of the
Company since October 19, 2023 and December 11, 2023 respectively.
(iii) Mr. Zhu Chunlin and Mr. Chen Lin resigned from their roles on May 23, 2025 while Mr. Zhao Pan and
Ms. Wang Jing were appointed as non-executive director and independent non-executive director of the
Company, respectively on May 23, 2025.
(iv) The shared-based payment expense for Mr. Xiang included the immediate expense recognition due to
acceleration of vesting arising from the cancellation of 2023 Incentive Scheme and 2024 Incentive
Scheme (as defined in Note 35).
The executive directors’ emoluments shown above were paid for their services in connection with the
management of the affairs of the Company and the Group. The non-executive directors’ and independent
non-executive directors’ emoluments shown above were for their services as directors of the Company. The
supervisors’ emoluments shown above were for their services as supervisors of the Company.
There was no arrangement under which a director or the supervisors waived or agreed to waive any
remuneration during the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 415 ---
13. FIVE HIGHEST PAID EMPLOYEES
The five highest paid individuals of the Group included one, two, two, two (unaudited) and two directors for
the years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2024 and 2025,
respectively, whose emoluments are included in the disclosure above. The emoluments of the remaining four, three,
three, three (unaudited) and three individuals for the years ended December 31, 2022, 2023 and 2024 and the nine
months ended September 30, 2024 and 2025, respectively, are as follows:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and
benefits in kind /H1118/H1118/H1118/H1118/H1118/H11185,569 5,515 7,088 5,078 5,491
Discretionary bonus /H1118/H1118/H1118/H1118/H1118473 357 597 – –
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865 88 72 53 43
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118761 284 248 438 775
6,868 6,244 8,005 5,569 6,309
The number of highest paid employees who are not the directors, chief executive and supervisors of the
Company whose remuneration fell within the following bands is as follows:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
No. of
employees
No. of
employees
No. of
employees
No. of
employees
No. of
employees
(unaudited)
HK$1,000,001 to
HK$1,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H111812–22
HK$1,500,001 to
HK$2,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H11182–2––
HK$3,500,001 to
HK$4,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H11181––1–
HK$4,000,001 to
HK$4,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118–1––1
HK$5,500,001 to
HK$6,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––1––
43333
During the Track Record Period, no emoluments were paid by the Group to the directors, supervisors or the
five highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of office.
14. DIVIDEND
During the year ended December 31, 2022, a dividend of RMB0.167 per share, with the aggregated amount
of RMB60,000,000, was paid to shareholders of the Company in April 2022. No dividend was paid or proposed for
the ordinary shareholders of the Company for the years ended December 31, 2023 and 2024. During the nine months
ended September 30, 2025, a dividend of RMB0.55556 per share, with the aggregated amount of RMB200,000,000,
was paid to shareholders of the Company in May 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 416 ---
15. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to owners of the Company is based on
the following data:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit for the year/period /H1118/H1118 364,507 456,747 397,257 350,807 423,174
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
(unaudited)
Weighted average number
of ordinary shares for
the purpose of basic
earnings per share /H1118/H1118/H1118/H1118/H1118343,768,627 343,768,627 343,768,627 343,768,627 343,768,627
Effect of dilutive potential
ordinary shares in
respect of
– Shares issued for
employee incentive
scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,523,692 10,694,703 10,985,921 10,886,419 11,373,411
Weighted average number
of ordinary shares for
the purpose of diluted
earnings per share /H1118/H1118/H1118/H1118/H1118354,292,319 354,463,330 354,754,548 354,655,046 355,142,038
During the nine months ended September 30, 2025, the computation of diluted earnings per share does not
assume the impact of the redemption liabilities, as their inclusion would have been anti-dilutive.
16a. PROPERTY, PLANT AND EQUIPMENT
The Group
Land and
buildings
Leasehold
improvement
Construction
in progress Machinery
Electronic
equipment
Motor
vehicles
Office
equipment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At January 1, 2022 /H1118/H1118/H1118/H1118161,748 13,407 6,123 6,333 32,570 3,802 10,650 234,633
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,969 4,650 46,724 3,285 26,834 722 6,452 135,636
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (14) (759) (1,032) (1,805)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 34,774 (35,565) – 279 – 512 –
Exchange adjustments /H1118/H1118 – 22 – 62 126 82 272 564
At December 31, 2022 /H1118/H1118208,717 52,853 17,282 9,680 59,795 3,847 16,854 369,028
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,667 54,510 2,548 10,286 1,425 4,223 75,659
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,348) (151) (493) (1,992)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 64,223 (64,697) – 47 4–––
Exchange adjustments /H1118/H1118 – 31 – 37 48 70 133 319
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 417 ---
Land and
buildings
Leasehold
improvement
Construction
in progress Machinery
Electronic
equipment
Motor
vehicles
Office
equipment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31, 2023 /H1118/H1118208,717 119,774 7,095 12,265 69,255 5,191 20,717 443,014
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118771,138 324 111,936 1,581 27,625 154 4,920 917,678
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (18) (2,033) (245) (2,395) (4,691)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (439) (1,754) (309) (1,315) (3,817)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 88,258 (90,419) – 521 159 1,481 –
Exchange adjustments /H1118/H1118 – (155) (55) 33 (33) (33) (101) (344)
At December 31, 2024 /H1118/H1118979,855 208,201 28,557 13,422 93,581 4,917 23,307 1,351,840
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,515 22,192 2,698 24,762 – 2,200 56,367
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,129) (5) (312) (1,446)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (231) – – (231)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 45,176 (45,176) –––––
Transfer to investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,442) –––––– ( 1 1,442)
Exchange adjustments /H1118/H1118 – 1,047 113 84 283 (127) 237 1,637
At September 30, 2025 /H1118/H1118968,413 258,939 5,686 16,204 117,266 4,785 25,432 1,396,725
DEPRECIATION
At January 1, 2022 /H1118/H1118/H1118/H11181,087 9,822 – 1,060 12,762 2,270 4,449 31,450
Provided for the year /H1118/H1118/H11182,999 11,280 – 865 8,458 688 2,459 26,749
Eliminated on disposal /H1118/H1118 –––– ( 1 1 ) (721) (454) (1,186)
Exchange adjustments /H1118/H1118 – – – 24 52 64 206 346
At December 31, 2022 /H1118/H11184,086 21,102 – 1,949 21,261 2,301 6,660 57,359
Provided for the year /H1118/H1118/H11188,991 6,830 – 1,013 19,592 785 3,114 40,325
Eliminated on disposal /H1118/H1118 –––– (1,236) (143) (334) (1,713)
Exchange adjustments /H1118/H1118 –––9 3 2 4 0 9 6 1 7 7
At December 31, 2023 /H1118/H111813,077 27,932 – 2,971 39,649 2,983 9,536 96,148
Provided for the year /H1118/H1118/H111838,781 5,987 – 2,115 19,299 606 2,530 69,318
Eliminated on disposal /H1118/H1118 – – – (10) (1,867) (232) (2,107) (4,216)
Eliminated on
written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (285) (1,656) (294) (1,193) (3,428)
Exchange adjustments /H1118/H1118 – (9) – 18 (5) (18) (37) (51)
At December 31, 2024 /H1118/H111851,858 33,910 – 4,809 55,420 3,045 8,729 157,771
Provided for the period /H1118 34,697 10,949 – 1,470 18,542 416 3,407 69,481
Eliminated on disposal /H1118 –––– (1,034) (5) (252) (1,291)
Eliminated on written
off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (195) – – (195)
Eliminated on transfer to
investment properties /H1118 (274) –––––– (274)
Exchange adjustments /H1118/H1118 – (75) – (13) 52 43 63 70
At September 30, 2025 /H1118/H111886,281 44,784 – 6,266 72,785 3,499 11,947 225,562
CARRYING V ALUES
At December 31, 2022 /H1118/H1118204,631 31,751 17,282 7,731 38,534 1,546 10,194 311,669
At December 31, 2023 /H1118/H1118195,640 91,842 7,095 9,294 29,606 2,208 11,181 346,866
At December 31, 2024 /H1118/H1118927,997 174,291 28,557 8,613 38,161 1,872 14,578 1,194,069
At September 30, 2025 /H1118/H1118882,132 214,155 5,686 9,938 44,481 1,286 13,485 1,171,163
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 418 ---
The Company
Land and
buildings
Leasehold
improvement
Construction
in progress Machinery
Electronic
equipment
Motor
vehicles
Office
equipment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At January 1, 2022 /H1118/H1118/H1118/H1118– 13,295 2,306 6,147 29,734 2,431 7,497 61,410
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,581 888 75 7,753 15 420 11,732
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (14) (759) (1,032) (1,805)
Disposal to subsidiaries /H1118 –––– (448) – (26) (474)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,277 (3,049) – 260 – 512 –
At December 31, 2022 /H1118/H1118 – 18,153 145 6,222 37,285 1,687 7,371 70,863
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 71 1,346 299 3,211 – 41 4,968
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,239) – (409) (1,648)
Disposal to subsidiaries /H1118 –––– (2,931) – – (2,931)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 716 (716) –––––
At December 31, 2023 /H1118/H1118 – 18,940 775 6,521 36,326 1,687 7,003 71,252
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118731,717 178 70,430 – 5,208 6 2,618 810,157
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (18) (1,968) (18) (1,593) (3,597)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,308) – – (1,308)
Transfer to investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,815) (8,083) ––––– (47,898)
Disposal to subsidiaries /H1118 –––– (5,623) (35) (8) (5,666)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 47,691 (47,691) –––––
At December 31, 2024 /H1118/H1118691,902 58,726 23,514 6,503 32,635 1,640 8,020 822,940
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 13,319 – 2,910 – 2,538 18,767
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (893) (5) (311) (1,209)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (12) – – (12)
Transfer to investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(182,170) (30,905) ––––– (213,075)
Disposal to subsidiaries /H1118 – – – (593) (191) – – (784)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 35,540 (35,540) –––––
At September 30, 2025 /H1118/H1118509,732 63,361 1,293 5,910 34,449 1,635 10,247 626,627
DEPRECIATION
At January 1, 2022 /H1118/H1118/H1118/H1118– 9,817 – 906 11,428 1,259 2,611 26,021
Provided for the year /H1118/H1118/H1118 – 4,486 – 584 6,857 395 1,295 13,617
Eliminated on disposal /H1118/H1118 –––– ( 1 1 ) (721) (454) (1,186)
Eliminated on disposal
to subsidiaries /H1118/H1118/H1118/H1118/H1118–––– (12) – (14) (26)
At December 31, 2022 /H1118/H1118 – 14,303 – 1,490 18,262 933 3,438 38,426
Provided for the year /H1118/H1118/H1118 – 3,095 – 599 11,078 400 1,275 16,447
Eliminated on disposal /H1118/H1118 –––– (1,150) – (261) (1,411)
Eliminated on disposal
to subsidiaries /H1118/H1118/H1118/H1118/H1118–––– (45) – – (45)
At December 31, 2023 /H1118/H1118 – 17,398 – 2,089 28,145 1,333 4,452 53,417
Provided for the year /H1118/H1118/H111814,658 2,092 – 617 5,142 243 1,085 23,837
Eliminated on disposal /H1118/H1118 – – – (10) (1,806) (16) (1,324) (3,156)
Eliminated on
written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,240) – – (1,240)
Eliminated on disposal to
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (3,244) (33) (5) (3,282)
At December 31, 2024 /H1118/H111814,658 19,490 – 2,696 26,997 1,527 4,208 69,576
Provided for the period /H1118 11,981 2,801 – 460 1,985 1 1,090 18,318
Eliminated on disposal /H1118/H1118 –––– (838) (5) (252) (1,095)
Eliminated on written
off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– ( 8 ) –– ( 8 )
Eliminated on transfer to
investment properties /H1118 (4,143) (226) ––––– (4,369)
Eliminated on disposal to
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (303) (5) – – (308)
At September 30, 2025 /H1118/H111822,496 22,065 – 2,853 28,131 1,523 5,046 82,114
CARRYING V ALUE
At December 31, 2022 /H1118/H1118 – 3,850 145 4,732 19,023 754 3,933 32,437
At December 31, 2023 /H1118/H1118 – 1,542 775 4,432 8,181 354 2,551 17,835
At December 31, 2024 /H1118/H1118677,244 39,236 23,514 3,807 5,638 113 3,812 753,364
At September 30, 2025 /H1118/H1118487,236 41,296 1,293 3,057 6,318 112 5,201 544,513
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 419 ---
The above items of property, plant and equipment, except for construction in progress, after taking into account
the residual values, where applicable, are depreciated on a straight-line basis over the following periods:
Land and buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 to 33 years
Leasehold improvement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 to 10 years, or the lease terms of the leased
properties, whichever is shorter
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/H111810 years
Electronic equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 to 5 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/H11184 to 5 years
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
Detail of pledge of property, plant and equipment are disclosed in Note 31.
16b. INVESTMENT PROPERTIES
The Group leases out car parks and retail store and the Company leases out offices, car parks and retail store
under operating leases with rentals receivable monthly. The leases typically run for a fixed period of 1 to 5 years and
the lease payments are fixed over the lease term.
The Group
Investment properties
RMB’000
COST
At January 1, 2022, December 31, 2022, 2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Transfer from 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/H111811,442
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,442
DEPRECIATION
At January 1, 2022, December 31, 2022, 2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Transfer from 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/H1118274
Provided for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405
CARRYING V ALUE
At January 1, 2022, December 31, 2022, 2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,037
The Company
Investment properties
RMB’000
COST
At January 1, 2022, December 31, 2022 and 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Transfer from 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/H111847,898
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,898
Transfer from 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/H1118213,075
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118260,973
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 420 ---
Investment properties
RMB’000
DEPRECIATION
At January 1, 2022, December 31, 2022 and 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,128
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,128
Transfer from 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/H11184,369
Provided for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,183
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,680
CARRYING V ALUE
At January 1, 2022, December 31, 2022 and 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,770
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248,293
The above investment properties, after taking into account the residual values, where applicable, are
depreciated on a straight-line basis over 20 to 33 years.
17. RIGHT-OF-USE ASSETS
The Group
Leased properties
RMB’000
As at December 31, 2022
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,651
As at December 31, 2023
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,511
As at December 31, 2024
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,041
As at September 30, 2025
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,413
For the year ended December 31, 2022
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,876
For the year ended December 31, 2023
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,122
For the year ended December 31, 2024
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,269
For the nine months ended September 30, 2024 (unaudited)
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,215
For the nine months ended September 30, 2025
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,176
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 421 ---
Y ear ended December 31, Nine months ended September 30,
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/H11186,749 6,824 9,171 8,707 2,675
Total cash outflow for
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,447 28,515 34,960 25,836 26,794
Additions to right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,575 79,701 63,548 42,587 25,765
Early termination of
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 719 2,355 2,351 3,217
The Company
Leased properties
RMB’000
As at December 31, 2022
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,192
As at December 31, 2023
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,125
As at December 31, 2024
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,046
As at September 30, 2025
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,399
For the year ended December 31, 2022
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,759
For the year ended December 31, 2023
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,737
For the year ended December 31, 2024
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,312
For the nine months ended September 30, 2024 (unaudited)
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,558
For the nine months ended September 30, 2025
Depreciation 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,647
Y ear ended December 31, Nine months ended September 30,
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/H11184,604 2,344 7,042 6,610 1,674
Total cash outflow for
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,814 15,988 15,278 11,639 5,565
Additions to right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,320 7,670 9,233 9,208 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 422 ---
During Track Record Period, the Group and the Company leases offices for its operations. Lease contracts are
entered into for fixed term of 1 to 10 years. 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.
The Group and the Company do not recognize right-of-use assets and lease liabilities for short-term leases of
offices, motor vehicles, machinery, warehouse and office equipment. The Group and the Company recognize the lease
payments for short-term leases in the profit or loss during the Track Record Period.
At the end of each reporting period, the portfolio of short-term leases is similar to the portfolio of short-term
leases to which the short-term lease expense disclosed in above.
Restrictions or covenants on leases
The lease agreements do not impose any covenants other than the security interests in the leased assets that
are held by the lessor. Leased assets may not be used as security for borrowing purposes.
18. INTANGIBLE ASSETS
The Group
Patent
use right
Domain
name
Software
use right Total
RMB’000 RMB’000 RMB’000 RMB’000
COST
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,806 14,975 4,308 35,089
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,975 1,975
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,461 – – 1,461
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,267 14,975 6,283 38,525
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,639 1,639
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293 – – 293
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (233) (233)
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,560 14,975 7,689 40,224
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,239 4,239
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263 – – 263
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,823 14,975 11,928 44,726
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118323 – 887 1,210
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(210) – – (210)
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,936 14,975 12,815 45,726
AMORTIZA TION
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,054 3,566 2,742 7,362
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,326 1,498 1,099 5,923
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223 – – 223
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,603 5,064 3,841 13,508
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,494 1,498 886 5,878
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 6–– 9 6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (175) (175)
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,193 6,562 4,552 19,307
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,524 1,498 1,860 6,882
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162 – – 162
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,879 8,060 6,412 26,351
Provided for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,906 1,123 1,881 4,910
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(154) – – (154)
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,631 9,183 8,293 31,107
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 423 ---
Patent
use right
Domain
name
Software
use right Total
RMB’000 RMB’000 RMB’000 RMB’000
CARRYING V ALUE
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,664 9,911 2,442 25,017
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,367 8,413 3,137 20,917
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,944 6,915 5,516 18,375
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,305 5,792 4,522 14,619
The Company
Domain name Software use right Total
RMB’000 RMB’000 RMB’000
COST
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,975 4,304 19,279
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,936 1,936
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,975 6,240 21,215
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 766 766
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– (227) (227)
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,975 6,779 21,754
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 790 790
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,975 7,569 22,544
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 654 654
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,975 8,223 23,198
AMORTIZA TION
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,566 2,742 6,308
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,498 1,090 2,588
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,064 3,832 8,896
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,498 840 2,338
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– (168) (168)
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,562 4,504 11,066
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,498 477 1,975
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,060 4,981 13,041
Provided for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,123 415 1,538
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,183 5,396 14,579
CARRYING V ALUE
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,911 2,408 12,319
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,413 2,275 10,688
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,915 2,588 9,503
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,792 2,827 8,619
The above intangible assets have finite useful lives. Such intangible assets are amortized on a straight-line
basis over the following periods:
Patent use right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
Domain name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years
Software use right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181-10 years
19. DEFERRED TAX ASSETS
For the purpose of presentation in the statements of financial position, deferred tax assets and liabilities have
been offset.
APPENDIX I ACCOUNTANTS’ REPORT
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The followings are the deferred tax assets (liabilities) recognized by the Group and the Company and movements therein during the Track Record Period :
The Group
ECL
provision
Allowance on
inventories Accruals
Refund
liabilities,
net of right
to returned
goods asset
Tax
losses
Unrealized
profit for
inventories
Accelerated tax
depreciation
Share-based
payment
expenses
Right-of-
use assets
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269 4,633 1,475 18 3,691 33,595 (4,054) 2,714 (6,029) 6,029 42,341
(Charge) credit to profit or loss /H1118/H1118/H1118/H1118/H1118(65) 208 329 306 3,954 11,533 537 1,982 254 (254) 18,784
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (578) – – 1,063 – – – – – 485
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204 4,263 1,804 324 8,708 45,128 (3,517) 4,696 (5,775) 5,775 61,610
Credit (charge) to profit or loss /H1118/H1118/H1118/H1118/H1118194 4,993 538 60 16,145 4,942 1,239 1,207 (16,800) 16,561 29,079
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 41 – – 135 – – – – – 176
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118398 9,297 2,342 384 24,988 50,070 (2,278) 5,903 (22,575) 22,336 90,865
Credit (charge) to profit or loss /H1118/H1118/H1118/H1118/H111834 7,578 3,320 30 (10,648) 27,435 (611) 1,065 (4,315) 5,863 29,751
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 790 – – (993) – – – – – (203)
Effect of changes in tax rates on
deferred tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) (671) – – (9,204) – – – – – (9,877)
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118430 16,994 5,662 414 4,143 77,505 (2,889) 6,968 (26,890) 28,199 110,536
Credit (charge) to profit or loss /H1118/H1118/H1118/H1118/H1118273 (89) (1,711) (82) 1,174 13,366 91 2,160 2,461 (1,054) 16,589
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 144 – – – – – 144
Effect of changes in tax rates on
deferred tax. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4) (3,150) – – – – – – 3,451 (4,889) (4,592)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699 13,755 3,951 332 5,461 90,871 (2,798) 9,128 (20,978) 22,256 122,677
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 425 ---
The Company
ECL
provision
Allowance on
inventories Accruals
Refund
liabilities,
net of right
to returned
goods asset
Accelerated tax
depreciation
Share-based
payment
expenses
Right-of-use
assets
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180 1,165 1,475 18 (4,054) 2,714 (3,727) 3,727 1,498
(Charge) credit to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(57) 267 (503) 11 537 1,982 1,719 (1,719) 2,237
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 1,432 972 29 (3,517) 4,696 (2,008) 2,008 3,735
Credit (charge) to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 926 (506) 32 1,427 1,207 639 (810) 2,977
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185 2,358 466 61 (2,090) 5,903 (1,369) 1,198 6,712
(Charge) credit to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(51) (1,625) 801 (10) 248 1,065 12 214 654
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134 733 1,267 51 (1,842) 6,968 (1,357) 1,412 7,366
(Charge) credit to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (326) (602) (41) (324) 2,160 547 (551) 856
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127 407 665 10 (2,166) 9,128 (810) 861 8,222
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 426 ---
20. INVENTORIES
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118630,367 570,338 547,841 454,637
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,301 25,374 11,437 13,550
Consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,409 10,403 12,993 16,648
659,077 606,115 572,271 484,835
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,007 33,430 1,203 219
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,509 32,683 5,437 466
Consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,779 906 466 385
173,295 67,019 7,106 1,070
As at the end of each reporting period, all the inventories of the Group and the Company are expected to be
recovered within 12 months.
21. TRADE RECEIV ABLES
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables – third parties /H1118/H1118/H1118104,170 124,744 156,889 221,095
Less: allowance for credit losses /H1118/H1118/H1118 (1,163) (2,145) (2,273) (2,731)
103,007 122,599 154,616 218,364
The following is an aged analysis of trade receivables net of allowance for credit losses presented based on
the date of delivery:
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,993 115,388 146,843 210,589
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,154 5,195 4,659 5,644
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,860 2,016 3,114 2,131
103,007 122,599 154,616 218,364
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 427 ---
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables – third parties /H1118/H1118/H1118 12,818 13,036 15,918 5,166
Less: allowance for credit losses /H1118/H1118/H1118 (603) (1,028) (749) (756)
12,215 12,008 15,169 4,410
The following is an aged analysis of trade receivables net of allowance for credit losses presented based on
the date of delivery:
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,309 10,469 12,706 2,246
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,518 1,250 1,043 1,310
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,388 289 1,420 854
12,215 12,008 15,169 4,410
As at January 1, 2022, trade receivables from contracts with customers amounted to approximately
RMB90,380,000 and RMB13,293,000 for the Group and the Company respectively.
The Group and Company grant the credit period ranging from 14 days to 90 days to its trade customers.
As at December 31, 2022, 2023 and 2024 and September 30, 2025, included in the Group’s trade receivables
balance are debtors with aggregate carrying amount of RMB33,817,000, RMB47,442,000, RMB55,496,000 and
RMB70,995,000 which are past due respectively. Out of the past due balances, RMB4,932,000, RMB5,148,000,
RMB6,397,000 and RMB5,906,000 have been past due over 90 days respectively and are not considered as in default
due to the history of cooperation, the sound collection history or the solid credit rating of the debtors.
As at December 31, 2022, 2023 and 2024 and September 30, 2025, included in the Company’s trade
receivables balance are debtors with aggregate carrying amount of RMB6,002,000, RMB5,775,000, RMB6,957,000
and RMB4,220,000, which are past due as at the reporting date. Out of the past due balances, RMB2,513,000,
RMB1,529,000, RMB2,377,000 and RMB1,983,000 have been past due over 90 days respectively and are not
considered as in default due to the history of cooperation, the sound collection history or the solid credit rating of
the debtors.
Details of impairment assessment of trade receivables are set out in Note 41.
22. OTHER RECEIV ABLES, DEPOSITS AND PREPAYMENTS
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,874 32,709 20,024 27,543
Refundable value-added tax /H1118/H1118/H1118/H1118/H1118/H111877,487 20,856 42,919 43,556
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H111828,300 56,313 114,190 87,733
Rental deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,559 16,544 21,691 20,584
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,920 3,166 5,947 4,375
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,697
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 428 ---
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 6 7 0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,140 2,871 4,165 4,498
157,280 132,459 208,936 193,656
Less: allowance for credit losses /H1118/H1118/H1118 (314) (420) (336) (453)
156,966 132,039 208,600 193,203
Represented by:
– Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,265 16,154 88,296 67,375
– Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,701 115,885 120,304 125,828
156,966 132,039 208,600 193,203
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,372 1,143 664 904
Refundable value-added tax /H1118/H1118/H1118/H1118/H1118/H111855,030 20,856 34,447 1,907
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H11188,326 18,697 80,275 69,504
Rental deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,744 4,454 4,035 1,818
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,920 3,092 4,749 3,012
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,697
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 6 7 0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,424 1,786 1,776 2,321
73,816 50,028 125,946 84,833
Less: allowance for credit losses /H1118/H1118/H1118 (215) (206) (144) (93)
73,601 49,822 125,802 84,740
Represented by:
– Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,534 4,255 70,813 48,736
– Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,067 45,567 54,989 36,004
73,601 49,822 125,802 84,740
Details of impairment assessment of other receivables and deposits are set out in Note 41.
23. AMOUNTS DUE FROM SUBSIDIARIES
The Company
At January 1, At December 31,
At
September 30,
2022 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118940,914 668,907 617,431 726,622 752,787
Non-trade in nature (Note) /H1118 82,130 229,623 255,504 495,450 535,438
1,023,044 898,530 872,935 1,222,072 1,288,225
Note: The amounts are unsecured, interest free and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 429 ---
The following is an aged analysis of amounts due from subsidiaries which are trade in nature presented based
on the date of delivery at the end of each reporting period.
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118668,907 617,431 726,622 752,787
The normal credit term grants to the subsidiaries is 3 months. None of the balance is past due as at December
31, 2022, 2023 and 2024 and September 30, 2025.
24. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group and the Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,038 180,347 506,444 694,046
The structured deposits represent structured deposit products issued by commercial banks and mainly invest
in bank deposits with the price linked to gold price and exchange rate.
25. BANK BALANCES AND CASH/SHORT-TERM BANK DEPOSITS/RESTRICTED BANK
DEPOSITS/BANK OVERDRAFTS
The Group
Bank balances and cash/short-term bank deposits/restricted bank deposits
Bank balances and cash include demand deposits for the purpose of meeting the Group’s short term cash
commitments, which carry interest at market rates range from 0% to 2.30% per annum, 0% to 2.30% per annum, 0%
to 1.35% per annum and 0% to 3.5% per annum as at 31 December 2022, 2023 and 2024 and September 30, 2025
respectively. Restricted bank deposits carry fixed interest rates from 0% to 0.2% per annum, 0% to 4.638% per
annum, 0% to 4.398% per annum and 0% to 4.398% per annum as at December 31, 2022, 2023 and 2024 and
September 30, 2025 respectively.
The Group’s short-term bank deposits amounting to RMB93,000,000 and RMB23,400,000 are with original
maturity of over three months carry interest rates from 1.80% to 1.85% per annum and 2.05% per annum as at
December 31, 2024 and September 30, 2025, respectively. The balance will mature within five months from the end
of each reporting period.
The Group’s restricted bank deposits represented the deposits placed in a bank for obtaining the letter of
guarantee and the oversea subsidiaries’ credit cards’ limit.
Bank overdrafts
Bank overdrafts did not incur any interest during the Track Record Period.
The Company
Bank balances and cash/short-term bank deposits/restricted bank deposits
Bank balances and cash include demand deposits for the purpose of meeting the Company’s short term cash
commitments, which carry interest at market rates range from 0% to 2.30% per annum, 0% to 2.30% per annum, 0%
to 1.15% per annum and 0% to 3.5% per annum as at December 31, 2022, 2023 and 2024 and September 30, 2025.
Restricted bank deposits carry fixed interest rates at 0.2% per annum, 0.2% per annum, 0.1% per annum and 0.05%
per annum as at December 31, 2022, 2023 and 2024 and September 30, 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 430 ---
The Company’s short-term bank deposits amounting to RMB93,000,000 and RMB23,400,000 are with original
maturity of over three months carry interest rates from 1.80% to 1.85% per annum and 2.05% per annum as at
December 31, 2024 and September 30, 2025, respectively. The balance will mature within five months from the end
of each reporting period.
The restricted bank deposits represented the deposits placed in a bank for obtaining the letter of guarantee.
Details of impairment assessment of bank balances, short-term bank deposits and restricted bank deposits are
set out in Note 41.
26. TRADE PAYABLES
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables – third parties /H1118/H1118/H1118/H1118/H1118345,630 278,330 251,449 217,423
The credit period on trade payables ranges from 0 to 180 days. The aging analysis of the Group’s based on the
invoice dates at the end of each reporting period are as follow:
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,541 223,723 169,869 207,782
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,516 53,666 62,249 8,837
6 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,573 941 19,331 804
345,630 278,330 251,449 217,423
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables – third parties /H1118/H1118/H1118/H1118/H1118147,263 2,474 82 45
The credit period on trade payables ranges from 0 to 180 days. The aging analysis of the Company’s based on
the invoice dates at the end of each reporting period are as follow:
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,736 503 1 1
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,009 1,644 8 6
6 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,518 327 73 38
147,263 2,474 82 45
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 431 ---
27. OTHER PAYABLES AND ACCRUALS
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accrued staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,804 41,312 52,182 33,016
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,339 19,964 23,478 35,114
Payables for patent use right /H1118/H1118/H1118/H1118/H111810,386 7,046 3,581 1,770
Accrued advertising costs /H1118/H1118/H1118/H1118/H1118/H1118/H11188,948 14,180 16,203 15,579
Other accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,553 9,536 8,032 9,587
Accrued freight costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,837 10,003 13,926 12,527
Accrued listing expenses and issue
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,674
Payables for construction costs /H1118/H1118/H1118/H11184,894 13,156 19,623 14,775
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,910 1,158 2,258 1,016
88,671 116,355 139,283 130,058
Represented by:
– Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,116 3,637 – –
– Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,555 112,718 139,283 130,058
88,671 116,355 139,283 130,058
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accrued staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,344 27,968 18,678 10,057
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,854 4,432 4,802 4,311
Accrued freight costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,110 3,625 4,864 512
Accrued listing expenses and issue
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,674
Other accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,500 2,004 1,824 843
Payables for construction costs /H1118/H1118/H1118/H1118 310 83 7,243 5,203
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142 369 389 63
37,260 38,481 37,800 27,663
28. AMOUNTS DUE TO SUBSIDIARIES
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,959 31,683 71,371 –
Non-trade in nature (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 45,519 187,930 169,444
33,959 77,202 259,301 169,444
Note: These amounts are unsecured, interest free and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 432 ---
The following is an aged analysis of an amounts due to subsidiaries which is trade in nature presented based
on the invoice date at the end of each reporting period:
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,959 31,683 71,371 –
The normal credit term to the Company is 3 months.
29. REFUND LIABILITIES
The refund liabilities relate to customers’ right to return products under the Group’s and the Company’s return
policy of 30 days. At the point of sale, a refund liability and a corresponding adjustment to revenue is recognized
for those products expected to be returned. The Group and the Company use its accumulated historical experience
to estimate the number of returns on a portfolio level using the expected value method.
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Refund liabilities arising from right
of return /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,711 6,000 6,987 7,555
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Refund liabilities arising from right
of return /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118434 800 666 126
30. CONTRACT LIABILITIES
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities from customers
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,560 109,499 40,692 46,219
Note: The significant increase in contract liabilities as at December 31, 2023 is due to a substantial order
placed by a customer, and as at September 30, 2025 is due to more advance received from customers.
As at January 1, 2022, contract liabilities amounted to RMB36,303,000. The directors of the Company
considered that the entire balance of contract liabilities as at December 31, 2022, 2023 and 2024 and September 30,
2025 would be realized within the Group’s normal operating cycle based on the Group’s earliest obligation to deliver
products to the customers and are classified as current liabilities.
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 433 ---
The following table shows the amount of revenue recognized during the Track Record Period relates to
carried-forward contract liabilities at the beginning of the year/period.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue recognized that
was included in the
contract liabilities
balance at the beginning
of the year/period /H1118/H1118/H1118/H1118/H111836,303 44,560 109,499 109,499 40,692
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities from customers
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980 18,335 1,283 967
Note: The significant increase in contract liabilities as at December 31, 2023 is due to a substantial order
placed by a customer.
As at January 1, 2022, contract liabilities amounted to RMB7,633,000. The directors of the Company
considered that the entire balance of contract liabilities as at December 31, 2022, 2023 and 2024 and September 30,
2025 would be realized within the Company’s normal operating cycle based on the Company’s earliest obligation to
provide services to the customers and are classified as current liabilities.
The following table shows the amount of revenue recognized during the Track Record Period relates to
carried-forward contract liabilities at the beginning of the year/period.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue recognized that
was included in the
contract liabilities
balance at the beginning
of the year/period /H1118/H1118/H1118/H1118/H11187,633 1,980 18,335 18,335 1,283
31. BORROWINGS
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Secured bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,015 96,779 573,360 521,793
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 434 ---
As at December 31, 2022, 2023 and 2024 and September 30, 2025, the Group’s secured bank loans amounting
to RMB79,015,000, RMB96,779,000, RMB573,360,000 and RMB521,793,000 were secured by the certain owned
land and buildings of the Group with carrying amount of RMB152,570,000, RMB139,742,000, RMB857,741,000 and
RMB835,788,000 respectively. Included in the secured bank loans stated above, RMB79,015,000, RMB70,299,000,
RMB61,670,000 and RMB76,937,000 were guaranteed by the Company; RMB26,480,000 and RMB23,832,000 as at
December 31, 2023 and 2024 respectively were guaranteed by the Company and Mr. Xiang. The remaining loan
amount of RMB487,858,000 and RMB444,856,000 as at December 31, 2024 and September 30, 2025 were
unguaranteed, respectively.
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The carrying amounts of the above
borrowings are repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,716 11,364 63,787 176,245
Within a period of more than one
year but not exceeding two years /H1118 8,716 11,364 176,200 48,700
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/H1118/H111826,148 34,092 146,100 146,100
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/H111835,435 39,959 187,273 150,748
79,015 96,779 573,360 521,793
Less: Amounts due within one year
shown under current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,716) (11,364) (63,787) (176,245)
Amounts shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,299 85,415 509,573 345,548
The bank borrowings at December 31, 2022, 2023 and 2024 and September 30, 2025 are all variable-rate
borrowings. The ranges of effective interest rates (which are also equal to contracted interest rates) on the Group’s
borrowings are as follow:
At December 31, At September 30,
2022 2023 2024 2025
Effective interest rate:
V ariable-rate borrowings (per
annum) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
4.30% to
4.80%
2.90% to
4.80%
2.30% to
4.50%
2.23% to
2.95%
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Secured bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 487,858 444,856
At December 31, 2024 and September 30, 2025, the Company’s secured bank loans amounting to
RMB487,858,000 and RMB444,856,000 were secured by certain owned land and buildings of the Company with
carrying amount of RMB651,841,000 and RMB473,224,000 and investment properties of the Company with carrying
amount of RMB38,957,000 and RMB202,369,000, respectively. Among the secured bank loans stated above,
RMB345,358,000 and RMB317,356,000 were also guaranteed by a subsidiary of the Company and the remaining
RMB142,500,000 and RMB127,500,000 was unguaranteed, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 435 ---
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The carrying amounts of the above
borrowings are repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 52,336 164,836
Within a period of more than one
year but not exceeding two years /H1118 – – 164,836 37,336
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/H1118/H1118– – 112,008 112,008
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/H1118– – 158,678 130,676
– – 487,858 444,856
Less: Amounts due within one year
shown under current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (52,336) (164,836)
Amounts shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 435,522 280,020
The bank borrowings at December 31, 2024 and September 30, 2025 are all variable-rate borrowings. The
ranges of effective interest rates (which are also equal to contracted interest rates) on the Company’s borrowings are
as follow:
At December 31, At September 30,
2022 2023 2024 2025
Effective interest rate:
V ariable-rate borrowings (per
annum) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A
2.58% to
2.70%
2.23% to
2.58%
32. LEASE LIABILITIES
The Group
At December 31, At September 30,
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/H111814,897 16,866 24,371 26,462
Within a period of more than one
year but not more than two years /H1118 11,771 19,619 19,963 29,518
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/H11182,326 19,735 64,167 57,638
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/H1118– 29,963 16,650 14,176
28,994 86,183 125,151 127,794
Less: Amount due for settlement
with 12 months shown
under current liabilities /H1118/H1118/H1118 (14,897) (16,866) (24,371) (26,462)
Amount due for settlement
after 12 months shown
under non-current liabilities /H1118 14,097 69,317 100,780 101,332
APPENDIX I ACCOUNTANTS’ REPORT
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As at December 31, 2022, 2023 and 2024 and September 30, 2025, the incremental borrowing rates applied
to lease liabilities was 1.48% to 5.51%, 1.48% to 5.51%, 1.48% to 5.51% and 1.48% to 5.51% per annum
respectively.
The Company
At December 31, At September 30,
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/H11189,381 6,168 5,108 4,313
Within a period of more than one
year but not more than two years /H1118 1,499 1,561 3,461 1,424
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/H11182,506 260 841 –
13,386 7,989 9,410 5,737
Less: Amount due for settlement
with 12 months shown
under current liabilities /H1118/H1118/H1118 (9,381) (6,168) (5,108) (4,313)
Amount due for settlement
after 12 months shown
under non-current liabilities /H1118 4,005 1,821 4,302 1,424
As at December 31, 2022, 2023, 2024 and September 30, 2025, the weighted average incremental borrowing
rates applied to lease liabilities was 4.15%, 4.15%, 4.01% and 4.01% per annum respectively.
33. REDEMPTION LIABILITIES
On May 27, 2025, the Company and all shareholders of the Company entered into a special right termination
agreement that all special rights previously granted to certain shareholders, other than redemption rights which were
borne by the controlling shareholder, Mr. Xiang, were terminated upon first submission of the listing application to
the Stock Exchange (“Listing Application). The redemption rights was remained, and ceased to be exercisable
immediately before the first submission of the Listing Application by the Company, and resumed to be exercisable
if (a) the Company voluntarily withdraws the Listing Application; (b) the Listing Application is withdrawn, rejected,
returned, or otherwise terminated by the relevant regulators; (c) the Listing Application becomes invalid and the
Company fails to resubmit the Listing Application within six months from the expiry date of first submission of
Listing Application, or resubmits the Listing Application which then becomes expired again; (d) the Company fails
to obtain a filing notice for overseas listing from the China Securities Regulatory Commission; (e) the Company fails
to pass the Stock Exchange’s listing committee hearing, or after the Company passes the hearing, the Company has
not issued shares and listed on the Stock Exchange within 12 months from the date of hearing; or (f) the Company
fails to achieve the initial listing of shares on the Stock Exchange before December 31, 2026 for other reasons. Such
redemption obligation was also amended from bearing by the controlling shareholder, Mr. Xiang, to the Company,
and was effective from May 27, 2025, the date of first submission of the Listing Application. The redemption amount
is the original investment principal from the respective investors plus an annual rate ranging from 5% to 10% per
annum of the original investment principal calculated from the relevant receipt date of investments to 1 December
2024 (calculated as 365 days in a calendar year) and deducted the accumulated dividends received by the relevant
investors.
The redemption rights granted to the investors constitute as the Company’s obligations to repurchase its own
equity instruments upon the amendments to the terms of financial instruments as detailed above. On the date of
modification, such obligations were recognized as redemption liabilities and are initially measured at fair value
(representing the present value of the cash flows for settling the related obligations if these rights are exercised by
the investors), with the corresponding amount charged against the other reserve within equity. The redemption
liabilities are subsequently measured at amortized cost. The Company applied a discount rate of 2.20% in determining
the initial recognition amount of the redemption liabilities.
APPENDIX I ACCOUNTANTS’ REPORT
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The movements of redemption liabilities during the nine months ended September 30, 2025 are set out below:
RMB’000
At January 1, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Initial recognition on May 27, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,395
Imputed interest charged to profit or loss (Note 9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,848
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,243
34. SHARE CAPITAL
Share capital of the Company
Number of shares Share capital
’000 RMB’000
Ordinary shares of RMB1 each
Registered, issued, and fully paid
At January 1, 2022, December 31, 2022, 2023 and 2024 and
September 30, 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/H1118360,000 360,000
As at September 30, 2025, among the 360,000,000 ordinary shares issued, 93,933,248 ordinary shares are held
by certain shareholders who have redemption rights described in Note 33.
35. SHARE-BASED PAYMENT
In year 2018, the Company has adopted the employee incentive scheme (“the Employee Incentive Scheme”)
which is valid for ten years since adoption and is subject to termination by the shareholders as provided under the
Employee Incentive Scheme and established three limited partnerships, Shenzhen Y uxuan Prudence Technology
Partnership (Limited Partnership)ҦΥྫΆุ(Υྫ) (“Y uxuan Prudence”), Shenzhen Y uxuan
Progress Technology Partnership (Limited Partnership)ҦΥྫΆุ(Υྫ) (“Y uxuan
Progress”), Shenzhen Y uxuan Growth Technology Partnership (Limited Partnership)ҦΥྫΆุ
(Υྫ) (“Y uxuan Growth”) as the employee incentive platforms, with a view to improve the enthusiasm and
creativity of the eligible participants of the Employee Incentive Scheme (the “Eligible Participants”), promoting the
sustainable growth of the performance of the Group, bringing value-added benefits to the Eligible Participants while
enhancing the value of the Group, and thus realizing the common development of both the Eligible Participants and
the Group. The Eligible Participants shall subscribe for partnership interest therein according to the amount approved
by the board of directors of the Company thereby holding indirect interest in the registered capital of the Company.
In July 2018, the Group granted the first phase of awarding shares under the Employee Incentive Scheme (the
“2018 Incentive Scheme”) to 80 Eligible Participants (the “2018 Eligible Participants”) through Y uxuan Prudence and
Y uxuan Progress. Y uxuan Prudence and Y uxuan Progress had, in turn, subscribed registered capital of the Company
of RMB39,426 and RMB7,025, representing approximately 2.74% and 0.49% of the registered capital of the
Company (as at the date of the adoption of the 2018 Incentive Scheme), respectively. The corresponding interests in
Y uxuan Prudence and Y uxuan Progress were granted to the 2018 Eligible Participants on October 22, 2018 and all
contribution payments have been paid in full. The 2018 Eligible Participants made aggregate contribution payments
of RMB24,610,000 and RMB4,385,000 into Y uxuan Prudence and Y uxuan Progress respectively which in turn
subscribed for RMB46,451 registered capital of the Company.
In December 2019, the Group granted the second phase of awarding shares under the Employee Incentive
Scheme (the “2019 Incentive Scheme”) to 89 Eligible Participants (the “2019 Eligible Participants”) through Y uxuan
Prudence, Y uxuan Progress and Y uxuan Growth. Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth had, in turn,
subscribed registered capital of the Company of RMB8,206, RMB4,949 and RMB8,633, representing approximately
0.54%, 0.32% and 0.57% of the registered capital of the Company (as at the date of the adoption of the 2019 Incentive
Scheme), respectively. The corresponding interests in Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth were
granted to the 2019 Eligible Participants on 30 December 2019 and all contribution payments have been paid in full.
APPENDIX I ACCOUNTANTS’ REPORT
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The 2019 Eligible Participants made aggregate contribution payments of RMB5,698,000, RMB3,475,000 and
RMB6,060,000 into Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth respectively which in turn subscribed
for RMB21,788 registered capital of the Company.
In March 2020, the Group granted the third phase of awarding shares under the Employee Incentive Scheme
(the “2020 Incentive Scheme”) to 30 Eligible Participants (the “2020 Eligible Participants”) through Y uxuan
Prudence and Y uxuan Growth. Y uxuan Prudence and Y uxuan Growth had, in turn, subscribed registered capital of the
Company of RMB4,272 and RMB813, representing approximately 0.28% and 0.05% of the registered capital of the
Company (as at the date of the adoption of the 2020 Incentive Scheme), respectively. The corresponding interests in
Y uxuan Prudence and Y uxuan Growth were granted to the 2020 Eligible Participants on March 13, 2020 and all
contribution payments have been paid in full. The 2020 Eligible Participants made aggregate contribution payments
of RMB3,000,000 and RMB570,000 into Y uxuan Prudence and Y uxuan Growth respectively which in turn subscribed
for RMB5,085 registered capital of the Company.
On September 29, 2020, the Company was converted from a limited liability company into a joint stock
company with a share capital of RMB60,000,000, comprising 60,000,000 ordinary shares of RMB1 each. The
registered capital held by Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth had, in turn, became 2,012,548,
464,268 and 366,259 shares, representing approximately 3.35%, 0.77% and 0.61% of the then total issued shares of
the Company, respectively.
On November 19, 2021, the Company issued 3,057,325 new shares to six new investors and the total issued
shares of the Company increased to 63,057,325 shares.
On December 23, 2021, with the approval of the shareholders’ meeting of the Company, the Company, based
on a total share capital of 63,057,325 shares, converted share premium of RMB296,942,675 into new shares at a ratio
of 4.7090908947 new shares for every 1 existing share for all shareholders. The share capital of the Company have
increased from RMB63,057,325 to RMB360,000,000. Following the increase of share capital, the number of ordinary
shares held by Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth was increased to 11,489,819, 2,650,548 and
2,091,006 shares respectively.
During the year ended December 31, 2022, the Group granted the fourth phase of awarding shares under the
Employee Incentive Scheme (the “2022 Incentive Scheme”) to 30 Eligible Participants (the “2022 Eligible
Participants”) through Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth. The shares granted to 2022 Eligible
Participants were coming from the shares repurchased from the participants of the first, second and third phases of
the Employee Incentive Scheme who have resigned. The shares granted to 2022 Eligible Participants through Y uxuan
Prudence, Y uxuan Progress and Y uxuan Growth were 1,575,072, 614,149 and 260,291 shares, representing
approximately 0.44%, 0.17% and 0.07% of the total issued shares of the Company (as at the date of the adoption of
the 2022 Employee Incentive Scheme), respectively. The fair value of the granted shares as of the grant date was
RMB44,973,000, as determined by the directors of the Company with reference to valuation carried out by an
independent qualified professional valuer not connected to the Group. The fair value at grant date was determined
using discounted cash flow model with the key inputs includes growth rates of revenue between 4% and 19% and
pre-tax discount rate of 13.80%.
During the year ended December 31, 2023, the Group granted the fifth phase of awarding shares under the
Employee Incentive Scheme (the “2023 Incentive Scheme”) to one Eligible Participant (the “2023 Eligible
Participant”) through Y uxuan Prudence and Y uxuan Growth. The shares granted to 2023 Eligible Participant were
coming from the shares repurchased from the participants of the first, second, third and fourth phases of the Employee
Incentive Scheme who have resigned. The shares granted to 2023 Eligible Participant through Y uxuan Prudence and
Y uxuan Growth were 83,737 and 15,763 shares, representing approximately 0.02% and 0.01% of the total issued
shares of the Company (as at the date of the adoption of the 2023 Employee Incentive Scheme), respectively. The
fair value of the granted shares as at the grant date was RMB1,826,000, as determined by the directors of the
Company with reference to valuation carried out by an independent qualified professional valuer not connected to
the Group. The fair value at the grant date was determined using discounted cash flow model with the key inputs
includes growth rates of revenue between 5% and 20% and pre-tax discount rate of 12.81%.
During the year ended December 31, 2024, the Group granted the sixth phase of awarding shares under the
Employee Incentive Scheme (the “2024 Incentive Scheme”) to one Eligible Participant (the “2024 Eligible
Participant”) through Y uxuan Growth. The shares granted to 2024 Eligible Participant were coming from the shares
repurchased from the participants of the first, second, third and fourth phases of the Employee Incentive Scheme who
have resigned. The shares granted to 2024 Eligible Participant through Y uxuan Growth were 287,657 shares,
representing approximately 0.08% of the total issued shares of the Company. The fair value of the granted shares as
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 439 ---
at the grant date was RMB5,277,000, as determined by the directors of the Company with reference to valuation
carried out by an independent qualified professional valuer not connected to the Group. The fair value at the grant
date was determined using discounted cash flow model with the key inputs includes growth rates of revenue between
5% and 20% and pre-tax discount rate of 12.81%.
During the nine months ended September 30, 2025, the Group canceled 2023 Incentive Scheme and 2024
Incentive Scheme, which resulted in immediate expense recognition due to acceleration of vesting and granted the
seventh phase of awarding shares under the Employee Incentive Scheme (the “2025 Incentive Scheme”) to 17
Eligible Participants (the “2025 Eligible Participants”) through Y uxuan Prudence, Y uxuan Progress and Y uxuan
Growth. The shares granted to 2025 Eligible Participants were coming from the shares originally granted to 2023
Eligible Participant and 2024 Eligible Participant. The shares granted to 2025 Eligible Participants through Y uxuan
Prudence, Y uxuan Progress and Y uxuan Growth were 79,502, 177,001 and 123,754 shares, representing
approximately 0.02%, 0.05% and 0.03% of the total issued shares of the Company (as at the date of the adoption of
the 2025 Employee Incentive Scheme), respectively. The fair value of the granted shares as at the grant date was
RMB5,704,000, as determined by the directors of the Company with reference to the recent transaction price between
shareholders.
The three limited partnerships were set up for the purpose of administering the Employee Incentive Scheme
and holding the shares of the Company granted to the Eligible Participants, and are assessed to be controlled by the
Company and consolidated to the Group accordingly.
The granted shares under the first to sixth phase of the Employee Incentive Scheme shall subject to transfer
restrictions which is also the vesting condition and such restrictions shall be released from the business day following
the third anniversary of the date of listing. The transfer restrictions are as following:
(i) Eligible Participants are not allowed to withdraw from the partnership platform before the vesting date;
and
(ii) if the Eligible Participants resigned before the vesting date, the granted shares will be repurchased by
the controlling shareholder of the Company or a party designated by him at the price of the cost plus
an annual interest rate of 10% for 2018 Incentive Scheme, 2019 Incentive Scheme and 2020 Incentive
Scheme and the cost plus an annual interest rate of 6% for 2022 Incentive Scheme, 2023 Incentive
Scheme and 2024 Incentive Scheme.
During the nine months ended September 30, 2025, the Group modified the date relating to transfer restrictions
and the granted shares shall be released for the first to sixth phase of the Employee Incentive Scheme as following:
(i) one quarter of the granted share was released from the business day following the first anniversary of
the date of listing; and
(ii) one quarter of the granted share was released from the business day following the second anniversary
of the date of listing; and
(iii) one quarter of the granted share was released from the business day following the third anniversary of
the date of listing; and
(iv) one quarter of the granted share was released from the business day following the fourth anniversary of
the date of listing.
The transfer restrictions and the modified date relating to transfer restrictions stated above also applied to the
2025 Employee Incentive Scheme.
In addition to the transfer restrictions sets forth above, the release of the shares shall be further subject to the
achievement of the certain performance targets of the Company and the grantee respectively (individually and
collectively, the “Performance Target(s)”). The remuneration committee of the board of directors of the Company
shall review and determine the fulfilment of the Performance Target(s), and report to the board of directors of the
Company accordingly.
During the years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2024
and 2025, share-based payment expenses amounting to RMB10,595,000, RMB6,373,000, RMB5,745,000,
RMB4,291,000 (unaudited) and RMB14,401,000 were recognized respectively. The shares granted but not vested as
at December 31, 2022, 2023 and 2024 and September 30, 2025 were 16,231,373 shares.
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 440 ---
36. RETIREMENT BENEFIT SCHEME
The employees of the Company and the Company’s subsidiaries are members of a state-managed retirement
benefit scheme operated by the government in PRC, USA, DEU, AUS, GBR, SGP and JPN. These entities are
required to contribute a certain percentage of the salaries of their employees to the state-managed retirement benefit
scheme. The only obligation of the Group with respect to the retirement benefit scheme is to make the required
contributions under the scheme.
The retirement benefit scheme contributions amounted to approximately RMB15,987,000, RMB18,672,000,
RMB23,945,000, RMB16,421,000 (unaudited) and RMB20,596,000 for the years ended December 31, 2022, 2023
and 2024 and the nine months ended September 30, 2024 and 2025, respectively. No forfeited contributions have been
used to reduce the level of contributions during each reporting period.
37. RESERVES OF THE COMPANY
Movement in the Company’s reserves
Share
premium
Statutory
surplus
reserve
Share-
based
payment
reserve
Retained
profits
Other
reserve Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118562,045 34,369 10,740 319,029 – 926,183
Profit and total other comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 377,142 – 377,142
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,714 – (37,714) – –
Dividends recognized as distribution
(Note 14) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (60,000) – (60,000)
Recognition of share-based payment
expenses
(Note 35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 10,595 – – 10,595
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118562,045 72,083 21,335 598,457 – 1,253,920
Profit and total other comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 412,923 – 412,923
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 41,292 – (41,292) – –
Recognition of share-based payment
expenses
(Note 35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,373 – – 6,373
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118562,045 113,375 27,708 970,088 – 1,673,216
Profit and total other comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 333,487 – 333,487
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 33,349 – (33,349) – –
Recognition of share-based payment
expenses
(Note 35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,745 – – 5,745
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118562,045 146,724 33,453 1,270,226 – 2,012,448
Profit and total other comprehensive
income for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 321,929 – 321,929
Dividends recognized as distribution
(Note 14) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (200,000) – (200,000)
Recognition of redemption
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (659,395) (659,395)
Recognition of share-based payment
expenses (Note 35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 14,401 – – 14,401
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118562,045 146,724 47,854 1,392,155 (659,395) 1,489,383
APPENDIX I ACCOUNTANTS’ REPORT
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38. CAPITAL COMMITMENTS
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Capital expenditure in respect of the
acquisition of property, plant and
equipment contracted for
but not provided in the Historical
Financial Information /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,492 548,443 27,093 27,247
39. PARTICULARS OF PRINCIPAL SUBSIDIARIES OF THE COMPANY
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted investments, at cost /H1118/H1118/H1118/H1118/H111842,885 140,085 150,085 140,085
Details of the principal subsidiaries held by the Company are set out below.
The below table lists the subsidiaries of the Company which, in the opinion of the directors of the Company,
principally affected the results or assets of the Group.
Percentage of attributable equity
interest held by the Group
Name of subsidiaries
Place and date of
incorporation/
establishment
Registered/
issued capital
As at December 31
As at
September
30,
As at the date
of this report
Principal activities/place
of operation Notes2022 2023 2024 2025
%%% % %
Directly owned:
Wuhan FS.COM
Technology Co.,
Ltd.* (஺
ʮ̡) /H1118
PRC/October 15,
2018
RMB100,000,000/
RMB100,000,000
100 100 100 100 100 Research and
development, supply
chain management
and warehousing/PRC
ii
FS Innovation (Wuhan)
Co., Ltd.* (஺௴อ
Ҧஔ(ဏ)ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC/February 9,
2022**
RMB10,000,000/
RMB10,000,000
100 100 100 100 100 After-sales service/PRC iv
FS Innovation
(Shanghai) Co.,
Ltd.* (ڦ
Ҧஔ(ɪऎ)ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC/November 1,
2021
RMB10,000,000/
RMB10,000,000
100 100 100 100 100 Sales support/PRC iv
Wuhan FS.COM
Commerce Co.,
Ltd.* (஺௴อ
ʮ̡) /H1118
PRC/July 18,
2024**
RMB10,000,000/
RMB10,000,000
– – 100 100 100 Sales support/PRC iv
FS Innovation
(Shenzhen) Co.,
Ltd.* (஺௴
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC/July 17,
2024**
RMB10,000,000/
RMB10,000,000
– – 100 100 100 Trading/PRC iv
FS.COM HK LIMITED Hong Kong/
November 8,
2016
Hong Kong Dollar
(“HKD”)
100,000/
HKD100,000
100 100 100 100 100 Trading and sales
settlement/HONG
KONG
ii
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 442 ---
Percentage of attributable equity
interest held by the Group
Name of subsidiaries
Place and date of
incorporation/
establishment
Registered/
issued capital
As at December 31
As at
September
30,
As at the date
of this report
Principal activities/place
of operation Notes2022 2023 2024 2025
%%% % %
Indirectly owned:
FS.COM INC /H1118/H1118/H1118/H1118/H1118USA/April 30, 2018 United States
Dollar (“USD”)
20,000/
USD20,000
100 100 100 100 100 Trading and
warehousing/USA
iv
FS.COM GmbH /H1118/H1118/H1118/H1118DEU/May 11, 2017 Euro (“EUR”)
25,000/
EUR25,000
100 100 100 100 100 Trading and
warehousing/DEU
ii
FS.COM PTY LTD /H1118/H1118AUS/July 19, 2017 Australian Dollar
(“AUD”) 10,000/
AUD10,000
100 100 100 100 100 Trading and
warehousing/AUS
ii
FS TECH PTE. LTD. /H1118SGP/June 4, 2018 USD38,000/
USD38,000
100 100 100 100 100 Trading and
warehousing/SGP
ii
FS.COM
INNOV A TION LTD./H1118
GBR/July 20, 2017 Great Britain Pound
(“GBP”) 10,000/
GBP10,000
100 100 100 100 100 Trading and
warehousing/GBR
ii
FS JAPAN CO., LTD. /H1118JPN/December 11,
2019
Japanese Y en
(“JPY”)
10,000,000/
JPY10,000,000
100 100 100 100 100 Trading and
warehousing/JPN
iv
Fiberstore.com Ltd. /H1118/H1118Russia/September
7, 2018
Ruble (“RUB”)
250,000/
RUB250,000
100 100 – – – Trading and
warehousing/Russia
i i i&i v
FS INNOV A TION
CANADA INC. /H1118/H1118/H1118
Canada/December
4, 2025***
Canadian Dollar
(“CAD”) 10,000/
CAD10,000
––– – 1 0 0 Trading and
warehousing/CAD
–
Notes:
(i) All subsidiaries are limited liability companies or partnership and have adopted December 31 as their financial
year end date.
(ii) The financial statements of the Company’s subsidiaries established in the PRC and other regions were prepared
in accordance with the relevant accounting principles (including Chinese Generally Accepted Accounting
Principles (“PRC GAAP”), HKFRS for Private Entities Accounting Standards, IFRS Accounting Standards,
Singapore Financial Reporting Standards (“SFRS”), Generally Accepted Accounting Principles in the UK
(“UK GAAP”), Australian Accounting Standards (“AAS”), and Handelsgesetzbuch (“HGB”)) and regulations.
The financial statements for Company’s subsidiaries for the years ended December 31, 2022, 2023, and 2024
were audited by the following certified public accountants.
Y ear ended December 31, 2022
Name of the subsidiaries
Name of certified
public accountants Accounting standards
Wuhan FS.COM Technology Co., Ltd.*
(ʮ̡) /H1118/H1118/H1118/H1118/H1118
Hubei Decheng Certified
Public Accountants Firm
Co., Ltd.
PRC GAAP
FS.COM HK LIMITED /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Global Vision Certified
Public Accountants
HKFRS for Private Entities
Accounting Standards
FS TECH PTE. LTD. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118V eronica L & Associates SFRS
FS.COM INNOV A TION LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MAH Professional Services
Limited
UK GAAP
FS.COM PTY LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Moore Australia (NSW)
Audit Pty Limited
AAS
FS.COM GmbH /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118LPA-GGV Grützmacher
Gravert Viegener
Partnerschaft mbB
HGB
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 443 ---
Y ear ended December 31, 2023
Name of the subsidiaries
Name of certified
public accountants Accounting policies
Wuhan FS.COM Technology Co., Ltd.*
(ʮ̡) /H1118/H1118/H1118/H1118/H1118
Hubei Decheng Certified
Public Accountants Firm
Co., Ltd.
PRC GAAP
FS.COM HK LIMITED /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Global Vision Certified
Public Accountants
IFRS Accounting Standards
FS TECH PTE. LTD. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118V eronica L & Associates SFRS
FS.COM INNOV A TION LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Alliotts LLP UK GAAP
FS.COM PTY LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Byrons Audit Pty Ltd AAS
FS.COM GmbH /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118LPA-GGV Grützmacher
Gravert Viegener
Partnerschaft mbB
HGB
Y ear ended December 31, 2024
Name of the subsidiaries
Name of certified public
accountants Accounting policies
Wuhan FS.COM Technology Co., Ltd.*
(ʮ̡) /H1118/H1118/H1118/H1118/H1118
Wuhan Y untian Certified
Public Accountants Firm
Co., Ltd.
PRC GAAP
FS.COM HK LIMITED /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Global Vision Certified
Public Accountants
IFRS Accounting Standards
FS TECH PTE. LTD. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118V eronica L & Associates SFRS
FS.COM INNOV A TION LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Alliotts LLP IFRS Accounting Standards
FS.COM PTY LTD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Byrons Audit Pty Ltd AAS
FS.COM GmbH /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118LPA-GGV Grützmacher
Gravert Viegener
Partnerschaft mbB
HGB
* The English translation of the names of the above domestic subsidiaries is for reference only. The
official names of these entities are in Chinese.
** These subsidiaries were established by the Group during the Track Record Period.
*** This subsidiary was established by the Group after the Track Record Period.
(iii) On August 3, 2023, Fiberstore.com Ltd. was deregistered.
(iv) No audited financial statements of other entities comprising the Group have been prepared since there are no
statutory audit requirements in the PRC, USA, JPN and Russia.
None of the subsidiaries had issued any debt securities as at the end of each reporting period.
40. CAPITAL RISK MANAGEMENT
The Group and the Company manage its capital to ensure that entities in the Group and the Company will be
able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt
and equity balance. The Group and the Company’s overall strategy remained unchanged throughout the Track Record
Period.
The capital structure of the Group consists of net debts, which includes bank overdrafts, lease liabilities,
redemption liabilities and borrowings, net of bank balances and cash and total equity attributable to owners of the
Company, comprising share capital, share premium and retained profits.
The management reviews the capital structure periodically. As part of this review, the management considers
the cost of capital and the risks associated with the capital. Based on recommendations of the management, the Group
will balance its overall capital structure through issue of new shares as well as the issue of new debt or the redemption
of existing debt.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 444 ---
41. FINANCIAL INSTRUMENTS
a. Categories of financial instruments
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,911 989,564 828,074 917,733
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118390,038 180,347 506,444 694,046
890,949 1,169,911 1,334,518 1,611,779
Financial liabilities
Amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,317 434,414 892,981 1,471,363
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,129,234 1,494,289 1,548,854 1,435,062
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118390,038 180,347 506,444 694,046
1,519,272 1,674,636 2,055,298 2,129,108
Financial liabilities
Amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118187,284 85,757 761,561 1,291,883
b. Financial risk management objectives and policies
The Group’s and the Company’s major financial instruments include trade receivables, other receivables and
deposits, amounts due from subsidiaries, financial assets at FVTPL, restricted bank deposits, short-term bank
deposits, bank balances and cash, trade payables, other payables and accruals, amounts due to subsidiaries,
borrowings, lease liabilities, bank overdrafts and redemption liabilities. Details of these financial instruments are
disclosed in the respective notes. The risks associated with these financial instruments include market risk (currency
risk and interest rate risk), credit risk and liquidity risk. The policies on how to mitigate these risks are set out below.
The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely
and effective manner.
Market risk
(i) Currency risk
Certain bank balances, trade and other receivables, trade and other payables, and amounts due from/to
subsidiaries are denominated in foreign currency of respective group entities which exposure the Group and the
Company to foreign currency risk. In addition, the Company has intra-group balances with several subsidiaries
denominated in foreign currency which also expose the Group to foreign currency risk. The Group and the Company
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 arise.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 445 ---
The carrying amounts of certain significant foreign currency denominated monetary assets and monetary
liabilities of the Group and the Company at the end of each reporting period are mainly as follows:
The Group
At December 31, At September 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/H1118/H1118413,406 534,334 997,730 879,077
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118324,950 342,552 404,362 426,772
Singapore Dollar (“SGD”) /H1118/H1118/H1118/H1118/H1118/H1118/H111819,385 39,878 185,541 253,715
Canadian Dollar (“CAD”) /H1118/H1118/H1118/H1118/H1118/H1118/H111849,020 70,929 95,017 5,239
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Liabilities
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,652 151,088 432,822 541,922
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,520 53,530 115,100 105,228
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 34,162 193,899 130,964
CAD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 774 1 100
The Company
At December 31, At September 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/H1118/H1118359,003 381,751 596,169 220,213
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,122 324,581 348,925 186,819
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,799 39,078 129,007 241,878
CAD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,887 21,874 26,962 149
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Liabilities
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,612 5,244
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,358 10,876 28,041
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 34,162 171,756 130,750
The Group’s and the Company’s foreign currency risk is concentrated on the fluctuation of RMB against USD,
EUR, SGD and CAD.
Sensitivity analysis
The following table details the Group’s and the Company’s sensitivity to a 10% increase and decrease
in RMB against USD, EUR, SGD and CAD. 10% 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 10% change
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 446 ---
in foreign currency rates. A positive number below indicates a increase in post-tax profit for the year/period
where RMB weakens 10% against other currencies. For a 10% strengthening of RMB against other currencies,
there would be an opposite impact on the post-tax profit for the year/period.
The Group
At December 31, At September 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/H111827,179 32,576 48,017 28,658
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,537 24,567 24,587 24,116
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,648 486 (710) 9,206
CAD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,867 5,542 7,506 488
The Company
At December 31, At September 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/H111830,515 32,449 50,282 18,272
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,445 26,624 28,734 13,496
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,598 418 (3,634) 9,446
CAD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,095 1,859 2,292 13
(ii) Interest rate risk
The Group and the Company is exposed to fair value interest rate risk in relation to restricted bank deposits
(Note 25), short-term bank deposits (Note 25), lease liabilities (Note 32) and redemption liabilities (Note 33). The
Group and the Company are also exposed to cash flow interest rate risk in relation to variable-rate bank balances
(Note 25) and variable-rate borrowings (Note 31). The Group and the Company cash flow interest rate risk is mainly
concentrated on the fluctuation of interest rates on borrowings. The Group and the Company manage its interest rate
exposures by assessing the potential impact arising from any interest rate movements based on interest rate level and
outlook.
The management considers that the exposure of fair value interest rate risk in relation to restricted bank
deposits, lease liabilities and redemption liabilities is insignificant and no sensitivity analysis is presented
accordingly. Bank balances are excluded from sensitivity analysis as the management considers that the exposure of
cash flow interest rate risk arising from variable-rate bank balances is insignificant.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates at the end
of each reporting period. The analysis is prepared assuming the financial instruments outstanding at the end
of each reporting period were outstanding for the whole year. A 50 basis point increase or decrease in
variable-rate borrowings rate are used when reporting interest rate risk internally to key management personnel
and represents management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
Group’s post-tax profit for the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025 would decrease/increase by RMB336,000, RMB411,000, RMB2,437,000 and
RMB1,663,000 respectively. The Company’s post-tax profit for the year ended December 31, 2024 and the
nine months ended September 30, 2025 would decrease/increase by RMB2,073,000 and RMB1,418,000
respectively. This is mainly attributable to the Group’s and the Company’s exposure to interest rates on their
variable-rate borrowings.
APPENDIX I ACCOUNTANTS’ REPORT
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Credit risk and impairment assessment
Credit risk refers to the risk that the Group’s and the Company’s counterparties default on their contractual
obligations resulting in financial losses to the Group and the Company. The Group’s and the Company’s credit risk
exposures are primarily attributable to trade receivables, other receivables and deposits, restricted bank deposits,
short-term bank deposits, bank balances and amounts due from subsidiaries. The Group and the Company does not
hold any collateral or other credit enhancements to cover its credit risks associated with its financial assets.
The Group and the Company performed impairment assessment for financial assets and other items under ECL
model. Information about the Group’s and the Company’s credit risk management, maximum credit risk exposures
and the related impairment assessment, if applicable, are summarized as below:
Trade receivables
Before accepting any new customer, the Group and the Company use an internal credit scoring system to assess
the potential customer’s credit quality and defines credit limits by customer. Limits and scoring attributed to
customers are reviewed twice a year. Other monitoring procedures are in place to ensure that follow-up action is taken
to recover overdue debts. In this regard, the management considers that the Group’s credit risk is significantly
reduced. The Group’s concentration of credit risk by geographical locations is mainly in the United States, which
accounted for 57%, 54%, 53% and 55% of the total trade receivables as at December 31, 2022, 2023 and 2024 and
nine months ended September 30, 2025 respectively. In order to minimize the credit risk, the management of the
Group has delegated a team responsible for determination of credit limits and credit approvals.
For trade receivables, the Group and the Company has applied the simplified approach in IFRS 9 to measure
the loss allowance at lifetime ECL. Except for debtors that are credit-impaired with the gross carrying amounts of
RMB810,000, RMB1,553,000, RMB1,679,000 and RMB1,892,000 for the Group, and RMB445,000, RMB941,000,
RMB547,000 and RMB571,000 for the Company as at December 31, 2022, 2023 and 2024 and September 30, 2025
respectively, the Group and the Company determines the ECL on these items on a collective basis, grouped by aging
of trade receivables. Details of the quantitative disclosures are set out below in this note.
Other receivables and deposits
For other receivables and deposits with gross carrying amount of RMB10,699,000, RMB19,415,000,
RMB25,856,000 and RMB25,082,000 for the Group, and RMB6,168,000, RMB6,240,000, RMB5,811,000 and
RMB4,139,000 for the Company as at December 31, 2022, 2023 and 2024 and September 30, 2025 respectively, the
management makes periodic assessment on the recoverability of other receivables and deposits 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 is no significant increase in credit risk
of these amounts since initial recognition and the Group and the Company assessed impairment based on 12m ECL.
During the years ended December 31, 2022 and 2024, the Group made a reversal of RMB6,000 and RMB78,000
respectively for impairment allowance. During the year ended December 31, 2023 and the nine months ended
September 30, 2025, RMB101,000 and RMB111,000 of impairment losses have been recognized respectively. During
the years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025, the Company
made a reversal of RMB9,000, RMB9,000, RMB62,000 and RMB51,000 respectively for impairment allowance.
During the years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025,
RMB4,000, RMBnil, RMBnil and RMBnil of impairment losses have been written-off respectively by the Group.
Restricted bank deposits, short-term bank deposits and bank balances
The gross carrying amounts of restricted bank deposits were RMB16,799,000, RMB14,662,000,
RMB17,363,000 and RMB32,011,000 for the Group, and RMB800,000, RMB800,000, RMB800,000 and
RMB800,000 for the Company as at December 31, 2022, 2023 and 2024 and September 30, 2025 respectively. The
gross carrying amount of short-term bank deposits of the Group and the Company was RMB93,000,000 and
RMB23,400,000 as at December 31, 2024 and September 30, 2025 respectively. The gross carrying amounts of bank
balances were RMB370,720,000, RMB833,308,000, RMB537,575,000, and RMB619,329,000 for the Group, and
RMB211,736,000, RMB602,512,000, RMB212,146,000, and RMB114,181,000 for the Company as at December 31,
2022, 2023 and 2024 and September 30, 2025 respectively. Credit risk on these financial assets is limited because
the counterparties are reputable banks with high credit ratings assigned by international credit agencies. The Group
and the Company assessed restricted bank deposits, short term bank deposits and bank balances on 12m ECL basis
APPENDIX I ACCOUNTANTS’ REPORT
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by reference to information relating to probability of default and loss given default of the respective credit rating
grades published by external credit rating agencies. Based on the average loss rates, the 12m ECL on restricted bank
deposits, short-term bank deposits, and bank balances is considered to be insignificant and therefore no loss
allowance was recognized.
Trade and non-trade nature amounts due from subsidiaries
The Company regularly monitors the business performance of the subsidiaries. The gross carrying amounts of
the Company’s trade and non-trade nature amounts due from subsidiaries were RMB898,530,000, RMB872,935,000,
RMB1,222,072,000 and RMB1,288,225,000 as at December 31, 2022, 2023 and 2024 and September 30, 2025
respectively. The Company’s credit risks in balances with the subsidiaries are mitigated through the value of the
assets held by these entities and the power to participate the relevant activities of these entities. The management
believes that there is no significant increase in credit risk of these amounts since initial recognition and the Company
provided impairment based on 12m ECL. During the year ended December 31, 2023, RMB4,066,000 impairment loss
has been recognized and written off.
Provision matrix — debtors’ aging
As part of the Group’s credit risk management, the Group and the Company uses debtors’ aging to assess the
impairment for its customers in relation to its operation because these customers consist of a large number of small
customers with common risk characteristics that are representative of the customers’ abilities to pay all amounts due
in accordance with the contractual terms. The following table provides information about the exposure to credit risk
for trade receivables which are assessed on a collective basis by using provision matrix within lifetime ECL (not
credit-impaired).
Gross carrying amount
The Group
December 31, 2022 December 31, 2023 December 31, 2024 September 30, 2025
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
RMB’000 RMB’000 RMB’000 RMB’000
1 – 90 days /H1118/H1118/H1118/H1118/H11180.13% 94,113 0.09% 115,492 0.10% 146,987 0.16% 210,931
91 – 180 days /H1118/H1118/H1118/H11180.73% 7,206 1.55% 5,277 1.47% 4,729 2.29% 5,769
181 – 360 days /H1118/H1118/H11188.89% 2,041 16.79% 2,422 10.88% 3,494 15.01% 2,503
103,360 123,191 155,210 219,203
The Company
December 31, 2022 December 31, 2023 December 31, 2024 September 30, 2025
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
Average
loss rate
Trade
receivables
RMB’000 RMB’000 RMB’000 RMB’000
1 – 90 days /H1118/H1118/H1118/H1118/H11180.12% 9,321 0.09% 10,477 0.10% 12,720 0.16% 2,250
91 – 180 days /H1118/H1118/H1118/H11180.73% 1,529 1.55% 1,270 1.47% 1,058 2.29% 1,340
181 – 360 days /H1118/H1118/H11188.89% 1,523 16.79% 348 10.88% 1,593 15.01% 1,005
12,373 12,095 15,371 4,595
The estimated loss rates are estimated based on historical observed default rates over the expected life of the
debtors 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.
As at December 31, 2022, 2023 and 2024 and September 30, 2025, the Group recognized impairment
allowance of RMB1,163,000, RMB2,145,000, RMB2,273,000 and RMB2,731,000 and the Company recognized
impairment allowance of RMB603,000, RMB1,028,000, RMB749,000 and RMB756,000 for trade receivables
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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The following table shows the movement in lifetime ECL that has been recognized for trade receivables:
The Group
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Beginning balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,420 1,163 2,145 2,273
Loss allowance (reversed)
recognized, net
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(264) 724 363 1,016
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) 834 723 511
Write-offs
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24) – (227) (832)
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (605) (717) (277)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 29 (14) 40
Closing balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,163 2,145 2,273 2,731
Analyzed as:
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118810 1,553 1,679 1,892
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118353 592 594 839
1,163 2,145 2,273 2,731
The Company
At December 31, At September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Beginning balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118976 603 1,028 749
Loss allowance (reversed)
recognized, net
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(405) 496 (168) 490
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 50 115 (15)
Write-offs
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (226) (466)
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (121) – (2)
Closing balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118603 1,028 749 756
Analyzed as:
– Credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118445 941 547 571
– Not credit-impaired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158 87 202 185
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118603 1,028 749 756
The Group and the Company write off a trade receivable when there is information indicating that the debtor
is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed
under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over one years,
whichever occurs earlier.
Liquidity risk
In the management of the liquidity risk, the Group and the Company monitor and maintain a level of bank
balances and cash deemed adequate by the management of the Group and the Company to finance the Group’s and
the Company’s operations and mitigate the effects of fluctuations in cash flows. The management of the Group and
the Company monitor the utilization of bank borrowings.
APPENDIX I ACCOUNTANTS’ REPORT
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The Group relies on bank borrowings as a significant source of liquidity. As at December 31, 2022, 2023 and
2024 and September 30, 2025, the Group has available unutilized overdraft of nil, RMB100,000,000,
RMB130,000,000 and RMB30,000,000 respectively.
The following tables detail the Group’s and the Company’s remaining contractual maturity for its financial
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group and the Company can be required to pay. The maturity dates for financial liabilities
are based on the agreed repayment dates.
The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the
undiscounted amount is derived based on management’s best estimates at the end of each reporting period, taking into
consideration interest rate curve, if available.
The Group
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2022
Trade payables /H1118/H1118/H1118/H1118/H1118– 345,630 – – 345,630 345,630
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 30,412 7,116 – 37,528 37,528
Bank overdrafts /H1118/H1118/H1118/H1118 – 3,144 – – 3,144 3,144
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H11184.30 – 4.80 12,250 46,432 37,499 96,181 79,015
Lease liabilities /H1118/H1118/H1118/H11181.48 – 5.51 15,692 14,620 – 30,312 28,994
407,128 68,168 37,499 512,795 494,311
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2023
Trade payables /H1118/H1118/H1118/H1118/H1118– 278,330 – – 278,330 278,330
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 51,442 3,637 – 55,079 55,079
Bank overdrafts /H1118/H1118/H1118/H1118 – 4,226 – – 4,226 4,226
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H11182.90 – 4.80 15,057 55,616 42,917 113,590 96,779
Lease liabilities /H1118/H1118/H1118/H11181.48 – 5.51 20,320 48,073 33,622 102,015 86,183
369,375 107,326 76,539 553,240 520,597
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2024
Trade payables /H1118/H1118/H1118/H1118/H1118– 251,449 – – 251,449 251,449
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 63,623 – – 63,623 63,623
Bank overdrafts /H1118/H1118/H1118/H1118 – 4,549 – – 4,549 4,549
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H11182.30 – 4.50 78,568 355,038 197,966 631,572 573,360
Lease liabilities /H1118/H1118/H1118/H11181.48 – 5.51 29,524 104,737 18,007 152,268 125,151
427,713 459,775 215,973 1,103,461 1,018,132
APPENDIX I ACCOUNTANTS’ REPORT
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Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At September 30,
2025
Trade payables /H1118/H1118/H1118/H1118/H1118– 217,423 – – 217,423 217,423
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 61,928 – – 61,928 61,928
Bank overdrafts /H1118/H1118/H1118/H1118 – 5,976 – – 5,976 5,976
Borrowings /H1118/H1118/H1118/H1118/H1118/H11182.23 - 2.95 186,737 218,776 156,904 562,417 521,793
Lease liabilities /H1118/H1118/H1118/H11181.48 - 5.51 31,773 99,335 14,882 145,990 127,794
Redemption
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11182.2 – 682,746 – 682,746 664,243
503,837 1,000,857 171,786 1,676,480 1,599,157
The Company
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2022
Trade payables /H1118/H1118/H1118/H1118/H1118– 147,263 – – 147,263 147,263
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,062 – – 6,062 6,062
Amounts due to
subsidiaries /H1118/H1118/H1118/H1118/H1118– 33,959 – – 33,959 33,959
Lease liabilities /H1118/H1118/H1118/H11184.15 9,762 4,094 – 13,856 13,386
197,046 4,094 – 201,140 200,670
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2023
Trade payables /H1118/H1118/H1118/H1118/H1118– 2,474 – – 2,474 2,474
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,081 – – 6,081 6,081
Amounts due to
subsidiaries /H1118/H1118/H1118/H1118/H1118– 77,202 – – 77,202 77,202
Lease liabilities /H1118/H1118/H1118/H11184.15 6,410 1,868 – 8,278 7,989
92,167 1,868 – 94,035 93,746
APPENDIX I ACCOUNTANTS’ REPORT
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Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31,
2024
Trade payables /H1118/H1118/H1118/H1118/H1118– 82 – – 82 82
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,320 – – 14,320 14,320
Amounts due to
subsidiaries /H1118/H1118/H1118/H1118/H1118– 259,301 – – 259,301 259,301
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H11182.58 – 2.70 64,821 303,391 168,101 536,313 487,858
Lease liabilities /H1118/H1118/H1118/H11184.01 5,374 4,398 – 9,772 9,410
343,898 307,789 168,101 819,788 770,971
Interest rate
On demand
or less than
1 year
1 year to
5 years
Over
5 years
Total
undiscounted
cash flows
Total
carrying
amount
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At September 30,
2025
Trade payables /H1118/H1118/H1118/H1118/H1118– 45 – – 45 45
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,295 – – 13,295 13,295
Amounts due to
subsidiaries /H1118/H1118/H1118/H1118/H1118– 169,444 – – 169,444 169,444
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H11182.23 - 2.58 173,628 169,076 136,263 478,967 444,856
Lease liabilities /H1118/H1118/H1118/H11184.01 4,436 1,445 – 5,881 5,737
Redemption
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11182.2 – 682,746 – 682,746 664,243
360,848 853,267 136,263 1,350,378 1,297,620
42. FAIR V ALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Some of the Group’s and the Company’s financial instruments are measured at fair value for financial reporting
purposes. In estimating the fair value, the Group uses market-observable data to the extent it is available.
(i) Fair value of the Group’s and the Company’s financial assets that are measured at fair value on a
recurring basis
Investments in structured deposits are measured at their fair values in the statements of financial position. The
Group and the Company categorized these structured deposits as Level 2 of the fair value hierarchy because they are
valued with reference to recent transaction price. No significant unobservable input is used for the fair value
valuation. There were no transfers between Level 1 and 2 during the Track Record Period.
(ii) Fair value of the Group’s and the Company’s financial assets and financial liabilities that are not
measured at fair value on a recurring basis
The directors consider that the carrying amounts of financial assets and financial liabilities recognized in the
Historical Financial Information approximate their fair values.
APPENDIX I ACCOUNTANTS’ REPORT
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43. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Group’s liabilities arising from financing activities, including both cash
and non-cash changes. Liabilities arising from financing 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.
Lease
liabilities Borrowings
Dividend
payable
Redemption
liabilities
Accrued issue
costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 32) (Note 31) (Note 27)
At January 1,
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111833,174 15,95 6––– 49,130
Financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118(26,698) 59,657 (60,000) – – (27,041)
New leases
entered /H1118/H1118/H1118/H1118/H111821,40 9–––– 21,409
Interest
expenses /H1118/H1118/H1118/H11181,109 3,40 2––– 4,511
Early termination
of leases /H1118/H1118/H1118/H1118 ––––––
Dividend
declared /H1118/H1118/H1118/H1118 – – 60,000 – – 60,000
At December 31,
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111828,994 79,01 5––– 108,009
Financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118(21,691) 14,40 7––– (7,284)
New lease
entered /H1118/H1118/H1118/H1118/H111878,35 4–––– 78,354
Interest
expenses /H1118/H1118/H1118/H11181,298 3,35 7––– 4,655
Early termination
of leases /H1118/H1118/H1118/H1118(772) –––– (772)
At December 31,
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H111886,183 96,77 9––– 182,962
Financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118(25,789) 462,95 0––– 437,161
New lease
entered and
lease modified /H1118 62,23 2–––– 62,232
Interest
expenses /H1118/H1118/H1118/H11184,913 13,63 1––– 18,544
Early termination
of leases /H1118/H1118/H1118/H1118(2,388) –––– (2,388)
At December 31,
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118125,151 573,36 0––– 698,511
Financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118(24,119) (61,645) (200,000) – (3,362) (289,126)
New lease
entered and
lease modified /H1118 25,27 1–––– 25,271
Interest expenses 5,071 10,078 – 4,848 – 19,997
Early termination
of leases /H1118/H1118/H1118/H1118(3,580) –––– (3,580)
Dividend
declared /H1118/H1118/H1118/H1118 – – 200,000 – – 200,000
Recognition of
redemption
liabilities /H1118/H1118/H1118/H1118 – – – 659,395 – 659,395
Deferred issue
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 4,697 4,697
At September 30,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118127,794 521,793 – 664,243 1,335 1,315,165
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 454 ---
Lease
liabilities Borrowings
Dividend
payable
Redemption
liabilities
Accrued issue
costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 32) (Note 31) (Note 27)
At January 1,
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H111886,183 96,77 9––– 182,962
Financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118(17,129) 479,07 9––– 461,950
New leases
entered and
lease modified /H1118 41,17 9–––– 41,179
Interest
expenses /H1118/H1118/H1118/H11183,168 9,65 5––– 12,823
Early termination
of leases /H1118/H1118/H1118/H1118(2,386) –––– (2,386)
At September 30,
2024
(unaudited) /H1118/H1118/H1118111,015 585,51 3––– 696,528
44. RELATED PARTY TRANSACTIONS
Other than as disclosed in Notes 23, 28 and 31 in the Historical Financial Information, the Group has following
transactions and balances with related parties:
The Group
Y ear ended December 31, Nine months ended September 30,
Name
Nature of
transaction 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cloud V enture
LLC /H1118/H1118/H1118/H1118/H1118
Licensing fee – 817 6,767 5,083 5,105
Note: Cloud V enture LLC is controlled by the spouse of Mr. Xiang.
Compensation of key management personnel
The remuneration of directors of the Company, chief executive officer and other members of key management
of the Group during the Track Record Period was as follows:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and
other benefits in kind /H1118/H1118 4,705 6,760 8,756 6,389 6,815
Discretionary bonus /H1118/H1118/H1118/H1118/H11181,263 1,775 2,046 – –
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118214 334 361 269 293
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,010 2,492 2,449 2,430 8,114
9,192 11,361 13,612 9,088 15,222
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 455 ---
Guarantees from a related party
Other than as disclosed in Note 31, the Group obtained banking facility of nil, RMB100,000,000,
RMB130,000,000 and RMB30,000,000 as of December 31, 2022, 2023 and 2024 and September 30, 2025 from
independent commercial banks, respectively. Such facility is secured by personal guarantee of Mr. Xiang. The Group
did not utilize such banking facility as at each reporting period. Such personal guarantee was released on November
24, 2025.
Redemption rights of certain shareholders granted by Mr. Xiang
Prior to the Track Record Period, certain shareholders had been granted the redemption right by Mr. Xiang
(“Mr. Xiang’s Redemption Obligation”). The Company is not a party to the Mr. Xiang’s Redemption Obligation.
Pursuant to another supplemental agreement entered into by the Company and all shareholders of the Company on
May 27, 2025, the Mr. Xiang’s Redemption Obligation was terminated prior to the first submission of the Listing
Application.
The Company has not provided any form of guarantee in connection with any potential default or failure by
Mr. Xiang to fulfill his obligations relating to Mr. Xiang’s Redemption Obligation. Accordingly, no financial liability
regarding Mr. Xiang’s Redemption Obligation was recorded by the Company prior to the first submission of the
Listing Application.
As represented by the directors of the Company, there were no other side arrangements between the Company
and the investors or between the Company and Mr. Xiang regarding Redemption Obligation granted to the investors
during Track Record Period and up to the date of this report.
45. EVENTS AFTER THE REPORTING PERIOD
There were no material events taken place subsequent to September 30, 2025.
46. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements of the Group, the Company or any of its subsidiaries, have been prepared in
respect of any period subsequent to September 30, 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 456 ---
The information set out in this Appendix does not form part of the accountants’ report on
the historical financial information of the Group for each of the three years ended December
31, 2024 and the nine months ended September 30, 2025 (the “Accountants’ Report”) prepared
by Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting
accountants of the Company, as set out in Appendix I to this prospectus, and is included in this
prospectus for information only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial information” in this prospectus and the Accountants’ Report set out
in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS OF THE GROUP ATTRIBUTABLE TO OWNERS OF THE
COMPANY
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group attributable to owners of the Company prepared in accordance with paragraph 4.29 of
the Listing Rules is set out below to illustrate the effect of the Global Offering (as defined in
this prospectus) on the audited consolidated net tangible assets of the Group attributable to the
owners of the Company as at September 30, 2025 as if the Global Offering had taken place on
such date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group attributable to the 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 the owners of the Company as at September 30,
2025 or any future dates following the Global Offering.
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group attributable to the owners of the Company is prepared based on the audited
consolidated net tangible assets of the Group attributable to the owners of the Company as at
September 30, 2025 as derived from the Accountants’ Report, the text of which is set out in
Appendix I to this prospectus, and adjusted as described below:
Audited
consolidated net
tangible assets
of the Group
attributable to
the owners of
the Company as
at September
30, 2025
Estimated
net proceeds
from the
Global Offering
Unaudited
pro forma
adjusted
consolidated net
tangible assets
of the Group
attributable to
the owners of
the Company as
at September
30, 2025
Unaudited pro forma
adjusted consolidated net
tangible assets of the Group
attributable to the owners of
the Company as at September 30,
2025 per Share
RMB’000 RMB’000 RMB’000 RMB HKD
Note 1 Note 2 Note 3 Note 4
Based on a minimum
Offer Price of
HK$35.20 per Offer
Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,969,893 1,178,715 3,148,608 8.20 9.26
Based on a maximum
Offer Price of
HK$41.60 per Offer
Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,969,893 1,397,282 3,367,175 8.77 9.91
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 457 ---
Notes:
1. The audited consolidated net tangible assets of the Group attributable to the owners of the Company as at
September 30, 2025 is based on the consolidated net assets of the Group amounted to RMB1,984,512,000 with
adjustment for intangible assets of RMB14,619,000 as at September 30, 2025 as extracted from the
Accountants’ Report set out in Appendix I to this prospectus.
2. The estimated net proceeds from the Global Offering are based on 40,000,000 H Shares at indicative Offer
Prices of HK$35.20 and HK$41.60 per Offer Share, being the low-end and high-end of the stated Offer Price
range, respectively, after deduction of the estimated underwriting commissions and fees and other listing
related expenses and share issue costs incurred and to be incurred by the Group (excluding listing expenses
recognised in profit or loss prior to September 30, 2025). The calculation of such estimated net proceeds does
not assume (i) the exercise of the Over-allotment Option, or (ii) any Shares which may be issued or
repurchased by the Company pursuant to the general mandate.
For the purpose of this unaudited pro forma financial information, the estimated net proceeds from the Global
Offering is converted from Hong Kong dollars into Renminbi at an exchange rate of HK$1.00 to RMB0.8857,
which was the exchange rate prevailing on March 4, 2026 with reference to the rate published by the People’s
Bank of China. No representation is made that Hong Kong dollar amounts have been, could have been or may
be converted to Renminbi, or vice versa, at that rate or at all.
3. The unaudited pro forma adjusted consolidated net tangible assets of the Group as at September 30, 2025 per
Share has been arrived on the basis of a total of 383,768,627 Shares, comprising 360,000,000 Shares in issue
as at September 30, 2025, excluding 16,231,373 shares held by Y uxuan Growth, Y uxuan Progress and Y uxuan
Prudence for Employee Incentive Scheme of the Group, which represent treasury shares as detailed in Note
35 to the Accountants’ Report, and 40,000,000 H Shares to be issued, assuming that the Global Offering has
been completed on September 30, 2025. It does not take into account (i) any shares which may be issued upon
the exercise of the Over-allotment Option, (ii) any shares which may be vested upon Global Offering under
the Employee Incentive Scheme of the Group or (iii) any shares which may be issued or repurchased by the
Company pursuant to the Company’s general mandates.
4. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to the owners of
the Company per Share as at September 30, 2025 is converted from Renminbi to Hong Kong dollars at an
exchange rate of RMB1.00 to HK$1.1290, which was the exchange rate prevailing on March 4, 2026 with
reference to the rate published by the People’s Bank of China. No representation is made that Renminbi
amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that rate 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 September 30, 2025 to reflect any trading result or other
transaction of the Group entered into subsequent to September 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 have not been adjusted to illustrate the effect of the following:
Upon completion of the Global Offering, all redemption rights entitled to the Company’s investors will be
terminated and the redemption liabilities recognized due to these redemption rights will be reclassified to
equity. Accordingly, for the purpose of the unaudited pro forma financial information, the unaudited pro forma
adjusted consolidated net tangible assets of the Group attributable to the owners of the Company will be
increased by RMB664,243,000, being the carrying amount of the redemption liabilities as at September 30,
2025.
The above effect would have adjusted the unaudited pro forma adjusted consolidated net tangible assets of the
Group attributable to the owners of the Company as at September 30, 2025 per Share to RMB9.94 (equivalent
to HK$11.22, based on an exchange rate of RMB1.00 to HK$1.1290, as detailed in Note 4 above) based on
an Offer Price of HK$35.20 per Offer Share and RMB10.50 (equivalent to HK$11.85, based on an exchange
rate of RMB1.00 to HK$1.1290 as detailed in Note 4 above) based on an Offer Price of HK$41.60 per Offer
Share, respectively. The above illustration does not take into account (i) any shares which may be issued upon
the exercise of the Over-allotment Option, (ii) any shares which may be vested upon Global Offering under
the Employee Incentive Scheme of the Group or (iii) any shares which may be issued or repurchased by the
Company pursuant to the Company’s general mandates.
6. Certain property interest of the Group as at October 31, 2025 has been valued by Jones Lang LaSalle Corporate
Appraisal and Advisory Limited, an independent property valuer. By comparing the valuation of the Group’s
property interest of approximately RMB827,900,000 provided by Jones Lang LaSalle Corporate Appraisal and
Advisory Limited and the carrying amounts of this property of approximately RMB751,161,000 as at
September 30, 2025, the valuation surplus is approximately RMB76,739,000, which was not reflected in the
above adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at
September 30, 2025. The revaluation surplus has not been included in the Historical Financial Information as
at September 30, 2025 as set out in Appendix I to this prospectus. If the revaluation surplus was recorded in
the Group’s consolidated financial statements, the annual depreciation of the Group would increase by
approximately RMB2,436,000.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 458 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of the independent reporting accountants’ assurance report
received from Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the
reporting accountants of the Company, in respect of the Group’ s unaudited pro forma financial
information prepared for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of FS.COM Limited
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of FS.COM Limited (ʮ̡) (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 September 30, 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 March 13, 2026 (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 September 30, 2025 as if the Global Offering had taken place
at September 30, 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 December 31, 2024 and the nine months ended September 30, 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 459 ---
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 September 30,
2025 would have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 460 ---
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
March 13, 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 461 ---
The following is the preliminary financial information of our Group as of and for the year
ended 31 December 2025 (the “ 2025 Preliminary Financial Information ”), together with
comparative figures as of and for the year ended 31 December 2024 and a discussion and
analysis of our Group’ s financial condition and results of operations. The 2025 Preliminary
Financial Information has not been audited. Investors should bear in mind that the 2025
Preliminary Financial Information in this Appendix IIB may be subject to adjustments.
2025 PRELIMINARY FINANCIAL INFORMATION
Consolidated Statement of Profit and Loss and Other Comprehensive Income
for the year ended 31 December 2025
(Expressed in Renminbi (“RMB”))
Y ear ended December 31,
NOTES 2025 2024
RMB’000 RMB’000
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 2,965,663 2,611,793
Cost of 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(1,350,549) (1,305,484)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,615,114 1,306,309
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 12,144 12,811
Impairment losses under expected credit loss
model, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,710) (1,008)
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,103 (948)
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(535,150) (487,665)
General and administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(210,241) (209,777)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(178,127) (143,710)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,123) (18,544)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,750) (893)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685,260 456,575
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (83,795) (59,318)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 601,465 397,257
Other comprehensive expense
Item that may be reclassified subsequently to
profit or loss:
Exchange differences arising on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(748) (247)
Total comprehensive income for the year /H1118/H1118/H1118/H1118/H1118/H1118600,717 397,010
Earnings per share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188
– Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.75 1.16
– Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.69 1.12
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-1 –


--- page 462 ---
Consolidated Statement of Financial Position
(Expressed in Renminbi (“RMB”))
At December 31,
NOTES 2025 2024
RMB’000 RMB’000
(Unaudited)
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,164,468 1,194,069
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/H1118112,277 119,041
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,954 –
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,783 18,375
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,082 110,536
Other receivables, deposits and prepayments /H1118/H1118/H1118/H1118/H111810 68,896 88,296
Deposits for the acquisition of 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/H11186,081 4,511
1,481,541 1,534,828
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118473,193 572,271
Trade 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/H11189 220,461 154,616
Other receivables, deposits and prepayments /H1118/H1118/H1118/H1118/H111810 159,713 120,304
Right to returned goods asset /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,908 3,392
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,947 10,606
Financial assets at fair value through profit or loss
(“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118762,766 506,444
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,245 17,363
Short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 93,000
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118802,274 537,575
2,472,507 2,015,571
Current liabilities
Trade 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/H111811 236,042 251,449
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 161,602 139,283
Refund 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/H11186,417 6,987
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 70,547 40,692
Tax 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/H111815,749 8,191
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,247 63,787
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,917 24,371
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,560 4,549
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,903 –
1,366,984 539,309
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,105,523 1,476,262
Total assets less current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,587,064 3,011,090
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-2 –


--- page 463 ---
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,373 509,573
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,837 100,780
427,210 610,353
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,159,854 2,400,737
Capital and reserves
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,799,854 2,040,737
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,159,854 2,400,737
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-3 –


--- page 464 ---
NOTES TO THE 2025 PRELIMINARY FINANCIAL INFORMATION
1. GENERAL INFORMATION
FS.COM Limited (ʮ̡) (the “Company”) was incorporated in the PRC on April
9, 2009 as a limited liability company under the Company Law of the PRC. On September 29, 2020, the Company
was converted from a limited liability company into a joint stock company. The respective addresses of the registered
office and the principal place of business of the Company is 1903-1904, Block C, China Resources Land Building,
Da Chong Community, Y uehai Street, Nanshan District, Shenzhen, Guangdong Province, PRC.
The Company and its subsidiaries (collectively referred to as the “Group”) is principally engaged in the sales
of optical communication product globally. Particulars and principal activities of the subsidiaries are disclosed in
Note 37. Mr. Xiang Wei (“Mr. Xiang”) is the founder and ultimate controlling shareholder of the Company.
The consolidated financial statements is presented in RMB, which is also the functional currency of the
Company.
2. MATERIAL ACCOUNTING POLICIES
(a) Statement of compliance
The consolidated financial statements has been prepared in accordance with IFRS Accounting Standards issued
by the IASB. For the purpose of preparation of the consolidated financial statements, information is considered
material if such information is reasonably expected to influence decisions made by primary users. In addition, the
consolidated financial statements includes applicable disclosures required by the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and by the Hong Kong Companies
Ordinance (the “CO”).
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
these consolidated financial statements, the Group has adopted all applicable new and amendments to IFRS
Accounting Standards for the accounting period beginning on 1 January 2025. The Group has not early adopted any
revised and new standards or interpretations that are not yet effective for the accounting period beginning on 1
January 2025. The revised and new accounting standards and interpretations issued but not yet effective for the
accounting period beginning on 1 January 2025 are set out in note 14.
(b) Basis of preparation of the financial statements
The consolidated financial statements incorporates the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when 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.
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 intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-4 –


--- page 465 ---
3. REVENUE AND SEGMENT INFORMATION
Revenue
(i) Disaggregation of revenue from contracts with customers
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Type of products
High-performance networking solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,073,000 831,107
General networking solutions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,552,088 1,497,508
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/H1118/H1118340,575 283,178
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/H11182,965,663 2,611,793
Timing of revenue recognition
At a point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,965,663 2,611,793
(ii) Performance obligations for contracts with customers
The Group sells its products to customers through its self-developed e-commerce platforms. Revenue from the
sale of products is recognized at the point in time when control of the products is transferred to the customer,
generally on the receipt of products by customers.
Majority contracts of the Group provide customers with rights of return, which give rise to variable
consideration.
For contracts which provide a customer with a right to return the goods within 30 days, the expected value
method is used to estimate the goods that will not be returned because this method best predicts the amount of
variable consideration to which the Group will be entitled. The requirements in IFRS 15 on constraining estimates
of variable consideration are applied in order to determine the amount of variable consideration that can be included
in the transaction price. For goods that are expected to be returned, instead of revenue, a refund liability is
recognized. A right-of-return asset (and the corresponding adjustment to cost of sales) is also recognized for the right
to recover products from a customer.
The Group grants credit period ranging from 14 days to 90 days to certain customers. For the rest of the
customers, payment was required before the Group delivers the products.
(iii) Transaction price allocated to the remaining performance obligation for contracts with customers
All contracts with customers of the Group are for periods of one year or less. As permitted under IFRS 15, the
transaction price allocated to these unsatisfied contracts is not disclosed.
Segment information
Information reported to the Mr. Xiang, being the chief operating decision maker, for the purposes of resource
allocation and performance assessment focuses on revenue analysis by products. No other discrete financial
information is provided other than the Group’s results and financial position as a whole. Accordingly, only
entity-wide disclosures, major geographic information and customers are presented.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-5 –


--- page 466 ---
(i) Geographical information
Information about the Group’s revenue from external customers is presented based on the location of
customers. Information about non-current assets (excluding deferred tax assets and financial assets) is presented
based on the geographical location of the assets.
Revenue from external customers
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
The United States of America (“USA”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,590,045 1,223,166
Europe 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850,091 898,048
Asia 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118282,306 228,118
Americas (excluding the USA) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,487 143,927
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,765 95,845
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,969 22,689
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/H11182,965,663 2,611,793
Non-current assets
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
The USA /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,572 22,286
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,320 52,865
Asia 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,235,754 1,258,394
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,917 2,451
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/H11181,306,563 1,335,996
1 Revenue from Europe mainly derived from Germany (“DEU”), the United Kingdom (“GBR”) and
France.
2 Revenue from Asia mainly derived from Japan (“JPN”), Singapore (“SGP”), India and the PRC.
3 Non-current assets from Asia mainly located in the PRC.
(ii) Information about major customers
During the both years, no customer contributed over 10% of the total revenue of the Group.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-6 –


--- page 467 ---
4. OTHER INCOME
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Government grants (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,956 5,646
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,768 6,651
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/H1118/H11181,420 514
12,144 12,811
Note: Government grants represented subsidies received from relevant government authorities, mainly
including subsidy for steady growth in software and information technology service industry, subsidy
for cross-border E-commerce enterprise and high-tech enterprise subsidy. There are no unfulfilled
conditions and contingencies attached to these grants.
5. INCOME TAX EXPENSE
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current tax:
PRC Enterprise Income Tax (“EIT”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,935 49,631
Hong Kong profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118262 4,471
USA profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,004 14,334
DEU profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118859 7,829
SGP profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,961 1,948
Other jurisdiction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,687 969
78,708 79,182
Underprovision in prior years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118877 10
79,585 79,192
Deferred tax charge (credit) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,210 (19,874)
83,795 59,318
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-7 –


--- page 468 ---
The income tax expense can be reconciled to the profit before tax per the consolidated statement of profit or
loss and other comprehensive income as follows:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685,260 456,575
Tax at PRC EIT rate of 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,789 68,486
Effect of different tax rates of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,046) 405
Tax effect of expenses not deductible for tax purpose /H1118/H1118/H1118/H1118/H1118/H11181,570 326
Tax effect of income not taxable for tax purpose /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(644) (378)
Tax effect of Super deduction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,692) (16,730)
Effect of changes in tax rates on deferred tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,596 9,877
Underprovision in prior years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118877 10
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/H1118/H11183,345 (2,678)
83,795 59,318
6. PROFIT FOR THE YEAR
Profit for the year has been arrived at after charging (crediting):
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Depreciation of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,863 69,318
Depreciation of investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118214 –
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,989 29,269
Amortization of intangible assets
– Cost of 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/H11183,448 3,525
– Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219 77
– General and administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,675 2,049
– Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,388 1,231
7,730 6,882
Total depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,796 105,469
Auditor’s remuneration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 24
Cost of inventories recognized as cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,363,054 1,266,630
Allowance on (reversal of allowance on) inventories included
in cost of 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(12,505) 38,854
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,750 893
Directors’, chief executive’s and supervisors’ emoluments /H1118/H1118/H1118 14,976 8,835
Other staff costs:
Salaries and allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118403,402 400,614
Retirement benefit scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,008 23,762
Share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,285 3,992
Total staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118453,671 437,203
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-8 –


--- page 469 ---
7. DIVIDEND
During the year ended December 31, 2025, a dividend of RMB0.55556 per share, with the aggregated amount
of RMB200,000,000, was paid to shareholders of the Company in May 2025 (2024: Nil).
8. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to owners of the Company is based on
the following data:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118601,465 397,257
Y ear ended December 31,
2025 2024
Weighted average number of ordinary shares for the purpose
of basic earnings per share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,768,627 343,768,627
Effect of dilutive potential ordinary shares in respect of
– Shares issued for employee incentive scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,543,606 10,985,921
Weighted average number of ordinary shares for the purpose
of diluted earnings per share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118355,312,233 354,754,548
During the year ended December 31, 2025, the computation of diluted earnings per share does not assume the
impact of the redemption liabilities, as their inclusion would have been anti-dilutive.
9. TRADE RECEIV ABLES
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade receivables – third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,070 156,889
Less: allowance for credit losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,609) (2,273)
220,461 154,616
The following is an aged analysis of trade receivables net of allowance for credit losses presented based on
the date of delivery:
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,762 146,843
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,640 4,659
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,059 3,114
220,461 154,616
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-9 –


--- page 470 ---
As at January 1, 2024, trade receivables from contracts with customers amounted to approximately
RMB122,599,000.
The Group grant the credit period ranging from 14 days to 90 days to its trade customers.
As at December 31, 2025, included in the Group’s trade receivables balance are debtors with aggregate
carrying amount of RMB77,041,000 (2024: RMB55,496,000) which are past due. Out of the past due balances,
RMB10,268,000 (2024: RMB6,397,000) have been past due over 90 days and are not considered as in default due
to the history of cooperation, the sound collection history or the solid credit rating of the debtors.
10. OTHER RECEIV ABLES, DEPOSITS AND PREPAYMENTS
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,818 114,190
Advances to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,031 20,024
Refundable value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,720 42,919
Rental deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,844 21,691
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,432 5,947
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,604 –
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,544 –
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/H1118/H11184,039 4,165
229,032 208,936
Less: allowance for credit losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(423) (336)
228,609 208,600
Represented by:
– Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,896 88,296
– Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,713 120,304
228,609 208,600
11. TRADE PAYABLES
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade payables – third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,042 251,449
The credit period on trade payables ranges from 0 to 180 days. The aging analysis of the Group’s based on the
invoice dates at the end of each reporting period are as follow:
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199,372 169,869
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,280 62,249
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,390 19,331
236,042 251,449
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-10 –


--- page 471 ---
12. OTHER PAYABLES AND ACCRUALS
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Accrued staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,809 52,182
Other tax 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/H111841,451 23,478
Accrued advertising costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,416 16,203
Payables for construction costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,321 19,623
Other accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,173 8,032
Accrued freight costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,446 13,926
Accrued listing expenses and issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,385 –
Payables for patent use right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,581
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/H1118/H11182,601 2,258
161,602 139,283
13. CONTRACT LIABILITIES
At December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Contract liabilities from customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,547 40,692
As at January 1, 2024, contract liabilities amounted to RMB109,499,000. The directors of the Company
considered that the entire balance of contract liabilities would be realized within the Group’s normal operating cycle
based on the Group’s earliest obligation to provide services to the customers and are classified as current liabilities.
The following table shows the amount of revenue recognized during both years relates to carried-forward
contract liabilities at the beginning of the year.
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Revenue recognized that was included in the contract
liabilities balance at the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,692 109,499
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-11 –


--- page 472 ---
14. NEW AND AMENDMENTS TO IFRS ACCOUNTING STANDARDS IN ISSUE BUT NOT YET
EFFECTIVE
The Group has not early applied 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/H1118Amendments to the Classification and Measurement of
Financial Instruments 2
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 2
Amendments to IFRS 10 and IAS 28 /H1118/H1118Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture 1
Amendments to IFRS
Accounting Standards /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Annual 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/H1118Presentation and Disclosure in Financial Statements 3
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation Currency 3
1 Effective for annual periods beginning on or after a date to be determined.
2 Effective for annual periods beginning on or after January 1, 2026.
3 Effective for annual periods beginning on or after January 1, 2027.
Except for new IFRS Accounting Standard mentioned below, the directors of the Company anticipate that the
application of these amendments to IFRS Accounting Standards will have no material impact on the Group’s financial
position and performance in the foreseeable future.
IFRS 18 Presentation and Disclosure in Financial Statements sets out requirements on presentation and
disclosures in financial statements and will replace IAS 1 Presentation of Financial Statements . This new IFRS
Accounting Standard, while carrying forward many of the requirements in IAS 1, 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. In addition, some IAS 1 paragraphs have
been moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial
Instruments: Disclosures . Minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share are
also made.
IFRS 18, and amendments to other standards, will be effective for annual periods beginning on or after January
1, 2027, with early application permitted. The directors of the Company anticipate that the application of IFRS 18
will affect the structure and presentation of the consolidated statement of profit or loss and disclosures in future
consolidated financial statement, but will have no material impact on the financial position and performance of the
Group given it will not impact the recognition or measurement of items in the consolidated financial statements.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-12 –


--- page 473 ---
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATION RESULTS
Business Review
Founded in April 2009, we are a global online DTC networking solutions provider
delivering scalable, cost-effective and one-stop networking solutions through our proprietary
online sales platform, FS.com , under a platform-centric and online-enabled approach. Our
solutions primarily include high-performance networking solutions and general networking
solutions, supporting a broad range of application scenarios including high-performance
computing, data centers, enterprise networks and telecommunications. Built on a decoupled
architecture that integrates standardized networking hardware with scalable, cloud-based
software capabilities, we provide services spanning pre-sales activities, including product and
solution display, sales consulting, technology support, solution design and testing and
validation, as well as product delivery and after-sales support. We serve a diversified global
customer base across multiple industries and markets, with more than 500,000 customers in
over 200 countries and regions worldwide.
Future Plans and Prospectus
Going forward, we plan to implement the following strategies, which we believe, will
strengthen our core competitive strengths and enable us to capture rising business
opportunities:
 Driving Technological updates and platform iterations
 Enriching product portfolio
 Expanding a diversified ecosystem
 Strengthening global talents acquisition and team building
See “Future Plans and Use of Proceeds” for details.
Our Directors confirm that there has been no material adverse change in the financial or
trading position or prospects of our Group since December 31, 2025 and up to the Latest
Practicable Date.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-13 –


--- page 474 ---
Y ear-to-Y ear Comparison of Results of Operations
Revenue
Our revenue increased by 13.5% from RMB2,611.8 million in 2024 to RMB2,965.7
million in 2025, primarily due to our expanded business scale of high-performance networking
solutions and general networking solutions as we optimized our product mix in response to the
market demand.
 Our revenue from sales of high-performance networking solutions increased by
29.1% from RMB831.1 million in 2024 to RMB1,073.0 million in 2025, primarily
due to (i) an increase in customer base from approximately 12,100 in 2024 to
approximately 13,500 in 2025; and (ii) an increase in sales volume of the
high-performance networking solutions from approximately 618,000 in 2024 to
approximately 756,300 in 2025.
 Our revenue from sales of general networking solutions remained relatively stable
at RMB1,497.5 million in 2024 and RMB1,552.1 million in 2025, primarily because
our customer base and sales volume of the general networking solutions both
remained stable in 2024 and 2025.
 Our revenue from sales of others increased by 20.3% from RMB283.2 million in
2024 to RMB340.6 million in 2025. Our other networking products are typically
deployed in conjunction with our high-performance networking solutions and
general networking solutions. The increase in revenue from sales of others is
generally in line with the revenue increase corresponding to our revenue increase in
high-performance networking solutions and general networking solutions.
Cost of Sales
Our cost of sales remained relatively stable at RMB1,305.5 million in 2024 and
RMB1,350.5 million in 2025.
Gross Profit and Gross Profit Margin
Our gross profit increased by 23.6% from RMB1,306.3 million in 2024 to RMB1,615.1
million in 2025, which was primarily driven by our increase in revenue. Our gross profit
margin also increased from 50.0% in 2024 to 54.5% in 2025.
 The gross profit margin for high-performance networking solutions increased from
44.8% in 2024 to 49.5% in 2025, primarily attributable to (i) increased selling prices
of high-performance networking solutions in response to U.S. tariff policies; and (ii)
an adjustment in the product mix, as the revenue proportion of high-performance
optical transceivers and fiber optic cables, with relatively higher gross margin,
increased during the period.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-14 –


--- page 475 ---
 The gross profit margin for general networking solutions increased from 51.7% in
2024 to 57.1% in 2025, primarily due to a decrease in procurement costs for general
modules and network equipment.
 The gross profit margin for others slightly increased from 56.7% in 2024 to 58.3%
in 2025, reflecting normal period-to-period fluctuations in product mix, pricing and
procurement costs.
Other Income
Our other income decreased by 5.2% from RMB12.8 million in 2024 to RMB12.1 million
in 2025, primarily due to (i) government’s reduction in the allocation of certain grants, and (ii)
a decrease in bank interest income due to a decrease in interest rates.
Impairment Losses Under Expected Credit Loss Model, Net of Reversal
We recognized impairment losses under expected credit loss model of RMB1.0 million in
2024 and RMB2.7 million in 2025, primarily due to the reclassification of certain receivables
to over one year, which under the expected credit loss model requires recognition of
impairment losses.
Other Gains and Losses
We recorded RMB0.9 million net other losses in 2024 and RMB35.1 million net other
gains in 2025, primarily due to an increase in the foreign exchange gains and an increase in fair
value changes of financial assets at FVTPL. The increase in foreign exchange gains was mainly
attributable to the increase in the exchange rates of the Euro which we held. The increase in
fair value changes of financial assets was mainly attributable to an increase in structured
deposits.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 9.7% from RMB487.7 million in 2024
to RMB535.2 million in 2025, primarily attributable to an increase in employee compensation
expenses, which was mainly attributable to the increase in the sales staff and salary
adjustments. Such increase was partially offset by a decrease in advertising and promotion
expenses.
General and Administrative Expenses
Our general and administrative expenses remained relatively stable at RMB209.8 million
in 2024 and RMB210.2 million in 2025.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-15 –


--- page 476 ---
Research and Development Expenses
Our research and development expenses increased by 23.9% from RMB143.7 million in
2024 to RMB178.1 million in 2025, primarily due to an increase in employee compensation
expenses which was mainly attributable to the increase in the number of R&D personnel.
Finance Costs
Our finance costs increased by 51.7% from RMB18.5 million in 2024 and RMB28.1
million in 2025, primarily due to (i) an increase in interest expense on lease liabilities incurred
from the leasing of Singapore properties, and (ii) an increase in interest expense on redemption
liabilities.
Income Tax Expense
Our income tax expense increased by 41.3% from RMB59.3 million in 2024 to RMB83.8
million in 2025, in line with the increase of our profit.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by 51.4% from RMB397.3
million in 2024 to RMB601.5 million in 2025.
Discussion of Selected Items of Consolidated Statement of Financial Position
Property, Plant and Equipment
Our property, plant and equipment primarily consisted of owned properties, owned
properties improvement, construction in process and electronic equipment. Our property, plant
and equipment remained relatively stable at RMB1,194.1 million as of December 31, 2024 and
RMB1,164.5 million as of December 31, 2025.
Right-of-Use Assets
Our right-of-use assets primarily consisted of leased properties. Our right-of-use assets
decreased by 5.7% from RMB119.0 million as of December 31, 2024 to RMB112.3 million as
of December 31, 2025, primarily due to the overall depreciation, partially offset by upward
adjustments made to our Singapore right-of-use assets in accordance with Singapore
accounting standards.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-16 –


--- page 477 ---
Net Current Assets
The table below sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118473,193 572,271
Trade 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/H1118220,461 154,616
Other receivables, deposits and prepayments /H1118/H1118/H1118/H1118/H1118159,713 120,304
Right to returned goods asset /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,908 3,392
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,947 10,606
Financial assets at fair value through profit or loss
(“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118762,766 506,444
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,245 17,363
Short-term bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 93,000
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118802,274 537,575
2,472,507 2,015,571
Current liabilities
Trade 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/H1118236,042 251,449
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118161,602 139,283
Refund 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/H11186,417 6,987
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,547 40,692
Tax 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/H111815,749 8,191
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,247 63,787
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,917 24,371
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,560 4,549
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,903 –
1,366,984 539,309
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,105,523 1,476,262
Our net current assets decreased from RMB1,476.3 million as of December 31, 2024 to
RMB1,105.5 million as of December 31, 2025, primarily due to (i) the reclassification of the
redemption liabilities of RMB667.9 million from non-current assets to current assets and (ii)
an increase in borrowings of RMB112.5 million, partially offset by (i) an increase in bank
balances and cash of RMB264.7 million and (ii) and increase in FVTPL of RMB256.3 million.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-17 –


--- page 478 ---
Inventories
Our inventories primarily consisted of (i) finished goods, (ii) goods in transit, and (iii)
consumables. Our inventories decreased by 17.3% from RMB572.3 million as of December 31,
2024 to RMB473.2 million as of December 31, 2025, primarily attributable to (i) an increase
in our revenue, and (ii) a strategic adjustment to our stocking cycle, which shortened the
inventory coverage period.
The following table sets forth our inventory turnover days for the periods indicated:
Y ear ended December 31,
2025 2024
Inventory turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141.3 164.7
Note:
(1) Inventory turnover days are calculated using the average of opening balance and closing balance of
inventories for a period divided by cost of sales for the relevant period and multiplied by the number
of days for the relevant period (i.e. 365 days for a calendar year).
Our inventory turnover days decreased from 164.7 days in 2024 to 141.3 days in 2025,
primarily attributable to an increase in revenue and a strategic adjustment to our stocking cycle.
Trade Receivables
Our trade receivables are amounts due for goods sold in the ordinary course of business.
Our trade receivables increased by 42.6% from RMB154.6 million as of December 31, 2024
to RMB220.5 million as of December 31, 2025, primarily due to an increase in credit sales to
certain major customers in 2025.
The following table sets forth our trade receivables turnover days for the periods
indicated:
Y ear ended December 31,
2025 2024
Trade receivables turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.1 19.4
Note:
(1) Trade receivables turnover days are calculated using the average of opening balance and closing balance
of trade receivables for a period divided by revenue for the relevant period and multiplied by the number
of days for the relevant period (i.e. 365 days for a calendar year).
Our trade receivables turnover days increased from 19.4 days in 2024 to 23.1 days in
2025, primarily due to an increase in credit sales to certain major customers in 2025.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-18 –


--- page 479 ---
Other receivables, deposits and prepayments
Our other receivables, deposits and prepayments primarily consisted of (i) deductible
value-added tax, (ii) refundable value added tax, and (iii) advances to supplier. Our current
other receivables, deposits and prepayments increased by 32.8% from RMB120.3 million as of
December 31, 2024 to RMB159.7 million as of December 31, 2025, primarily attributable to
prepayments for the procurement of specific model switches from certain strategic partner.
Financial Assets at Fair V alue through Profit or Loss (“FVTPL”)
Our financial assets at FVTPL mainly include structured deposits issued by commercial
banks. We had financial assets at FVTPL of RMB506.4 million and RMB762.8 million as of
December 31, 2024 and 2025, respectively.
Restricted Bank Deposits
Our restricted bank deposits increased by 85.7% from RMB17.4 million as of December
31, 2024 to RMB32.2 million as of December 31, 2025, primarily attributable to (i) guarantees
for customs duties in relation to import and export declarations, and (ii) merchant deposits paid
to certain platforms.
Bank Balance and Cash
Our bank balance and cash increased by 49.2% from RMB537.6 million as of December
31, 2024 to RMB802.3 million as of December 31, 2025, primarily due to the growth in our
revenue.
Trade Payables
Our trade payables primarily consisted of trade payables to our suppliers of hardware
components. Our trade payables decreased by 6.1% from RMB251.4 million as of December
31,2024 to RMB236.0 million as of December 31,2025, primarily due to the decrease of
procurement.
The following table sets forth our trade payables turnover days for the periods indicated:
Y ear ended December 31,
2025 2024
Trade payables turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865.9 74.1
Note:
(1) Trade payables turnover days are calculated using the average of opening balance and closing balance
of trade payables for a period divided by cost of sales used for the relevant period and multiplied by the
number of days for the relevant period (i.e. 365 days for a calendar year).
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-19 –


--- page 480 ---
Our trade payables turnover days decreased from 74.1 days in 2024 to 65.9 days in 2025,
primarily due to the decrease of procurement.
Other Payables and Accruals (Current)
Our current other payables and accruals primarily consisted of (i) accrued staff costs, (ii)
accrued listing expenses, and (iii) other tax payables. Our other payables and accruals
increased from RMB139.3 million as of December 31,2024 to RMB161.6 million as of
December 31,2025, primarily due to (i) an increase in other tax payables, and (ii) an increase
in accrued staff costs.
Refund Liabilities
Our refund liabilities primarily relate to the right of return under our return policy during
the warranty period. Our refund liabilities decreased by 8.2% from RMB7.0 million as of
December 31, 2024 to RMB6.4 million in 2025, primarily due to a decrease in our historical
return rate, which led to a decrease in recognized refund liabilities.
Contract Liabilities
Our contract liabilities represent the advance payments received from our customers for
solutions and solutions to be provided during a period of time in the future. Our contract
liabilities increased by 73.4% from RMB40.7 million as of December 31,2024 to RMB70.5
million as of December 31, 2025, primarily due to an increase in sales of solutions where
customers were required to make prepayments, which will be recognized as revenue upon
delivery or after service was provided.
Indebtedness
Our indebtedness primarily include borrowings, lease liabilities and redemption
liabilities. The following table sets forth the breakdown of our total indebtedness as of the dates
indicated:
As of December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509,620 573,360
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,754 125,151
Bank overdrafts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,560 4,549
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,903 –
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/H11181,303,837 703,060
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-20 –


--- page 481 ---
Key Financial Ratios
The following table sets forth our key financial ratios for the periods indicated:
As of/For the Y ear ended
December 31,
2025 2024
Gross profit margin (%) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854.5 50.0
Net profit margin (%) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.3 15.2
Adjusted net profit margin
(non-IFRS measure) (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.9 15.6
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.8 3.7
Debt ratio (%) (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.0 6.7
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin equals profit for the year/period divided by revenue and multiplied by 100%.
(3) Adjusted net profit margin (non-IFRS measure) equals adjusted net profit (non-IFRS measure) divided
by revenue and multiplied by 100%. See “– Non-IFRS Financial Measure.”
(4) Current ratio equals current assets divided by current liabilities.
(5) Debt ratio equals net debt divided by total equity and multiplied by 100%. Net debt equals bank
borrowing plus lease liabilities plus redemption liabilities minus bank balances and cash.
Current Ratio
Our current ratio decreased from 3.7 as of December 31, 2024 to 1.8 as of December 31,
2025, primarily due to an increase in current liabilities, mainly attributable to redemption
liabilities incurred in 2025.
DISCLOSURE ABOUT MARKET RISK
See “Financial Risk Management Objectives and Policies” in Note 41 to the Accountants’
Report in Appendix I to this Prospectus for details.
CODE ON CORPORATE GOVERNANCE PRACTICES
Since we were not yet listed on the Stock Exchange for the year ended December 31,
2025, the Corporate Governance Code as set out in Appendix C1 to the Listing Rules was not
applicable to us during such period. After the Listing, save as disclosed in “Directors,
Supervisors and Senior Management – Compliance with the Corporate Governance Code,” we
will comply with all the code provisions set forth in the Corporate Governance Code.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-21 –


--- page 482 ---
REVIEW OF OUR PRELIMINARY FINANCIAL INFORMATION
We established an audit committee, which will come into operation with effect from the
Listing, in compliance with the Corporate Governance Code. Each of the proposed members
of the audit committee has reviewed the 2025 Preliminary Financial Information as set out in
this appendix.
The unaudited financial information in respect of our consolidated statement of financial
position, consolidated statement of profit and loss and other comprehensive income and the
related notes thereto for the year ended December 31, 2025 as set out in the 2025 Preliminary
Financial Information above has been agreed by the Group’s reporting accountants to the
amounts set out in the draft consolidated financial statements of the Group for the year ended
December 31, 2025 following their work under Practice Note 730 (Revised) “Guidance for
Auditors Regarding Preliminary Announcements of Annual Results” issued by the Hong Kong
Institute of Certified Public Accountants (the “HKICPA”). The work performed by the
reporting accountants in this respect did not constitute an assurance engagement and
consequently no opinion or assurance conclusion has been expressed by the reporting
accountants on the 2025 Preliminary Financial Information.
PURCHASE, SALE OR REDEMPTION OF OUR COMPANY’S SHARES
As we were not yet listed on the Hong Kong Stock Exchange for the year ended December
31, 2025, this disclosure requirement is not applicable to us.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-22 –


--- page 483 ---
The following is the text of a letter , summary of values and valuation certificates prepared
for the purpose of incorporation in this prospectus received from Jones Lang LaSalle
Corporate Appraisal and Advisory Limited, an independent valuer , in connection with its
valuation as at 31 January 2026 of the selected property interest held by the Group.
Jones Lang LaSalle Corporate Appraisal and Advisory Limited
7/F One Taikoo Place 979 King’s Road Hong Kong
tel +852 2846 5000  fax +852 2169 6001
Licence No: C-030171
13 March 2026
The Board of Directors
FS.COM Limited
1903-1904, Block C
China Resources Land Building
Da Chong Community, Y uehai Street
Nanshan District
Shenzhen
Guangdong Province
The PRC
Dear Sirs,
In accordance with your instructions to value the selected property interest held by
FS.COM Limited (the “ Company ”) and its subsidiaries (hereinafter together referred to as the
“Group ”) in the People’s Republic of China (the “ PRC”), we confirm that we have carried out
inspections, made relevant enquiries and searches and obtained such further information as we
consider necessary for the purpose of providing you with our opinion of the market value of
the selected property interest as at 31 January 2026 (the “ valuation date ”).
The selected property interest forms part of non-property activities and has a carrying
amount of 15% or more of the Group’s total assets and therefore the valuation of the property
interest is required to be included in this Prospectus.
Our valuation is carried out on a market value basis. Market value is defined as “the
estimated amount for which an asset or liability should exchange on the valuation date between
a willing buyer and a willing seller in an arm’s-length transaction, after proper marketing and
where the parties had each acted knowledgeably, prudently and without compulsion.”
We have valued the property held for owner-occupation by the Group by the comparison
approach assuming sale of the property interest in its existing state with the benefit of
immediate vacant possession and by making reference to comparable sales transactions as
available in the market. This approach rests on the wide acceptance of the market transactions
as the best indicator and pre-supposes that evidence of relevant transactions in the market place
can be extrapolated to similar properties, subject to allowances for variable factors.
APPENDIX III PROPERTY V ALUATION REPORT
– III-1 –


--- page 484 ---
Our valuation has been made on the assumption that the seller sells the property interest
in the market without the benefit of a deferred term contract, leaseback, joint venture,
management agreement or any similar arrangement, which could serve to affect the value of the
property interest.
No allowance has been made in our report for any charge, mortgage or amount owing on
any of the property interests valued nor for any expense or taxation which may be incurred in
effecting a sale. Unless otherwise stated, it is assumed that the property is free from
encumbrances, restrictions and outgoings of an onerous nature, which could affect its value.
In valuing the property interest, we have complied with all requirements contained in
Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by the
Stock Exchange of Hong Kong Limited; the RICS V aluation — Global Standards published by
the Royal Institution of Chartered Surveyors; the HKIS V aluation Standards published by the
Hong Kong Institute of Surveyors, and the International V aluation Standards issued by the
International V aluation Standards Council.
We have relied to a very considerable extent on the information given by the Group and
have accepted advice given to us on such matters as tenure, planning approvals, statutory
notices, easements, particulars of occupancy, lettings, and all other relevant matters.
We have been shown copies of various title documents including Sale and Purchase
Contracts, Real Estate Title Certificates and other official plans relating to the property interest
and have made relevant enquiries. Where possible, we have examined the original documents
to verify the existing title to the property interests in the PRC and any material encumbrance
that might be attached to the property interest or any tenancy amendment. We have relied
considerably on the advice given by the Company’s PRC legal advisor — Zhong Lun Law
Firm, concerning the validity of the property interests in the PRC.
We have not carried out detailed measurements to verify the correctness of the areas in
respect of the properties but have assumed that the areas shown on the title documents and
official site plans handed to us are correct. All documents and contracts have been used as
reference only and all dimensions, measurements and areas are approximations. No on-site
measurement has been taken.
We have inspected the exterior and, where possible, the interior of the properties.
However, we have not carried out investigation to determine the suitability of the ground
conditions and services for any development thereon. Our valuation has been prepared on the
assumption that these aspects are satisfactory. Moreover, no structural survey has been made,
but in the course of our inspection, we did not note any serious defect. We are not, however,
able to report whether the properties are free of rot, infestation or any other structural defect.
No tests were carried out on any of the services.
APPENDIX III PROPERTY V ALUATION REPORT
– III-2 –


--- page 485 ---
Inspection of the property was carried out on 1 December 2025 by Mrs. Daisy Zhang who
is a China Certified Public V aluer and has more than 5 years’ experience in the valuation of
properties in the PRC.
Climate change, sustainability, resilience, and ESG are increasingly influencing
investment approaches as they may affect prospects for rental and capital growth, and
susceptibility to obsolescence. Properties that do not meet the sustainability characteristics
expected in the market may represent a higher investment risk, particularly as occupiers
become more conscious of ESG impacts on operational workspace, which could impact on
vacancy and rental levels. This view is supported by RICS in their recently published guidance
note “Sustainability and ESG in commercial property valuation and strategic advice (3rd
Edition).”
While some of the sustainability and ESG initiatives are considered subjective and
intangible, they cannot always be demonstrated with quantifiable evidence. Based on our
research and local market knowledge, there is not yet any direct and tangible evidence of ESG
being reflected in specific investment behaviours and/or pricing considerations for assets of a
similar nature to the subject property, although it is acknowledged that ESG criteria is forming
part of an increasing number of investment mandates. However more tangible benefits such as
energy efficiency are realisable in operational costs. We have not undertaken full asset and
market investigations in this regard. Whilst there is currently no direct and tangible evidence
to suggest that the market is making pricing adjustments for ESG, we will continue to monitor
market movements and sentiment.
We have had no reason to doubt the truth and accuracy of the information provided to us
by the Group. We have also sought confirmation from the Group that no material factors have
been omitted from the information supplied. We consider that we have been provided with
sufficient information to arrive an informed view, and we have no reason to suspect that any
material information has been withheld.
Unless otherwise stated, all monetary figures stated in this report are in Renminbi (RMB).
Our summary of values and valuation certificates are attached below for your attention.
Y ours faithfully,
For and on behalf of
Jones Lang LaSalle Corporate Appraisal and
Advisory Limited
Eddie T. W. Yiu
MRICS MHKIS R.P .S. (GP)
Senior Director
Note: Eddie T.W. Yiu is a Chartered Surveyor who has 32 years’ experience in the valuation of properties in Hong
Kong and the PRC as well as relevant experience in the Asia-Pacific region.
APPENDIX III PROPERTY V ALUATION REPORT
– III-3 –


--- page 486 ---
V ALUATION CERTIFICATE
Property interest held for owner-occupation by the Group in the PRC
Property Description and tenure
Particulars of
occupancy
Market value in
existing state as at
the valuation date
RMB
Fifty-nine office units and
eight commercial units of
Phase I of Optics V alley
Innovation World
located at
No. 188 Gaokeyuan
West Road
Donghu New Technology
Development Zone
Wuhan City
Hubei Province
The PRC
The property is located at
No. 188 Gaokeyuan West Road
near its junction with Shendun
First Road to its north.
It is about 30 minutes’ driving
distance to the Wuhan Railway
Station. The locality is a well-
developed office area with mature
and sophisticated infrastructural
facilities.
The property comprises fifty-nine
office units and eight commercial
units of Phase I of Optics V alley
Innovation World, which were
completed in December 2022. The
property has a total gross floor
area of approximately 67,884.35
sq.m.
The usage and gross floor area
details of the property are set out
in note 2.
The land use rights of the property
have been granted for a term
expiring on 4 May 2057 for
commercial and service uses.
As at the valuation date,
the property was
occupied by the Group
for office and
commercial uses.
827,900,000
Notes:
1. Pursuant to 67 Commercial Housing Sale and Purchase Contracts (ready for sale property) of Wuhan City, the
property with a gross floor area of approximately 67,884.35 sq.m. was purchased by the Company in December
2023 at a total purchase price of RMB746.73 million.
2. Pursuant to 67 Real Estate Title Certificates, the land use rights of the land parcel of the property with a total
site area of approximately 353,740.76 sq.m.(including the land use rights of the property) have been granted
to the Company for a term expiring on 4 May 2057 for commercial and service uses. The property with a gross
floor area of approximately 67,884.35 sq.m. is owned by the Company. Details of the gross floor area of the
property are as below:
Unit No.
Real Estate Title
Certificates –
E(2024) Wu Han Shi
Dong Kai Bu Dong
Chan Quan Di Nos.
Gross Floor
Area Usage
(sq.m.)
Unit 101, Level 1, Entrance T1, Building B10 /H1118/H1118/H11180012960 290.73 Commercial
Unit 102, Level 1, Entrance T1, Building B10 /H1118/H1118/H11180012998 266.10 Commercial
Unit 201, Level 2, Entrance T1, Building B10 /H1118/H1118/H11180012968 976.64 Office
Unit 202, Level 2, Entrance T1, Building B10 /H1118/H1118/H11180012975 340.31 Office
Unit 301, Level 3, Entrance T1, Building B10 /H1118/H1118/H11180012997 1,682.65 Office
Unit 401, Level 4, Entrance T1, Building B10 /H1118/H1118/H11180012995 1,833.73 Office
Unit 501, Level 5, Entrance T1, Building B10 /H1118/H1118/H11180012961 1,250.82 Office
Unit 601, Level 6, Entrance T1, Building B10 /H1118/H1118/H11180012988 1,276.11 Office
APPENDIX III PROPERTY V ALUATION REPORT
– III-4 –


--- page 487 ---
Unit No.
Real Estate Title
Certificates –
E(2024) Wu Han Shi
Dong Kai Bu Dong
Chan Quan Di Nos.
Gross Floor
Area Usage
(sq.m.)
Unit 701, Level 7, Entrance T1, Building B10 /H1118/H1118/H11180012983 1,276.11 Office
Unit 801, Level 8, Entrance T1, Building B10 /H1118/H1118/H11180013020 1,276.11 Office
Unit 901, Level 9, Entrance T1, Building B10 /H1118/H1118/H11180013012 1,276.11 Office
Unit 1001, Level 10, Entrance T1, Building B10 /H1118/H11180012956 1,276.11 Office
Unit 1101, Level 11, Entrance T1, Building B10 /H1118/H11180012987 1,276.11 Office
Unit 1201, Level 12, Entrance T1, Building B10 /H1118/H11180013016 1,276.11 Office
Unit 1301, Level 13, Entrance T1, Building B10 /H1118/H11180012965 1,276.11 Office
Unit 1401, Level 14, Entrance T1, Building B10 /H1118/H11180012964 1,276.11 Office
Unit 1501, Level 15, Entrance T1, Building B10 /H1118/H11180012969 1,276.11 Office
Unit 1601, Level 16, Entrance T1, Building B10 /H1118/H11180012996 1,276.11 Office
Unit 201, Level 2, Entrance P1, Building B10 /H1118/H1118/H1118/H11180013008 839.01 Office
Unit 301, Level 3, Entrance P1, Building B10 /H1118/H1118/H1118/H11180012999 839.01 Office
Unit 401, Level 4, Entrance P1, Building B10 /H1118/H1118/H1118/H11180012957 206.14 Office
Unit 402, Level 4, Entrance P1, Building B10 /H1118/H1118/H1118/H11180013006 839.13 Office
Unit 102, Level 1, Entrance T2, Building B10 /H1118/H1118/H11180013010 221.27 Commercial
Unit 101, Level 1, Entrance T2, Building B10 /H1118/H1118/H11180012966 208.83 Commercial
Unit 201, Level 2, Entrance T2, Building B10 /H1118/H1118/H11180013000 763.13 Office
Unit 301, Level 3, Entrance T2, Building B10 /H1118/H1118/H11180012985 1,082.43 Office
Unit 401, Level 4, Entrance T2, Building B10 /H1118/H1118/H11180012974 1,063.54 Office
Unit 501, Level 5, Entrance T2, Building B10 /H1118/H1118/H11180012962 1,093.64 Office
Unit 601, Level 6, Entrance T2, Building B10 /H1118/H1118/H11180012994 1,068.59 Office
Unit 701, Level 7, Entrance T2, Building B10 /H1118/H1118/H11180012973 1,068.59 Office
Unit 801, Level 8, Entrance T2, Building B10 /H1118/H1118/H11180013003 1,068.59 Office
Unit 901, Level 9, Entrance T2, Building B10 /H1118/H1118/H11180012978 1,068.59 Office
Unit 1001, Level 10, Entrance T2, Building B10 /H1118/H11180013004 1,068.59 Office
Unit 1101, Level 11, Entrance T2, Building B10 /H1118/H11180013001 1,068.59 Office
Unit 1201, Level 12, Entrance T2, Building B10 /H1118/H11180012959 1,068.59 Office
Unit 1301, Level 13, Entrance T2, Building B10 /H1118/H11180012977 1,068.59 Office
Unit 201, Level 2, Entrance P2, Building B10 /H1118/H1118/H1118/H11180012967 1,229.85 Office
Unit 301, Level 3, Entrance P2, Building B10 /H1118/H1118/H1118/H11180012984 1,241.42 Office
Unit 401, Level 4, Entrance P2, Building B10 /H1118/H1118/H1118/H11180012992 1,393.33 Office
Unit 101, Level 1, Entrance P3, Building B11 /H1118/H1118/H1118/H11180012989 389.72 Commercial
Unit 102, Level 1, Entrance P3, Building B11 /H1118/H1118/H1118/H11180013007 340.62 Commercial
Unit 201, Level 2, Entrance P3, Building B11 /H1118/H1118/H1118/H11180013005 1,340.23 Office
Unit 301, Level 3, Entrance P3, Building B11 /H1118/H1118/H1118/H11180012991 1,444.45 Office
Unit 401, Level 4, Entrance P3, Building B11 /H1118/H1118/H1118/H11180012955 1,740.42 Office
Unit 201, Level 2, Entrance P4, Building B11 /H1118/H1118/H1118/H11180012953 857.48 Office
Unit 301, Level 3, Entrance P4, Building B11 /H1118/H1118/H1118/H11180012958 857.48 Office
Unit 401, Level 4, Entrance P4, Building B11 /H1118/H1118/H1118/H11180012972 857.48 Office
Unit 101, Level 1, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012976 204.84 Commercial
Unit 102, Level 1, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012980 195.02 Commercial
Unit 201, Level 2, Entrance T3, Building B11 /H1118/H1118/H1118/H11180013009 742.59 Office
Unit 301, Level 3, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012990 1,054.66 Office
Unit 401, Level 4, Entrance T3, Building B11 /H1118/H1118/H1118/H11180013018 1,086.28 Office
Unit 501, Level 5, Entrance T3, Building B11 /H1118/H1118/H1118/H11180013014 1,066.00 Office
Unit 601, Level 6, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012979 1,053.49 Office
Unit 701, Level 7, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012986 1,053.49 Office
Unit 801, Level 8, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012970 1,053.49 Office
Unit 901, Level 9, Entrance T3, Building B11 /H1118/H1118/H1118/H11180012981 1,053.49 Office
Unit 1001, Level 10, Entrance T3, Building B11 /H1118/H11180013013 1,053.49 Office
Unit 1101, Level 11, Entrance T3, Building B11 /H1118/H11180012954 1,053.49 Office
Unit 1201, Level 12, Entrance T3, Building B11 /H1118/H11180013017 1,053.49 Office
Unit 1301, Level 13, Entrance T3, Building B11 /H1118/H11180013002 1,053.49 Office
APPENDIX III PROPERTY V ALUATION REPORT
– III-5 –


--- page 488 ---
Unit No.
Real Estate Title
Certificates –
E(2024) Wu Han Shi
Dong Kai Bu Dong
Chan Quan Di Nos.
Gross Floor
Area Usage
(sq.m.)
Unit 1401, Level 14, Entrance T3, Building B11 /H1118/H11180013015 1,053.49 Office
Unit 1501, Level 15, Entrance T3, Building B11 /H1118/H11180013011 1,053.49 Office
Unit 1601, Level 16, Entrance T3, Building B11 /H1118/H11180012982 1,053.49 Office
Unit 201, Level 2, Entrance P5, Building B11 /H1118/H1118/H1118/H11180012963 1,230.70 Office
Unit 301, Level 3, Entrance P5, Building B11 /H1118/H1118/H1118/H11180012971 1,245.75 Office
Unit 401, Level 4, Entrance P5, Building B11 /H1118/H1118/H1118/H11180012993 1,394.60 Office
3. According to the information provided by the Group, the gross floor area of the property is set out as below:
Usage Gross Floor Area
(sq.m.)
Office /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,767.22
Commercial /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,117.13
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/H111867,884.35
4. In undertaking our valuation of the property, considering the location, size, usage, building quality and
condition of the property, we have identified and analyzed various relevant sales evidences in the locality
which have similar characteristics as the property and the unit price of these comparable properties ranges from
RMB11,000 to RMB13,000 per sq.m. for office units and RMB12,000 to RMB15,000 per sq.m. for commercial
units on the first floor. Appropriate adjustments and analysis are considered to the differences in location, size,
building age and other characters between the comparable properties and the property to arrive at the assumed
unit rate of the property.
5. We have been provided with the legal opinion containing the property interests by the Company’s PRC legal
advisor, which contains, inter alia, the following:
a. The Company has obtained the complete real estate title certificates and is the legal owner the property;
b. The property does not have any property rights disputes and there is no situation of being sealed or asset
frozen; and
c. The property has been mortgaged to Bank of China Limited Shenzhen High Tech Zone Branch with a
loan amount of RMB150.00 million for a term expiring on 21 March 2026 and a loan amount of
RMB373.36 million for a term expiring on 22 February 2034.
APPENDIX III PROPERTY V ALUATION REPORT
– III-6 –


--- page 489 ---
OVERVIEW
This Appendix provides a summary of the key terms of the Articles of Association of the
Company. As this Appendix mainly provides prospective investors with an overview of the
Articles of Association of the Company, it may not contain all the information that may be
important to prospective investors. The full Chinese version of the Articles of Association of
the Company can be viewed in accordance with the section headed “Appendix VI – Documents
Delivered to the Registrar of Companies in Hong Kong and Available on Display” in this
document.
SHARES
Share Issuance
The shares of the Company shall be in the form of stocks.
The Company issues its shares in an open, fair and just manner, and each share of the
same class carries equal rights.
Shares of the same class issued at the same time shall be issued on the same conditions
and at the same price; all entities or individuals shall pay the same price for each share.
All shares issued by the Company are ordinary shares, denominated in Renminbi, with a
par value of RMB1.00 per share.
Increase, Reduction and Repurchase of Shares
Increase of Registered Capital
The Company may, in accordance with laws, regulations, and resolutions passed at the
general meeting, increase its capital as needed for its operations and development through the
following means:
(1) public offering of shares;
(2) private placing of shares;
(3) bonus issue to existing shareholders;
(4) conversion of capital reserve into share capital;
(5) Other means approved by the laws, administrative regulations, CSRC and relevant
competent authorities.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-1 –


--- page 490 ---
Reduction of Registered Capital
Our Company may reduce our registered capital. When we do so, we shall comply with
the Company Law, the Hong Kong Listing Rules and other related regulations, and the
procedures stipulated in the Articles of Association of the Company.
If the Company needs to reduce its registered capital, it shall prepare a balance sheet and
a list of assets.
The Company shall notify its creditors within ten days from the date on which the
resolution for capital reduce is passed, and shall publish an announcement within thirty days
from the date of such resolution in the newspaper designated in the Articles of Association or
on the National Enterprise Credit Information Publicity System. Creditors shall have the right,
within thirty days from the date of receipt of such notice, or within forty-five days from the
date of the announcement if no such notice is received, to require the Company to repay debts
or provide guarantees regarding such debts.
Repurchase of Shares
The Company shall not repurchase its shares, except in one of the following
circumstances:
(1) The Company reduces its registered capital;
(2) The Company merges with other companies holding its shares;
(3) The Company uses its shares for employee share ownership schemes or share
incentive schemes;
(4) The Company is required to repurchase shares held by shareholders who voted
against any resolution passed at the general meeting in respect of the merger or
division of the Company;
(5) It uses shares for conversion of corporate bonds issued by the Company that could
be converted into its share certificates;
(6) It is necessary for the Company to maintain its value and rights and interests of
Shareholders;
(7) Other circumstances permitted under the laws, regulations, and the securities
regulatory rules of the place where the Company’s shares are listed.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-2 –


--- page 491 ---
The Company may acquire its own shares by means of public centralized trading or other
means that are approved by laws, administrative regulations, the Hong Kong Listing Rules,
other regulatory rules of the place where the Company’s shares are listed, and other means
approved by the CSRC. If the Company acquires its own shares in the circumstances specified
in items (3), (5), or (6) above, it shall do so through public centralized trading.
If the Company acquires its own shares in the circumstances specified in items (1) and
(2) above, it shall do so through a resolution at the general meeting. If the Company acquires
its own shares in the circumstances specified in items (3), (5), or (6) above, it shall do so in
accordance with the Articles of Association of the Company or through a mandate by the
general meeting and with resolution passed at a meeting of the Board of Directors attended by
more than two-thirds of the Directors, except for otherwise provided in the Hong Kong Listing
Rules.
After the Company acquires its own shares in accordance with the above-mentioned
provisions, in case of item (1), such shares shall be cancelled within ten days from the date of
acquisition; in case of items (2) or (4), such shares shall be transferred or cancelled within six
months; in case of items (3), (5) or (6), the number of its own shares held by the Company in
aggregate shall not exceed 10% of the total number of Company’s shares in issue, and such
shares shall be transferred or cancelled within three years.
Transfer of Shares
The Company’s shares shall be transferred in accordance with the law.
The Company does not accept any of its own shares as the subject of pledge.
Shares issued by the Company prior to the public issuance of shares shall not be
transferred within one year from the date of listing and trading of the Company’s shares on the
stock exchange. Where there are separate provisions under the laws, administrative regulations
and rules, and as prescribed by the CSRC regarding the transfer of the shares of the Company
held by the shareholders of the listed company or the de facto controller, such provisions shall
prevail.
Directors, supervisors and senior management personnel of the Company shall declare to
the Company the shares held by them in the Company and the changes therein, and shall not
transfer more than twenty-five per cent of the total number of shares held by them in the
Company each year during their term of office; their shareholding in the Company shall not be
transferred within one year from the date of listing and trading of the Company’s shares. The
Company’s shares held by the aforementioned personnel shall not be transferred within six
months after their departure from office.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-3 –


--- page 492 ---
SHAREHOLDERS AND SHAREHOLDERS’ GENERAL MEETING
Shareholders
Register of Members
The Company shall establish a register of shareholders in accordance with the certificates
provided by the share registrar and made the same available at the Company. The register of
shareholders shall be sufficient evidence of the shareholders’ shareholdings in the Company.
Shareholders enjoy rights and assume obligations according to the types of shares they hold.
Shareholders holding the same kind of shares shall enjoy the same rights and undertake the
same obligations.
The Company shall enter into a share custody agreement with the share registrar and
regularly verify information regarding substantial shareholders and changes in their
shareholdings (including share pledges) in order to monitor the shareholding structure of the
Company.
When the Company convenes a general meeting, distributes dividends, conducts
liquidation, or carries out any other matters that require the confirmation of shareholder
identity, the Board or the convener of the general meeting shall determine the record date.
Shareholders whose names appear on the register of members after closing of trading on the
record date shall be entitled to the relevant rights and interests.
If the Hong Kong Listing Rules provides for a period during which the register of
members shall be closed prior to the convening of a general meeting, or specify a record date
for determining entitlement to dividends, such provisions shall prevail.
Shareholders’ Rights and Obligations
The Shareholders of the Company shall be entitled to below rights:
(1) To receive dividends and other forms of profit distributions in proportion to their
shareholding;
(2) To request, convene, preside over, attend, or appoint a proxy to attend general
meetings, and to speak and exercise corresponding rights of speech and voting at
such meetings (except where a Shareholder is, under the Hong Kong Listing Rules,
required to abstain from voting for a specific matter);
(3) To supervise the operations of the Company and to make suggestions or inquiries;
(4) To transfer, grant, or pledge their shares in accordance with laws, administrative
regulations, and the Articles of Association of the Company;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-4 –


--- page 493 ---
(5) To inspect and copy the Articles of Association, register of members, minutes of
general meetings, resolutions of the Board of Directors, resolutions of the
Supervisory Committee, and financial statements;
(6) In the event of the termination or liquidation of the Company, the right to participate
in the distribution of the surplus assets of the Company according to the number of
shares held;
(7) To require the Company to acquire shares held by shareholders who voted against
resolutions regarding the merger or division of the Company at a general meeting;
(8) Other rights conferred by laws, administrative regulations, departmental rules, the
Hong Kong Listing Rules, or the Articles of Association.
If any shareholder is required to abstain from voting on a specific resolution or is
restricted to voting only for or against such resolution, any votes cast by or on behalf of such
shareholder in contravention of such requirement or restriction shall not be counted.
If a shareholder intends to inspect the aforementioned information or seek any data, the
shareholder shall provide the Company with written proof of the class and number of shares
it holds. The Company shall, upon verifying the shareholder’s identity, provide such
information or data accordingly.
Any resolutions of the general meeting or meeting of the Board that contravene laws or
administrative regulations shall be invalid.
If the convening procedures or voting methods of a general meeting or a meeting of the
Board violate any laws, administrative regulations, or the Articles of Association, or where the
contents of the resolution violates the Articles of Association, shareholders shall have the right
to request a People’s Court to revoke such resolution within 60 days from the date the
resolution is approved, except where the defects of the convening procedures or voting
methods are minor and have no material impact on the resolution.
Shareholders who were not notified to attend the general meeting may request a People’s
Court to revoke such resolution, within 60 days from the date on which they become aware or
shall become aware of the resolution approved at the general meeting. In this case, if the right
of revocation is not exercised within one year from the date the resolution was approved, the
right shall be invalid.
If a Director or senior management member, when performing their duties, violates laws,
administrative regulations, or the Articles of Association and causes losses to the Company,
shareholders who individually or jointly hold 1% or more of the Company’s shares for a period
of more than 180 consecutive days shall have the right to request the Supervisory Committee
to initiate legal proceedings in the People’s Court in writing. If the Supervisory Committee,
when performing its duties, violates laws, administrative regulations, or the Articles of
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-5 –


--- page 494 ---
Association and causes losses to the Company, shareholders may request the Board of
Directors to initiate legal proceedings in writing. If the Supervisory Committee or the Board
refuses to initiate legal proceedings upon receipt of the written request from the shareholders,
or fails to do so within 30 days from the date of receipt, or in case of emergency where failure
to initiate such proceedings immediately will result in irreparable damage to the interests of the
Company, the shareholders described in the preceding paragraph shall have the right to initiate
legal proceedings in the People’s Court in their own name and in the interest of the Company.
If another person infringes the lawful rights and interests of the Company, thus causing any
losses to the Company, the shareholders mentioned above may also initial legal proceedings in
the People’s Court in accordance with the provision as above.
If a Director, Supervisor or senior management member of a wholly-owned subsidiary of
the Company falls under any of the circumstances prescribed in the preceding paragraph, or
another person infringes the lawful rights and interests of a wholly-owned subsidiary of the
Company, thus causing any losses to the wholly-owned subsidiary of the Company,
shareholders who individually or jointly hold 1% or more of the Company’s shares for a period
of more than 180 consecutive days shall have the right to request the Supervisory Committee
of Board of the wholly-owned subsidiary of the Company to initiate legal proceedings in the
People’s Court in writing in their own name in accordance with the provision as above.
If a Director or senior management member violates the laws, administrative regulations,
or the Articles of Association, thus infringing the rights and interests of shareholders, the
shareholders may initiate legal proceedings in a People’s Court.
Shareholders of the Company shall undertake the following obligations:
(1) To comply with laws, administrative regulations, and the Articles of Association;
(2) To pay the application monies according to the number of shares subscribed and the
method of subscription;
(3) Not to surrender the shares unless required by the laws and regulations;
(4) Not to abuse the shareholder’s rights so as to damage the interests of the Company
or those of any other shareholders; not to abuse the independent legal person status
and the limited liability owed by the shareholders so as to damage the interests of
the Company’s creditors;
(5) Other obligations imposed by laws, administrative regulations, and the Articles of
Association.
If shareholders of the Company abuse their shareholders’ rights and thereby causing loss
to the Company or other shareholders, such shareholders shall be liable for indemnity in
accordance with laws. Where shareholders of the Company abuse the Company’s status as an
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-6 –


--- page 495 ---
independent legal entity and the limited liability owed by the shareholders for the purposes of
evading from making debt repayments, thereby materially impairing the interests of the
creditors of the Company, such shareholders shall be jointly and severally liable for the debts
owed by the Company.
If any shareholder holding more than 5% of the Company’s voting shares has pledged
such shares, that shareholder shall submit a written report to the Company on the date the
pledge occurs.
Restrictions on Rights of the Controlling Shareholders
The controlling shareholders and de facto controllers of the Company shall not use their
connected relations to damage the interests of the Company. If the violation causes losses to
the Company, it shall be liable for compensation.
The controlling shareholders and de facto controllers of the Company shall have fiduciary
duties towards the Company and its public shareholders. The controlling shareholder shall
exercise its rights as a capital contributor in strict compliance with the laws. The controlling
shareholder shall not damage the legitimate rights and interests of the Company and public
shareholders by means of profit distribution, asset restructuring, external investment, fund
appropriation, loan guarantee, etc., and shall not use its controlling status to damage the
interests of the Company and public shareholders.
General Meeting
The shareholders’ meeting is the organ of authority of the Company and shall exercise the
following functions and powers:
(1) To elect and replace directors and non-employee representative supervisors and to
decide on matters relating to the remuneration of directors and supervisors;
(2) To consider and approve the reports of the Board;
(3) To consider and approve the report of the Supervisory Committee;
(4) To consider and approve the Company’s profit distribution plans and loss recovery
plans;
(5) To resolve on the increase or reduction of the registered capital of the Company;
(6) To resolve on the Company’s issue of corporate bonds;
(7) To resolve on the merger, division, dissolution, liquidation or change of corporate
form of the Company;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-7 –


--- page 496 ---
(8) Amendments to the Articles of Association;
(9) To resolve on the appointment, dismissal or discontinuance of the accounting firm
engaged in the audit work of the Company and to decide on matters relating to its
remuneration;
(10) To consider and approve the guarantee matters stipulated in Article 45 to 48 of the
Articles of Association;
(11) To consider the purchase or disposal of material assets within one year with an
amount exceeding 30% of the latest audited total assets of the Company;
(12) To consider and approve the change in use of proceeds;
(13) To consider share incentive schemes and employee share ownership schemes;
(14) To consider the proposals submitted by shareholders who individually or jointly
hold 1% or more of the Company’s voting shares;
(15) To consider other matters that shall be resolved the general meeting as stipulated by
the laws, administrative regulations, departmental rules, the Hong Kong Listing
Rules or the Articles of Association.
Shareholders’ meetings are divided into annual shareholders’ meetings and extraordinary
shareholders’ meetings. The annual shareholders’ meeting shall be convened once a year within
six months after the end of the previous financial year.
The Company shall convene an extraordinary shareholders’ meeting within two months
from the date of occurrence of any of the following circumstances:
(1) The number of directors is less than the number stipulated in the Company Law or
less than two-thirds of the number specified in the Articles of Association;
(2) When the unrecovered losses of the Company amount to one-third of the total
amount of its paid-up share capital;
(3) When shareholders individually or jointly holding 10% or more of the Company’s
shares so request;
(4) When deemed necessary by the Board;
(5) When proposed by the Board of Supervisors;
(6) When proposed by more than half of the independent Directors;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-8 –


--- page 497 ---
(7) other circumstances stipulated by laws, administrative regulations, departmental
rules, Hong Kong Listing Rules, securities regulatory rules of the place where the
Company’s shares are listed or the Articles of Association.
Summoning of Shareholders’ Meetings
The independent non-executive Directors are entitled to propose to the Board to convene
an extraordinary shareholders’ meeting. The Board shall, in accordance with the laws,
administrative regulations, the Hong Kong Listing Rules, the securities regulatory rules of the
place where the Company’s shares are listed and the Articles of Association, give a written
reply on whether or not to convene the extraordinary shareholders’ meeting within 10 days
after receiving the proposal from the independent non-executive Directors.
If the Board agrees to convene the extraordinary shareholders’ meeting, a notice of such
meeting shall be issued within five days after the resolution of the Board is passed. If the Board
does not agree to convene the extraordinary shareholders’ meeting, it shall explain the reasons
and make an announcement.
The Board of Supervisors shall have the right to propose to the Board to convene an
extraordinary shareholders’ meeting in writing. The Board shall, in accordance with the laws,
administrative regulations, the Hong Kong Listing Rules, the securities regulatory rules of the
place where the Company’s shares are listed and the Articles of Association, give a written
reply on whether to convene the extraordinary shareholders’ meeting or not within 10 days
after receipt of the proposal.
If the Board agrees to convene the extraordinary shareholders’ meeting, a notice of such
meeting shall be issued within five days after the resolution of the Board is passed. Any
changes to the original proposal made in the notice shall be approved by the Board of
Supervisors.
If the Board does not agree to convene the extraordinary shareholders’ meeting or fails
to give a reply within 10 days after receiving the proposal, the Board shall be deemed to be
unable or fail to perform the duty of convening the shareholders’ meeting, and the Board of
Supervisors may summon and preside over the meeting on its own.
Shareholders individually or jointly holding 10% or more of the Company’s shares shall
have the right to request the Board of Directors in writing to convene an extraordinary
shareholders’ meeting. The Board shall, in accordance with the laws, administrative regulations
and the Articles of Association, give a written reply on whether to convene the extraordinary
shareholders’ meeting or not within 10 days after receipt of the proposal.
If the Board agrees to convene the extraordinary shareholders’ meeting, a notice of such
meeting shall be issued within five days after the resolution of the Board is passed. Any change
to the original request made in the notice shall be subject to the consent of the relevant
shareholders.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-9 –


--- page 498 ---
If the Board does not agree to convene an extraordinary shareholders’ meeting or does not
reply within 10 days upon receipt of the proposal, the shareholders individually or jointly
holding more than 10% of the Company’s shares shall have the right to propose to the Board
of Supervisors to convene an extraordinary shareholders’ meeting, and such proposal shall be
made in writing.
If the Board of Supervisors agrees to convene the extraordinary shareholders’ meeting, it
shall issue a notice of shareholders’ meeting within five days upon receipt of the request. Any
changes to the original request in the notice shall be approved by the relevant shareholders.
If the Board of Supervisors fails to issue the notice of the shareholders’ meeting within
the prescribed period, it shall be deemed that the Board of Supervisors will not convene and
preside over the shareholders’ meeting, and shareholders individually or jointly holding 10%
or more of the Company’s shares for more than 90 consecutive days may summon and preside
over the meeting by themselves.
Motion of General Meeting
The motion at the general meeting shall be governed by the general meeting, with definite
subjects and specific matters pending resolution, in compliance with the relevant provisions
under the laws, administrative regulations, the Hong Kong Listing Rules, other regulatory rules
of the place where the Company’s shares are listed and the Articles of Association.
At the general meeting, the board of directors, the supervisory committee and the
shareholder(s) individually or jointly holding 1% or more shares of the Company may propose
a motion to the Company.
Shareholders who individually or collectively hold 1% or more of the Company’s shares
may submit a provisional proposal to the Board in writing no later than ten days before the
general meeting is convened. The Board shall issue a supplementary notice of the general
meeting within two days of receiving the proposal, announcing the content of the provisional
proposal. If, pursuant to the requirements under the securities regulatory rules of the place
where the Company’s shares are listed, the general meeting must be postponed due to the
issuance of the supplementary notice, the general meeting shall be postponed in accordance
with the securities regulatory rules of the place where the Company’s shares are listed.
Subject to the above provisions, the convener after sending a notice of meeting shall not
modify the motion listed in the notice of meeting or add a new motion.
The general meeting shall not vote or resolve on a motion not listed in the notice of
meeting or not in compliance with Article 60 hereof.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-10 –


--- page 499 ---
Notice Of General Meeting
The convener shall notify the shareholders in writing 20 days prior to the annual general
meeting. When an extraordinary general meeting is convened, shareholders shall be notified by
way of a public announcement at least 15 days prior to the meeting.
In determining the notice period, the Company shall not include the date on which the
meeting is convened.
Notice of a general meeting shall contain the following:
(1) the time, place and duration of the meeting;
(2) matters and proposals to be considered at the meeting;
(3) a clear statement shall be made to indicate that all shareholders of ordinary shares
are entitled to attend the general meeting, and that all shareholders of ordinary
shares are entitled to appoint a proxy to attend and vote at the meeting on their
behalf, and that such proxy need not be a shareholder of the Company;
(4) the record date of shareholders’ equity rights that they are entitled to attend the
general meeting;
(5) the name and telephone number of the permanent contact person for the meeting;
(6) the time and procedures for voting via online or other means;
(7) other requirements stipulated by laws, administrative regulations, departmental
rules, the Hong Kong Listing Rules, other securities regulatory rules of the place
where the Company’s shares are listed and the Articles of Association.
The notice and supplemental notice of the general meeting shall fully and completely
disclose the specific details of all proposals. If independent non-executive Directors are
required to provide their opinions on the matters to be discussed, such opinions and the reasons
therefor shall be disclosed when the notice or supplemental notice of the general meeting is
issued.
Convention Of General Meeting
All shareholders of ordinary shares whose names appear on the register of members on
the shareholding registration date, or their proxies, are entitled to attend the general meeting
and exercise their voting rights in accordance with the relevant laws, regulations, the Hong
Kong Listing Rules and the Articles of Association of the Company (unless the securities
regulatory rules of the place where the Company’s shares are listed require specific
shareholders to abstain from voting on particular matters). Shareholders have the right to speak
at the general meeting.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-11 –


--- page 500 ---
Shareholders may attend the general meeting in person or appoint a proxy (who need not
be a shareholder of the Company) to attend and vote on their behalf.
When a general meeting is convened, all Directors, Supervisors, and the Board secretary
of the Company shall attend the meeting, and the general manager and other senior
management personnel shall attend the meeting as non-voting participants.
The general meeting shall be presided over by the chairman of the Board. If the chairman
is unable or fails to perform his duties, a Director jointly elected by more than half of the
Directors shall preside over the meeting.
If the meeting is convened by the Supervisory Committee, it shall be presided over by the
chairman of the Supervisory Committee. If the chairman of the Supervisory Committee is
unable or fails to perform his duties, a Supervisor jointly elected by more than half of the
Supervisors shall preside over the meeting.
A general meeting convened by the shareholders themselves shall be presided over by a
representative elected by the convener.
If, during the general meeting, the presiding person violates the rules of procedure such
that the meeting cannot proceed, the general meeting may, with the consent of more than half
of the attending shareholders with voting rights, elect another person to preside over the
meeting and continue with the proceedings.
V oting and Resolutions at General Meetings
Resolutions at general meetings are classified as either ordinary resolutions or special
resolutions.
An ordinary resolution must be passed by more than half of the voting rights held by
shareholders (including their proxies) present at the general meeting.
A special resolution must be passed by at least two-thirds of the voting rights held by
shareholders (including their proxies) present at the general meeting.
The following matters must be approved by ordinary resolution at a general meeting:
(1) the work reports of the Board and the Supervisory Committee;
(2) the profit distribution plan and loss recovery plan proposed by the Board;
(3) the appointment or removal of members of the Board and the Supervisory
Committee, as well as their remuneration and method of payment;
(4) the Company’s annual report;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-12 –


--- page 501 ---
(5) other matters that are not required by laws, administrative regulations or the Articles
of Association to be passed by special resolution.
The following matters must be approved by special resolution at a general meeting:
(1) any increase or reduction in the Company’s registered capital;
(2) the merger, division, spin-off, change of corporate form, dissolution or liquidation
of the Company;
(3) amendments to the Articles of Association;
(4) acquisition or disposal of major assets or provision of guarantees, where the amount
involved exceeds 30% of the Company’s most recent audited total assets within a
single year;
(5) share incentive schemes and employee shareholding plans;
(6) other matters that are required by laws, administrative regulations, securities
regulatory rules of the place where the Company’s shares are listed or the Articles
of Association — or that are deemed by ordinary resolution of the general meeting
to have a material impact on the Company and should be passed by special
resolution.
Shareholders (including their proxies) shall exercise their voting rights based on the
number of voting shares they represent, with one vote per Share. The Company’s own shares
held by itself do not carry voting rights and shall not be counted in the total number of voting
shares at the general meeting.
Resolutions passed at the general meeting shall specify the number of shareholders and
proxies present, the total number of voting shares they hold and the proportion of such shares
relative to the Company’s total voting shares, the voting method for each resolution, the voting
results and the detailed content of each resolution passed.
DIRECTORS AND THE BOARD
Directors
Directors shall be elected or replaced by the general meeting. Any Director (including
executive Directors) may be removed before the expiry of their term by an ordinary resolution
of the general meeting, subject to compliance with the relevant laws, administrative
regulations, departmental rules, regulatory documents and the Hong Kong Listing Rules. The
term of office for a Director shall be three years. A Director may be re-elected upon the expiry
of their term.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-13 –


--- page 502 ---
The term of a Director shall commence from the date of assumption of office and end
upon the expiry of the current Board’s term. If a new Director is not elected in a timely manner
upon the expiry of the term, the original Director shall continue to perform their duties in
accordance with the requirements under the relevant laws, administrative regulations,
departmental rules, the Hong Kong Listing Rules, other regulatory rules applicable to the place
where the Company’s shares are listed and the Articles of Association until the newly elected
Director assumes office.
Directors shall comply with laws, administrative regulations and the Articles of
Association, and owe the Company duties of loyalty and diligence.
Board
The Company shall establish a Board, which shall be responsible for implementing the
resolutions of the general meeting. The Board shall consist of seven Directors, including one
chairperson and three independent non-executive Directors.
The Board shall exercise the following powers:
(1) convene general meetings and report its work to the general meeting;
(2) implement the resolutions of the general meeting;
(3) determine the Company’s business plans and investment proposals;
(4) formulate the Company’s profit distribution plan and loss recovery plan;
(5) formulate plans for the Company’s increase or reduction of registered capital,
issuance of bonds or other securities and listing;
(6) propose plans for the Company’s major acquisitions, repurchase of the Company’s
shares or mergers, divisions, dissolution and change of corporate form;
(7) within the scope of authority granted by the general meeting, decide on matters such
as the Company’s external investments, acquisition or disposal of assets, asset
mortgages, external guarantees, entrusted financial management, related party
transactions and external donations;
(8) decide on the establishment of the Company’s internal management structure;
(9) decide on the appointment or dismissal of the Company’s general manager, Board
secretary and other senior management, as well as decisions regarding their
remuneration and disciplinary matters; decide, based on the general manager’s
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-14 –


--- page 503 ---
nomination, on the appointment or dismissal of deputy general managers, chief
financial officer and other senior management personnel, including their
remuneration and disciplinary matters;
(10) formulate the company’s basic management system;
(11) formulate proposals for amendments to the company’s Articles of Association;
(12) manage the Company’s information disclosure matters;
(13) make resolutions regarding the appointment and dismissal of the Company’s auditor
firm;
(14) hear the Company’s general manager’s work report and review the general
manager’s work;
(15) other duties and powers granted by laws, administrative regulations, departmental
rules, the Hong Kong Listing Rules, other regulatory rules of the location where the
Company’s shares are listed, the Company’s Articles of Association or the general
meeting.
Matters beyond the scope of the general meeting’s authorization should be submitted to
the general meeting for consideration.
The Board shall hold at least two meetings annually, convened by the chairman, with
written notice sent to all Directors and Supervisors at least ten days prior to the meeting, along
with sufficient information.
A Board meeting shall be held with the presence of more than half of the Directors.
Resolutions of the Board must be approved by more than half of all Directors, unless otherwise
stipulated by laws, regulations, the Articles of Association, or agreed upon by all Shareholders.
The voting on Board resolutions is based on one vote per Director. In the case of equal
division of votes, the chairman of the Board of Directors is entitled to an additional vote.
Special Committees under the Board
The Board of the Company shall set up an audit committee and remuneration committee,
a strategy committee, a nomination committee, and such special committees shall be
responsible to the Board, perform their duties in accordance with the Articles of Associations
and the authorization of the Board, and the proposals of such committees shall be submitted
to the Board for review and consideration. All members of the special committees are
composed of Directors, with independent Directors making up the majority and serving as the
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-15 –


--- page 504 ---
convenors of the audit committee, nomination committee, and remuneration committee. The
convenor of the audit committee must be a professional accountant. The Board shall be
responsible in formulating the rules of procedures of the special committees to regulate their
operation.
Secretary to the Board of the Company
The Company has a secretary to the Board, who is responsible for the preparation of
general meeting and Board meeting, the safekeeping of documents, the management of the
Company’s shareholder records and the handling of information disclosure matters.
The secretary to the Board must comply with the requirements under the applicable laws,
administrative regulations, departmental rules and the Articles of Association.
General Manager and Other Senior Management
The Company shall have one general manager, who shall be appointed or dismissed by the
Board. Each term of the general manager shall be three years and may be re-appointed upon
reappointment.
The general manager shall be accountable to the Board and shall exercise duties and
powers in accordance with the provisions of the Articles of Association or as authorized by the
Board. The general manager shall attend meetings of the Board.
SUPERVISORS AND SUPERVISORY COMMITTEE
Supervisors
Directors, the general manager and other senior management personnel may not
concurrently serve as Supervisors.
Each term of a Supervisor shall be three years. Upon expiry of their term, Supervisors
may be re-elected and re-appointed. If a Supervisor’s term expires without a timely re-election,
or if a resignation during the term results in the number of Supervisors falling below the
quorum, the original Supervisor shall continue to perform supervisory duties in accordance
with the requirements under the applicable laws, administrative regulations and the Articles of
Association until a new Supervisor assumes office.
Supervisors shall comply with laws, administrative regulations, the Hong Kong Listing
Rules, other regulatory rules of the place where the Company’s shares are listed and the
Articles of Association. They owe the Company duties of loyalty and diligence, and shall not,
by virtue of their position, accept bribes or other unlawful income, nor misappropriate the
Company’s assets.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-16 –


--- page 505 ---
Supervisory Committee
The Company shall establish a Supervisory Committee. The Supervisory Committee shall
consist of three Supervisors. The Supervisory Committee shall have one chairperson. The
chairperson of the Supervisory Committee shall be elected by a majority of all the Supervisors.
The chairperson shall convene and preside over meetings of the Supervisory Committee; if the
chairperson is unable or unwilling to perform their duties, more than half of the Supervisors
shall jointly elect one supervisor to convene and preside over the meeting.
The employee representative(s) on the Supervisory Committee shall be elected by the
Company’s employees through the employee representatives’ congress, general staff meeting,
or other democratic forms. The Supervisory Committee shall exercise the following powers:
(1) shall review the periodic reports prepared by the Board and provide written review
opinions;
(2) examine the financial condition of the Company;
(3) supervise the conduct of the Directors and senior management in performing their
duties for the Company, and propose the dismissal of any Director or senior
management personnel who violates laws, administrative regulations the Articles of
Association or resolutions of the general meeting;
(4) To require the directors and senior management to take corrective action if their
conduct is found to be detrimental to the interests of the Company;
(5) To propose and, where the Board fails to do so in accordance with the Company
Law, to convene and preside over an extraordinary general meeting of shareholders;
(6) To put forward proposals for consideration at the shareholders’ meeting;
(7) To initiate legal proceedings against the directors and senior management in
accordance with Article 189 of the Company Law;
(8) To conduct investigations upon identifying irregularities in the Company’s
operations, and, where necessary, to engage external professional institutions such
as accounting firms or law firms to assist, with expenses borne by the Company;
(9) To exercise such other powers and functions as may be conferred by the Articles of
Association.
The Supervisory Committee shall meet at least once every six months. Any Supervisor
may propose the convening of an extraordinary meeting of the Supervisory Committee.
Resolutions of the Supervisory Committee shall be adopted by a majority of all Supervisors.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-17 –


--- page 506 ---
FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT ALLOCATION AND AUDITING
Financial and Accounting Systems
The Company shall establish its financial and accounting systems in compliance with
applicable laws, administrative regulations, the securities regulatory rules of the place where
the Company’s shares are listed, and the requirements of relevant national authorities.
The Company shall prepare a financial report at the end of each fiscal year, which shall
be reviewed and audited in accordance with the law.
The Company’s periodic reports in respect of its H shares shall include an annual report
and an interim report. The Company shall publish a preliminary announcement of its annual
results within three months after the end of each fiscal year and shall complete and publish its
annual report within four months after the end of each fiscal year and at least 21 days prior to
the date of the annual general meeting.
The Company shall publish a preliminary announcement of its interim results within two
months after the end of the first six months of each fiscal year and shall complete and publish
its interim report within three months after the end of the first six months of each fiscal year.
The annual results, annual report, interim results, and interim report shall be prepared in
accordance with applicable laws, administrative regulations, and the requirements of the
securities regulatory authorities and stock exchanges of the place where the Company’s shares
are listed.
In the event of any special financial reporting requirements under applicable laws,
administrative regulations, regulatory documents issued by competent authorities, the Hong
Kong Listing Rules, or other relevant regulatory rules of the place where the Company’s shares
are listed, such requirements shall prevail.
Profit Distribution
When allocating its after-tax profits of a year, the Company shall appropriate 10% of such
profits to its statutory reserve. However, if the accumulated amount of the statutory reserve has
reached or exceeds 50% of the Company’s registered capital, no further appropriation to the
statutory reserve shall be required.
If the statutory reserve is insufficient to cover losses carried forward from previous years,
the current year’s profits shall first be used to cover such losses before any appropriation is
made to the statutory reserve as set out above.
Following the appropriation of after-tax profits to the statutory reserve, the Company
may, upon resolution of the shareholders’ meeting, allocate a portion of the remaining after-tax
profits to a discretionary reserve.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-18 –


--- page 507 ---
The remaining after-tax profits, after covering any prior-year losses and making the
required appropriations to the reserves, shall be distributed to shareholders in proportion to
their respective shareholdings, unless otherwise provided in the Articles of Association.
If the Company distributes profits to shareholders in violation of the Company Law or the
Articles of Association, such shareholders shall return the improperly distributed profits to the
Company. In the event that such distributions result in losses to the Company, the shareholders,
responsible directors, supervisors, and senior management personnel shall be held liable for
compensation.
Shares held by the Company itself shall not be entitled to participate in profit distribution.
Audit
The Company shall implement an internal audit system and appoint dedicated auditors to
carry out internal audit oversight of its financial income and expenditures, as well as its
economic activities.
Notices and Announcements
Notices issued by the Company may be delivered in the following forms:
(1) Personal delivery;
(2) Transmission by facsimile, electronic mail, or postal service;
(3) Public announcement;
(4) Any other forms as prescribed in the Articles of Association of the Company.
For notices to holders of H Shares delivered by way of announcement, the Company shall,
on the same day, submit an electronic version of the notice to the Hong Kong Stock Exchange
for immediate publication via its e-Submission System, for dissemination on the Stock
Exchange’s official website or in newspapers (including newspaper advertisements), as
required under the local Listing Rules. At the same time, such notices shall also be published
on the Company’s official website. For notices delivered by hand or by post, the Company shall
send such notices by hand delivery or by prepaid mail to the registered addresses listed in the
register of members for H Shares, ensuring shareholders are provided with adequate notice and
time to exercise their rights or take action as specified in the notice. In the event of any special
requirements under the listing rules of the stock exchange of the place where the Company’s
shares are listed, such provisions shall prevail.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-19 –


--- page 508 ---
Holders of H Shares of the Company may elect in writing to receive corporate
communications from the Company either by electronic means or by post. They may also
choose to receive such communications in Chinese, English, or both languages. Shareholders
may change their preferred method and language of receipt by providing written notice to the
Company, in accordance with the prescribed procedures and within a reasonable time in
advance.
A member or director who wishes to certify that certain notices, documents, information,
or written statements have been served on the Company must provide evidence that such
materials were delivered to the correct address by standard mail or by prepaid mail within the
specified time frame.
If the listing rules of the stock exchange where the Company’s shares are listed require
the Company to send, post, distribute, issue, publish, or otherwise make available relevant
corporate documents in both English and Chinese, and the Company has made appropriate
arrangements to identify shareholders who wish to receive such documents in either English or
Chinese only, the Company may, as indicated by the respective shareholders and to the extent
permitted by applicable laws and regulations, provide the relevant documents in English or
Chinese language only.
The Company shall publish its announcements and other information required to be
disclosed through information disclosure channels that comply with the Company Law, the
Securities Law, other applicable laws and administrative regulations, and the regulatory rules
of the place where its shares are listed. The Company shall publish its announcements and
information disclosures in newspapers and on websites designated or recognized by the
relevant laws, administrative regulations, national regulatory authorities, or the stock
exchange(s) where the Company’s shares are listed.
MERGER, SPIN-OFFS, DISSOLUTION AND LIQUIDATION
Mergers and spin-offs
The Company may carry out a merger either by absorption or by the establishment of a
new entity.
A merger by absorption refers to the process by which one company absorbs another,
resulting in the dissolution of the absorbed company. A merger by new establishment refers to
two or more companies merging to form a new company, with all original entities being
dissolved.
Where the Company merges with another company in which it holds 90% or more of the
shares, such merger is not required to be approved by a resolution of the shareholders’ meeting.
However, the Company shall notify the shareholders, who have the right to request the
Company to purchase their equity or shares at a reasonable price. If the consideration involved
in the merger does not exceed 10% of the Company’s net assets, approval by a shareholders’
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-20 –


--- page 509 ---
meeting is not required, unless otherwise provided under the regulatory rules of the place
where Company’s shares are listed or by the Articles of Association. In such cases where
shareholders’ meeting approval is not required, the merger shall be approved by a resolution
of the Board of Directors.
In the event of a merger or spin-off, or any changes to the Company’s registered
particulars, such changes shall be registered with the company registration authority in
accordance with the law. In the case of dissolution, the Company shall undergo deregistration
procedures in accordance with applicable laws. If a new company is established as a result of
a merger, company establishment registration shall be completed in accordance with the law.
Dissolution and Liquidation
The Company shall be dissolved under any of the following circumstances:
(1) The expiration of the business term as stipulated in the Articles of Association, the
occurrence of other dissolution events specified in the Articles of Association, or
upon the unanimous consent of all shareholders;
(2) A resolution for dissolution is passed at a shareholders’ meeting;
(3) The Company is dissolved due to a merger or division;
(4) The Company’s business license is revoked, it is ordered to cease operations, or its
registration is cancelled in accordance with the law;
(5) The Company experiences serious operational and management difficulties, and
continued existence would result in significant harm to shareholders’ interests,
which cannot be resolved through other means; in such cases, shareholders holding
10% or more of the Company’s voting rights may petition a people’s court for
dissolution.
Upon the occurrence of any of the above circumstances, the Company shall, within 10
days, publish an announcement stating the reason for dissolution on the National Enterprise
Credit Information Publicity System.
If the Company is dissolved under circumstances (1) or (2) and no assets have been
distributed to shareholders, the Company may continue to exist by amending the Articles of
Association. Any such amendment or resolution to continue the Company must be approved by
shareholders holding two-thirds or more of the voting rights present at the shareholders’
meeting.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-21 –


--- page 510 ---
Where the Company is dissolved under items (1), (2), (4), or (5) above, it shall establish
a liquidation committee and commence liquidation procedures within 15 days from the date the
grounds for dissolution arise. Unless otherwise stipulated in the Articles of Association or
resolved by the shareholders’ meeting to appoint other members, the liquidation committee
shall be composed of directors. If the liquidation obligors fail to fulfill their duties in a timely
manner, resulting in losses to the Company or its creditors, they shall be held liable for
compensation. If a liquidation committee is not formed within the prescribed period, or if
liquidation has not commenced after its formation, an interested party may apply to the
people’s court for the appointment of relevant personnel to establish and carry out the
liquidation.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company shall amend its Articles of Association under any of the following
circumstances:
(1) Where amendments to the Company Law, relevant laws, administrative regulations,
the Hong Kong Listing Rules, or other regulatory rules of the place where the
Company’s shares are listed result in conflicts with the current provisions of the
Articles of Association;
(2) Where changes in the Company’s circumstances render the existing provisions of the
Articles of Association inconsistent with the actual situation;
(3) Where a shareholders’ meeting resolves to amend the Articles of Association.
Any amendment to the Articles of Association approved by the shareholders’ meeting that
requires the consent of the relevant regulatory authorities shall be submitted to such authorities
for approval. Where the amendment involves matters subject to company registration, the
Company shall complete the relevant registration procedures in accordance with applicable
laws.
The Board of Directors shall revise the Articles of Association in accordance with the
shareholders’ meeting resolution and obtain approval from the relevant competent authorities.
If disclosure of the amendment is required under applicable laws or regulations, it is
supposed to make the necessary announcement in compliance with such requirements.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION OF THE COMPANY
– IV-22 –


--- page 511 ---
1. FURTHER INFORMATION ABOUT OUR COMPANY
A. Incorporation
On April 9, 2009, our Company was established under the name of Shenzhen Y uxuan
Network Technology Co., Ltd. (ʮ̡), as a limited liability company
in Shenzhen, the PRC, with a registered capital of RMB100,000. In October 2020, our
Company was converted into a joint stock company with limited liability and renamed as
FS.COM Limited (ʮ̡).
Our registered office is at Shenzhen, Guangdong Province, the PRC. We have established
a place of business in Hong Kong at Room 1910, 19/F, Lee Garden One, 33 Hysan Avenue,
Causeway Bay and have been registered as a non-Hong Kong company in Hong Kong under
Part 16 of the Companies Ordinance on May 29, 2025. Ms. Sham Ying Man ( Ҋᅂ˖) has been
appointed as our authorized representative for the acceptance of services of process and notices
on behalf of our Company in Hong Kong. Our address for acceptance of service of process in
Hong Kong is the same as the address of our principal place of business in Hong Kong.
As we are incorporated in the PRC, we are subject to the relevant laws and regulations
of the PRC. A summary of the relevant aspects of laws and regulations of the PRC and our
Articles of Association is set out in “Regulatory Overview” of this prospectus and Appendices
IV and V to this prospectus.
B. Changes in the Share Capital of our Company
Upon completion of the Global Offering, without taking into account any H Shares which
may be issued pursuant to the Over-allotment Option, our registered share capital will be
increased to RMB400,000,000, comprising 360,000,000 H Shares to be converted from
Unlisted Shares and 40,000,000 H Shares to be issued and sold under the Global Offering,
representing approximately 90% and 10% of our registered capital, respectively.
Save as disclosed above, there has been no alteration in the share capital of our Company
during the two years immediately preceding the date of this prospectus.
C. Resolutions of the Shareholders of our Company dated May 23, 2025
On May 23, 2025, the shareholders of our Company passed, among other things, the
following resolutions (as supplemented and detailed by Board/persons authorized by the
Shareholders):
(a) the issue by our Company of H Shares with a 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 shall be no more than 90,000,000, representing
approximately 20% of the total issued share capital of our Company as enlarged by
the Global Offering, and the grant of the Over-allotment Option in respect of no
more than 15% of the number of H Shares issued pursuant to the Global Offering;
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-1 –


--- page 512 ---
(c) subject to the CSRC’s approval, upon completion of the Global Offering,
360,000,000 Unlisted Shares will be converted into H Shares on a one-for-one basis;
(d) authorization of the Board or its authorized individual to handle all matters relating
to, among other things, the Global Offering, the issue and the listing of H Shares on
the Hong Kong Stock Exchange; and
(e) subject to the completion of the Global Offering, the conditional adoption of the
revised Articles of Association, which shall become effective on the Listing Date.
D. Conversion
We were converted into a joint stock company in October 2020. See “History,
Development and Corporate Structure — Joint Stock Conversion.” Our PRC Legal Advisor,
Zhong Lun Law Firm, has confirmed that we have obtained all necessary approvals from
relevant PRC regulatory authorities required for the Conversion.
E. Subsidiaries of Our Company
(a) Subsidiaries
Certain details of our subsidiaries are set forth in the Accountant’s Report in Appendix I
to this prospectus.
(b) Changes in the share capital of our subsidiaries
The following changes in the share capital of our subsidiaries took place within the two
years immediately preceding the date of this prospectus:
 On July 17, 2024, Shenzhen FS Innovation International Trade Co., Ltd. (࠭
ʮ̡), a wholly-owned subsidiary of our Company, was
established in PRC with the registered capital of RMB10,000,000;
 On July 18, 2024, Wuhan FS Innovation Business Service Co., Ltd. (஺௴อ
ʮ̡), a wholly-owned subsidiary of our Company, was established in
PRC with the registered capital of RMB10,000,000;
 On December 4, 2025, FS INNOV A TION CANADA INC., a wholly-owned
subsidiary of our Company, was established in Canada with the registered capital of
CAD10,000; and
 On January 9, 2026, Feisu Innovation Communication Technology (Wuhan) Co.,
Ltd. (Ҧஔ(ဏ)ʮ̡) was deregistered.
Save as disclosed above, there has been no alteration in the share capital of any of the
subsidiaries of our Company within the two years immediately preceding the date of this
prospectus.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-2 –


--- page 513 ---
2. FURTHER INFORMATION ABOUT OUR BUSINESS
A. Summary of Our Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within two years preceding the date of this prospectus which are
or may be material, and a copy of each has been published on the Stock Exchange’s website
and our Company’s own website:
(a) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, HAO GREA T CHINA FOCUS FUND, China International Capital
Corporation Hong Kong Securities Limited, China Securities (International)
Corporate Finance Company Limited and China Merchants Securities (HK) Co.,
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$20 million;
(b) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, GREA T HOLDING DEVELOPMENT LIMITED, China International
Capital Corporation Hong Kong Securities Limited, China Securities (International)
Corporate Finance Company Limited and China Merchants Securities (HK) Co.,
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of RMB100 million;
(c) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, WT ASSET MANAGEMENT LIMITED, China International Capital
Corporation Hong Kong Securities Limited, China Securities (International)
Corporate Finance Company Limited and China Merchants Securities (HK) Co.,
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$10 million;
(d) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, Caitong Funds SPC – Strategic Equity Fund III SP , China International
Capital Corporation Hong Kong Securities Limited, China Securities (International)
Corporate Finance Company Limited and China Merchants Securities (HK) Co.,
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of HK$75 million;
(e) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, CICC Financial Trading Limited, China International Capital Corporation
Hong Kong Securities Limited, China Securities (International) Corporate Finance
Company Limited and China Merchants Securities (HK) Co., Limited, with respect
to a subscription of H Shares at the Offer Price in the aggregate amount of HK$56
million, which will be held on a non-discretionary basis to hedge a series of cross
border over-the-counter swap transactions entered into by CICC Financial Trading
Limited, China International Capital Corporation Limited and Shanghai Intewise
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-3 –


--- page 514 ---
Capital Investment Limited (ʮ̡) acting in its capacity as
investment manager for and on behalf of Intewise Jinghong Electronic Technology
Private Securities Investment Fund (ږIntewise
Jiangchuan No. 3 Private Securities Investment Fund ( ၳჼΘෂ3໮ӷ෍ᗇՎҳ༟ਿ
ږand Intewise Jiangchuan No. 6 Private Securities Investment Fund ( ၳჼΘෂ6
ږ;)
f) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, Foresight Capital Steady Growth LPF (ږ,)
China International Capital Corporation Hong Kong Securities Limited, China
Securities (International) Corporate Finance Company Limited and China
Merchants Securities (HK) Co., Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of HK$50 million;
(g) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, SCGC Capital Holding Company Limited, China International Capital
Corporation Hong Kong Securities Limited, China Securities (International)
Corporate Finance Company Limited and China Merchants Securities (HK) Co.,
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of HK$50 million;
(h) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, Aether Wave Fund L.P ., China International Capital Corporation Hong
Kong Securities Limited, China Securities (International) Corporate Finance
Company Limited and China Merchants Securities (HK) Co., Limited, with respect
to a subscription of H Shares at the Offer Price in the aggregate amount of Hong
Kong dollars equivalent of US$6 million;
(i) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, GF International Investment Management Limited ( ᄿ೯਷ყ༟ପ၍ଣϞ
ʮ̡), China International Capital Corporation Hong Kong Securities Limited,
China Securities (International) Corporate Finance Company Limited and China
Merchants Securities (HK) Co., Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of Hong Kong dollars equivalent of US$5
million;
(j) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, CICC Financial Trading Limited, China International Capital Corporation
Hong Kong Securities Limited, China Securities (International) Corporate Finance
Company Limited and China Merchants Securities (HK) Co., Limited, with respect
to a subscription of H Shares at the Offer Price in the aggregate amount of HK$20
million, which will be held on a non-discretionary basis to hedge a series of cross
border over-the-counter swap transactions entered into by CICC Financial Trading
Limited, China International Capital Corporation Limited and Shenzhen Kaifeng
Investment Management Co., Ltd. (ʮ̡) acting in its
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-4 –


--- page 515 ---
capacity as investment manager for and on behalf of Kaifeng Xingrui Equity
Strategy No. 1 Securities Investment Private Fund (ୃഄଫ1໮ᗇՎҳ༟
ږand Kaifeng Macro Strategy No. 10 Securities Investment Private Fund
(௱ᔮ҃ᝈഄଫ10ږ;)
k) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, CICC Financial Trading Limited, China International Capital Corporation
Hong Kong Securities Limited, China Securities (International) Corporate Finance
Company Limited and China Merchants Securities (HK) Co., Limited, with respect
to a subscription of H Shares at the Offer Price in the aggregate amount of HK$10
million, which will be held on a non-discretionary basis to hedge a series of cross
border over-the-counter swap transactions entered into by CICC Financial Trading
Limited, China International Capital Corporation Limited and Changdu Kaifeng
Investment Management Co., Ltd. (ʮ̡) acting in its
capacity as investment manager for and on behalf of Kaifeng Macro Hedge No. 11
Private Fund ( ௱ᔮ҃ᝈ࿁ә11ږ;)
l) a cornerstone investment agreement dated March 11, 2026 entered into among our
Company, Wider Huge Group Limited, China International Capital Corporation
Hong Kong Securities Limited, China Securities (International) Corporate Finance
Company Limited and China Merchants Securities (HK) Co., Limited, with respect
to a subscription of H Shares at the Offer Price in the aggregate amount of
HK$10,155,200;
(m) a share transfer agreement entered into among our Company, Shenzhen Grandway
Chuangfu Investment Partnership (Limited Partnership) ( ଉέ̹ྗჃ௴బҳ༟Υྫ
Άุ(Υྫ), “ Grandway Chuangfu ”), Shenzhen Chaoyue Future V enture
Capital Partnership (Limited Partnership) ( ଉέ̹൴൳͊Ը௴ุҳ༟ΥྫΆุ(ࠢ
Υྫ), “ Chaoyue Future ”) and Mr. Xiang Wei ( Σਃ) dated June 13, 2024, pursuant
to which Grandway Chuangfu transferred 5,798,073 shares of our Company to
Chaoyue Future at the consideration of RMB64,420,000;
(n) a share transfer agreement entered into among our Company, Shenzhen Grandway
Investment Partnership (Limited Partnership) ( ଉέ̹ྗჃҳ༟ΥྫΆุ(Υྫ),
“Grandway Investment ”), Shenzhen Chaoyue Future V enture Capital Partnership
(Limited Partnership) ( ଉέ̹൴൳͊Ը௴ุҳ༟ΥྫΆุ(Υྫ), “ Chaoyue
Future ”) and Mr. Xiang Wei ( Σਃ) dated July 9, 2024, pursuant to which Grandway
Investment transferred 1,062,759 shares of our Company to Chaoyue Future at the
consideration of RMB13,000,000;
(o) A shareholders agreement dated May 27, 2025, entered into among the Company,
Mr. Xiang Wei ( Σਃ), Ms. Gong Cuihua (ၯശ), Mr. Chen Shaofeng ( ௓ˇᔮ), Mr.
Peng Chao ( ు൴), Mr. Y ang Jie (؏Gongqingcheng Fupeng Hongxiang No. 3
Equity Investment Management Center (Limited Partnership) (၅ᘄ҃ୂ䂋໮
ᛆҳ༟၍ଣʕː(Υྫ)), Ningbo Meishan Bonded Port Area Fupeng
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-5 –


--- page 516 ---
Hongxiang No. 8 Equity Investment Management Centre (Limited Partnership) ( ྐྵ
ᛆҳ༟၍ଣʕː(Υྫ)), Haitong Innovation
Securities Investment Co., Ltd. (ʮ̡), Xiamen Taiya Phase
I V enture Capital Partnership (Limited Partnership) (इԭɓಂ௴ุҳ༟ΥྫΆ
ุ(Υྫ)), Guoxin H&S (Zhuhai) Energy Industry Fund (Limited Partnership)
(̾ସ(मऎ)ږ(Υྫ)), Zhuhai Lafang Excellence No. 7
Investment Fund (Limited Partnership) (ږ(Υྫ)),
Jieyang Herun Investment Co., Ltd. (ʮ̡), Xiamen H&S
Lianfa Intelligent Technology Industry Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Shenzhen Chiyu Enterprise Management Partnership (Limited Partnership) ( ଉ
έཱུ̹༃Άุ၍ଣΥྫΆุ(Υྫ)), Shenzhen Hongtu No. 1 Private Equity
Investment Fund Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Shenzhen Capital Group Co., Ltd. ( ଉέ̹௴อҳ༟ණྠ
ʮ̡), Shenzhen Nanshan Hongtu Equity Investment Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Shenzhen
Chaoyue No. 1 Investment Partnership (Limited Partnership) ( ଉέ൴൳ɓ໮ҳ༟Υ
ྫΆุ(Υྫ)), Jinggangshan Mingcheng Feisu Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)),
Jinggangshan Mingcheng Ruiying Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Xuzhou Y ongzheng
Investment Partnership (Limited Partnership) (ψ͍͑ҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Chaoyue Future V enture Capital Partnership (Limited Partnership) ( ଉέ
̹൴൳͊Ը௴ุҳ༟ΥྫΆุ(Υྫ)), Hainan Orcas Private Equity Investment
Fund Partnership (limited Partnership) (ΥྫΆุ(Ϟ
Υྫ)), Shenzhen Sailvan Network Technology Co., Ltd. (ҦϞ
ʮ̡), Shenzhen Y uxuan Prudence Technology Partnership (Limited Partnership)
(ҦΥྫΆุ(Υྫ)), Shenzhen Y uxuan Growth Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(
Υྫ)), and
Shenzhen Y uxuan Progress Technology Partnership (Limited Partnership) ( ଉέឈρ
ҦΥྫΆุ(Υྫ)), which provided among others, the termination of
special rights previously granted to the shareholders of the Company; and
(p) the Hong Kong Underwriting Agreement.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-6 –


--- page 517 ---
B. Intellectual Property Rights
(a) Patents
As of the Latest Practicable Date, our Group has the following patents which are
considered by us to be or may be material to our business:
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
1. Our Company Design Chassis (FHD-1UFCE)
(ዚᇌ(FHD-1UFCE))
2017301668170 May 8, 2027 PRC
2. Our Company Design Transceiver ( ϗ೯ኜ) 2018303899460 July 18, 2028 PRC
3. Our Company Design Duplex dust plug
(ᕐʈԣྡྷ෦)
2020306176742 October 15, 2030 PRC
4. Our Company Design Optical transmission
chassis ( Έෂ፩ዚᇌ)
2021302186379 April 15, 2031 PRC
5. Our Company Utility
Model
Fiber optic distribution
box ( Έᜄৣᇞᇌ)
2017211108678 August 30, 2027 PRC
6. Our Company Utility
Model
Fiber optic adapter panel
and fiber optic
distribution box ( Έᜄ
ʿΈᜄৣᇞ
ଷ)
2017212973805 October 9, 2027 PRC
7. Our Company Utility
Model
Fiber optic splice tray
(Έᜄအᜄᆵ)
2017213270046 October 12, 2027 PRC
8. Our Company Utility
Model
Fiber optic distribution
box ( Έᜄৣᇞᇌ)
2017213988973 October 25, 2027 PRC
9. Our Company Utility
Model
WDM device box (ʱ
ል͜ኜ΁ᇌ)
201721444229X November 1,
2027
PRC
10. Our Company Utility
Model
Fiber optic distribution
box ( Έᜄৣᇞᇌ)
2017215043850 November 12,
2027
PRC
11. Our Company Utility
Model
A type of quick-
detachable rack mount
fiber optic distribution
box (ݖ
όΈᜄৣᇞᇌ)
2018212715282 August 6, 2028 PRC
12. Our Company Utility
Model
Simple chassis
(ዚᇌ)
2018213174683 August 13, 2028 PRC
13. Our Company Utility
model
Clamping device, cable
distribution box and
chassis ( ̔ၡༀໄeৣ
ᇞᇌʿዚᇌ)
2019220893002 November 26,
2029
PRC
14. Our Company Utility
Model
Optical module code
writer ( Έᅼ෯ᄳᇁኜ)
2019223552404 December 23,
2029
PRC
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-7 –


--- page 518 ---
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
15. Our Company Utility
Model
A type of fiber optic
distribution box ( ɓ၇
Έᜄৣᇞଷ)
2020210767608 June 10, 2030 PRC
16. Our Company Utility
Model
A type of cable
management rack ( ɓ
ݖ)
202023040112X December 15,
2030
PRC
17. Our Company Invention Coding method and
terminal device ( ᄳᇁ
ʿ୞၌ண௪)
2018108951713 August 7, 2038 PRC
18. Our Company Utility
model
type of housing assembly
and the optical
transmission equipment
incorporating such
housing assembly ( ɓ
၇ಠ᜗ଡ଼΁ʿՈϞ༈ಠ
Έෂ፩ண௪)
2021226014379 October 25, 2031 PRC
19. Our Company Utility
model
A type of optical module
coding device ( ɓ၇Έ
ᅼ෯ᄳᇁༀໄ)
2021227525051 November 8,
2031
PRC
20. Our Company Design Code writer ( ᄳᇁኜ) 2021307346478 November 8,
2036
PRC
21. Our Company Design Server (ਕኜ) 2022305816736 September 1,
2037
PRC
22. Our Company Invention Method and device for
modifying the
compatibility code for
an optical module ( Έ
ج
ʿༀໄ)
2022104562869 April 27, 2042 PRC
23. Our Company Utility
Model
Converter box ( ᔷ౬ଷ) 2023210736425 May 4, 2033 PRC
24. Our Company Invention A type of equipment for
upgrading firmware
(ɓ၇ո΁ʺॴண௪)
2020115878936 December 27,
2040
PRC
25. FS Wuhan Utility
Model
Front panel components
and servers (ଡ଼
ਕኜ)
2022215650996 June 19, 2032 PRC
26. FS Wuhan Invention Optical fiber distribution
box ( Έᜄৣᇞᇌ)
2017107707106 August 30, 2037 PRC
27. FS Wuhan Design Wireless access point ( ೌ
ᇞટɝᓃ)
2023305834866 September 7,
2038
PRC
28. Our Company Design Passive Multiplexers 005321890-0001 June 22, 2043 European
Union
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-8 –


--- page 519 ---
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
29. Our Company Design Passive Multiplexers 005321890-0002 June 22, 2043 European
Union
30. Our Company Design Passive Multiplexers 005321890-0003 June 22, 2043 European
Union
31. Our Company Design Passive Multiplexers 005321890-0004 June 22, 2043 European
Union
32. Our Company Design Wavelength Division
Multiplexer
30201805536V August 10, 2033 Singapore
33. Our Company Design Wavelength Division
Multiplexer
30201805537W August 10, 2033 Singapore
34. Our Company Design Wavelength Division
Multiplexer
30201805538Y August 10, 2033 Singapore
35. Our Company Design Wavelength Division
Multiplexer
30201805539P August 10, 2033 Singapore
36. Our Company Design High Density Fiber
Enclosure
30201805828Y November 5,
2033
Singapore
37. Our Company Design High Density Fiber
Enclosure
30201805829P November 5,
2033
Singapore
38. Our Company Design High Density Fiber
Enclosure
30201805830T November 5,
2033
Singapore
39. Our Company Design Ultra High Density Fiber
Enclosure
30201805831R November 5,
2033
Singapore
40. Our Company Design Ultra High Density Fiber
Enclosure
30201805832P November 5,
2033
Singapore
41. Our Company Design Ultra High Density Fiber
Enclosure
30201805833V November 5,
2033
Singapore
42. Our Company Design Branch boxes for optical
fibres
005307659-0001 June 12, 2043 European
Union
43. Our Company Design Branch boxes for optical
fibres
005307659-0002 June 12, 2043 European
Union
44. Our Company Design Branch boxes for optical
fibres
005307659-0003 June 12, 2043 European
Union
45. Our Company Design Branch boxes for optical
fibres
005307659-0004 June 12, 2043 European
Union
46. Our Company Design Branch boxes for optical
fibres
005307659-0005 June 12, 2043 European
Union
47. Our Company Design Branch boxes for optical
fibres
005307659-0006 June 12, 2043 European
Union
48. Our Company Design Wavelength Division
Multiplexer
6041051 August 9, 2043 United
Kingdom
49. Our Company Design Wavelength Division
Multiplexer
6041052 August 9, 2043 United
Kingdom
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-9 –


--- page 520 ---
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
50. Our Company Design Wavelength Division
Multiplexer
6041053 August 9, 2043 United
Kingdom
51. Our Company Design Wavelength Division
Multiplexer
6041054 August 9, 2043 United
Kingdom
52. Our Company Design High Density Fiber
Enclosure
6047476 November 2,
2043
United
Kingdom
53. Our Company Design High Density Fiber
Enclosure
6047477 November 2,
2043
United
Kingdom
54. Our Company Design High Density Fiber
Enclosure
6047478 November 2,
2043
United
Kingdom
55. Our Company Design High Density Fiber
Enclosure
6047479 November 2,
2043
United
Kingdom
56. Our Company Design High Density Fiber
Enclosure
6047480 November 2,
2043
United
Kingdom
57. Our Company Design High Density Fiber
Enclosure
6047481 November 2,
2043
United
Kingdom
58. Our Company Design a wavelength division
multiplexer
201814796 August 13, 2028 Australia
59. Our Company Design a wavelength division
multiplexer
201814797 August 13, 2028 Australia
60. Our Company Design a wavelength division
multiplexer
201814798 August 13, 2028 Australia
61. Our Company Design a wavelength division
multiplexer
201814799 August 13, 2028 Australia
62. Our Company Design High Density Fiber
Enclosure
201816461 October 29, 2028 Australia
63. Our Company Design High Density Fiber
Enclosure
201816462 October 29, 2028 Australia
64. Our Company Design High Density Fiber
Enclosure
201816463 October 29, 2028 Australia
65. Our Company Design Ultra High Density Fiber
Enclosure
201816457 October 29, 2028 Australia
66. Our Company Design Ultra High Density Fiber
Enclosure
201816458 October 29, 2028 Australia
67. Our Company Design Ultra High Density Fiber
Enclosure
201816459 October 29, 2028 Australia
68. Our Company Design High Density Fiber
Enclosure
USD865,693S November 5,
2034
U.S.
69. Our Company Design Ultra High Density Fiber
Enclosure
USD865,697S November 5,
2034
U.S.
70. Our Company Design HIGH DENSITY FIBER
ENCLOSURE
USD865,694S November 5,
2034
U.S.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-10 –


--- page 521 ---
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
71. Our Company Design HIGH DENSITY FIBER
ENCLOSURE
USD865,695S November 5,
2034
U.S.
72. Our Company Design ULTRA HIGH DENSITY
FIBER ENCLOSURE
USD865,696S November 5,
2034
U.S.
73. Our Company Design Ultra High Density Fiber
Enclosure
USD887,377S June 16, 2035 U.S.
74. Our Company Design METHOD FOR
PROGRAMMING
AND TERMINAL
DEVICE
US10,691,424B2 October 22, 2038 U.S.
75. Our Company Design PASSIVE
MULTIPLEXER
USD886,752S June 9, 2035 U.S.
76. Our Company Design PASSIVE
MULTIPLEXER
USD937,234S November 30,
2036
U.S.
77. Our Company Design PASSIVE
MULTIPLEXER
USD895,561S September 8,
2035
U.S.
78. Our Company Design PASSIVE
MULTIPLEXER
USD937,235S November 30,
2036
U.S.
79. Our Company Design PASSIVE
MULTIPLEXER
USD896,191S September 15,
2035
U.S.
80. Our Company Design PASSIVE
MULTIPLEXER
USD937,236S November 30,
2036
U.S.
81. Our Company Design CASE PANEL 30202110105U November 12,
2036
Singapore
82. Our Company Design Control panel consoles 008757801-0001 November 12,
2046
European
Union
83. Our Company Design Case Panel 6175458 November 12,
2046
United
Kingdom
84. Our Company Design Branch boxes for optical
fibres
90053076590001 June 12, 2043 United
Kingdom
85. Our Company Design Branch boxes for optical
fibres
90053076590002 June 12, 2043 United
Kingdom
86. Our Company Design Branch Boxes for Optical
Fibres
90053076590003 June 12, 2043 United
Kingdom
87. Our Company Design Branch boxes for optical
fibres
90053076590004 June 12, 2043 United
Kingdom
88. Our Company Design Branch boxes for optical
fibres
90053076590005 June 12, 2043 United
Kingdom
89. Our Company Design Branch boxes for optical
fibres
90053076590006 June 12, 2043 United
Kingdom
90. Our Company Design Passive Multiplexer 90053218900001 June 22, 2043 United
Kingdom
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-11 –


--- page 522 ---
No. Patent Owner Type Patent Patent No. Expiry Date
Country/
Region
91. Our Company Design Passive Multiplexer 90053218900002 June 22, 2043 United
Kingdom
92. Our Company Design Passive Multiplexer 90053218900003 June 22, 2043 United
Kingdom
93. Our Company Design Passive Multiplexer 90053218900004 June 22, 2043 United
Kingdom
94. Our Company Design Code writer 6197981 March 24, 2047 United
Kingdom
95. Our Company Design Modem case panel 202116994 November 12,
2031
Australia
96. Our Company Design Code writer 202211686 March 23, 2032 Australia
97. Our Company Design Data Processing
equipment
008916274-0001 March 24, 2047 European
Union
98. Our Company Design Code writer 30202210677U March 23, 2037 Singapore
99. Our Company Invention method for programming
and terminal device
10201809234V October 19, 2038 Singapore
100. Our Company Design SERVER DM/227726 February 16,
2048
European
Union
101. Our Company Design SERVER DM/227726 February 16,
2048
Japan
102. Our Company Invention method for programming
and terminal device
2018250531 October 22, 2038 Australia
103. Our Company Design SERVER DM/227726 February 16,
2048
Korea
104. Our Company Design Coding Device USD1,074,669S May 13, 2040 U.S.
105. Our Company Design SERVER USD1,065,179S March 4, 2040 U.S.
(b) Trademarks
As of the Latest Practicable Date, the following trademarks have been registered in the
name of the relevant member of our Group which are considered by us to be or may be material
to our business:
No.
Trademark
Registrant Trademark
Registration
Number
Place of
Registration Class Valid Period
1. Our Company
 25117822 PRC 09 From March 7, 2020 to
March 6, 2030
2. Our Company
 43509526 PRC 9 From September 7, 2021 to
September 6, 2031
3. Our Company
 41257701 PRC 42 From April 7, 2021 to
April 6, 2031
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-12 –


--- page 523 ---
No.
Trademark
Registrant Trademark
Registration
Number
Place of
Registration Class Valid Period
4. Our Company
 28399758 PRC 42 From May 14, 2021 to
May 13, 2031
5. Our Company
 49298277 PRC 09 From February 7, 2022 to
February 6, 2032
6. Our Company
 57287000 PRC 35 From February 7, 2023 to
February 6, 2033
7. Our Company
 52797639 PRC 09 From March 7, 2023 to
March 6, 2033
8. Our Company
 305121242 HK 09 From November 22, 2019 to
November 21, 2029
9. Our Company
 305685698 HK 35/42 From July 14, 2021 to
July 13, 2031
10. Our Company
 305092290 HK 09 From October 23, 2019 to
October 22, 2029
11. Our Company
 305685689 HK 35/42 From July 14, 2021 to
July 13, 2031
12. Our Company
 305092308 HK 09 From October 23, 2019 to
October 22, 2029
As of the Latest Practicable Date, we have applied for the registration of the following
trademark which is considered by us to be or may be material to our business:
No. Applicant Trademark
Application
Number
Place of
Application Class Application Date
1. Our Company
 307070030 HK 9/35/42 October 24, 2025
(c) Software Copyrights registered
As at the Latest Practicable Date, we have registered the following software copyrights
which we consider to be or may be material to our business:
No. Copyright Registered Owner Registration Number Registration Date
1. FS.COM Mall
Android version
software V6.0 (࠭
஺௴อFS.COM ਠ
۬Androidழ΁
V6.0)
Our Company 2023SR0128685 January 20, 2023
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-13 –


--- page 524 ---
No. Copyright Registered Owner Registration Number Registration Date
2. FS.COM Mall iOS
version software
V6.0 (஺௴อ
FS.COM۬iOS
ழ΁V6.0)
Our Company 2023SR0128777 January 20, 2023
3. FS.COM official
website platform
V3.0 (஺௴อ
FS.COMၣ̨̻
V3.0)
Our Company 2023SR0616221 June 9, 2023
4. FS Airmodule cloud
platform V1.0 (࠭
஺௴อFS
Airmodule ථ̨̻
V1.0)
FS Wuhan 2023SR1075307 September 15,
2023
5. FS S58 series switch
system software
V1.0 (FS S58 ӻ
ΐʹ౬ዚӻ୕ழ΁
V1.0)
FS Wuhan 2023SR1393236 November 7,
2023
6. FS WireNet network
cable management
system V1.0 (FS
WireNet бᇞၣഖ
၍ଣӻ୕V1.0)
FS Wuhan 2024SR1321900 September 6,
2024
7. FS Optical Network
Unified
Management
System V1.0 (FS
Έၣഖ୕ɓ၍ଣӻ
୕V1.0)
FS Wuhan 2025SR1348007 July 24, 2025
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-14 –


--- page 525 ---
(d) Copyrights registered
As at the Latest Practicable Date, we have registered the following copyrights which we
consider to be or may be material to our business:
No. Copyright Type
Registered
Owner Registration Number
Date of
Publication
Registration
Date
1. FS BOX software
system UI
interface design
sketch (FS
BOX ழ΁ӻ୕
UIྡ)
Artwork Our
Company
Guo Zuo Deng Zi-2021-F-
00077316 ( ਷Ъ೮
ο-2021-F-00077316)
September 23,
2020
April 6, 2021
2. Feisu WireNet
management
software
homepage
design (஺
WireNet ၍ଣழ
ࠇ)
Artwork FS Wuhan Guo Zuo Deng Zi-2024-F-
00340075 ( ਷Ъ೮
ο-2024-F-00340075)
August 14,
2024
November 22,
2024
3. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUPERVISORS
A. Particulars of Directors’ and Supervisors’ Contracts
Each of the Directors and Supervisors entered into a service contract or appointment letter
with our Company. The principal particulars of these service contracts and appointment letters
comprise (i) the terms of the service and (ii) termination provisions in accordance with their
respective terms. The service contracts and appointment letters may be renewed in accordance
with our Articles of Association and the applicable laws, rules and regulations.
Save as disclosed above, none of our Directors or Supervisors has or is proposed to have
a service contract with any of our Group (other than contracts expiring or determinable by the
relevant employer within one year without the payment of compensation (other than statutory
compensation)).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-15 –


--- page 526 ---
B. Directors’ and Supervisors’ Remuneration
Save as disclosed in “Directors, Supervisors and Senior Management — Remuneration of
Directors, Senior Management and Supervisors” and under Note 12 to the financial information
in the Accountant’s Report set out in Appendix I, no Director or Supervisor received any other
fees, salaries, allowances, share based compensation, pension schemes contribution and other
benefits in kind (if applicable) from our Company for the three years ended December 31,
2024.
4. DISCLOSURE OF INTERESTS
A. Substantial Shareholders
Save as disclosed in the section headed “Substantial Shareholders” in this prospectus, up
to the Latest Practicable Date, our Directors, Supervisors or chief executive were not aware of
any other person, not being a Director, Supervisor or chief executive of our Company, who had
an interest or short position in the Shares and underlying Shares of our Company, which
following the completion of the Global Offering, would fall to be disclosed to our Company
under the provisions of Divisions 2 an 3 of Part XV of the SFO, or who was, directly or
indirectly, interested in 10% or more of the issued voting Shares of our Company or any
member of our Group.
B. Directors, Supervisors or Chief Executives
Save as disclosed below and in the section headed “Substantial Shareholders” in this
prospectus, immediately following completion of the Global Offering (and assuming the
Over-allotment Option is not exercised), none of our Directors, Supervisors or chief executive
of our Company has any interest and/or short position in the Shares, underlying Shares and
debentures of our Company or any of its associated corporations (within the meaning of Part
XV of the SFO), which will have to be notified to us and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which has been
taken or is deemed to have under such provisions of the SFO) or which will be required,
pursuant to section 352 of the SFO, to be entered in the register referred to therein, or will be
required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers
to be notified to our Company and the Stock Exchange (for this purpose, the relevant
provisions of the SFO will be interpreted as if they applied to the Supervisors).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-16 –


--- page 527 ---
Interests in our Company
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the
Over-Allotment Option is not exercised) (1)
Name
Position held
within our
Company
Type of
Shares held
Capacity/nature of
interest
Number of
Shares held
Approximate
percentage of
shareholding
interest in the
total share
capital
Number of
Shares held
Approximate
percentage of
shareholding in
the relevant type
of Shares
Approximate
percentage in
the total
registered share
capital of the
Company
Mr. Peng Chao /H1118/H1118/H1118Non-executive
Director
Unlisted
Shares
Beneficial owner 508,680 0.14% – – –
Interest in controlled
corporation 1
8,497,194 2.36% – – –
H Shares Beneficial owner – – 508,680 0.13% 0.13%
Interest in controlled
corporation
– – 8,497,194 1.72% 1.72%
1 Chaoyue Future and Chaoyue No. 1 held 1.91% and 0.45% equity interests in our Company, respectively. The
general partner of Chaoyue Future and Chaoyue No. 1 is Hainan Chaoyue V enture Capital Co, Ltd., which was
held as to 56% by Mr. Peng Chao. Therefore, Mr. Peng Chao is deemed to be interested in the Shares held by
Chaoyue Future and Chaoyue No. 1.
C. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors, Supervisors or chief executive of Our Company has any
interests and short positions in the shares, underlying shares and debentures of Our
Company or any associated corporations (within the meaning of Part XV of the
SFO) which will have to be notified to us and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions
which he is taken or deemed to have under such provisions of SFO) or which will
be required, pursuant to section 352 of the SFO, to be entered in the register referred
to therein, or will be required, pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers to be notified to us and the Stock
Exchange, in each case once our Shares are listed. For this purpose, the relevant
provisions of the SFO will be interpreted as if they applied to the Supervisors;
(b) none of our Directors or Supervisors is a director or employee of a company which
is expected to have an interest in the Shares falling to be disclosed to our Company
and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the
SFO once our Shares are listed on the Stock Exchange;
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(c) none of our Directors or Supervisor nor any of the parties listed in “— 6. Other
Information — G. Qualification of Experts” of this Appendix is materially interested
in any contract or arrangement subsisting at the date of this prospectus which is
significant in relation to our business;
(d) none of our Directors or Supervisor nor any of the parties listed in “— 6. Other
Information — G. Qualification of Experts” of this Appendix is interested in our
promotion, or in any assets which have, within two years immediately preceding the
issue of this prospectus, been acquired or disposed of by or leased to us, or are
proposed to be acquired or disposed of by or leased to our Company;
(e) none of the parties listed in the paragraph headed “— 6. Other Information — G.
Qualification of Experts” of this Appendix: (i) is interested legally or beneficially in
any of our Shares or any shares in any of our subsidiaries; or (ii) has any right
(whether legally enforceable or not) to subscribe for or to nominate persons to
subscribe for our securities; and
(f) save as disclosed in the section headed “Business” in this prospectus, none of our
Directors or Supervisors or their respective associates or any Shareholders of our
Company (who to the knowledge of our Directors owns more than 5% of our issued
share capital) has any interest in our five largest suppliers or our five largest
customers in each year during the Track Record Period.
5. Employee Incentive Schemes
In order to further enhance our corporate governance structure, attract and retain
management talents and employees, incentivize our employees to promote our sustainable
development and balance our long-term and short-term goals, we adopted employee incentive
schemes (the “ Employee Incentive Schemes ”) on August 2018, December 2019, October
2020, March 2022 and March 2025 to award the partnership interests in our employee incentive
platforms to the scheme participants (the “ Participant ”). The Employee Incentive Schemes are
not subject to the provisions of Chapter 17 of the Listing Rules.
(a) Employee Incentive Platforms
Y uxuan Prudence, Y uxuan Progress and Y uxuan Growth were established in May and July
2018 to serve as our employee incentive platforms. Shenzhen Y uxuan Innovation Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ), “ Yuxuan
Innovation ”) is a limited partner of Y uxuan Prudence holding 8.74% partnership interests
therein. Shenzhen Y uxuan Speed Technology Partnership (Limited Partnership) (࠭
ҦΥྫΆุ(Υྫ), “ Yuxuan Speed ”) is a limited partner of Y uxuan Growth holding
15.36% partnership interest therein.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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Set out below is the holding structure of our employee incentive platforms as of the Latest
Practicable Date:
 Yuxuan Prudence : The general partner of Y uxuan Prudence is Mr. Xiang, holding
2.51% partnership interests therein. Y uxuan Innovation, as a limited partner of
Y uxuan Prudence, holds 8.74% partnership interests therein. The remaining 88.75%
partnership interests in Y uxuan Prudence are held by 48 limited partners who are
former or current employees of our Group, among whom, Mr. Zeng Di, our
executive Director, Ms. Zhu Y ue, Ms. Duan Ting, Mr. Zhang Denghui, our
Supervisors, holds 13.45%, 4.63%, 1.75% and 1.75% partnership interests therein,
respectively. None of the other limited partners of Y uxuan Prudence hold more than
5% partnership interests therein.
 Yuxuan Progress : The general partner of Y uxuan Progress is Mr. Xiang, holding
0.04% partnership interest therein. The remaining 99.96% partnership interests in
Y uxuan Progress are held by 43 limited partners who are current employees of our
Group, among whom, NI Y uanying (Ⴣᆦ) and QIN Kang ( ॢੰ) hold 8.82% and
5.20% partnership interests therein, respectively. None of the other limited partners
of Y uxuan Progress hold more than 5% partnership interests in Y uxuan Progress.
 Yuxuan Growth : The general partner of Y uxuan Growth is Mr. Xiang, holding
0.48% partnership interest therein. Y uxuan Speed, as a limited partner of Y uxuan
Growth, holds 15.36% partnership interests therein. The remaining 84.16%
partnership interests in Y uxuan Growth are held by 37 limited partners who are
current employees of our Group, among whom, Y ANG Ruixing (݋JIN Huan
(◽ᛇ), Y AN Hao (ᘌೱ) and Y ANG Jin ( เආ) hold 6.78%, 6.03%, 6.03% and 5.28%
partnership interests therein, respectively. None of the other limited partners of
Y uxuan Growth hold more than 5% partnership interests in Y uxuan Growth.
 Yuxuan Innovation : The general partners of Y uxuan Innovation is Mr. Xiang,
holding 0.0004% partnership interest therein. The remaining 99.9996% partnership
interests in Y uxuan Innovation are held by 11 limited partners who are current
employees of our Group, among whom, Mr. Qi Jixiang ( ᄁΛୂ), our deputy general
manager and senior product R&D director, Andreas Kloo, W ANG Bingfan ( ˮΏɭ),
ZENG Y ang (ݱY AO Wei (۾ۼW ANG Jinming (თ), YUAN Jiaxin ( ঺
ؚY ANG Jin ( เආ) and BI Chang ( ଭ࿫), hold 17.66%, 17.56%, 14.13%,
8.83%, 8.83%, 8.83%, 7.06%, 7.06% and 5.30% partnership interests therein,
respectively. None of the other limited partners of Y uxuan Innovation hold more
than 5% partnership interests in Y uxuan Innovation.
 Yuxuan Speed : The general partner of Y uxuan Speed is Mr. Xiang, holding 0.001%
partnership interest in Y uxuan Speed. The remaining 99.999% partnership interests
in Y uxuan Speed are held by Mr. Taoyue Zhang, the general manager of FS U.S.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(b) Administration
The Employee Incentive Schemes shall be reviewed by the Board and approved by the
Shareholders. Subject to the authorization from the executive Directors or the Shareholders, a
working group (“ Working Group ”), which is appointed by executive Directors, shall be
responsible for the implementation of the Employee Incentive Schemes.
(c) Participants
The participants (“ Participants ”) of the Employee Incentive Schemes shall be an
employee of our Group who serves as directors, senior management, core technicists or other
important employees as deemed by the Working Group.
(d) Term
The employee Incentive Schemes are valid for ten years since adoption, subject to
termination by the Shareholders as provided under the Employee Incentive Schemes.
(e) Shares under the Employee Incentive Schemes
As of the Latest Practicable Date, a total of 16,231,373 Shares were held by Y uxuan
Prudence, Y uxuan Progress and Y uxuan Growth. We do not expect to grant additional
partnership interest or Shares as incentive under the Employee Incentive Schemes.
Immediately following completion of the Global Offering, the aggregate number of Shares
underlying the Employee Incentive Schemes remain as 16,231,373 representing 4.06% of the
total issued Shares (without taking into consideration the exercise of Over-allotment Option).
As a result, the Employee Incentive Schemes will not cause any dilution of the shareholding
of our Shareholders immediately after the Global Offering. For further details on the interest
of our connected persons granted under the Schemes, see “5. Employee Incentive Schemes —
(a) Employee Incentive Platforms.”
(f) Transferability
Before the expiry of a 48-month period following the completion of the Listing (the
“Lock-up Period ”), Participants shall not in any way dispose the partnership interests held by
him/her, whether by way of transfer, pledge, debt repayment, or entrustment management or
any other events which may results in change of beneficial owners.
During the Lock-up Period, the general partners of the employee incentive platforms may
repurchase or designate a third party who is qualified to be a Participant to purchase part or
all of the partnership interests granted to a Participant in the events, including (i) mutual
termination of the employment contract between the Participant and our Company; (ii)
expiration of the employment contract between the Participant and our Company, with neither
wishing to renew the contract; (iii) the retirement of the Participant without being rehired; (iv)
termination of the employment contract due to the Participant’s loss of ability to work; (v) the
APPENDIX V STATUTORY AND GENERAL INFORMATION
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Participant violates laws or administrative regulations, resulting in significant economic loss
to the Company; (vi) the Participant engages in serious dereliction of duty, abuse of power,
bribery etc. resulting in significant damage to the Company; (vii) the Participant engages in
other serious violations of the Articles of Association or rules of our Company etc.
6. OTHER INFORMATION
A. Estate Duty
We have been advised that no material liability for estate duty under the PRC law is likely
to fall upon our Company or any member of our Group.
B. Litigation
As of the Latest Practicable Date, we were not involved in any material litigation,
arbitration or administrative proceedings, and so far as our Directors are aware, no such
material litigation, arbitration or administrative proceedings are pending or threatened against
any member of our Group.
C. Joint Sponsors
Each of the Joint Sponsors has declared its independence pursuant to Rule 3A.07 of the
Listing Rules.
The Joint Sponsors have made an application on our behalf to the Listing Committee for
listing of, and permission to deal in, our H Shares, including any Offer Shares which may be
issued pursuant to the exercise of the Over-allotment Option. All necessary arrangements have
been made to enable the H Shares to be admitted into CCASS.
We have entered into an engagement agreement with the Joint Sponsors, pursuant to
which we agreed to pay a total amount of US$500,000, US$300,000 and US$200,000
respectively to each of China International Capital Corporation Hong Kong Securities Limited,
China Securities (International) Corporate Finance Company Limited and China Merchants
Securities (HK) Co., Limited for acting as Joint Sponsors to our Company in the Global
Offering.
D. Compliance Advisor
We have appointed Rainbow Capital (HK) Limited as our compliance advisor in
compliance with Rule 3A.19 of the Listing Rules.
E. Preliminary Expenses
As of the Latest Practicable Date, our Company has not incurred material preliminary
expenses.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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F. Promoters
The promoters of our Company are Mr. Xiang, Fupeng No. 3, Fupeng No. 8, Mr. Wu
Dunxiang ( ю౱Σ), Haitong Investment, Y uxuan Prudence, Shenzhen Grandway Capital
Management Co., Ltd., Hangzhou Mingcheng Zhihui Phase I Equity Investment Partnership
(Limited Partnership), Taiya Investment, Zhuhai H&S, Lafang No. 7, Herun Investment,
Y uxuan Progress, Y uxuan Growth, Mr. Chen Zhiwei, Xiamen H&S, Shenzhen Chiyu, Ms. Gong
Cuihua, Grandway Investment, Mr. Chen Shaofeng and Mr. Peng Chao.
Save as disclosed in this prospectus, within the two years immediately preceding the date
of this prospectus, no cash, securities or other interest have been paid, allotted or given to the
above promoters in connection with the Global Offering or related transactions in this
prospectus.
G. Qualification of Experts
The qualifications of the experts, as defined under the Listing Rules, who have given their
opinions or advice in this prospectus, are as follows:
Name Qualification
China International Capital
Corporation Hong Kong Securities
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation to conduct Type 1
(dealing in securities), Type 2 (dealing in
futures contracts), Type 4 (advising on
securities), Type 5 (advising on futures
contracts) and Type 6 (advising on corporate
finance) regulated activities under the SFO
China Securities (International)
Corporate Finance Company
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation to conduct Type 1
(dealing in securities) and Type 6 (advising on
corporate finance) regulated activities under the
SFO
China Merchants Securities (HK)
Co., Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation to conduct Type 1
(dealing in securities), Type 2 (dealing in
futures contracts), Type 4 (advising on
securities), Type 6 (advising on corporate
finance) and Type 9 (asset management)
regulated activities under the SFO
Deloitte Touche Tohmatsu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Public Interest
Entity Auditors registered in accordance with
the Accounting and Financial Reporting Council
Ordinance
Zhong Lun Law Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC legal advisor
K&L Gates LLP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118U.S. legal advisor
Jones Lang LaSalle Corporate
Appraisal and Advisory Limited /H1118/H1118/H1118
Independent property valuer
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
KPMG Advisory (China) Limited
Beijing Branch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Transfer pricing advisor
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-22 –


--- page 533 ---
H. Consents of Experts
Each of the experts as referred to in “Statutory and General Information — 6. Other
Information — G. Qualification of Experts” has given, and has not withdrawn, its respective
written consents to the issue of this prospectus with the inclusion of its reports and/or letter
and/or opinion and/or the references to its name included herein in the form and context in
which it is respectively included.
As of the Latest Practicable Date, none of the experts named above has any shareholding
interests in any member of our Group or the right (other than the penal provisions) of sections
44A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as
applicable.
I. Taxation of Holders of H Shares
The sale, purchase and transfer of H shares are subject to Hong Kong stamp duty if such
sale, purchase and transfer are effected on the H share register of members of our Company,
including in circumstances where such transaction is effected on the Stock Exchange. The
stamp duty is charged to each of the seller and purchaser at the ad valorem rate of 0.1% of the
consideration for, or (if higher) the fair value of the H Shares being sold or transferred. In other
words, a total of 0.2% is currently payable on a typical sale and purchase transaction of the
H Shares. In addition, a fixed duty of HK$5 is charged on each instrument of transfer (if
required).
J. No Material Adverse Change
Save as disclosed in this prospectus, our Directors confirm that there has been no material
adverse change in our financial or operational position since September 30, 2025, being the end
date of our latest audited financial statements, and up to the Latest Practicable Date.
K. Binding effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all 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.
L. Related Party Transactions
Within the two years immediately preceding the date of this prospectus, we have entered
into the related party transactions as described in Note 43 to the financial information in the
Accountant’s Report set out in Appendix I.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-23 –


--- page 534 ---
M. Agency Fees or Commissions Paid or Payable
Save as disclosed in this prospectus, no commissions, discounts, brokerages or other
special terms have been granted in connection with the issue or sale of any capital of any
member of our Group within the two years preceding the date of this prospectus.
N. Miscellaneous
Save as disclosed in this prospectus:
(a) within the two years immediately preceding the date of this prospectus, we have not
issued or agreed to issue any share or loan capital fully or partly paid either for cash
or for a consideration other than cash;
(b) no share or loan capital of our Group, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) we have not issued or agreed to issue any founder shares, management shares or
deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(f) within the two years immediately preceding the date of this prospectus, no
commission, discount, brokerage or other special term has been granted in
connection with the issue or sale of any capital of our Company;
(g) there is no arrangement under which future dividends are waived or agreed to be
waived;
(h) there has been no interruption in our business which may have or have had a
significant effect on the financial position in the last 12 months; and
(i) 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.
O. Bilingual prospectus
The English language and Chinese language versions of this prospectus are being
published separately, in reliance upon the exemption provided by section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-24 –


--- page 535 ---
1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were, among other documents:
(a) a copy of each of the material contracts referred to in the section headed “Statutory
and General Information — 2. Further Information about Our Business —
A. Summary of Our Material Contracts” in Appendix V to this prospectus; and
(b) the written consents referred to under the paragraph headed “Statutory and General
Information — 6. Other Information — H. Consents of Experts” in Appendix V to
this prospectus.
2. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the website of the Stock
Exchange at www.hkexnews.hk and our Company’s website at www.fs.com up to and
including the date which is 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report of our Group prepared by Deloitte Touche Tohmatsu, the
text of which is set out in Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Group for the three years ended
December 31, 2024 and the nine months ended September 30, 2025;
(d) the report on the unaudited pro forma financial information of our Group prepared
by Deloitte Touche Tohmatsu, the text of which is set out in Appendix II to this
prospectus;
(e) the service contracts referred to in the paragraph headed “Statutory and General
Information — 3. Further Information about our Directors and Supervisors —
A. Particulars of Directors’ and Supervisors’ Contracts” in Appendix V to this
prospectus;
(f) a copy of each of the material contracts referred to in the paragraph headed
“Statutory and General Information — 2. Further Information about Our Business —
A. Summary of Our Material Contracts” in Appendix V to this prospectus;
(g) the written consents referred to under the paragraph headed “Statutory and General
Information — 6. Other Information — H. Consents of experts” in Appendix V to
this prospectus;
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– VI-1 –


--- page 536 ---
(h) the legal opinions issued by Zhong Lun Law Firm, our PRC Legal Advisor, in
respect of, among other things, the general corporate matters and the property
interests of our Group under PRC law;
(i) the legal opinions issued by K&L Gates LLP , our U.S. legal advisor, in respect of
certain aspects of our Group in the U.S.;
(j) the industry report issued by Frost & Sullivan, the summary of which is set forth in
the section headed “Industry Overview” in this prospectus;
(k) the property valuation report prepared by Jones Lang LaSalle Corporate Appraisal
and Advisory Limited, the text of which is set out in Appendix III to this prospectus;
(l) the transfer pricing report prepared by KPMG Advisory (China) Limited Beijing
Branch;
(m) the PRC Company Law, PRC Securities Law and Overseas Listing Trial Measures
together with their unofficial English translations.
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– VI-2 –


--- page 537 ---
深圳市飛速創新技術股份有限公司
FS.COM Limited
