--- page 1 ---
Joint Sponsors, Sponsor - Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
SHUANGDENG GROUP CO., L TD.
雙登集團股份有限公司
A joint stock company incorporated in the People’s Republic of China with limited liability
Stock Code: 06960
Glob/a.altl Offer/i.roundn/g.alt


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
SHUANGDENG GROUP CO., LTD.
雙登集團股份有限公司
(A joint stock company inc orporated in the People ’s Republic of China with limited liability)
Global Offering
Number of Offer Shares under the
Global Offering
: 58,557,000 H Shares (subject to the Over-
allotment Option)
Number of Hong Kong Offer Shares : 5,856 ,000 H Shares (subject to reallocation)
Number of International Offer Shares : 52,701,000 H Shares (subject to reallocation and
the Over-allotment Option)
Offer Price : HK$14.51 per H Share, plus brokerage of 1.0%,
SFC transaction levy of 0.0027%, Hong Kong
Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015% (payable
in full on application in Hong Kong dollars
and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 6960
Joint Sponsors, Sponsor-Overall Coor dinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited
take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Appendix VII – Documents Delivered to the
Registrar of Companies 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 and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The
Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this
prospectus or any other documents referred to above.
The Offer Price will be HK$14.51 per Offer Share unless otherwise announced.
The Overall Coordinators, for themselves and on behalf of the Underwriters, may, where considered appropriate and with the consent of our
Company, reduce the number of Hong Kong Offer Shares that is stated in this prospectus 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 will
be published on the website of our Company at www.shuangdeng.com.cn 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, please refer to the sections headed ‘‘Structure of the Global
Offering ’’and ‘‘How to Apply for Hong Kong Offer Shares ’’in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by Overall Coordinators
(for themselves and on behalf of the Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. Please refer to the section headed
‘‘Underwriting ’’in this prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may
not be offered, sold, pledged or transferred within the United States, except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S. Securities Act and in accordance with any applicable U.S. state securities laws. The Offer Shares may be
offered and sold only outside the United States in offshore transactions in reliance on Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this
prospectus to the public in relation to the Hong Kong Public Offering. This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk and our website at www.shuangdeng.com.cn.
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
August 18, 2025
IMPORTANT


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic app lication process for the Hong Kong Public
Offering. We will not provide printed copies o f this prospectus to the public in relation to
the Hong Kong Public Offering.
This prospectus is available at the webs ite of the Hong Kong Stock Exchange at
www.hkexnews.hk under the ‘‘HKEXnews > New Listings > New Listing Information ’’
section, and our website at www.shuangdeng.c om.cn. If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online through the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who is a
HKSCC Participant to give electroni c application instructions via HKSCC ’sF I N I
system to apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of this prospectus are
identical to the printed prospectus as register ed with the Registrar of Companies in Hong Kong
pursuant to Section 342C of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses above.
Please refer to the section headed ‘‘How to Apply for Hong Kong Offer Shares ’’ in this
prospectus for further details of the procedures through which you can apply for the Hong
Kong Offer Shares electronically.
IMPORTANT
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--- page 4 ---
Your application through the White Form eIPO service or the HKSCC EIPO channel
must be for a minimum of 500 Hong Kong Offer Shares and in one of the numbers set out in
the table.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund
your application based on the amount specified by your broker or custodian, as determined
based on the applicable laws and regulations in Hong Kong.
If you are applying through the HKSCC EIPO channel, your broker or custodian may
require you to pre-fund your application in such amount as determined by the broker or
custodian , based on the applicable laws and regulations in Hong Kong. You are responsible
for complying with any such pre-funding requirement imposed by your broker or custodian
with respect to the Hong Kong Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
HK$ HK$ HK$ HK$
500 7,328.17 6,000 87,938.00 40,000 586,253.33 400,000 5,862,533.35
1,000 14,656.33 7,000 102,594.33 45,000 659,535.00 500,000 7,328,166.68
1,500 21,984.50 8,000 117,250.66 50,000 732,816.67 600,000 8,793,800.01
2,000 29,312.66 9,000 131,907.01 60,000 879,380.01 700,000 10,259,433.35
2,500 36,640.83 10,000 146,563.34 70,000 1,025,943.33 800,000 11,725,066.68
3,000 43,969.01 15,000 219,845.01 80,000 1,172,506.67 900,000 13,190,700.01
3,500 51,297.17 20,000 293,126.68 90,000 1,319,070.00 1,000,000 14,656,333.36
4,000 58,625.34 25,000 366,408.33 100,000 1,465,633.34 1,500,000 21,984,500.03
4,500 65,953.50 30,000 439,689.99 200,000 2,931,266.66 2,000,000 29,312,666.70
5,000 73,281.67 35,000 512,971.66 300,000 4,396,900.00 2,928,000
(1) 42,913,744.05
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your applicatio n is successful, brokerage will be pa id to the Exchange Participants (as
d e f i n e di nt h eL i s t i n gR u l e s )a n dt h eS F Ct r a n s a c t i o nl e v y ,t h eS t o c kE x c h a n g et r a d i n gf e ea n dA F R C
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
No application for any other number of Hong Kong Offer Shares will be considered and
any such application is liable to be rejected.
IMPORTANT
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If there is any change in the f ollowing expected timetable (1) of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published the websites of the Stock
Exchange at www.hkexnews.hk and our Company at www.shuangdeng.com.cn .
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s ...........................9 : 0 0a . m .o n
Monday, August 18, 2025
Latest time to complete electronic applications
under White Form eIPO service through
the designated website www.eipo.com.hk (2) ......................1 1 : 3 0a . m .o n
Thursday, August 21, 2025
Application lists open (3) ....................................1 1 : 4 5a . m .o n
Thursday, August 21, 2025
Latest time to (a) lodge completing payment
of White Form eIPO applications
by effecting internet banking Transfers(s)
or PPS payment transfer(s) and (b) giving
electronic application instructions
to HKSCC (4) ......................................... 1 2 : 0 0n o o no n
Thursday, August 21, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions via FINI to apply for the Hong Kong Offer Shares on your
behalf, you are advised to contact your broker or custodian for the latest time for giving such
instructions which may be different from the latest time as stated above.
Application lists close (3) .................................... 1 2 : 0 0n o o no n
Thursday, August 21, 2025
Announcement of the level of indications of
interest in the International Offering,
the level of applications in the Hong Kong
Public Offering and the basis of
allocations of the Hong Kong Offer Shares to
be published on the website of our Company
at www.shuangdeng.com.cn
(5)
and the website of the Stock Exchange
at www.hkexnews.hk ............................ n ol a t e rt h a n1 1 : 0 0p . m .o n
Monday, August 25, 2025
EXPECTED TIMETABLE
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The results of allocations in the Hong Kong P ublic Offering (with successful applicants ’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 the announcement to be posted on
websites of the Stock Exchange at
www.hkexnews.hk and our Company ’s
website at www.shuangdeng.com.cn ................... n ol a t e rt h a n1 1 : 0 0p . m .o n
Monday, August 25, 2025
from the designated results of allocations
website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a ‘‘search by ID ’’f u n c t i o nf r o m...........................1 1 : 0 0p . m .o n
Monday, August 25, 2025 to
12:00 midnight on
Sunday, August 31, 2025
 from the allocation results telephone
enquiry by calling +852 2862 8555
b e t w e e n9 : 0 0a . m .a n d6 : 0 0p . m .o n ...................T u e s d a y ,A u g u s t2 6 ,2 0 2 5 ,
Wednesday, August 27, 2025,
Thursday, August 28, 2025
and Friday, August 29, 2025
For those applying through HKSCC EIPO channel,
y o um a ya l s oc h e c kw i t hy o u rb r o k e ro rc u s t o d i a nf r o m ................. 6 : 0 0 p . m .o n
Friday, August 22, 2025
H Share certificates in respect of wholly
or partially successful applications to
be dispatched or deposited into
CCASS on or before (6) ........................... M o n d a y ,A u g u s t2 5 ,2 0 2 5
White Form e-Refund payment
instructions/refund checks in respect
of wholly or partially unsuccessful applications
to be dispatched/collected on or before (7)(8) ............... T u e s d a y ,A u g u s t2 6 ,2 0 2 5
Dealings in H Shares on the Stock Exchange to
c o m m e n c ea t...........................................9 : 0 0a . m .o n
Tuesday, August 26, 2025
EXPECTED TIMETABLE
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T h ea p p l i c a t i o nf o rt h eH o n gK o n gO f f e rS h ares will commence on Monday, August 18,
2025 through Thursday, August 21, 2025. For details on the payments and refund
arrangements, see ‘‘How to Apply for Hong Kong Offer Shares ’’ in this prospectus.
Applicants should be aware that the dea lings in H Shares on the Stock Exchange are
expected to commence on Tuesday, August 26, 2025.
(1) Unless otherwise stated, all dates and times refer to Hong Kong dates and times.
(2) You will not be permitted to s ubmit your application under the White Form eIPO service through the designated
website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already
submitted your application and obtained an application reference number from the designated website prior to
11:30 a.m., you will be permitted to cont inue the application pro cess (by completing pay ment of application
monies) until 12:00 noon on the last day for submittin g applications, when the ap plication lists close.
(3) If there is/are Severe Weat her Signal(s) (as defined in ‘‘H o wt oA p p l yf o rH o n gK o n gO f f e rS h a r e s’’)i nf o r c ei n
Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, August 21, 2025, the application lists will
not open and will close on that day. For details, see ‘‘How to Apply for Hong Kong Offer Shares – (E) Severe
Weather Arrangements ’’in this prospectus.
(4) For details, see ‘‘How to Apply for Hong Kong Offer Shares – (A) Applications for Hong Kong Offer Shares – 2.
Application Channels ’’in this prospectus.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) H Share certificates will only be come valid evidence of title at 8:00 a.m. on the Listing Date provided that the
Global Offering has become unconditional and the right of termination described in ‘‘Underwriting – Underwriting
Arrangements and Expenses – Hong Kong Public Offering – Grounds for Termination ’’ has not been exercised.
Investors who trade Shares on the basis of publicly available allocation details prior to the receipt of H Share
certificates or prior to the Share certificates becoming valid evidence of title do so e ntirely at their own risk.
(7) White Form e-Refund payment instructions/refund cheques will be issued in respec t of wholly or partially
unsuccessful applications pursuant to the Hong Kong Offering. Part of the applicant ’s Hong Kong identity card
number or passport number, or, if the application is made by joint applicants, part of the Hong Kong identity card
number or passport number of the first-named applicant, provided by the applicant(s) may be printed on the refund
check, if any. Such data would also be transferred to a third party for refund purposes. Banks may require
verification of an applicant ’s Hong Kong identity card numb er or passport number befor e encashment of the refund
check. Inaccurate completion of an applicant ’s Hong Kong identity card number or passport number may invalidate
or delay encashment of the refund check.
(8) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed ‘‘How to Apply for Hong Kong Offer Shares – (D) Dispatch/Collection of H Share Certificates and
Refund of Application Monies ’’in this prospectus for details.
EXPECTED TIMETABLE
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Applicants who have applied through the White Form eIPO service and paid their app lications monies through
single bank accounts may have refund monies (if any) dispatched to the bank account in the form of White Form
e-Refund payment instructions. Applicants who have applied through the White Form eIPO service and paid their
application monies through multiple bank accounts may have refund monies (if any) dispatched to the address as
specified in their application ins tructions in the form of refund checks by ordinary post at their own risk.
Further information is set out in the section headed ‘‘How to Apply for Hong Kong Offer Shares – (D) Dispatch/
Collection of H Share Certificates and Refund of Application Monies. ’’
The above expected timetable is a summary only. For details of the structure of the Global
Offering, including its conditions, and the pro cedures for applications for Hong Kong Offer
Shares, see ‘‘Structure of the Global Offering ’’and ‘‘How to Apply for Hong Kong Offer Shares ’’
in this prospectus.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proc eed. In such case, the 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 ot her 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 n ot 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 jurisd ictions pursuant to registration with or
authorization by the relevant securities regu latory authorities or an exemption therefrom.
You should rely only on the information c ontained 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 informati on or representation not contained nor made
in this prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Sponsor-Overall Coordinator s, the Joint Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunne rs, the Joint Lead Managers, the Capital
Market Intermediaries, 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. Inf ormation contained on our website
www.shuangdeng.com.cn does not form part of this prospectus.
Page
Expected Timetable .......................................................... i i i
Contents .................................................................... v i i
Summary .................................................................... 1
Definitions ................................................................... 2 6
Glossary of Technical Terms .................................................. 4 2
Forward-looking Statements .................................................. 4 8
CONTENTS
– vii –


--- page 10 ---
Page
Risk Factors ................................................................. 5 0
Waivers from Strict Compliance with the Listing Rules .......................... 1 0 0
Information about this Prospectus and the Global Offering ...................... 1 0 4
Directors, Supervisors and Parties Involved in the Global Offering ............... 1 0 8
Corporate Information ....................................................... 1 1 7
Industry Overview ........................................................... 1 2 0
Regulatory Overview ......................................................... 1 4 1
History, Development and Corporate Structure ................................. 1 5 4
Business ..................................................................... 1 8 1
Directors, Supervisors and Senior Management ................................. 2 8 0
Relationship with Our Controlling Shareholders ................................ 2 9 7
Connected Transactions ...................................................... 3 0 1
Substantial Shareholders ...................................................... 3 1 0
Share Capital ................................................................ 3 1 2
Cornerstone Investor ......................................................... 3 1 6
Financial Information ........................................................ 3 2 1
Future Plans and Use of Proceeds ............................................. 3 9 9
Underwriting ................................................................ 4 0 4
Structure of the Global Offering ............................................... 4 2 0
H o wt oA p p l yf o rH o n gK o n gO f f e rS h a r e s..................................... 4 3 0
CONTENTS
– viii –


--- page 11 ---
Page
Appendix I – Accountants ’ Report ....................................... I - 1
Appendix II – Unaudited Pro Forma Financial Information ................. II-1
Appendix III – Taxation and Foreign Exchange ............................ I II-1
Appendix IV – Summary of Principal Legal and Regulatory Provisions ....... I V - 1
Appendix V – Summary of Article of Association .......................... V - 1
Appendix VI – Statutory and General Information ......................... V I - 1
Appendix VII – Documents Delivered to the R egistrar of Companies and
Available on Display .................................... V II-1
CONTENTS
– ix –


--- page 12 ---
This summary aims to give you an overview of the information contained in this
p r o s p e c t u sa n di sq u a l i f i e di ni t se n t i r e t yb y ,a n ds h o u l db er e a di nc o n j u n c t i o nw i t h ,t h e
more detailed information and financial information appearing elsewhere in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you and we urge you to read the entire prospectus carefully before making
your investment decision. There are risks associated with any investment. Some of the
particular risks in investing in the Offe r Shares are set out in the section headed ‘‘Risk
Factors ’’ in this prospectus. You should read that section carefully before you decide to
invest in the Offer Shares.
OVERVIEW
We are a leading company in energy storage business for big-data and telecommunication
industries. We focus on the design, R&D, manufacturing, and sales of energy storage batteries
and systems.
As of December 31, 2024, we have served five of the world ’s top ten telecom operators and
equipment manufacturers, nearly 30% of the world ’s top 100 telecom operators and equipment
manufacturers, and all of China ’s top five telecom operators and equipment manufacturers. We
have served 80% of top 10 Chinese self-owned data center companies and 90% of top 10 Chinese
third-party data center companies. We have served our top five customers in 2022, 2023 and 2024
for an average of over ten years. According to F rost & Sullivan, in 2024, we ranked the first
among global telecom and data center energy s torage battery providers in terms of shipment
volume, achieving a market share of 11.1%. A ccording to Frost & Sullivan, in 2024, we ranked
the twelfth among global energy storage battery providers in terms of added installed capacity,
achieving a market share of 2.5%.
Notes:
(1) Top 100 telecom operators and equipment manufacturers are ranked based on the top telecom equipment
manufacturers ranking integ rated by Frost & Sullivan fro m multiple open sources, a nnual report, and research
database of Frost & Sullivan, and the top 100 telecom operators ranking provided by Dgtl Infra, a platform for
digital infrastructure intelligence providing data on telecom, data centers, fiber, etc. The top 100 telecom operators
and equipment manufacturers are selected based on several quantifiable factors including sales revenue, market
capitalization, number of subscribers, number of employees, etc.
(2) Based on the definition provided b y China Academy of Information and C ommunications Tech nology (CAICT),
self-owned data center companies are companies build, own and operate thei r own data centers, mainly telecom
operators and cloud services providers. Top 10 Chinese self-owned data center companies are ranked based on
CAICT, International Data Corporation (IDC) and research database of Frost & Sullivan. Top 10 Chinese self-
owned data center companies are selected based on several quantifiable factors including sales revenue, service
range, investment in research and development, etc.
(3) Top 10 Chinese third party data center companies are ranked based on ‘‘Top 10 Data Center Service Providers in
China in 2024 ’’ launched by CAICT. Top 10 Chinese third party data center companies are selected based on
factors including overall scale, capacity building, financial status, international layout, etc.
SUMMARY
– 1 –


--- page 13 ---
Our Market Opportunity
The global energy market is undergoing a profound transformation from fossil fuels to
renewable energy. The evolving global trend toward electrification further drives significant
collaboration among new energy, energy stor age, and smart grids, promoting sustainable
development of green economy and rapid growth of the global energy storage market. According
to Frost & Sullivan, global energy storage cumula tive installed capacity is expected to increase
from 746.8 GWh in 2024 to 6,810.1 GWh in 2030.
 Telecom base stations: In recent years, along with the rapid global expansion of 5G
telecom base stations, the upgrading and development of telecommunication
technology are expected to continue to drive robust demand for infrastructure
development. According to Frost & Sullivan , the cumulative number of global telecom
base stations is expected to increase from 21.0 million units in 2024 to 43.9 million
units in 2030, which will drive the global ad ded installed capacity of telecom energy
s t o r a g et or i s ef r o m4 3 . 9G W hi n2 0 2 4t o1 0 0 . 2G W hi n2 0 3 0 .
 Data centers: The advent of the AI era is also accelerating the industry trend towards
large-scale and high-computing power data centers. According to Frost & Sullivan, the
proportion of global electricity consump tion by data centers is expected to increase
from 4.0% in 2024 to 10.1% in 2030. During this process, driven by global pursuit of
clean and secure energy source, there has been a rapid growth in market demands for
energy storage products. A ccording to Frost & Sullivan, t he global added installed
capacity of data center energy storage is e xpected to increase from 16.5 GWh in 2024
to 209.4 GWh in 2030.
Our Journey and Strategic Evolution
Founded in 2011 in Taizhou, Jiangsu Provinc e in China, we have demonstrated reliability
and high quality of our batteries and services over t he past decade. We have c ontinually expanded
our business, established a strong global reputation, and built brand influence, laying a solid
foundation for our long-term sustainable development.
 Energy storage for telecom base stations : At the outset, we entered the energy
storage sector for telecom base stations, establishing long-term cooperation
relationship with leading telecom operators and equipment manufacturers in China,
including China Mobile, China Unicom, China Telecom, and China Tower. We have
continuously expanded our overseas presence, and have successfully entered into
supply chains of many world-renowned enterprises to provide energy storage battery
products for telecom base stations, including Ericsson, Vodafone, and Telenor.
According to Frost & Sullivan, in 2024, we ranked first in terms of shipment volumes
in the global telecom base station energy sto rage market. In 2024, our market share in
the global telecom market reached 9.2%.
SUMMARY
– 2 –


--- page 14 ---
 Energy Storage for Data Centers : With the penetration and promotion of big data,
technologies, energy storage batteries for data centers have become essential products
f o re n s u r i n gd a t as e c u r i t ya n de n e r g ys e curity. In 2018, we keenly identified the
market demands of the internet era and began establishing cooperation relationship
with large tech companies and data center operators. Since 2018, we have successively
collaborated with Alibaba, JD.com, Baidu, GDS, and ChinData. In 2022, we
innovatively developed the first large-scale dual-function energy storage plan
incorporating ‘‘backup power + power storage and management ’’ for data centers in
China, and supplied our products to the Xiong ’an Urban Supercomputing Center,
contributing its successful achievement of being recognized as national green data
center. Up to the Latest Practicable Date, our energy storage products have been used
in hundreds of data centers. According to Frost & Sullivan, in 2024, we ranked first
among Chinese companies in terms of shipment volumes in the global data center
energy storage market. In 2024, our market share in the global data center market
reached 16.1%.
 Electrical Energy Storage Settings: Leveraging advanced technology and
manufacturing capacity, we are committed to expanding our presence in the electrical
energy storage settings, where we have succ essfully captured market opportunities
brought up by sectors in large-scale power grid energy storage, and commercial and
residential storage settings. In particular , we have participated in, as a key supplier of
energy storage products and system, the development of the State Grid Zhangbei
Energy Storage System Project, which st arted operation since 2011 as the world ’s
largest new energy power station in terms of in stalled capacity integrating wind power,
solar PV, energy storage systems, and intelligent power transmission as of the Latest
Practicable Date. We have subs equently launched energy sto rage projects across China,
as well as in Cambodia, Mongolia, Guinea and Central Africa. In 2016, we began
developing energy storage batteries in co mmercial and residential settings. As a well-
recognized brand, our products are sold in Europe, Africa, Asia, and 18 other countries
and regions. According to Frost & Sullivan, in 2024, we are one of the leading
Chinese companies in terms of shipment volume of energy storage batteries in
commercial and residential settings.
OUR PRODUCTS
During the Track Record Period, we derived revenues mainly from sales of energy storage
batteries, including both lithium-ion batteries and l ead-acid batteries. Our lithium-ion batteries are
mainly lithium iron phosphate ( ‘‘LFP’’) batteries, the products line of which includes both
flexible packaging and square aluminum shell con figurations. Our lead-acid batteries include
absorbent glass mat batteries, gel batteries, and le ad-carbon batteries. Each type of our batteries
offers a comprehensive range of features and distinctive advantages, catering to our customers ’
diverse requirements in relation to their specific application scenarios under telecom base stations,
data centers and electrical energy storage settings.
SUMMARY
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Energy Storage Batteries for Telecom Base Station
Our energy storage batteries for telecom base stations serve as a vital safeguard against
power outages and shortages that could lead to network paralysis and communication disruptions,
and therefore ensure the reliable operation of telecom base stations. Additionally, our energy
storage batteries can be utilized to capitalize on the cost differences between peak and off-peak
electricity rates.
Energy Storage Batteries for Data Center
Our energy storage batteries applied in data cen ters provide robust defense against the risks
of power outages and shortages that can lead to network failures and service interruptions. In
addition to providing emergency power during o utages, our storage batteries also enable our
customers to optimize the energy usage and reduce utility cost of the data centers by taking
advantage of differences in electrici ty rates during peak and off-peak times.
Energy Storage Batteries for Electrical Energy Storage Settings
Our energy storage batteries fo r electrical energy storage se ttings cover both the power side
and the user side. On the generation side, our energy storage batteries can store excess energy
produced during low-demand periods and release it during peak times, effectively matching
electricity production with consum ption. On the grid side, these batteries alleviate congestion by
providing additional power during high demand, preventing overload and potential outages. For
user side, we provide lithium-ion energy storage ba tteries for the user side, including commercial
and residential setting.
Energy Storage Batteries for Other Settings
Our energy storage batteries for other settings p rimarily include UPS batteries and start-stop
batteries. Our uninterruptible power supply ( ‘‘UPS’’) batteries are designed to provide reliable
backup power during electrical outages for critical devices like computers and servers. Our start-
stop batteries are specifically designed fo r vehicles with start-stop functionality.
For details, see ‘‘Business — Our Products ’’in this prospectus.
SALES, MARKETING AND CUSTOMERS
During the Track Record Peri od, we primarily sold directly to end customers in China and
abroad. To expand the geographic coverage and consumer reach of our products, we complement
our direct sales with distribution network. As of December 31, 2022, 2023, 2024, and May 31,
2025, we had 124, 114, 106 and 29 distributors, respectively, which contributed to 10.4%, 13.8%,
7.2% and 4.4% of our total revenues in 2022, 2023 and 2024, and for the five months ended May
31, 2025, respectively.
SUMMARY
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We maintain a buyer-seller relationship with ou r distributors. We value the management of
our distributors, and maintain a good coopera tive relationship with them. During the Track
Record Period, to the best of our Directors ’ knowledge, all of our distributors were Independent
Third Parties, and none were controlled by our current or former employees. For details, see
‘‘Business — Sales, Marketing and Customers — Sales and Distribution ’’in this prospectus.
Our Customers
Leveraging our broad product portfolio featur ing various technological specifications
designed to serve diverse application scenarios and stringent customers ’ demands, as well as our
rich industry experience and technological capability to capture and solve evolving practical
challenges that our customers may encounter in their energy storage needs, we have established
and retained long-term relationship with custom ers with leading industry positions in China and
overseas.
The major customers of our energy storage batteries used for telecom base stations are
leading telecom operators and equipment manufact urers, including China Mobile, China Unicom,
China Telecom, China Tower, Ericsson, Vodafone, and Telenor. The major customers of our
energy storage batteries used for data centers are data center operators, such as Alibaba, JD.com,
Baidu, Chindata, and GDS. The major customers of our energy storage batteries used for
electrical energy storage settings are power st ations, power grids, commercial and household
users.
In 2022, 2023 and 2024, and the five months ended May 31, 2025, our five largest
customers in each period during the Track Record Period contributed 54.2%, 46.1%, 38.4% and
34.0%, respectively, to our total revenues in the same year. The revenue contribution of our five
largest customers decreased during the Track Record Period, primarily due to the decrease in
revenue contribution from the sales of batteri es used in telecom base stations while our largest
customers were mainly telecommu nication companies. The average selling price of batteries sold
to our top five customers decreased as a result of declined raw material prices and their reduced
market demand for our energy storage batteries, r esulting in the decreased revenue generated from
our five largest customers. Additionally, heighte ned market competition led to increased supplier
participation in the supply chains of certain maj or telecommunication cu stomers, resulting in the
declined revenue from our top five customers. Our single largest customer in each year/period
during the Track Record Period contributed 24.3%, 21.3%, 13.1% and 10.2%, respectively, to our
total revenues in the same year/period.
To the best knowledge of our Directors, each of our five largest customers in each year/
period during the Track Record Period was an Independent Third Party. For details, see
‘‘Business — Sales, Marketing and Customers — Our Customers ’’in this prospectus.
SUMMARY
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SUPPLIERS
We purchase almost all of our raw materials and key components from third-party suppliers
in China, including lithium iron phosphate, lead alloy, and lead ingots. We have established stable
relationships with our suppliers, enabling us to secure a consistent supply of raw materials at
competitive prices. This helps ensure our ability to produce and deliver high quality products on
time, meeting the needs of our customers.
During the Track Record Period, purcha se from our top five suppliers amounted to
RMB1,273.1 million, RMB1,243.7 million, RMB1,541.4 million and RMB801.8 million,
accounting for 42.3%, 43.8%, 47.9% and 50.3% of our total purchase for the corresponding
years, respectively. To the best knowledge of our D irectors, each of our five largest suppliers in
each year/period during the Track Record Period was an Independent Third Party. During the
Track Record Period, our single largest supplier amounted to 17.5%, 16.5%, 20.6% and 25.4% of
our total purchase amount for the corresponding year in 2022, 2023 and 2024, and the five
months ended May 31, 2025, respectively. For details, see ‘‘Business — Suppliers ’’ in this
prospectus.
OUR STRENGTHS
Our strengths include:
 Global leading storage battery company i n data center and telecom industries;
 R&D capabilities in high safety, cost efficiency and superior performance;
 Outstanding manufacturing a nd operational capabilities;
 High-quality customer base with trust and loyalty to our brand; and
 An experienced and visionary management team.
OUR STRATEGIES
Our strategies include:
 Further enhance and expand our energy storage business with customer-centric
approach;
 Further develop our data center business;
 Continue to invest in R&D; and
 Expand our global presence.
SUMMARY
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BUSINESS ACTIVITIES WITH CUSTOMERS IN RELEVANT REGIONS
During the Track Record Period, we had sold our Chinese-origin lithium-ion batteries and
lead-acid batteries directly to our customers in the Relevant Regions. To our best knowledge,
customers purchased our batteries mainly to be used for telecom base stations in Relevant
Regions. We believe these customers determined to choose our products mainly due to their
recognition on our product qua lities and market reputation.
The revenue generated from such sales to the Relevant Regions was approximately
RMB59.2 million, RMB84.0 million, RMB90.0 million and RMB8.0 million, representing
approximately 1.5%, 2.0%, 2.0% and 0.4% of our total revenue in 2022, 2023 and 2024 and the
five months ended May 31, 2025, respectively.
However, none of the Relevant Regions was a Comprehensively Sanctioned Country and
none of our customers located in the Relevan t Regions were identified on the Specially
Designated Nationals and Blocked Persons List maintained by OFAC or the relevant restricted
parties lists maintained by the European Union, Australia and the United Nations. While certain
customers were listed on the Entity List maintained by the BIS, all products sold to our customers
were Chinese-origin lithium-ion battery and lead- acid battery products th at does not subject to the
EAR.
Based on above mentioned factors, and as advised by our International Sanctions Legal
Adviser, our Directors believe that we are not subject to sanctions risk that could have a material
adverse effect on our transactions involving the Relevant Regions during the Track Record
Period, and our Directors do not foresee any material adverse effect to our business or operations
for continuing our business in relation to the Relevant Regions. Based on the above, nothing has
come to the attention of the Joint Sponsors that w ould cause them to cast reasonable doubt on the
views of our International Sanctions Legal Adviser and our Directors. For more details, please
refer to the sections headed ‘‘Risk Factors — Risks Relating to Our Business and Industry — We
could be adversely affected as a result of any sales we make to certain countries that are, or
become subject to, sanctions administered by th e United States, the European Union, the United
Kingdoms, the United Nations, Australia and other relevant sanctions authorities ’’ and ‘‘Business
— Business Activities with Customers in the Relevant Regions ’’in this prospectus.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financ ial data from our consolidated financial
information for the Track Record Pe riod, extracted from the Accountant ’s Report set out in
Appendix I to this prospectus.
SUMMARY
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Summary of Our Consolidated Statements of Profit or Loss
The following table sets forth our consolidated statements of profit or loss and other
comprehensive income for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Revenues . . . . . . . . . . . . . . . . . 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Cost of sales . . . . . . . . . . . . . . . (3,382,884) (83.1) (3,393,009) (79.7) (3,747,639) (83.3) (1,119,099) (80.3) (1,588,050) (85.1)
Gross profit ............... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9
Other income and gains. . . . . . . . . 50,614 1.2 77,718 1.8 115,584 2.6 37,727 2.7 40,533 2.2
Selling and marketing expenses . . . . (100,255) (2.5) (151,785 ) (3.6) (138,043) (3.1) (50,102) (3.6) (53,254) (2.9)
Administrative expenses . . . . . . . . . (126,516) (3.1) (162,748) (3.8) (156,470) (3.5) (50,506) (3.6) (45,672) (2.4)
Research and development expenses. . (100,676) (2.5) (112,803) (2.6) (110,478) (2.5) (44,089) (3.2) (55,249) (3.0)
Impairment losses on financial and
contract assets, net . . . . . . . . . . (22,607) (0.6) (6,347) (0.1) (19,181) (0.4) 3,908 0.3 (10) 0.0
Other expenses . . . . . . . . . . . . . . (21,467) (0.5) (34,145) (0.8) (20,169) (0.4) (5,663) (0.4) (11,556) (0.6)
Finance costs . . . . . . . . . . . . . . . (49,372) (1.2) (30,005) (0.7) (19,842) (0.4) (5,626) (0.4) (12,002) (0.6)
Share of profits and losses of an
a s s o c i a t e................ ( 6 4 7 ) ( 0 . 0 ) ( 4 7 5 ) ( 0 . 0 ) 4 2 8 0 . 0 2 9 6 0 . 0 3 2 0 . 0
Profit before tax ............ 318,670 7.8 446,178 10.5 402,712 9.0 161,031 11.5 141,380 7.6
Income tax expense . . . . . . . . . . . (37,645) (0.9) (60,975) (1.5) (49,381) (1.1) (21,339) (1.5) (4,677) (0.8)
Profit for the year ........... 281,025 6.9 385,203 9.0 353,331 7.9 139,692 10.0 126,703 6.8
Attributable to:
Owners of the parent . . . . . . . . 281,019 6.9 385,203 9.0 353,331 7.9 139,692 10.0 126,703 6.8
Non-controlling interests . . . . . . 6 0.0 ––––––––
Revenues
Revenues by Application Scenario
During the Track Record Period, we derived revenues from sales of our products, which
include lithium-ion battery and lead-acid battery to our customers. We also generated revenues
from others, which primarily represented sales of waste including lead slag, used batteries, and
electricity sales during the Track Record Per iod. Revenues increased from RMB4,072.5 million in
2022 to RMB4,259.8 million in 2023 and further in creased to RMB4,498.5 million in 2024, and
our revenues increased from RMB1,394.2 million in the five months ended May 31, 2024 to
RMB1,866.6 million in the five months ended M ay 31, 2025, which was primarily due to the
increase in revenues from sales of batteries used in data centers driven by the growing demand for
data storage and processing capabilities. For details, see ‘‘Financial Information — Year to Year
Comparison of Resu lts of Operations ’’ and ‘‘Financial Information — Period to Period
Comparison of Results of Operations ’’in this prospectus.
The following table sets forth a breakdown of our revenues by application scenario for the
years/periods indicated.
SUMMARY
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--- page 20 ---
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base Station . . . . . . . . . . 2,640,989 64.8 2,464,004 57.8 2,299,367 51.1 746,772 53.6 792,785 42.5
Data center . . . . . . . . . . . . . . . . 764,815 18.8 899,942 21.1 1,391,898 31.0 397,000 28.4 872,947 46.7
Electrical energy storage settings . . . 302,443 7.4 487,977 11.5 450,840 10.0 132,366 9.5 68,696 3.7
Other settings (1) . . . . . . . . . . . . . 281,906 7.0 339,863 8.0 261,105 5.8 86,570 6.2 80,555 4.3
Others (2) . . . . . . . . . . . . . . . . . . 82,327 2.0 67,991 1.6 95,312 2.1 31,477 2.3 51,625 2.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Notes:
(1) Primarily include uninterruptible power supply ( ‘‘UPS’’) batteries and start -stop batteries.
(2) Primarily include sales of waste including le ad slag, used batteries, and electricity sales.
The revenue we generated from sales of batteries used in telecom base stations decreased
from 2022 to 2024. Such decrease in our revenue from 2022 to 2023 was mainly due to the the
decrease in our sales volume of batteries used in telecom base stations from 4,252,809kWh in
2022 to 3,648,862kWh in 2023, ma inly resulting from the slowdown in the construction of new
5G telecom base stations in China. The decrease in revenue from 2023 to 2024 was primarily
attributable to the decrease in our average sellin g price of batteries used in telecom base stations
from RMB675.3/kWh in 2023 to RMB568.3/kWh in 2024 resulting from reduced cost of raw
materials, namely LFP. According to Frost & Su llivan, the construction of new 5G telecom base
stations in China experienced a decline from 2 022 to 2024, falling from 887 thousand units to
874 thousand units. As we generated the majority of our revenue of batteries used for telecom
base stations from our sales in China, which amounted to 76.7%, 69.2% and 71.8% of total
revenue of batteries used in telecom base stations in 2022, 2023 and 2024, respectively, our sales
volume of batteries used for telecom base stations decreased from 2022 to 2024. The slowdown in
the construction of new 5G telecom base stations fu rther intensified the market competition in the
telecom energy storage battery market, resulting i n our declined revenue generated from the sales
of batteries used in telecom base stations. The revenue we generated from sales of batteries used
in telecom base stations increased from RMB7 46.8 million in the five months ended May 31,
2024 to RMB792.8 million in the five months en ded May 31, 2025. The increase is primarily
related to increased sales volume of lithium-ion b atteries, as a result of increased market demand
for telecom base stations.
Sales Volume
During the Track Record Peri od, changes in sales volume of batteries were primarily
influenced by the demand dynamics within the industries where our batteries are applied, as well
as by the performance and competitiv e positioning of our batteries. Specifically, fluctuations in
sales volume were driven by the following key factors:

downstream demand , which is closely linked to the broader industry trends. See also
‘‘Industry Overview — Overview of the Global and China Energy Storage Market —
Supply-demand Dynamics of Ene rgy Storage Battery Products ’’in this prospectus;
SUMMARY
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--- page 21 ---
 our expansion strategy , particularly in the data center and electrical energy storage
markets, which contributed to an increase in battery sales as we targeted these growing
sectors. See also ‘‘Business — Our Strategies — Further Develop Our Data Center
Business ’’in this prospectus; and
 our global efforts to enhance market penetration , including expanding partnerships and
establishing a stronger intern ational presence. See also ‘‘Business — Our Strategies —
Expand Our Global Presence ’’in this prospectus.
Average Selling Price
The average selling price of our batteries was c ollectively influenced by multiple factors,
including ：
 Raw material costs: the average selling p rice of batteries was mainly affected by
fluctuations in the market price of key raw materials, such as the market price of
lithium carbonate and lead ingots. For ex ample, the lithium carbonate price has
declined over the past two years, enabling u s to lower the selling price of lithium-ion
batteries while maintaining profitability.
 Market price of lithium-ion and lead-acid batteries: the average selling price of our
batteries was primarily determined by the m arket prices of lithium-ion and lead-acid
batteries, which were largely affected by raw material costs as well as supply-demand
dynamics in the market. During the Track Record Period, the movement of our average
selling price was generally in line with the market price trends.
 Our pricing strategy: in addition to the mark et prices of raw materials and lithium-ion
and lead-acid batteries, we adopt a pricing strategy based on our development strategy,
business objectives, and market competition to maintain our leading position.
For our lithium-ion batteries, the average se lling price decreased from RMB979.2/kWh to
RMB698.6/kWh from 2023 to 2024, and it decreased from RMB841.1/kWh to RMB595.1/kWh
from the five months ended May 31, 2024 to the five months ended May 31, 2025, primarily due
to the decreases in the market price of lithium- ion batteries and the price of raw materials.
According to Frost & Sullivan, the market pric e of lithium-ion batteries decreased from
RMB1.09/Wh in 2023 to RMB0.63/Wh in 2024, and it decreased from RMB0.69/Wh to
RMB0.54/Wh from the five months ended May 31, 2024 to the five months ended May 31, 2025,
and the market price of lithium carbonate decr eased from RMB272.3 thousand per ton in 2023 to
RMB95.9 thousand per ton in 2024, and it decreased from RMB109.1 thousand per ton to
RMB74.8 thousand per ton from the five months ended May 31, 2024 to the five months ended
May 31, 2025. The average selling price of our lithiu m-ion batteries stayed relatively stable at
RMB948.3/Wh in 2022 and RMB979.2 in 2023, generally in line with the market trend.
SUMMARY
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--- page 22 ---
For our lead-acid batteries, the average s elling price remained relatively stable at
RMB506.7/kWh and RMB509.5/kWh in 2023 and 2 024. According to Frost & Sullivan, despite
rising raw materials costs of lead ingots, the market price of lead-acid batteries remained
relatively stable at RMB0.51/Wh and RMB0.54/Wh in 2023 and 2024, respectively. Given the
relatively stable market price of lead-acid batte ries, it is our business decision not to increase in
our selling price of lead-acid batteries to mainta in and promote leading market share in the energy
storage business for big data and telecommunication industries, especially the lead-acid batteries
applied in data centers, despite of the increased raw material costs. The average selling price of
our lead-acid batteries remained relatively s table at RMB490.3/Wh and RMB506.7/Wh in 2022
and 2023, generally in line with the market trend. The average selling price for our lead-acid
batteries increased from R MB496.0/kWh in the five mon ths ended May 31, 2024 to
RMB520.5/kWh in the five months ended May 31, 2025, primarily as a result of (i) our
improved recognition of our brand awareness and product quality and (ii) an increase in raw
material costs, particularly the prices of lead ingots and battery casings, which is in line with
industry trend, according to Frost & Sullivan.
During the Track Record Period, RMB66.6 million, RMB453.0 million, RMB256.5 million
and RMB85.6 million of revenue ge nerated from the sales of lithium-ion battery, and RMB296.8
million, RMB150.4 million, RMB608.4 million and RM B56.9 million of revenue generated from
the sales of lead-acid battery was adjusted based on our price adjustment mechanism in 2022,
2023, 2024 and the five months ended May 31, 2025, respectively. For details, see ‘‘Business —
Sales, Marketing and Customers — Pricing ’’in this prospectus.
The following table sets forth the average selling price and sales volume of our products by
application scenario for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
(kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh)
Telecom base station . . . . . . . . . . 4,252,809 621.0 3,648,862 675.3 4,046,291 568.3 1,272,619 586.8 1,484,726 534.0
Data center . . . . . . . . . . . . . . . . 1,397,252 547.4 1,636,033 550.1 2,656,366 524.0 757,797 523.8 1,655,325 527.4
Electrical energy storage settings . . . 329,448 918.0 482,182 1,012.0 597,686 754.3 157,956 838.0 86,450 794.6
Other settings* . . . . . . . . . . . . . . 613,421 459.6 739,265 459.7 546,812 477.5 198,543 436.0 150,357 535.8
Note:
* Primarily include UPS batteri es and start-stop batteries.
SUMMARY
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--- page 23 ---
Revenues by Product
Revenues were primarily derived from sale of lithium-ion batteries and lead-acid batteries
during the Track Record Period. While maintain ing and promoting our leading market positions in
offering lead-acid batteries and solutions for cus tomers leveraging our outstanding quality, strong
technological strength, and industry expertis e, we invested in the expansion of lithium-ion
batteries in response to growing market demand for more efficient and environmentally friendly
energy storage products. The following table sets forth a breakdown of our revenues by product
for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Lithium-ion battery . . . . . . . . . . . 1,568,531 38.5 1,854,556 43.5 1,495,978 33.3 435,600 31.2 457,479 24.5
Lead-acid battery. . . . . . . . . . . . . 2,421,622 59.5 2,337,230 54.9 2,907,232 64.6 927,108 66.5 1,357,504 72.7
Others* . . . . . . . . . . . . . . . . . . 82,327 2.0 67,991 1.6 95,312 2.1 31,477 2.3 51,625 2.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Note:
* Primarily include sales of waste including lead slag, used batteries, and electricity sales.
The revenue contribution of our lithium-ion battery increased from 38.5% in 2022 to 43.5%
in 2023, mainly due to the increase in demand of lithium-ion batteries and our effort of expanding
the market of our lithium-ion batteries. The reve nue contribution decreased from 43.5% in 2023
to 33.3% in 2024, primarily due to (i) a decrease in the absolute amount of revenues from
lithium-ion batteries, which decreased from R MB1,854.6 million in 2023 to RMB1,496.0 million
in 2024, and (ii) an increase in the absolute amount of revenues from lead-acid batteries from
RMB2,337.2 million in 2023 to RMB2,907.2 millio n in 2024. The revenue contribution of our
lithium-ion batteries decreased from 31.2% in the five months ended May 31, 2024 to 24.5% in
the five months ended May 31, 2025, primarily due to an increase in the absolute amount of
revenues from lead-acid batteri es from RMB927.1 million in the five months ended May 31, 2024
to RMB1,357.5 million in the five months ended May 31, 2025 as a result of the strong growth in
lead-acid battery sales driven by increasing m arket demand from data centers, while revenues
from lithium-ion batteries remained rela tively stable in respective periods.
The decrease in revenue generated in lithium- ion batteries from 2023 to 2024 was driven by
decrease in our average selling p rice. The average selling pri ce decreased from RMB979.2/kWh
in 2023 to RMB698.6/kWh in 2024, primarily due to the decreases in the market price of lithium-
ion batteries and the price of raw materials. Ac cording to Frost & Sullivan, the market price of
lithium-ion batteries decreas ed from RMB1.09 per Wh in 2023 t o RMB0.63 per Wh in 2024, and
the market price of lithium carbonate decreas ed from RMB272.3 thousand per ton in 2023 to
RMB95.9 thousand per ton in 2024. The sales vo lume of lithium-ion batteries increased from
1,894.0 MWh in 2023 to 2,141.5 MWh in 2024, primarily due to increase in demand of our
lithium-ion batteries. The revenue increased from RMB435.6 million in the five months ended
May 31, 2024 to RMB457.5 million in the five mo nths ended May 31, 2025 primarily due to an
increase in sales volume from 517,875 kWh in the five months ended May 31, 2024 to 768,679
kWh in the five months ended May 31, 2025, as a result of increased market demand for our
lithium-ion batteries.
SUMMARY
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--- page 24 ---
Revenues from sales of lead-acid batteries increased from RMB2,337.2 million in 2023 to
RMB2,907.2 million in 2024, primarily due to the i ncrease in sales volume of lead-acid batteries
from 4,612.3 MWh in 2023 to 5,705.7 MWh in 2024. The growth in sales volume of lead-acid
batteries outpaced the growth in sales volume of lithium-ion batteries in 2024, primarily due to
the market demand of lead-acid batteries, particularly for batteries used in data centers. According
to Frost & Sullivan, the added installed capacity of global data center energy storage increased
from 13.1 GWh in 2023 to 16.5 GWh in 2024, representing a CAGR of 26.0%. Currently, lead-
acid batteries, with their relatively mature technology and high safety levels compared to other
battery types, are suitable for multiple applicatio n scenarios in data centers. As a result, lead-acid
batteries accounted for more than 85.0% of the total added installed capacity of global data center
energy storage in 2024. However, driven by ren ewable energy initiatives, and advancements in
technology, the proportion of lithium-ion batteri es in the added installed capacity of the global
data center energy storage mar ket is expected to rise, according to Frost & Sullivan. Revenues
from sales of lead-acid batteries increased fro m RMB927.1 million in the five months ended May
31, 2024 to RMB1,357.5 million in the five months ended May 31, 2025. The increase was due to
(i) an increase in sales volume from 1,869.2 MWh in the five months ended May 31, 2024 to
2,608.2 MWh in the five months ended May 31, 2025, as a result of growing demand; (ii) an
increase in average selling price from RMB496 .0/kWh in the five months ended May 31, 2024 to
RMB520.5/kWh in the five months ended May 31, 2025, as a result of (i) improved recognition
of our brand awareness and product quality and (ii) an increase in raw material costs, particularly
the prices of lead ingots and battery casings, w hich is in line with industry trend, according to
Frost & Sullivan.
The following table sets forth the average se lling price and sales volume by product for the
years indicated. The sales volume of lithium-io n batteries showed steady growth over the years.
The sales volume of lithium-ion batteries in creased from 1,654.1 MWh in 2022 to 1,894.0 MWh
in 2023, and further to 2,141.5 MWh in 2024. The sales volume of our lead-acid batteries
decreased from 4,938.9 MWh in 2022 to 4,612.3 MWh in 2023, and increased from 4,612.3 MWh
in 2023 to 5,705.7 MWh in 2024. This growth in absolute sales volume from 2022 to 2024
reflects the increasing demand for our batteri es over the period. The average selling price of
lithium-ion batteries decreased from RMB979. 2/kWh in 2023 to RMB705.6/kWh in 2024 due to
the decrease in price of major raw materials. Ac cording to Frost & Sullivan, such fluctuation is
generally in line with the market trend.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
(kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh)
Lithium-ion battery . . . . . . . . . . . 1,654,073 948.3 1,894,000 979.2 2,141,497 698.6 517,875 841.1 768,679 595.1
Lead-acid battery. . . . . . . . . . . . . 4,938,858 490.3 4,612,342 506.7 5,705,658 509.5 1,869,222 496.0 2,608,179 520.5
For details, see ‘‘Financial Information — Year to Year Comparison of Results of
Operations ’’ and ‘‘Financial Information — Period to Period Comp arison of Results of
Operations ’’in this prospectus.
SUMMARY
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Revenues by Region
During the Track Record Period, we primarily derived revenues from sales to customers in
mainland China. We have continuously expanded our overseas presence, and have successfully
entered into supply chains of many world-renowned enterprises to provide energy storage
batteries for telecom base stations. We also have launched electrical energy storage projects in
overseas countries/regions. The following table sets forth a breakdown of revenues by regions and
major country for the years/periods indicated:
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Mainland China . . . . . . . . . . . . . 3,394,555 83.4 3,330,829 78.2 3,608,974 80.2 1,031,967 74.1 1,546,929 82.9
Asia Pacific excluding mainland
China
Malaysia. . . . . . . . . . . . . . . . . . 8,284 0.2 10,217 0.2 98,553 2.2 38,979 2.8 36,713 2.0
Indonesia . . . . . . . . . . . . . . . . . 55,310 1.4 37,668 0.9 91,481 2.0 39,161 2.8 25,864 1.4
I n d i a .................... 7 9 2 – 135,746 3.2 80,603 1.8 16,498 1.2 32,497 1.7
Vietnam . . . . . . . . . . . . . . . . . . 65,894 1.6 88,106 2.1 70,199 1.6 19,972 1.4 33,169 1.8
Others
(1) . . . . . . . . . . . . . . . . . . 55,547 1.4 74,896 1.8 70,712 1.5 33,987 2.4 38,816 2.0
Subtotal .................. 185,827 4.6 346,633 8.2 411,548 9.1 148,597 10.6 167,059 8.9
EMEA
Sweden . . . . . . . . . . . . . . . . . . 186,915 4.6 125,100 2.9 120,375 2.7 36,942 2.6 62,891 3.4
N o r w a y.................. 3 2 , 4 4 4 0 . 8 8 9 , 0 0 1 2 . 1 7 5 , 7 7 0 1 . 7 4 9 , 5 7 1 3 . 6 9 , 3 3 5 0 . 5
E g y p t................... 7 , 6 2 8 0 . 2 2 9 , 3 0 5 0 . 7 2 6 , 5 8 5 0 . 6 1 9 , 3 9 0 1 . 4 ––
South Africa . . . . . . . . . . . . . . . 46,364 1.1 42,814 1.0 20,291 0.5 18 – 14,016 0.8
Finland . . . . . . . . . . . . . . . . . . 81,162 2.0 61,422 1.4 17,520 0.4 9,881 0.7 2,568 0.1
Others
(2) . . . . . . . . . . . . . . . . . . 81,093 2.0 166,149 3.9 134,867 2.9 58,938 4.2 30,594 1.6
Subtotal .................. 435,606 10.7 513,791 12.0 395,408 8.8 174,740 12.5 119,404 6.4
Other Regions
Brazil . . . . . . . . . . . . . . . . . . . 24,406 0.6 33,167 0.8 47,610 1.1 23,664 1.7 11,497 0.6
G u a t e m a l a ................. 1 0 , 3 8 1 0 . 2 7 , 1 0 3 0 . 2 1 0 , 2 1 0 0 . 2 9 , 5 4 2 0 . 7 ––
Others
(3) .................. 2 1 , 7 0 5 0 . 5 2 8 , 2 5 4 0 . 7 2 4 , 7 7 2 0 . 6 5 , 6 7 5 0 . 4 2 1 , 7 1 9 1 . 2
Subtotal .................. 56,492 1.3 68,524 1.6 82,592 1.9 38,881 2.8 33,216 1.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Notes:
(1) mainly include Hong Kong SAR, Pakistan and Kazakhstan, and Singapore.
(2) mainly include UAE, Romania, and Mauritius.
(3) mainly include Peru, Mexico, Uruguay and Colombia.
Gross Profit and Gross Profit Margin
During the Track Record Period, we derived gr oss profits from batteries used in telecom
base stations, data centers, ele ctrical energy storage settings and other settings. Gross profit
margins during the Track Record Period were influenced by several factors:
SUMMARY
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 Raw Material Costs : The fluctuation in the price of raw materials, particularly lead
ingots, significantly impacted gross profit margins. Increased raw material costs in
2024 were a primary contributor to the decline in gross profit margins for various
application scenarios.
 Pricing Strategy : To maintain and promote market leadership, we adopted competitive
pricing strategies. This included maintain ing a relatively stable average selling price
for lead-acid batteries in line with prevailing m arket trends, which affected gross profit
margins.
 Product Mix and Market Dynamics : Changes in the structure of products sold, shifts
in demand across application scenarios, a nd competitive market conditions influenced
gross profit margins. For example, aligning prices with market trends in electrical
energy storage settings led to lower margins.
 Operational Efficiency and Economies of Scale : Improvements in production
efficiency and economies of scale in 2023 positively impacted gross profit margins.
Investments in advanced technologies and automation helped reduce manufacturing
costs, particularly in telecom base s tations and data center applications.
We recorded a decrease in overall gross profit margin from 20.3% in 2023 to 16.7% in 2024
and from 19.7% in the five months ended May 31, 2024 to 14.9% in the five months ended May
31, 2025, primarily due to (i) a decrease of revenue contribution from lithium-ion batteries, the
product category with a higher gross profit ma rgin and (ii) the fluctuation of price of raw
materials. In particular, to preserve relations hips with our customers and take effort to maintain
and promote our position as a leader in the market, we strategically maintained a relatively stable
average selling price for lead-acid batteries, whi ch is also in line with prevailing market price, to
respond to this fluctuation in raw material price, resulting in decrease in gross profit margin. Such
factor primarily contributed to the decrease in our gross profit margin. For details of the
movement of our gross profit and gross profit margin by application scenario and by product, see
‘‘Financial Information — Year to Year Comparison of Results of Operations ’’ and ‘‘Financial
Information — Period to Period Comparison of Results of Operations ’’ in this prospectus. The
following table sets forth a breakdown of gross pr ofits and gross profit margins by application
scenario for the years/periods indicated.
SUMMARY
– 15 –


--- page 27 ---
For the year ended December 31, For the five months ended May 31,
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
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base station . . . . . . . . . . 424,570 16.1 578,421 23.5 470,349 20.5 164,766 22.1 133,451 16.8
Data center . . . . . . . . . . . . . . . . 130,812 17.1 169,946 18.9 191,110 13.7 61,600 15.5 119,857 13.7
Electrical energy storage settings . . . 68,602 22.7 81,453 16.7 40,447 9.0 30,010 22.7 4,970 7.2
Other settings
(1) . . . . . . . . . . . . . 58,876 20.9 31,439 9.3 46,181 17.7 15,476 17.9 15,875 19.7
Others (2) .................. 6 , 7 3 6 8 . 2 5 , 5 0 9 8 . 1 2 , 7 9 6 2 . 9 3 , 2 3 4 1 0 . 3 4 , 4 0 5 8 . 5
Total ................... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9
Notes:
(1) Primarily include UPS batteri es and start-stop batteries.
(2) Primarily include sales of waste including le ad slag, used batteries, and electricity sales.
Gross profit margin of sales of lithium-ion b atteries decreased from 27.2% in the five
months ended May 31, 2024 to 18.3% in the five months ended May 31, 2025. This decrease was
primarily driven by intensified m arket competition, which led to lowe r average selling prices. The
gross profit margin of lithium-ion batteries decreased from 22.9% in 2023 to 20.6% in 2024,
primarily due to a decrease in the gross profit margin of batteries used in electrical energy storage
settings. In response to the comp etitive landscape in the electri cal energy storage market, we
aligned the average selling prices of our batteries used in electrical energy storage settings with
the market price, resulting in the decrease in gro ss profit margin of lithium-ion batteries. Gross
profit margin of sales of lead-acid batteries slightly decreased from 16.6% in the five months
ended May 31, 2024 to 14.0% in the five months ended May 31, 2025, primarily due to the
average selling price of lead-acid batteries increasing at a slower pace than the unit cost. The
gross profit margin of lead-acid batteries decreased from 18.7% in 2023 to 15.1% in 2024, driven
by an increase in lead ingot prices, which account for approximately 60% of production costs.
From 2022 to 2023, the gross profit margin of lithium-ion batteries improved from 18.5% to
22.9%, benefiting from economies of scale, strategic pricing, and favorable raw material trends.
Similarly, the gross profit margin of lead-acid b atteries increased from 16.2% in 2022 to 18.7% in
2023, reflecting our cost-reductio n efforts, supply chain optimization, and higher average selling
prices.
SUMMARY
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--- page 28 ---
The following table sets forth gross profit and gross profit margin by product for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
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
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Lithium-ion battery . . . . . . . . . . . 289,409 18.5 424,400 22.9 307,693 20.6 118,280 27.2 83,940 18.3
Lead-acid battery. . . . . . . . . . . . . 393,451 16.2 436,859 18.7 440,394 15.1 153,572 16.6 190,213 14.0
O t h e r s *.................. 6 , 7 3 6 8 . 2 5 , 5 0 9 8 . 1 2 , 7 9 6 2 . 9 3 , 2 3 4 1 0 . 3 4 , 4 0 5 8 . 5
Total ................... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 275,558 14.9Note:
* Primarily include sales of waste including lead slag, used batteries, and electricity sales.
For details, see ‘‘Financial Information — Year to Year Comparison of Results of
Operations ’’ and ‘‘Financial Information — Period to Period Comp arison of Results of
Operations ’’in this prospectus.
Other Item of the Consolidated Statements of Profit or Loss
Impairment losses on financial and contract as sets, net represented net impairment losses on
financial and contract assets, inc luding trade and bills receivables, other receivables and contract
assets. Impairment losses on financial and con tract assets, net increased from RMB6.3 million in
2023 to RMB19.2 million in 2024, due to the in crease in impairment of trade and bills
receivables in line with our increasing trade and bills receivables balance as of December 31,
2024. For other year-to-year comparison of impairment losses on financial and contract assets, see
‘‘Financial Information — Year to Year Comparison of Results of Operations ’’in this prospectus.
Profit for the Year/Period
During the Track Record Period, the fluctuation of net profit was primarily due to the
change in revenues generated from sales of ba tteries and our ability to control cost of sales in
response to the fluctuations in prices of key raw materials and other expenses.
Our net profit increased by 27.0% from RMB281.0 million in 2022 to RMB385.2 million in
2023, driven by the increase in market demand and our economies of scale. Net profit decreased
from RMB385.2 million in 2023 to RMB353.3 m illion in 2024, and from RMB139.3 million in
the five months ended May 31, 2024 to RMB126. 7 million in the five months ended May 31,
2025, mainly due to the decrease in average sellin g price and gross profit margin. To maintain
and promote our position as a leader in the marke t, we strategically accepted more competitive
pricing terms, which is also in line with the prevailing market price according to Frost &
Sullivan. Such factor primarily contribute d to the decrease in our net profit margin.
SUMMARY
– 17 –


--- page 29 ---
Summary of Our Consolidated Balance Sheets
The following table sets forth selected info rmation from our consolidated statements of
financial position as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Total non-current assets . . . . . 1,047,929 1,382,574 1,520,511 1,490,542
Total current assets . . . . . . . . 2,989,424 2,945,328 3,640,419 4,122,920
Total current liabilities . . . . . . 2,150 ,605 1,790,864 2,3 16,153 2,694,792
Net current assets . . . . . . . . . 838,819 1,154,464 1,324,266 1,428,128
Total assets less current
liabilities. . . . . . . . . . . . . . 1,886,748 2,537,038 2,844, 777 2,918,670
Total non-current liabilities . . . 158,620 451,877 4 57,316 458,198
Net assets. . . . . . . . . . . . . . . 1,728,128 2,085,161 2,387,461 2,460,472
Total equity . . . . . . . . . . . . . 1,728,128 2,085,161 2,387,461 2,460,472
Net current assets increased from RMB838.8 million as of December 31, 2022 to
RMB1,154.5 million as of December 31, 2023, w hich was primarily due to the increase in
restricted cash from RMB228.7 million to RMB303.5 million, the decrease in interest-bearing
bank and other borrowings from RMB944. 8 million as of December 31, 2022 to RMB410.5
million as of December 31, 2023, partially offset by the decrease in trade and bills receivables
from RMB1,862.2 million as of December 31, 20 22 to RMB1,609.3 million as of December 31,
2023.
Net current assets increased to RMB1,324 .3 million as of December 31, 2024, which was
primarily due to increase in trade and bills recei vables from RMB1,606.6 million to RMB2,318.3
million, increase in financial assets at fair value through profit or loss from nil to RMB86.0
million and increase in prepayments, other recei vables and other assets from RMB63.9 million to
RMB85.3 million.
Net current assets increased to RMB1,4 28.1 million as of May 31, 2025, which was
primarily due to increase in inventories from R MB513.5 million to RMB773.8 million, increase in
cash and cash equivalents from RMB395.2 m illion to RMB616.9 million, and increase in
prepayments, other receivables and other a ssets from RMB85.3 million to RMB127.0 million.
Net current assets increased to RMB1,4 46.2 million as of June 30, 2025, which was
primarily due to (i) an increase in inventori es from RMB773.8 million to RMB881.3 million, (ii)
an increase in debt investments at fair value through other comprehensive income from RMB2.2
million to RMB14.9 million, and (iii) an increase in prepayments, other receivables and other
assets from RMB127.0 million to RMB130.6 million.
SUMMARY
– 18 –


--- page 30 ---
Net assets amounted to RMB1,728.1 million, RMB2,085.2 million, RMB2,387.5 million and
RMB2,460.5 million as of December 31, 2022, 2023, 2024, and May 31, 2025, respectively. In
2022, net assets increased to RM B1,728.1 million, primarily due to total comprehensive income
of RMB281.0 million and the issuance of shares amounting to RMB385.5 million. In 2023, net
assets increased by RMB357.1 million to RMB2, 085.2 million, driven by total comprehensive
income of RMB385.2 million, partially offset by a dividend distribution of RMB48.4 million. In
2024, net assets increased by RMB302.3 millio n to RMB2,387.5 million, mainly due to total
comprehensive income of RMB353.3 million and a share-based compensation reserve of
RMB22.5 million, offset by a dividend distrib ution of RMB73.8 million. In the five months
ended May 31, 2025, net assets increased by RMB78.7 millio n to RMB2,466.2 million, mainly
due to total comprehensive income of RMB132.4 million.
Summary of Our Statements of Cash Flows
The following table sets forth our consolidated statements of cash flows for the years/
periods indicated.
Year Ended December 31,
Five Months Ended
May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Net cash flows generated from
operating activities ............ 15,375 907,214 261,379 (11,951) 375,503
Net cash flows used in investing
activities ................... (55,708) (338,316) (154,484) (59,135) (33,860)
Net cash flows generated from/(used
in) financing activities ......... 184,080 (376,137) (203,783) (140,415) (123,107)
Net increase/(decrease) in cash and
cash equivalents ............. 143,747 192,761 (96,888) (211,501) 218,536
Cash and cash equivalents at
beginning of year ............. 99,032 270,264 479,582 479,582 395,234
Effect of foreign exchange rate changes,
net . . . . . . . . . . . . . . . . . . . . . . . 27,485 16,557 12,540 4,053 3,170
Cash and cash equivalents included in
assets of a disposal group classified
a sh e l df o rs a l e ............... – 542 – 145 –
Cash and cash equivalents at end of
year ...................... 270,264 479,582 395,234 272,134 616,940
SUMMARY
– 19 –


--- page 31 ---
Key Financial Ratios
The table below sets forth key finan cial ratio as of the dates indicated.
For the year ended/
As of December 31,
For the five
months ended/
As of May 31,
2022 2023 2024 2025
Gross Profit Margin (1) . . . . . . . . . . . 16.9% 20.3% 16.7% 14.9%
Net Profit Margin (2) ............. 6 . 9 % 9 . 0 % 7 . 9 % 6 . 8 %
Debt to Asset Ratio (3) . . . . . . . . . . . 57.2% 51.8% 53.7% 56.2%
Current Ratio (4) ................ 1 . 4 1 . 6 1 . 6 1 . 5
Return on Equity (5) . . . . . . . . . . . . . 20.2% 20.2% 15.8% 5.2%
Gearing Ratio (6) . . . . . . . . . . . . . . . 58.2% 34.5% 39.6% 45.6%
Quick Ratio (7) ................. 1 . 1 1 . 4 1 . 4 1 . 2
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenues for the year/period and multiplied by 100%.
(2) Net profit margin is calculated using profit and total comprehensive income for the year divided by revenues for the
year/period and multiplied by 100%.
(3) Debt to asset ratio is calcu lated using total liabilities divided by tota l assets as of the end of the year/period and
multiplied by 100%.
(4) Current ratio is calculated using cu rrent assets divided by cur rent liabilities as of the e nd of the year/period.
(5) Return on equity is calculated using net profit for the year divided by the average of total equity as of the beginning
and ending of the year/peri od and multip lied by 100%.
(6) Gearing ratio is calculated using total debt (including b ank and other borrowings, and lease liabilities) divided by
shareholders ’ equity as of the end of the year/ period and multiplied by 100%.
(7) Quick ratio is calculated using total cu rrent assets less inventorie s divided by total current liabilities as of the end of
the year/period.
COMPETITIVE LANDSCAPE
According to Frost & Sullivan, the global ener gy storage battery market is competitive.
Within the global energy storage battery indust ry, we participated in the global telecom and data
center energy storage battery market, as well as the global electrical energy storage market. In
2024, the total global added installed capacity fo r energy storage batteries in telecom and data
center application reached 60.4 GWh, with the top five players holding a combined market share
of approximately 40.7%. Our group achieved a shipment volume of 6.7 GWh, ranking the first
among global telecom and data center energy storage battery providers, with the market share of
11.1%.
SUMMARY
– 20 –


--- page 32 ---
The global electrical energy storage market is characterized by a relatively fragmented
competitive landscape, with more than 10,000 ex isting and startup companies in the industry,
covering products including energy storage ba tteries, battery management systems, power
conversion system, etc. For details, see ‘‘Industry Overview ’’in this prospectus.
RISK FACTORS
Our business and the Global Offering involve certain risks, many of which are beyond of
our control. For details, see ‘‘Risk Factors ’’ in this prospectus. A summary of key risk factors is
set forth below. Any of the following developments may have a material and adverse effect on
our business, financial condition, results of operations and prospects:
 Our business is affected by conditions in the energy storage industry; in particular,
potential adverse development of the supply-demand dynamics of energy storage
industry may significantly affect the price and market demand of our product.
 We may not be able to derive the desired benefits from our research and development
efforts, and keep up with the latest technological development and industry trends,
which may negatively affect our competitiveness and profitability.
 We operate in a competitive industry and many of our competitors may be more
established, resourceful or adaptive, we ma y not be able to effectively compete with
other industry players.
 We are exposed to price fluctuations of raw materials, and we may not be able to
adjust our prices to fully offset the inc reased costs of raw materials, which will
adversely affect our profit margins, resu lt of operations and financial condition.
 The average selling price of our products may face downward pressure because of
decline in raw material prices and decreasing trend of market prices of batteries, which
will adversely affect our profit margins, resu lt of operations and f inancial condition.
You should read the entire section headed ‘‘Risk Factors ’’ in this prospectus before you
decide to invest in the Offer Shares.
IMPACT OF THE COVID-19 PANDEMIC
In 2022, there was a resurgence of the CO VID-19 pandemic including the highly
transmissible Delta and Omicron variants in China and across the world, which had adversely
affected the economy. Due to the more stringent requirement and limited supply in freight, and
relevant policies affecting the movement of products between regions, we recorded relatively
higher transportation costs in 2022. However, our business and results of operations had not been
materially affected by the COVID-19 pandemic, during the Track Record Period.
SUMMARY
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--- page 33 ---
For further information on the risk of the C OVID-19 pandemic, see the section headed
‘‘Risk Factors – Risks Relating to Our Business and Our Industry – We face risks related to
health epidemics, natural disasters and other catastrophic events, which could have a material
adverse effect on our business and results of operations. ’’in this prospectus.
DIVIDEND
As of the Latest Practicable Date, we do not ha ve a dividend policy. Our Board may declare
dividends in the future after taking into account factors, including results of operations, financial
condition, cash requirements and availability an d other factors as it may deem relevant at such
time. PRC laws require that dividends be paid only o ut of our distributable profits. Distributable
profits are our after-tax profits, less appropriations to statutory and other reserves that we are
required to make. No dividend may be declared or paid other than out of our profits and reserves
lawfully available for distribution, including share premium. Our earning per share was RMB0.85,
RMB1.08, RMB0.99 and RMB0.35 in 2022, 2023, 2024 and the five months ended May 31,
2025, respectively. We declared dividend of nil, RMB0.135, RMB0.206, and RMB0.170 per
ordinary share for the years ended December 31, 2022, 2023, 2024 and the five months ended
May 31, 2025, respectively, all of which had been paid in full. For details, see Note 11 to the
Accountant ’s Report set out in Appendix I to this prospectus.
Our ability to declare and pay dividends w ill depend on the availability of dividends
received from group companies in the PRC and other jurisdictions. Pursuant to PRC laws,
dividends shall be paid only out of the net profit calculated according to PRC accounting
principles, which differ in many aspects from generally accepted accounting principles in other
jurisdictions, including IFRSs. PRC laws also requi re foreign-invested enterprises to set aside at
least 10% of its after-tax profits as the statu tory common reserve fund until the cumulative
amount of the statutory common reserve fund reaches 50% or more of such enterprises ’ registered
capital, if any, to fund its statutory common reser ves, which are not available for distribution as
cash dividends. Distributions from our subsidiaries may also be restricted if they incur debt or
losses or in accordance with any restrictive coven ants in bank credit facilities or other agreements
that we or our subsidiaries may enter into in the future.
SUMMARY
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--- page 34 ---
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Yang, father of Dr. Yang (chairman of the Board,
executive Director and chief executive officer), is able to exercise approximately 78.29% voting
rights in our Company through (i) 138,310,000 Shares directly held by him; (ii) 109,590,000
Shares held by Shuangdeng Investment; (iii) his c ontrol of 19,000,000 Sh ares of Taizhou Heying
through controlling Taizhou Hanfu; and (iv) his co ntrol of 13,600,000 Shares of Taizhou Hexin
through controlling Taizhou Hanfu. Taizhou Hec huang is the general partner of each of Taizhou
Heying and Taizhou Hexin and the general partner of Taizhou Hechuang is Taizhou Hanfu.
Immediately upon completion of the Global Offer ing (assuming the Over-allotment Option is not
exercised), Mr. Yang will be directly and indire ctly entitled to exercise a pproximately 64.66%
voting rights in our Company. In addition, Shuangdeng Investment is owned by Mr. Yang and his
spouse, Ms. Qian Wuzhen （錢五珍）as to 80% and 20%, respectively, thus Ms. Qian Wuzhen is
deemed to be interested in all Shares held by Shuangdeng Investment by virtue of the SFO.
Therefore, Mr. Yang, Ms. Qian Wuzhen, Shuangdeng Investment, Taizhou Hanfu, Taizhou
Hechuang, Taizhou Heying an d Taizhou Hexin will be regard ed as a group of Controlling
Shareholders under the Listing Rules upon the Listing.
PRE-IPO INVESTMENTS
We have entered into financing agreements w ith our Pre-IPO Investors. For details, see
‘‘History, Development and Corporate Structure — Pre-IPO Investment ’’in this prospectus.
CONNECTED TRANSACTIONS
We have entered into and are expected to continue with certain transactions after the
completion of the Listing which will constitute par tially-exempt continuing connected transactions
under Chapter 14A of Listing Rules upon Listing. See ‘‘Connected Transactions ’’ and ‘‘Waivers
from Strict Compliance with the Listing Rules — Partially-exempt Continuing Connected
Transactions ’’in this prospectus for further details.
PREVIOUS APPLICATION FOR LISTING
Our Company submitted an application for listin g on Shenzhen Stock Exchange on June 28,
2023 and withdrawn the application on April 9, 2024 (the ‘‘A-Share Listing Application ’’). With
regard to the A-Share Listing Application, our Company has addressed enquiries received from
the Shenzhen Stock Exchange which were primarily disclosure-based. As advised by our PRC
Legal Advisor and based on relevant applicable rules and regulations, we, may at our sole and
absolute discretion, withdraw our listing app lication at any time during the A-Share Listing
Application and the withdrawal of the A-Share Listing Application did not constitute
contravention of regulatory requirements app licable to the A-Share Listing Application. As
confirmed by the Directors, (a) there was no disputes or disagreements between the Company and
any professional parties engaged for the previous A-Share Listing Application; (b) there was no
material matters in relation to the previous A-Sh are Listing Application which would affect the
Company ’s suitability for listing; and (c) there was no other matters in relation to the previous A-
Share Listing Application that nee d to be brought to the Exchange ’s attention.
SUMMARY
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GLOBAL OFFERING STATISTICS
All statistics in this table are based on the assu mption that (1) the Global Offering has been
completed and 58,557,000 Offer Shares are issu ed pursuant to the Global Offering; and (2) the
Over-Allotment Option is not exercised.
B a s e do nt h e
Offer Price of
HK$14.51
Market capitalization of our Shares (1)
HK$6,048.1
million
Unaudited pro forma adjusted consolidated
net tangible assets per Share
as of May 31, 2025 (2)(3) HK$8.34
(1) The calculation of market capitalization is based on 416,826,000 total issued Shares immediately upon
completion of the Global Offering (assuming the Over-allotment Option is not exercised).
(2) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per
Share is arrived at by dividing the unaudited pro forma adjusted net tangible assets by 416,826,000 Shares,
being the number of shares in issue assuming that the Global Offering had been completed on May 31, 2025,
without taking account of the exercise of the Over-allotment Option.
(3) No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of
the Group to reflect any trading results or other transactions entered into subsequent to May 31, 2025.
FUTURE PLAN AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$756.3 million, after deducting underwriting c ommissions, fees and estimated expenses
payable by us in connection with the Global Offer ing, and assuming the Ove r-Allotment Option is
not exercised and an Offer Price of HK$14.51 per Offer Share.
We intend to use the net proceeds from the Global Offering for the following purposes: (i)
approximately 40.0%, or HK$302.6 million, will be used for the construction of a lithium-ion
batteries production facility in S outheast Asia; (ii) approximat ely 35.0% of the net proceeds, or
HK$264.7 million, is intended to be used to fund the establishment of a research and development
center; (iii) approximately 15.0% of the net proc eeds, or HK$113.4 million, is intended to be used
to strengthen our overseas sales and marketing so that we can enhance our global presence and
boost our international sales; and (iv) approximately 10.0% of the net proceeds, or HK$75.6
million, will be used to provide funding for workin g capital and other general corporate purposes.
For details, see ‘‘Future Plans and Use of Proceeds ’’in this prospectus.
SUMMARY
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LISTING EXPENSES
Listing expenses represent professional fe es, underwriting commission, and other fees
incurred in connection with the Global Offering.
As of May 31, 2025, listing expenses in an aggregate of RMB20.1 million were incurred
and charged to our consolidated statement of pro fit or loss, and RMB8.2 million will be deducted
from equity upon the Listing. We expect an add itional listing expenses of approximately
RMB56.6 million (HK$62.2 million), of which approximately RMB 17.3 million (HK$19.0
million) will be charged to our consolidated statements of profit or loss after May 31, 2025, and
the remaining balance of approximately RM B39.3 million (HK$43.2 million) is expected to be
deducted from equity. The listing expenses above are t he latest practicable estimate for reference
only, and the actual amount may differ from this estimate.
We expect to incur a total of RMB84.9 million (HK$93.4 million) of listing expenses,
including (1) underwriting-re lated expenses, which include sponsor fee and underwriting
commissions, of approximately RMB38.4 million ( HK$42.2 million), and (2) non-underwriting
related expenses of approxima tely RMB46.5 million (HK$51.1 million), which include (i) fees
and expenses of legal advisors and the Repor ting Accountant of approximately RMB27.9 million
(HK$30.7 million) and (ii) other fees and expens es of approximately RMB18.6 million (HK$20.4
million), assuming the Over-allotment Option is not exercised and based on the Offer Price of
HK$14.51 per Offer Share. Our listing expenses as a percentage of gross proceeds is 11.0%, at an
Offer Price of HK$14.51 per Share, and assuming the Over-allotment Option is not exercised.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Subsequent to the Track Record Period, our financial and operating performance generally
maintained the trends observed in 2024. We expect a decrease in our net profit in 2025, primarily
due to research and development expenses and se lling and distribution expenses associated with
our expected growth in sales volume.
Our Directors confirm that, up to the date of this prospectus, there has been no material
adverse change in our financial or trading pos ition since May 31, 2025 (being the date on which
the latest audited consolidated financial information of our Company was prepared) and there is
no event since May 31, 2025 which would materially affect the information shown in our
consolidated financial statements included in the Accountants ’ Report in Appendix I to this
prospectus.
SUMMARY
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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below.
‘‘Accountants ’ Report ’’ the accountants ’ report prepared by Ernst & Young, the
text of which is set out in Appendix I to this prospectus
‘‘affiliate(s) ’’ with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified
person
‘‘AFRC ’’ Accounting and Financial Reporting Council
‘‘Alibaba ’’ Alibaba Group Holding Limited, a limited liability
company established under the laws of Cayman on June
28, 1999, which is a customer of the Company
‘‘application lists ’’ the application lists for the Hong Kong Public Offering
‘‘Articles ’’or ‘‘Articles of
Association ’’
the articles of association to be adopted by our Company
with effect upon Listing, as am ended from time to time, a
summary of which is set out in Appendix V to this
prospectus
‘‘associate(s) ’’ has the meaning ascribed thereto under the Listing Rules
‘‘Audit Committee ’’ the audit committee of the Board
‘‘Baidu ’’ Baidu, Inc., a company incorporated in Cayman with
limited liability on January 18, 2000, which is a customer
of the Company
‘‘BIS’’ the U.S. Department of Commerce ’s Bureau of Industry
and Security
‘‘Board ’’or ‘‘Board of Directors ’’ the board of Directors
‘‘Business Day ’’or ‘‘business day ’’ a day on which banks in Hong Kong are generally open for
normal business to the public and which is not a Saturday,
Sunday or public holiday in Hong Kong
‘‘CAGR ’’ compound annual growth rate
DEFINITIONS
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‘‘Capital Market Intermediary(ies) ’’
or ‘‘CMI(s) ’’
the capital market intermediar y(ies) participating in the
Global Offering and has the meaning ascribed thereto
under the Listing Rules
‘‘CCASS ’’ the Central Clearing and Settle ment System established and
operated by HKSCC
‘‘China, ’’ ‘‘mainland China, ’’or
‘‘the PRC ’’
the People ’s Republic of China, which only in the context
of describing PRC rules, law s, regulations, regulatory
authority, and any PRC en tities or citizens under such
rules, laws and regulations and other legal or tax matters in
this prospectus, excludes Hong Kong, the Macau Special
Administrative Region of the People ’s Republic of China
and Taiwan
‘‘ChinData ’’ Chindata Group Holdings Limited, a limited liability
company established under the laws of Cayman on
December 27, 2018, which is a customer of the Company
‘‘close associate(s) ’’ has the meaning ascribed thereto under the Listing Rules
‘‘Companies Ordinance ’’ the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
‘‘Companies (Winding Up and
Miscellaneous Provisions)
Ordinance ’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time to
time
‘‘Company ’’, ‘‘our Company ’’or
‘‘the Company ’’
SHUANGDENG GROUP CO., LTD. （雙登集團股份有限
公司）, a joint stock company with limited liability
incorporated on December 28, 2011
‘‘Comprehensively Sanctioned
Countries ’’
Cuba, Iran, North Korea, Syria, the Crimea Region of
Russia/Ukraine, the self-proclaimed Luhansk People ’s
Republic ( ‘‘LPR’’) and self-proclaimed Donetsk People
’s
Republic ( ‘‘DPR ’’) regions, Kherson region and
Zaporizhzhia region
‘‘connected person(s) ’’ has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
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‘‘Controlling Shareholder(s) ’’ has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Mr. Yang,
Ms. Qian Wuzhen （錢五珍）, Shuangdeng Investment,
Taizhou Heying, Taizhou Hexin, Taizhou Hechuang and
Taizhou Hanfu. For details, see ‘‘Relationship with Our
Controlling Shareholders ’’in this prospectus
‘‘core connected person(s) ’’ has the meaning ascribed thereto under the Listing Rules
‘‘Corporate Governance Code ’’ the Corporate Governance Code as set out in Appendix C1
to the Listing Rules
‘‘Countries subject to International
Sanctions ’’
Countries or territories for which Relevant Jurisdictions
maintain various forms of sanctions programs in place
‘‘COVID-19 pandemic ’’ outbreaks of coronavirus di sease 2019, an infectious
disease caused by the recently discovered coronavirus
(severe acute respiratory syndrome coronavirus 2, SARS-
CoV-2)
‘‘CSDC ’’ China Securities Depository and Clearing Corporation
Limited（中國證券登記結算有限責任公司）
‘‘CSRC ’’ China Securities Regulatory Commission （中國證券監督管
理委員會）
‘‘Designated Bank ’’ HKSCC Participant ’s EIPO Designated Bank
‘‘Director(s) ’’ the director(s) of our Company
‘‘Dr. Yang ’’or ‘‘Dr. Yang Rui ’’ Dr. Yang Rui （楊銳）, chairman of the Board, executive
Director and chief executive officer of our Company
‘‘EAR’’ the Export Administration Regulations administered by the
BIS
‘‘EIT’’ enterprise income tax
‘‘EIT Law ’’ the PRC Enterprise Income Tax Law （《中華人民共和國企
業所得稅法》）, as amended, supplemented or otherwise
modified from time to time
‘‘Employee Incentive Platform(s) ’’ Taizhou Heying and/or Taizhou Hexin
DEFINITIONS
– 28 –


--- page 40 ---
‘‘Employee Incentive Scheme ’’ the employee incentive schemes adopted by our Company
in June 2019 and December 2022 the principal terms of
which are set out in ‘‘Statutory and General Information –
Further Information about our Directors, Supervisors and
Substantial Shareholders – 5. Employee Incentive
Schemes ’’in Appendix VI to this prospectus
‘‘Entity List ’’ maintained by the U.S. Dep artment of Commerce, the
Bureau of Industry and Security, which sets forth
individual and entities that are subject to its export control
restrictions and licensing requirements for certain items
‘‘Ericsson ’’ Telefonaktiebolaget LM Ericsson, a public limited
c o m p a n ye s t a b l i s h e du n d e rt h el a w so fS w e d e no nA u g u s t
19, 1918, which is a customer of the Company
‘‘Extreme Conditions ’’ extreme conditions caused by a super typhoon as
announced by the government of Hong Kong due to
serious disruption of public transport services, extensive
flooding, major landslides, large-scale power outage or any
other adverse conditions before Typhoon Signal No. 8 or
above is replaced with Typhoon Signal No. 3 or below
‘‘FINI ’’ Fast Interface for New Issuance, a new digital platform
through which IPO market participants and regulators can
manage the end-to-end settleme nt process for new listings
in Hong Kong
‘‘Frost & Sullivan ’’or ‘‘Industry
Consultant ’’
Frost & Sullivan (Beijing) Inc. , Shanghai Branch Co., our
industry consultant
‘‘Frost & Sullivan Report ’’ the industry report commissioned by our Company and
independently prepared by Frost & Sullivan, summary of
which is set forth in the section headed ‘‘Industry
Overview ’’in this prospectus
‘‘GDS’’ GDS Holdings Limited, a limited liability company
established under the laws of Cayman on December 1,
2006, which is a customer of the Company
‘‘General Rules of HKSCC ’’ the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational Procedures
DEFINITIONS
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‘‘Global Offering ’’ the Hong Kong Public Offering and the International
Offering
‘‘Group ’’, ‘‘our Group ’’, ‘‘our’’,
‘‘we’’,o r ‘‘us’’
the Company and all of its subsidiaries, or any one of them
as the context may require
‘‘Guide ’’ The Guide for New Listing Applicants, as published by the
Stock Exchange on November 29, 2023 and effective on
January 1, 2024, as amended or supplemented or otherwise
modified from time to time
‘‘H Share(s) ’’ ordinary share(s) in the share capital of our Company with
a nominal value of RMB1.00 each, which are to be
subscribed for and traded in Hong Kong dollars and to be
listed on the Hong Kong Stock Exchange
‘‘H Share Registrar ’’ Computershare Hong Kong Investor Services Limited
‘‘HKSCC ’’ the Hong Kong Securities Cl earing Company Limited, a
wholly owned subsidiary of Hong Kong Exchanges and
Clearing Limited
‘‘HKSCC EIPO ’’ the arrangement in these HKSCC Operational Procedures
for instructions to be given electronically to HKSCC by
Participants via FINI for applications to be made on their
behalf for new issue shares and for the payment of
application moneys, and for those instructions to be acted
upon
‘‘HKSCC Nominees ’’ HKSCC Nominees Limited, a wholly owned subsidiary of
the HKSCC
‘‘HKSCC Operational Procedures ’’ the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC ’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time to
time in force
‘‘HKSCC Participant ’’ a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
DEFINITIONS
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‘‘Hong Kong ’’or ‘‘HK’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong dollars ’’or ‘‘HK$’’ Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
‘‘Hong Kong Offer Shares ’’ the 5,856,000 H Shares being initially offered by us for
subscription pursuant to the Hong Kong Public Offering
(subject to reallocation as described in the section headed
‘‘Structure of the Global Offering ’’in this prospectus)
‘‘Hong Kong Public Offering ’’ the offer for subscription of the Hong Kong Offer Shares
to the public in Hong Kong, at the Offer Price (plus
brokerage of 1.0%, SFC transaction levy of 0.0027%, Hong
Kong Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%), on and subject to the terms
and conditions described in the section headed ‘‘Structure
of the Global 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 as
listed in the section headed ‘‘Underwriting — Hong Kong
Underwriters ’’in this prospectus
‘‘Hong Kong Underwriting
Agreement ’’
the underwriting agreement d ated August 15, 2025 relating
to the Hong Kong Public Offering entered into by our
Company, Mr. Yang, Ms. Qian Wuzhen （錢五珍）,t h e
Overall Coordinators and the Hong Kong Underwriters
‘‘Huifeng Juneng ’’ Beijing Shuangdeng Huifeng Juneng Technology Co.,
Ltd.（北京雙登慧峰聚能科技有限公司）, formerly known
as Beijing Huifeng Juneng Technology Co., Ltd. （北京
慧
峰聚能科技有限公司）, a company incorporated in the PRC
with limited liability on March 5, 2012 and a wholly-
owned subsidiary of our Company
DEFINITIONS
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‘‘IFRS ’’ the International Financial Reporting Standards, which
include standards, amend ments and interpretations
promulgated by the International Accounting Standards
Board (IASB) and the International Accounting Standards
(IAS) and interpretations issued by the International
Accounting Standards Committee (IASC)
‘‘IIT Law ’’ the Individual Income Tax Law of the PRC （《中華人民共
和國個人所得稅法》）
‘‘Independent Third Party(ies) ’’ any person(s) or entity(ies) who, to the best of our
Directors ’ knowledge, information and belief having made
all reasonable enquiries, is not a connected person of our
Company within the meaning of the Listing Rules
‘‘International Offer Shares ’’ the 52,701,000 H Shares being initially offered by our
Company for subscription under the International Offering
(subject to reallocation as described in the section headed
‘‘Structure of the Global Offering ’’ in this prospectus)
together with any additional H Shares that may be allotted
and issued pursuant to the exercise of the Over-allotment
Option
‘‘International Offering ’’ the conditional placing of the International Offer Shares at
the Offer Price outside the United States in offshore
transactions in reliance on Regulation S, in each case on
and subject to the terms and conditions described in the
section headed ‘‘Structure of the Global Offering ’’ in this
prospectus
‘‘International Sanctions ’’ all applicable laws and regulation to economic sanctions,
export controls, trade embargoes and wider prohibitions
and restrictions on interna tional trade and investment
related activities, including t hose adopted administered and
enforced by the U.S. Government, the EU and its member
states, the UK, UN or Government of Australia
‘‘International Sanctions Legal
Advisors ’’
Hogan Lovells, our legal advisors as to International
Sanctions laws in connection with the Listing
‘‘International Underwriters ’’ the underwriters of the International Offering listed in the
International Underwriting Agreement
DEFINITIONS
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‘‘International Underwriting
Agreement ’’
the underwriting agreement rel ating to the International
Offering which is expected to b ee n t e r e di n t oo no ra r o u n d
Friday, August 22, 2025 by, among others, the Company,
Mr. Yang, Ms. Qian Wuzhen （ 錢五珍）,t h eO v e r a l l
Coordinators, and the International Underwriters
‘‘JD.com ’’ JD.com, Inc., a company incorporated in the BVI on
November 6, 2006 and subsequently redomiciled to the
Cayman Islands on January 16, 2014 as an exempted
company under the laws of the Cayman Islands, which is a
customer of the Company
‘‘Jiangsu Shuangdeng ’’ Jiangsu Shuangdeng Group Limited （江蘇雙登集團有限公
司）, a company incorporated in the PRC with limited
liability on October 15, 2002 and a wholly-owned
subsidiary of Wealth Sour ce Development Limited （富源發
展有限公司）, a company controlled by Mr. Yang
‘‘Joint Bookrunners ’’ the joint bookrunners as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’in this prospectus
‘‘Joint Global Coordinators ’’ the joint global coordinators as named in the section
headed ‘‘Directors, Supervisors and Parties Involved in the
Global Offering ’’in this prospectus
‘‘Joint Lead Managers ’’ the joint lead managers as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’in this prospectus
‘‘Joint Sponsors ’’ the joint sponsors of the listing of the H Shares on the
Hong Kong Stock Exchange as named in ‘‘Directors,
Supervisors and Parties Involved in the Global Offering ’’
in this prospectus
‘‘Latest Practicable Date ’’ August 8, 2025, being the latest practicable date for the
purpose of ascertaining certain information contained in
this prospectus prio r to its publication
‘‘Listing
’’ the listing of the H Shares on the Main Board of the Stock
Exchange
‘‘Listing Committee ’’ the listing committee of the Hong Kong Stock Exchange
DEFINITIONS
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‘‘Listing Date ’’ the date, expected to be on or about Tuesday, August 26,
2025, on which the H Shares are listed and on which
dealings in the H Shares are first permitted to commence
on the Hong Kong Stock Exchange
‘‘Listing Rules ’’ the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
‘‘Main Board ’’ the stock market (excluding the option market) operated by
the Hong Kong Stock Exchange which is independent from
and operated in parallel with the GEM of the Hong Kong
Stock Exchange
‘‘MOF’’ Ministry of Finance of the PRC （中華人民共和國財政部）
‘‘MOFCOM ’’ Ministry of Commerce of the PRC （中華人民共和國商務
部）
‘‘Mr. Yang ’’ Mr. Yang Shanji （ 楊善基 ）, one of our Controlling
Shareholders and father of Dr. Yang
‘‘NDRC ’’ the National Development and Reform Commission of the
PRC（中華人民共和國國家發展和改革委員會）
‘‘Nomination Committee ’’ the nomination committee of the Board
‘‘NPC’’ the National People ’s Congress of the PRC （中華人民共和
國全國人民代表大會）
‘‘OFAC ’’ the U.S. Department of Treasury ’s Office of Foreign Assets
Control
‘‘Offer Price ’’ the final offer price per Offer Share (exclusive of
brokerage fee of 1.0%, SFC transaction levy of 0.0027%,
Hong Kong Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015%) at which the Offer
Shares are to be subscribed for and issued pursuant to the
Global Offering as described in the section headed
‘‘Structure of the Global Offering ’’in this prospectus
DEFINITIONS
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‘‘Offer Shares ’’ 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
‘‘Over-allotment Option ’’ the option to be granted by us to the International
Underwriters exercisable by the Overall Coordinators (on
behalf of the International Underwriters) under the
International Underwriting Agreement, to require our
C o m p a n yt oa l l o ta n di s s u eu pt oa na g g r e g a t eo f
8,783,500 additional H Shares at the Offer Price,
representing approximately 15% of the total number of
Offer Shares initially availa ble under the Global Offering
to, among others, cover over-allocations in the
International Offering, if an y, further details of which are
d e s c r i b e di nt h es e c t i o nh e a d e d‘‘Structure of the Global
Offering ’’in this prospectus
‘‘Overall-Coordinators ’’ the overall coordinators as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’in this prospectus
‘‘Overseas Listing Trial Measures ’’ The Trial Measures for the Administration on Overseas
Securities Offering and Listing by Domestic Companies
（《 境 內 企 業 境 外 發 行 證 券 和 上 市 管 理 試 行 辦 法 》）
promulgated by the CSRC on February 17, 2023, which
became effective on March 31, 2023, as amended,
supplemented or otherwise modified from time to time
‘‘PBOC ’’ the People ’sB a n ko fC h i n a （中國人民銀行）, the central
bank of the PRC
‘‘PRC Company Law ’’ the Company Law of the People ’s Republic of China （中華
人民共和國公司法 ）, as amended, supplemented or
otherwise modified from time to time
‘‘PRC Government ’’ the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and instrumentalities
thereof or, where the context requires, any of them
‘‘PRC Legal Advisor ’’ JC Master Law Offices, the Company ’s PRC Legal Advisor
DEFINITIONS
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‘‘PRC Securities Law ’’ the Securities Law of the PRC （中華人民共和國證券法）,
as amended, supplemented or otherwise modified from time
to time
‘‘Pre-IPO Investment(s) ’’ the investment(s) in our Company undertaken by the Pre-
IPO Investors, details of which are set out in the section
headed ‘‘History, Development and Corporate Structure ’’in
this prospectus
‘‘Pre-IPO Investor(s) ’’ the investor(s) from whom our Company obtained several
rounds of investments, details of which are set out in the
section headed ‘‘History, Development and Corporate
Structure ’’in this prospectus
‘‘Primary Sanctioned Activity ’’ any activities in a Comprehens ively Sanctioned Country or
(i) with; or (ii) directly or indirectly benefiting or involving
the property or interests in property of, a Sanctioned Target
by the Company incorporated or located in a Relevant
Jurisdiction or which otherwise has a nexus with such
jurisdiction with respect to the relevant activity, such that
it is subject to the relevant sanctions law and regulation
‘‘R&D’’ research and development
‘‘Regulation S ’’ Regulation S under the U.S. Securities Act
‘‘Relevant Persons ’’ means the Company, together with its investors and
shareholders and persons who might directly or indirectly,
be involved in permitting the listing, trading clearing and
settlement of its shares including the Stock Exchange and
related group companies
DEFINITIONS
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--- page 48 ---
‘‘Relevant Regions ’’ Afghanistan, Balkans, Belaru s, Democratic Republic of the
Congo, Egypt, Hong Kong, Iraq, Lebanon, Libya, Mali,
Myanmar, Russia (excluding the Crimea, Kherson,
Zaporizhzhia, and LPR/DPR r egions), Somalia, Tunisia,
Turkey, Ukraine (excluding the Crimea, Kherson,
Zaporizhzhia, and LPR/DPR regions) and Zimbabwe
‘‘Remuneration Committee ’’ the remuneration committee of the Board
‘‘RMB’’or ‘‘Renminbi ’’ Renminbi, the lawful currency of the PRC
‘‘SAFE ’’ the State Administration of Foreign Exchange of the PRC
（中華人民共和國外匯管理局）
‘‘SAMR ’’ the State Administration for Market Regulation （國家市場
監督管理總局）
‘‘Sanctioned Target ’’ any person or entity (i) designated on any list of targeted
persons or entities issued under the sanctions-related law or
regulation of a Relevant Jurisdiction; (ii) that is, or is
owned or controlled by, a government of a
Comprehensively Sanctioned Country; or (iii) that is the
target of sanctions under the law or regulation of a
Relevant Jurisdiction because of a relationship of
ownership, control, or agency with a person or entity
described in (i) or (ii)
‘‘SAT’’ the State Administration of Taxation of the PRC （中華人民
共和國國家稅務總局）
‘‘Secondary Sanctionable Activity ’’ certain activity by the Company that may result in the
imposition of sanctions against the Relevant Person(s) by a
Relevant Jurisdiction (in cluding designation as a
Sanctioned Target or the imposition of penalties), even
though the Company is not incorporated or located in that
Relevant Jurisdiction and does not otherwise have any
nexus sutra that Relevant Jurisdiction
‘‘Securities and Futures
Commission ’’or ‘‘
SFC’’
the Securities and Futures Commission of Hong Kong
‘‘SEK’’ Swedish Krona, the lawful currency of the Sweden
DEFINITIONS
– 37 –


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‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
‘‘Shanghai-Hong Kong Stock
Connect ’’
a securities trading and clearing links program developed
by the Hong Kong Stock Exchange, Shanghai Stock
Exchange, HKSCC and CSDC for the establishment of
mutual market access between Hong Kong and Shanghai,
including Southbound Trading and Northbound Trading
‘‘Share(s) ’’ ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both Unlisted
Shares and H Shares
‘‘Shareholder(s) ’’ h o l d e r ( s )o ft h eS h a r e ( s )
‘‘Shenzhen-Hong Kong Stock
Connect ’’
a securities trading and clearing links program developed
by the Hong Kong Stock Exchange, Shenzhen Stock
Exchange, HKSCC and CSDC for the establishment of
mutual market access between Hong Kong and Shenzhen
‘‘Shuangdeng Energy Storage ’’ Hubei Shuangdeng Energy Storage Technology Co.,
Ltd. （ 湖 北 雙 登 儲 能 科 技 有 限 公 司 ）, a company
incorporated in the PRC with limited liability on December
23, 2022 and a wholly-owned subsidiary of our Company
‘‘Shuangdeng Front ’’ Jiangsu Shuangdeng Front New Energy Co., Ltd. （江蘇雙
登富朗特新能源有限公司）, formerly known as Jiangsu
Front New Energy Co., Ltd. （江蘇富朗特新能源有限公
司）, a company incorporated in the PRC with limited
liability on November 13, 2006 and a wholly-owned
subsidiary of our Company
‘‘Shuangdeng Investment ’’ Shuangdeng Investment Management (Shanghai) Co.,
Ltd. （ 雙
登 投 資 管 理（ 上 海 ）有 限 公 司 ）, a company
incorporated in the PRC with limited liability on December
24, 2015 and is owned as to 80% and 20% by Mr. Yang
and his spouse, Ms. Qian Wuzhen （錢五珍）, respectively,
one of our Controlling Shareholders
DEFINITIONS
– 38 –


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‘‘Shuangdeng Runyoung ’’ Hubei Shuangdeng Runyoung New Energy Co., Ltd. （湖北
雙登潤陽新能源有限公司）, formerly known as Hubei
Shuangdeng Runyoung New Energy Co., Ltd. （湖北潤陽新
能源有限公司）, a company incorporated in the PRC with
limited liability on July 20, 2007 and a wholly-owned
subsidiary of our Company
‘‘Special Regulations ’’ the Special Regulations of the State Council on the
Overseas Offering and Listing of Shares by Joint Stock
Limited Companies （國務院關於股份有限公司境外募集股
份及上市的特別規定）, promulgated by the State Council
on August 4, 1994, which was repealed on March 31, 2023
‘‘Sponsor-Overall Coordinators ’’ the sponsor-overall coordinators as named in the section
headed ‘‘Directors, Supervisors and Parties Involved in the
Global Offering ’’in this prospectus
‘‘Stabilizing Manager ’’ China International Capital Corporation Hong Kong
Securities Limited
‘‘State Council ’’ the State Council of the PRC （中華人民共和國國務院）
‘‘subsidiary(ies) ’’ has the meaning ascribed thereto under the Listing Rules
‘‘substantial shareholder(s) ’’ has the meaning ascribed thereto under the Listing Rules
‘‘Supervisor(s) ’’ member(s) of our Supervisory Committee
‘‘Supervisory Committee ’’ the supervisory committee of our Company
‘‘Taizhou Hanfu ’’ Taizhou Hanfu Investment Co., Ltd. （泰州涵富投資有限責
任公司）, a company incorporated in the PRC with limited
liability on December 3, 2015 and wholly owned by Mr.
Yang, one of our Controlling Shareholders
‘‘Taizhou Hechuang ’’ Taizhou Hechuang Investment Management Center
(Limited Partnership) （ 泰州合創投資管理中心（ 有限合
夥））, a limited partnership established in the PRC on
December 15, 2015 with Taizhou Hanfu, a company
wholly owned by Mr. Yang, acting as the general partner,
one of our Controlling Shareholders
DEFINITIONS
– 39 –


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‘‘Taizhou Hexin ’’ Taizhou Hexin Enterprise Management Center (Limited
Partnership) （ 泰 州 合 鑫 企 業 管 理 中 心（ 有 限 合 夥 ））,a
limited partnership established in the PRC on March 17,
2020 with Taizhou Hechuang acting as the general partner,
one of our Controlling Shareholders and our Employee
Incentive Platform
‘‘Taizhou Heying ’’ Taizhou Heying Enterprise Management Center (Limited
Partnership) （ 泰州市合贏企業管理中心（ 有限合夥 ））,a
limited partnership established in the PRC on July 15,
2019 with Taizhou Hechuang acting as the general partner,
one of our Controlling Shareholders and our Employee
Incentive Platform
‘‘Takeovers Code ’’ the Code on Takeovers and Mergers and Share Buybacks
published by the SFC, as amended, supplemented or
otherwise modified from time to time
‘‘Telenor ’’ Telenor ASA, a state-owned public company established
under the laws of Norway on July 21, 2000, which is a
customer of the Company
‘‘Track Record Period ’’ the financial years ended December 31, 2022, 2023 and
2024 and the five months ended May 31, 2025
‘‘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 Share(s) in the share capital of our Company, with
a nominal value of RMB1.00 each, which is/are not listed
or traded on any stock exchange
‘‘United States ’’or ‘‘U.S. ’’ the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
‘‘U.S. dollars ’’
, ‘‘US$’’or ‘‘USD’’ United States dollars, the lawful currency of the United
States
‘‘U.S. Person ’’ Has the meaning given to such term in Rule 902(k) of
Regulation S
DEFINITIONS
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‘‘U.S. Securities Act ’’ the U.S. Securities Act of 1933, as amended, supplemented
or otherwise modified from time to time, and the rules and
regulations promulgated thereunder
‘‘VAT’’ value-added tax
‘‘Vodafone ’’ Vodafone Group Plc, a public li mited company established
under the laws of the UK on July 17, 1984, which is a
customer of the Company
‘‘White Form eIPO ’’ the application process for Hong Kong Offer Shares with
applications issued in applicant ’s own name and submitted
online through the designated website of the White Form
eIPO Service Provider at www.eipo.com.hk
‘‘White Form eIPO Service
Provider ’’
Computershare Hong Kong Investor Services Limited
‘‘%’’ percent
For ease of reference, the names of PRC laws a nd regulations, governmental authorities,
institutions, nature persons or other entities (incl uding our subsidiaries) have been included in this
prospectus in both the Chinese and English languages and in the event of any inconsistency, the
Chinese versions shall prevail.
DEFINITIONS
– 41 –


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This glossary of technical terms contains explanations of certain technical terms used
in this prospectus. As such, these terms and their meanings may not correspond to
standard industry meanings or usage of t hese terms and may not be comparable to
similar terms adopted by other companies.
‘‘Ah’’ Amp-hour, battery capacity unit
‘‘BMS’’ Battery Management System
‘‘BOM’’ Bill of materials
‘‘charge/discharge efficiency ’’ the ratio of the energy outpu t during discharge to the
energy input during charge, typically expressed as a
percentage to indicate how effectively a battery can store
and release energy
‘‘Chinese Academy of Engineering
and Chinese Academy of
Sciences ’’
a national and independent organization that aims to
advance engineering sciences and technology in China
‘‘CPT’’ Carriage Paid To, one of the Incoterms which means the
seller pays for transporting g oods to a named destination
but transfers risk to the buyer once handed to the carrier
‘‘C-rate ’’ a measure of the rate at which a battery is charged or
discharged relative to its maximum capacity
‘‘cycle life ’’or ‘‘life cycle ’’ the number of times (or cycles) that the a battery can
undergo the process of complete charging and discharging
until the end of its life, and the end life of a battery
generally indicates that the av ailable capacity of the battery
has decay to 80% of its designed capacity
‘‘DAP’’ Delivered At Place, one of the Incoterms which means the
seller delivers goods to a speci fied destination, bearing all
costs and risks until arrival, but the buyer handles
unloading and import duties.
‘‘data center ’’ a specialized facility designed to house an organization ’s
IT operations and equipment, such as servers, storage
systems, networking devices, and other computing
resources
GLOSSARY OF TECHNICAL TERMS
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--- page 54 ---
‘‘design life ’’ the series of stages that a product or system goes through
from its initial concept to its final phase of retirement or
disposal
‘‘discharge rate ’’ the speed at which a battery rele ases its stored energy. It is
typically expressed in terms of current (amperes, A) or as a
C-rate
‘‘economies of scale ’’ the cost advantages that enterprises obtain due to their
scale of operation
‘‘EMEA ’’ Europe, Middle East, and Africa
‘‘EMS’’ Energy Management System
‘‘energy density ’’ the amount of energy that can be contained within a given
volume or given mass
‘‘energy storage battery ’’,o r ‘‘ESS’’ a device that can store and output power, consists of
multiple subsystems such as battery system and energy
management system
‘‘ERP system ’’ Enterprise Resource Planning System
‘‘EV’’or ‘‘electric vehicle ’’ a vehicle that can be powered by an electric motor that
draws electricity from a battery and is capable of being
charged from an external source
‘‘FCA’’ Free Carrier, one of the Inco terms which means the seller
delivering the goods to a named place, which can be a
carrier ’s premises or another location
‘‘float charge life ’’ expected duration of time that a battery can operate by
maintaining a battery ’s full charge by applying a
continuous, low-level charging voltage that compensates
for the battery ’s self-discharge
‘‘FOB’’ Free On Board, one of the Incoterms which means that the
seller is responsible for delivering the goods to a
designated port and loading them onto the vessel chosen
by the buyer
‘‘GB/T 36276 ’’ PRC National Standard: 5Lithium ion battery for electrical
energy storage 4
GLOSSARY OF TECHNICAL TERMS
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‘‘GB/T 45001 ’’ PRC National Standard: 5Occupational Health and Safety
Management Systems – Requirements with Guidance for
Use4
‘‘GWh’’ unit of electricity, kWh is th e degree, 1GWh=1,000,000kWh
‘‘International Electrotechnical
Commission ’’or ‘‘IEC’’
a global organization tha t prepares and publishes
international standards for all electrical, electronic, and
related technologies
‘‘IEC 60896 ’’ requirements for stationary lead-acid batteries, which were
released by International Electrotechnical Commission
(IEC)
‘‘IEC 62619 ’’ 5Secondary cells and batteries containing alkaline or other
non-acid electrolytes – Safety requirements for secondary
lithium cells and batteries for use in industrial
applications 4, which was released by International
Electrotechnical Commission (IEC)
‘‘IEC 62620 ’’ 5Secondary cells and batteries containing alkaline or other
non-acid electrolytes – Secondary lithium cells and
batteries for use in industrial applications 4,w h i c hw a s
released by International Electrotechnical Commission
(IEC)
‘‘installed capacity ’’or
‘‘installation ’’
the volume of battery products installed in EVs or ESSs,
usually expressed in electricity unit of GWh or kWh
‘‘ISO 10012 ’’ Measurement Management System, which was released by
ISO (International Organi zation for Standardization)
‘‘ISO 14001 ’’ Environmental Management System, which was released by
ISO
‘‘ISO 45001 ’’ Occupational Health and Safety Management System,
which was released by ISO
‘‘ISO 50001 ’’ Energy Management System, which was released by ISO
‘‘IP65 ’’ a rating given to electrical enclosures and devices to
signify their level of protection against solids and liquids.
The rating is defined by the IEC under the IEC 60529
standard
GLOSSARY OF TECHNICAL TERMS
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--- page 56 ---
‘‘lead-acid battery ’’ rechargeable battery that re lies on a combination of lead
and sulfuric acid for its operation
‘‘lithium carbonate ’’ a common lithium compound with the chemical formula
Li2CO3, which has a broad application range
‘‘lithium-ion battery ’’ rechargeable battery that composes of cells in which
lithium ions move from the negative electrode through
electrolytes to the positive electrode during discharge and
back when charging
‘‘LFP’’ cathode material of lithium iron phosphate batteries with
formula of LiFePO
4, synthesized mainly by lithium
carbonate and iron phosphate
‘‘mass energy density ’’ the amount of energy that can be contained within a given
mass
‘‘NMP’’ N-methylpyrrolidone, which is a chemical that is widely
used during the manufacture and production of
petrochemicals, electronics and plastic material and resin
manufacturing
‘‘OA system ’’ office automation system
‘‘off-peak ’’ periods of time when the demand for electricity or other
services is lower than the usual levels
‘‘operating temperature range ’’ operating temperature range of a device or system refers to
the range of ambient temperatures within which it can
function effectively and reliably
‘‘peak ’’ the period of highest demand or maximum load in a given
time frame
‘‘per-unit cost(s) ’’ per-units cost of batteries is calculated by the sum of raw
material costs, manufacturing and labor costs, and other
costs in the manufacturing process divided by production
volume (kWh)
‘‘solar PV ’’ the technology that converts sunlight directly into
electricity using solar cells
GLOSSARY OF TECHNICAL TERMS
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‘‘Relevant Jurisdiction(s) ’’ means any jurisdiction that is relevant to the Company and
has sanctions related law or regulation restricting, among
other things, its nationals and/or entities which are
incorporated or located in that jurisdiction from directly or
indirectly making assets or services available to or
otherwise dealing in assets of certain countries,
governments, persons or entities targeted by such law or
regulation. The Relevant Jurisdictions include United
States ( ‘‘U.S. ’’), United Nations ( ‘‘UN’’), European Union
(‘‘EU’’), the United Kingdom ( ‘‘UK’’), the UK Overseas
Territories and Australia
‘‘Relevant Region(s) ’’ Afghanistan, Balkans, Belaru s, Democratic Republic of the
Congo, Egypt, Hong Kong, Iraq, Lebanon, Libya, Mali,
Myanmar, Russia (excluding the Crimea, Kherson,
Zaporizhzhia, and LPR/DPR r egions), Somalia, Tunisia,
Turkey, Ukraine (excluding the Crimea, Kherson,
Zaporizhzhia, and LPR/DPR regions) and Zimbabwe
‘‘Sanctioned Person(s) ’’ certain person(s) and identity(ies) listed on OFAC ’s
Specially Designated Nationals and Blocked Persons List
or other restricted parties lists maintained by the U.S., EU,
UK, UN or Australia
‘‘sq.m. ’’ square meters
‘‘Sodium-ion batteries ’’ a rechargeable battery, which use sodium ions (Na
+)a s
their charge carriers
‘‘telecom base station ’’ a fixed point of communication for cellular networks that
connects mobile devices to the core network
‘‘UL’’ UL Solutions Inc., a global leader in applied safety science
who helps businesses demonst rate compliance with safety
regulations and standards, fosters innovation, and enhances
brand trust through rigorous testing and certification
processes
‘‘UN38.3 ’’ the prevailing United Nations standard that lithium
batteries must meet to receive certification for safe
transport, which refers to Section 38.3 of Part 3 of the
‘‘United Nations Manual of Tests and Standards for the
Transport of Dangerous Goods ’’
GLOSSARY OF TECHNICAL TERMS
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‘‘utilization rate ’’ utilization rate is calculated as dividing production volume
by the production capacity for the same year
‘‘V’’ basic unit of voltage
‘‘voltage range ’’ voltage range of a device or system refers to the span of
voltages within which it can oper ate safely and effectively
‘‘Wh/kg ’’ Watt hour/kilogram
GLOSSARY OF TECHNICAL TERMS
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This prospectus contains certain forward-looking statements relating to our plans, objectives,
beliefs, expectations, predictions and intentions, which are not historical facts and may not
represent our overall performance for the periods of time to which such statements relate. Such
statements reflect the current views of our manage ment with respect to future events, operations,
liquidity and capital resources, some of wh ich may not materialize or may change. These
statements are subject to certain risks, uncerta inties and assumptions, including the other risk
factors as described in this prospectus. You are s trongly cautioned that reliance on any forward-
looking statements involves known and unknown risks and uncertainties. The risks, uncertainties
and other factors facing our Company which could affect the accuracy of forward-looking
statements include, but are not limited to, the following:
 our future business development, fina ncial condition and results of operations;
 our business strategies and plans to achieve these strategies;
 our ability to identify and satisfy user demands and preferences;
 our ability to maintain good relations hips with business partners;
 general economic, political and business co nditions in the industries and markets in
which we operate;
 relevant government policies and regulations relating to our industry, business and
corporate structure;
 the actions and developments of our competitors; and
 all other risk and uncertainties d escribed in the section headed ‘‘Risk Factors ’’ in this
prospectus.
In some cases, we use the words ‘‘aim, ’’ ‘‘anticipate, ’’ ‘‘believe, ’’ ‘‘can, ’’ ‘‘continue, ’’
‘‘could, ’’ ‘‘estimate, ’’ ‘‘expect, ’’ ‘‘going forward, ’’ ‘‘intend, ’’ ‘‘ought to, ’’ ‘‘may, ’’ ‘‘might, ’’
‘‘plan, ’’ ‘‘potential, ’’ ‘‘predict, ’’ ‘‘project, ’’ ‘‘seek, ’’ ‘‘should, ’’ ‘‘will, ’’ ‘‘would ’’ and similar
expressions to identify forward-l ooking statements. In particular, we use these forward-looking
statements in the ‘‘Business ’’ and ‘‘Financial Information ’’sections in this prospectus in relation
to future events, our future financial, business or other performance and development, the future
development of our industry and the future development of the general economy of our key
markets.
FORWARD-LOOKING STATEMENTS
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The forward-looking statements are based on our current plans and estimates and speak only
as of the date they were made. We undertake no obligation to update or revise any forward-
looking statements in light of new information, future events or otherwise. Forward-looking
statements involve inherent risks and uncertain ties and are subject to assumptions, some of which
are beyond our control. We caution you that a number of important factors could cause actual
outcomes to differ, or to differ materially, from those expressed in any forward-looking
statements.
Our Directors confirm that the forward-looking statements are made after reasonable care
and due consideration. Nonetheless, due to the ri sks, uncertainties and assumptions, the forward-
looking events and circumstances discussed in this prospectus might not occur in the way we
expect, or at all.
Accordingly, you should not place undue reliance on any forward-looking statements in this
prospectus. All forward-looking statements conta ined in this prospectus are qualified by reference
to this cautionary statement.
FORWARD-LOOKING STATEMENTS
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You should carefully consider all of the info rmation in this prospectus, including the
risks and uncertainties described below, before making an investment in our H Shares.
These risks could materially and adversely affe ct our business, financial condition and
results of operations. The trading price of our H Shares could significantly decrease due
to any of these risks, and you may lose all or part of your investment. You should pay
particular attention to the fact that substa ntially all of our operations are conducted in
the PRC, which is governed by a legal and regulatory environment that may differ
significantly from that of other countries. For more information concerning the PRC and
certain related matters discussed below, see ‘‘Regulatory Overview ’’ and ‘‘Appendix IV –
Summary of Principal Legal and Regulatory Provisions ’’ in this prospectus.
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 Practicab le Date unless otherwise stated, will not be
updated after the date hereof, and is sub ject to the cautionary statements in ‘‘Forward-
looking Statements. ’’
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our business is affected by conditions in the energ y storage industry; in p articular, potential
adverse development of the supply-demand dynamics of energy storage industry may
significantly affect the price and market demand of our product.
We provide energy storage products that are primarily used for telecom base stations and
data centers. Accordingly, our results of operations have been and are expected to continue to be
affected by downstream demand and the market development of the telecom base stations and
data centers markets. Strong growths in the global and China ’s telecom base stations and data
centers markets, and the corresponding growth in the added installed capacity of energy storage in
such markets, were major drivers for our growth during the Track Record Period. For details, see
‘‘Industry Overview ’’ in this prospectus. The downstream demands for energy storage products
are affected by many factors, such as:
 the government policies which promote the development of energy storage products;
 the rapid development of telecom networks and data centers; and
 energy storage technologies boosting data center and telecom industries ’ efficiency and
economic sustainability.
RISK FACTORS
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There is no assurance that the market growth of the telecom base stations or data centers
will maintain at the same level as we experien ced during the Track Record Period which drove
our revenues increase rapidly, or continue to increase in the future. If such downstream demands
do not increase as we expect, the market demand for our products will decrease correspondingly,
which may result in underutilization of our pro duction capacity, and in turn materially and
adversely affect our business, financ ial condition and results of operations.
We may not be able to derive the desired benefits from our research and development
efforts, and keep up with the latest technological development and industry trends, which
may negatively affect our competitiveness and profitability.
Technological innovation is critical to our success. We make significant investments in
product R&D, which we believe are crucial factors for our future growth and prospects. To
maintain and expand our competitive advantage , we plan to continue our investment in our R&D
efforts. For the years ended December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, our research and development expe nses amounted to RMB100.7 million, RMB112.8
millions, RMB110.5 million and RMB55.2 million, respectively. In addition, we have been
actively engaging in the R&D of the next gener ation of products and materials, which we
consider crucial for us to maintain our leadin g industry position and achieve sustainable
development. For details, see ‘‘Business — Research & Development — Our Key R&D Projects ’’
in this prospectus.
However, as R&D activities are inherently un certain, we cannot assure you that our R&D
projects will be successful or be completed within the anticipated time frame and budget, or that
our newly developed products will be commercialized. Even if such products can be successfully
commercialized, we cannot assure you that they will be accepted by our customers and achieve
the anticipated sales target or profit.
In addition, we cannot assure you that our exis ting or potential competitors will not develop
products which are similar or s uperior to our products or are more competitively priced. Due to
uncertainties in the time frame for developing new products and the duration of market window
for these products, there is a substantial risk that we may have to abandon a potential product that
is no longer commercially viable, even after we have invested significant resources in the
development of such product. If we fail in our product launching efforts, our business, prospects,
financial condition and results of operations may be materially and adversely affected.
RISK FACTORS
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We operate in a competitive industry and many of our competitors may be more established,
resourceful or adaptive, we may not be able to effectively compete with other industry
players.
The global and Chinese market for energy st orage products is intensely competitive and
continuously evolving. Both our competitors and us need to make improvement and upgrade the
existing products from time to time. To effe ctively compete, we have been continuously
improving technologies, products and production capacity, which may be unsuccessful and incur
risks of missing market opportunities and losing market share and in turn negatively affect our
performance.
In addition, some of our current and potenti al competitors may have a longer operating
history, stronger brand recognition, more estab lished relationships with customers, greater
financial and other resources, a larger customer base, better access to raw materials and greater
economies of scale than we do. So me of our competitors may also have closer relationships or
may enter into exclusive relationships with some of the key customers in the market. As a result,
they may be able to respond more quickly to changing customer demands or devote greater
resources to the development, promotion and sales of their products to respond to the changing
customer demand. In the meantime, some of our c ompetitors may have more diversified product
offerings comprising different types of energy storage products from ours, which may better
position them to withstand a decline or shift in demand for certain types of energy storage
products. Moreover, many market players in China, who may have more capital, market and/or
technology resources than we do, have been actively expanding their production capacity of
energy storage products in recent years. Leveraging their compe titive advantages, they may enjoy
benefits from economy of scale, and adopt aggressive business expansion strategy, which allow
them to offer their energy stor age products at a price similar or lower than ours, resulting in
decreased customer demand from us. If we fail to co mpete successfully, our business will suffer,
and we may not be able to maintain or increase our market share.
Furthermore, as we have a global footprint and sell our products to overseas customers, we
are subject to competition globally. In certain of our target markets, local state-owned and private
companies have been taking advantage of the significant market opportunity created by attractive
financial incentives and favorable regulatory environment that may not be available to us. State-
owned companies may have stronger relationships with local governments in certain regions, and
private companies may be more focused and expe rienced in manufacturing and selling energy
storage products in the markets where we compete. Our failure to adapt to changing market
conditions and to compete successfully with exis ting or new state-owned or private competitors
will limit our growth and will have a material adverse effect on our business and prospects. We
cannot assure you that we can compete successf ully in the markets in which we operate or the
ones we plan to enter in the future.
RISK FACTORS
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We are exposed to price fluctuations of raw materials, and we may not be able to adjust our
prices to fully offset the increased costs of raw materials, which will adversely affect our
profit margins, result of operations and financial condition.
Prices of raw materials have a significant impact on our cost of sales. For the years ended
December 31, 2022, 2023 and 2024, and the five months ended May 31, 2025, costs of raw
materials accounted for 83.5%, 84.6%, 82.7%, and 85.5% of our cost of sales, respectively. For
details, see ‘‘Financial Information — Major Factors Affecting O ur Results of Operations —
Fluctuation in Prices of Raw Materials ’’ in this prospectus. The current or expected supply of our
key raw materials may fluctuate depending on a number of factors beyond our control, including
but not limited to the availability of resources in the raw materials market, market demand,
potential speculation, market disruptions, natural disasters and other factors. We may not be able
to obtain stable, high-quality raw materials at reas onable prices at all times. Raw materials for our
products primarily include lead ingots, lead all oys, lithium iron phosphate, graphite, separators,
electrolytes, and other auxiliary materials.
Historically, we experienced price fluctuations of key raw materials needed for our products.
According to Frost & Sullivan, graphite prices de clined initially from RMB44,000 per ton in 2019
to RMB37,000 per ton in 2021 due to increased production capacity and efficiency gains.
However, prices began rising from RMB37,000 per ton in 2021 and reached RMB47,000 per ton
in 2022, driven by heightened demand from applica tions such as the electric vehicle sector, with
future trends suggesting potential stabilizatio n or slight decreases due to advancements in mining
technology and evolving demand dynamics. Conversely, the average price of aluminum alloy
steadily increased from RMB14,619 per ton in 2019 to RMB21,295 per ton in 2022, driven by
growing downstream demand and limited supply, before experiencing a decrease in 2023 to
RMB19,491 per ton, and the average price has rebounded to RMB20,437 per ton in 2024.
Besides, prices of lead ingots and lithium carbonate also experience d fluctuations. After the short-
term price drop of lead ingots in 2019, from 2020 to 2023, the price of lead ingots has shown a
steady increase and price of lead ingot maintained at the price range from RMB14.0 thousand per
ton to RMB17.5 thousand per ton. In 2024, the price of lead ingots increased to RMB16.9
thousand per ton compared to RMB15.6 thous and per ton in 2023 due to the global capacity
contraction of mining and smelting for lead ingot s. Lithium carbonate prices first dropped to an
average of RMB48.0 thousand per ton in 2 020 and then, the price of lithium carbonate
experienced significant growth between 2020 and 2022, and later dropped to RMB95.9 thousand
per ton in 2024, according to Fro st & Sullivan. For details, see ‘‘Industry Overview — Battery
and Raw Materials Price Analysis ’’in this prospectus.
We cannot assure you that we will not experience significant increases in the prices of raw
materials in the future. Under such circumstances, we may need to adjust the prices of our
products accordingly to pass down the increased costs onto our customers or procure other
sources of supply of raw materials to maintain our profit. However, we cannot assure you that we
will be able to pass all or a portion of the increa sed costs to our customers due to factors such as
competition, or we will be able to find alternativ e sources in a timely and cost-effective manner,
or at all.
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The average selling price of our products may fa ce downward pressure because of decline in
raw material prices and decreasing trend of market prices of batteries, which will adversely
affect our profit margins, result of operations and financial condition.
The average selling price of our products is infl uenced by a variety of factors beyond our
control, including but not limited to raw materi al costs, competitor pricing, market trends and
labor costs. During the Track Record Period, our product prices have experienced fluctuations.
The average selling price of our lithium-ion b attery increased from RMB948.3/kWh in 2022 to
RMB979.2/kWh in 2023. The ave rage selling price of our lithium- ion battery decreased from
RMB979.2/kWh in 2023 to RMB698 .6/kWh in 2024. The average se lling price of our lithium-ion
battery decreased from RMBRMB841.1/kWh in the five months ended May 31, 2024 to
RMB595.1/kWh in the five months ended May 31, 2025. For lead-acid battery, its average selling
price increased from RMB490.3 /kWh in 2022 to RMB506.7/kWh i n 2023. The average selling
price of our lead-acid battery remained stab le, from RMB506.7/kWh in 2023 to RMB509.5/kWh
in 2024. The average selling price of our lead-ac id battery increased from RMB496.0/kWh in the
five months ended May 31, 2024 to RMB520.5/kWh in the five months ended May 31, 2025.
During the track record period, the decrease of average selling prices of our products is mainly
due to decrease in price of raw materials, such as lithium iron phosphate, which is in line with
industry trend. See ‘‘Financial Information — Year to Year Comparison of Results of Operations ’’
in this prospectus for details.
We cannot predict the future trend of the average selling price of our products, nor can we
guarantee that the fluctuation of average sellin g price will not continue. A continued decline in
the average selling price could result in reduced gross profit margins and net profit, which may
adversely affect our results of operations and financial condition.
Our business, financial condition and results of operations may be subject to adverse effect
from the risk of customer concentration or o ur ability to retain existing customers and
attract new customers.
For the years ended December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, our revenues from the top five customers was approximately RMB2,210.0 million,
RMB1,964.5 million, RMB1,723.3 million, and RMB 1,866.6 million, respectively, accounting for
54.2%, 46.1%, 38.3% and 34.0% of our total sales during the respective year. During the same
years, our revenues from the largest custome r for the respective year was RMB990.3 million,
RMB907.5 million, RMB589.6 million and RMB189 .5 million, respectively, accounting for
24.3%, 21.3%, 13.1% and 10.2% of our total sales during the respective year. For details, see
‘‘Business — Sales, Marketing and Customers — Our Customers ’’in this prospectus.
According to Frost & Sullivan, the market for the telecom base station is highly
concentrated with large State-Owned Enterpri ses occupying substantial market shares, and thus
we are and may still be subject to risks arisin g from the customer c oncentration. We cannot
assure you that our major customers will not diversify their suppliers, change their business scope
or business model nor suspend their operation, or they will not encounter any operating or
financial difficulties. Any material adverse cha nges in the business, operation and financial
conditions of our major customers may in turn have a material adverse effect on us.
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In addition, there is no assuranc e that we could retain our existing customers or attract new
customers as we did during the Track Record Period. If we fail to retain our existing customers or
attract new customers in the future because our products could not meet the requirements of the
market, or that our selling prices are not competitiv e, or due to other factors as disclosed in this
section of this Prospectus, our business, financial conditions and results of operations will be
adversely affected. There is no assurance that we are able to maintain good relationship with our
major customers, or our major customers will continue to have high demands for our products in
the future. Under the aforementioned circums tances, if we are unable to identify and acquire
suitable new customers within a reasonable perio d of time, our business, financial condition and
results of operation may be materi ally and adversely affected.
Our operating history may not be a reliable predictor of our prospects and future results of
operations.
We experienced growth during the Track Record Period. In order to meet rapidly growing
demands for quality products by our customers, we have grew ra pidly, built up or expanded our
production capacity, and recruited, trained and managed employees in the past few years. The
success of new capacity projects is affected by a number of factors beyond our control, such as
construction progress, local laws and regulations, government support and customer demand for
expanded capacity. Our future operating results depend to a large extent on our ability to manage
our expansion and growth successfully. Risks that we face in undertaking our construction/
expansion plan include, among others:
 managing our supply chain to support fast business growth;
 managing a continuing growing organization as we expand;
 continuing to improve our operating efficiency;
 controlling expenses and investments in a nticipation of expanded operations;
 implementing and enhancing administrative infrastructure, system and processes;
 executing our strategies and business initiative successfully; and
 addressing new markets and potentially unforeseen challenges as they arise.
If we are unable to manage our growth effectively, we may be unable to take advantage of
market opportunities, execute our business strat egies or respond to competitive pressures which
could have a material adverse effect on our results of operation and prospects.
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Our historical performance is not indicativ e of our future performance as we went through
rapid growth and changes. We may not always be accurate in predicting industry trends that may
emerge and affect our business. Investors should comprehensively consider our business and
prospects in light of the risks and challenges we face in our industry, including our ability to
continuously drive technical advancement, effectively manage our supply chain, enhance and
maintain operational efficiency, and effec tively manage our growth in the face of the ever-
changing regulatory environment and adapti ng to changing market conditions, including
technological developments and changes in th e competitive landscape. If we fail to address any
of the aforesaid risks and challe nges, our business, financial co ndition and results of operations
could be materially and adversely affected.
We cannot assure you that we can sustain our revenues and profit growth in the future. Our
profitability depends partially on our ability to c ontrol costs and operating expenses, which may
increase as we expand our business. In addition, we may continue to devote significant resources
to expand our business operations, which may re quire increased sales and marketing expenses,
among others. Such expansion could negativel y impact our short-term profitability and cash
flows. If our business expansion is proven to be ineffective, and we fail to increase revenues, or if
our cost and operating expense gr ow faster than our revenues, our business, financial position and
results of operations may be negatively affected.
We may not be able to increase our production capacity as planned, and even if our
production expansion projects proceed as planned, we may not be able to increase our
production output in a timely manner or at all as initially envisioned.
For the years ended December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, our lithium-ion battery production c apacity was 1.58 GWh, 2.17 GWh, 2.13 GWh and
0.89 GWh, respectively, and our lead-acid battery production capacity was 6.25 GWh, 6.62 GWh,
6.62 GWh and 2.76 GWh, respectively. We may i ncrease our production capacities through our
e x p a n s i o np r o j e c t ss oa st om e e tc u s t o m e r s’ expected demands for our products in the future.
Such expansion will impose significant resp onsibilities on our senior management and
require significant commitment of our resources, including financial resources and the time
needed to identify, recruit, maintain, and integr ate additional employees. Our proposed expansion
will also expose us to greater overhead and support costs and other risks associated with the
manufacture and commercialization of new produ cts. Difficulties in effectively managing the
budgeting, financing, forecasting and other process control issues presented by such expansion
could negatively affect our business, prospects, results of operations and financial condition. Such
e x p a n s i o ni sa l s or e q u i r e dt oo b t a i nv a r i o u sa pprovals, permits, licenses and certificates and
complete relevant inspections b y competent government authorities. There is no assurance that we
will be able to execute our expansion plan as c ontemplated or at all. Any delay or failure to
obtain relevant approvals, permits, licenses and certificates or complete the inspections for our
production expansion projects may materially delay our production expansion or even result in the
cancellation of such plans, which may adversely affect our business, financial conditions and
results of operations.
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However, even if we manage to expand our production capacity as planned, there is no
assurance that we may increase our production output in a timely manner or at all as envisaged.
Our ability to increase our productio n output is subject to significant constraints and uncertainties,
including but not limited to:
 delays by our suppliers and equipment vendors and cost overruns as a result of a
number of factors, many of which may be beyond our control or cannot be foreseen,
such as increases in raw material prices and problems with equipment vendors;
 delays in government approval process or denial of required approvals for production
by relevant government authorities;
 our ability to configure the production lines for specific products in a timely manner;
and
 the performance and efficiency of the manufacturing equipment we procured and the
production expertise we retained;
Moreover, our product development, manufacturing and testing protocols are complex and
require significant technological and production process expertise. Any change in our processes
could cause one or more production errors, requiring a temporary suspension or delay in our
production line until the errors can be researched, i dentified, and properly addressed and rectified,
and thus limit our production output. This may o ccur particularly as we introduce new products,
modify our engineering and production techniques, and/or expand our production capacity. In
addition, our failure to maintain appropriate qua lity assurance processes c ould result in increased
product failures, loss of customers, increased warranty reserve, or increased production and
logistics costs, and delays. If we are unable to increase our production output in a timely manner
or at all in the end because of any of the risks described above, we may be unable to fulfill
customer orders or achieve the growth we expect. In addition, if we are unable to fulfill customer
orders, our reputation could be affected, and our customers could source products from other
companies. The combination of the foregoing could materially and adversely affect our business,
financial condition and results of operations.
The reduction, modification, delay or eliminat ion of government grants and other economic
incentives may affect our business.
We received government grants of RMB25. 1 million, RMB35.6 million, RMB39.4 million
and RMB14.2 million for the years ended Dec ember 31, 2022, 2023 a nd 2024, and the five
months ended May 31, 2025, respectively. Not all of the government grants are recurring in
nature. According to Frost & Sullivan, in the ne ar term, the market demand for energy storage
products, including our lithium-ion batteries, w ill continue to be affected by the availability of
government incentives. Government-sponsored financial incentives to promote energy storage
include subsidies from the central and local governments, preferential tax rates and other non-
monetary incentives. The availa bility and size of such subsidies an d incentives depend, to a large
extent, on political and policy developments rela ting to environmental concerns and other macro-
economic factors.
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Moreover, government incentive programs are expected to gradually decrease in scope or be
discontinued as energy storage technology improves and becomes more affordable. Negative
public or community response to energy storage projects could adversely affect the government
support and approval of our energy storage business. In addition, our Company was qualified as a
High and New Technology Enterprise in 2019 and 2 022 and is entitled to a preferential tax rate of
15% from 2019 to 2025. This qualification is subject to review by the relevant tax authority in
the PRC for every three years. For details, see ‘‘Financial Information — Description of Major
Components of Our Results of Operations — Income Expense ’’ in this prospectus. We cannot
assure you that we will be able to receive any such government grants in the future. If we are
unable to receive the government grants in the future at the same level as we had during the
Track Record Period, or if there are any adverse changes in government regulations and policies
relating to energy storage industry and their implem entation, especially those relating to economic
subsidies and incentives, could significantly reduce the profitability of our business and materially
and adversely affect the state of the industry.
If we fail to manage our inventory effectively, our results of operations, financial condition
and liquidity may be materially and adversely affected.
In order to operate our business effectively and meet our consumers ’ demands and
expectations, we must maintain a certain level of inventory to meet the needs of production and
ensure timely delivery of our products. As of December 31, 2022, 2023 and 2024, and May 31,
2025, we had inventories of RMB537.0 mi llion, RMB459.2 million, RMB551.0 million and
RMB773.8 million, respectively. We are committed to adopting a flexible ap proach to inventory
management, adjusting our inventory levels in response to market demand fluctuations. When
market demand increases, we correspondingly raise our inventory levels to ensure supply stability.
However, such an approach is inherently uncertain, and the demand for our products could change
significantly between the order date and the projected delivery date. We cannot assure you that
we are able to always maintain optimal inventory levels in the future. If we fail to accurately
assess the demand, we may experience inventory obsolescence and inventory shortage risk.
Inventory levels in excess of demand, or substantial decrease in the expected market price of our
products, may result in inventory write-downs or write-offs and we may sell the excess inventory
at discounted prices, which would have an advers e effect on our profitability. Furthermore, if we
underestimate the demand for our products, we may not be able to produce a sufficient number of
products to meet such unanticipated demand, wh ich could result in delays in the delivery of our
products and negatively affect our reputation.
For the years ended December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, we recorded loss allo wance for impairment of inve ntories of RMB14.8 million,
RMB53.8 million, RMB31.5 million and RMB30.9 m illion, respectively. Demand forecasts are
inherently uncertain despite supply chain management mechanisms due to a number of factors,
such as launch of new products, pricing, changes in customer procurement decisions and evolving
preferences of consumers of energy storage products, each of which may affect the accuracy of
any forecast. We may record impairment losses from time to time in accordance with our
impairment policies. Any of the above may materi ally and adversely affect our business, results of
operations and financial condition. As we plan to continue to expand our production capacities,
we may continue to face challenges in effectively managing our inventory.
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We are exposed to credit risk of our custome rs and failure to collect our trade and bills
receivables in a timely manner ma y affect our financial condition and results of operations.
As of December 31, 2022, 2023 and 2024, and May 31, 2025, our trade and bills
receivables amounted to RMB 1,862.2 million, RMB1,609.3 million, RMB2,309.1 million and
RMB2,386.6 million, respectively. Our trade and b ills receivables turnover days were 136.5 days,
146.7 days, 157.2 days and 189.0 days for the years ended December 31, 2022, 2023 and 2024,
respectively. The fluctuation of our trade and bills receivables may influence our cash flow
generated from operating activities.
Should the creditworthiness of our customers d eteriorate or should a significant number of
our customers fail to settle their trade and bills r eceivables in full for any reason, we may incur
impairment losses and our results of operations and financial position could be materially and
adversely affected. In addition, there may be a risk of delay in payment by our customers beyond
their respective credit period, which in turn m ay also result in an impairment loss provision.
There is no assurance that we will be able to fully re cover our trade and bills receivables from the
customers or that they will settle our trade and bills receivables in a timely manner. In the event
that settlements from customers ar e not made on a timely manner, or at all, our financial position
and results of operations may be materially and adversely affected.
We are subject to risk related to the prolonged cash conversion cycle.
During the Track Record Period, we recorded inventory turnover days of 52.2 days, 52.8
days, 46.7 days and 60.8 days in 2022, 2023 and 2024, and the five months ended May 31, 2025.
See ‘‘Financial Information — Discussion of Certain Selected Items From the Consolidated
Statements of Financial Position — Assets — Inventories. ’’ Besides, our trade and bills
receivables turnover days remained relatively high at 136.5 days in 2022, 146.7 days in 2023,
157.2 days in 2024 and 189.0 days in the five months ended May 31, 2025, primarily due to (i) a
considerable number of our customers are state-owned enterprises, whose payment cycles are
generally longer as a result of more complex internal approval procedures; and (ii) a significant
portion of our energy storage batteries are for telecom base stations and data centers, which
typically involve longer construction and deployment timelines compared to other companies such
as those engaging in sales of battery cells, there by leading to slower payment collection. See
‘‘Financial Information — Discussion of Certain Selected Items From the Consolidated Statements
of Financial Position — Assets — Trade and Bills Receivables. ’’
Although we have been diversifying our customer profile and aim to continuously improve
the collection of trade receivables and the turnover days by strengthening communication with
customers, actively collecting and negotiating feasible repayment plans based on actual
conditions, these efforts may not be successful . If our inventory turnover days and our trade
receivables turnover days increase in the future, it may lead to a longer cash conversion cycle,
which could further add pressure to our cash flow a nd working capital, and our financial position,
business and results of operations might be adversely and materially impacted.
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There is uncertainty as to the tender s uccess rate of our Group in the future.
Some of our revenue is derived from contracts awarded through tendering and such
contracts are not recurring in nature. During the Track Record Period, some of our revenue were
generated from projects that were awarded by e ither public tender or invitation by tender. Our
Group ’s tender success rates for the years ended December 31, 2022, 2023 and 2024, and the five
months ended May 31, 2025 were approximately 34.8%, 38.0%, 39.5% and 42.1%, respectively.
We cannot guarantee that we will be invited to participate in the tender process and even if we
are invited, our tender success rate is influenced by the following factors, including but not
limited to (i) our production capacity; (ii) the n umber of tenders submitted by our Group and (iii)
the pricing and other terms and conditions offe red by our competitors, which is beyond our
control. Therefore, we cannot assure you that we will succeed in the tender process and we may
not be able to maintain or increase our tender success rate. Moreover, we may not be awarded
with new contracts by our customers upon expiry of the existing contracts. If our Group is not
able to maintain the current te nder success rate, or if we are unable to secure new orders with a
contract sum similar to or larger than the contract sum of our current ones on a continuous basis,
our revenue and operation may be mate rially and adversely affected.
Our business depends on our ability to protect our intellectual property rights, and we may
be exposed to intellectual property infringem ent, misappropriation claims or invalidation
applications by third parties, which, if determined adversely to us, could cause us to pay
significant damage and subject us to injunctions prohibiting sale of our products in certain
markets. We may not be able to prevent the unau thorized use of our intellectual property
rights by others, which could damage our business and competitive position.
We rely primarily on a combination of our patents, trade secrets, trademarks, the
confidentiality agreements signed by the employ ees, and confidentiality agreements signed with
the third parties to protect our intellectual property rights. Although we have applied and obtained
a number of trademarks and patents for the operations of our business, there is no assurance that
we are able to successfully apply and be granted new intellectual property rights in a timely and
cost-effective manner in the future, for such applications are expensive and time consuming. For
details, see ‘‘Business — Intellectual Property ’’ in this prospectus. Despite our efforts to protect
our proprietary rights, unauthorized parties m ay be able to obtain and use information that we
regard as proprietary. Under such circumstances, to protect our intellectual property rights and
maintain our competitive advantages, we may initia te legal proceedings against parties who we
believe are infringing our intellectual property r ights. Legal proceedings are often costly and may
divert management attention and resources away from our business. In certain situations, we may
have to initiate such legal proceedings in foreign jurisdictions, in which case we are subject to
additional risks as to the result of the proceedings, the amount of damages that we can recover,
and the enforcement process. As of the Latest Practicable Date, we were not involved in any legal
proceeding against parties who we believe are infringing upon our intellectual properties.
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Our success is also subject to our ability to use, develop and protect our technology and
trade secrets without infringing the intellectual property rights of third parties. Others may hold or
obtain patents, copyrights, trademarks, or other proprietary rights used in our products and
service. This might prevent, limit, or interfere with our production, use, development, sales, or
marketing, and could therefore disturb our daily operations and distract our management. From
time to time, we may receive communications from intellectual property right holders regarding
their proprietary rights. Companies holding patent s or other intellectual property rights may bring
suits alleging infringement of such rights or otherwise assert their rights and urge us to obtain
licenses. Our uses of trademarks relating to our design, software, technology could be found to
infringe upon existing intellectual property ri ghts owned by others. In addition, if we are found to
have infringed upon a third party ’s intellectual property rights, we may be required to do one or
more of the following:
 cease to sell products that are involved in the challenged intellectual property rights
owned by others;
 pay damages;
 redesign our products; or
 establish and maintain alternat ive branding for our products.
The validity and scope of any potential claim s/requests can be complicated and involve
complex scientific, legal and factual questio ns and analysis and, therefore, may be highly
uncertain. The defense and prosecution of intellectual property suits, patent opposition
proceedings and related legal and administrative proceedings or requests can be both costly and
time consuming and may significantly divert the efforts and resources of our management. A
determination in any such litigation or proceed ings or requests to which we are a party may
invalidate our patents, subject us to pay damages to third parties, require us to seek licenses from
third parties, pay ongoing royalties, redesign our products, subject us to injunctions prohibiting
the manufacture and sale of our products or the use of our technologies. Any of the afore-
mentioned will materially and adv ersely affect our business, fi nancial condition and results of
operations. As of the Latest Practicable Date, we were not involved in any legal proceeding
against us for the infringement upon inte llectual properties of third parties.
Unsatisfactory performance of or defects in our products may cause us to incur additional
expenses and warranty costs, tarnish our reputation and cause our sales and market share to
decline.
Designing, manufacturing and selling quality pr oducts that are safe and reliable are of vital
importance to our business. However, the lithium- ion battery can rapidly release the energy they
contain by venting smoke and flames in a manner that can ignite nearby materials as well as other
lithium-ion batteries. Additionally, lead-acid batt eries contain heavy metals such as lead and lead
alloys, which, if disposed of improperly or d ismantled without follo wing environmental
regulations, can potentially cause e nvironmental pollution. This faulty result could subject us to
lawsuits of product liability claims, product re calls, or redesign efforts, all of which would be
time consuming and expensive.
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We are exposed to the risk of product recalls, which could arise from various factors
including, but not limited to, design flaws, manufacturing defects, component failures, or non-
compliance with safety standards. Product recalls can have significant adverse effects on our
operations, financial condition, and reputation. If a recall is ne cessary, we may incur substantial
costs related to the repair, replacement, or ref und of the affected produc ts. Additionally, a recall
could lead to legal liabilities, regu latory penalties, and a loss of customer trust. These events may
negatively impact our market share and profitability, and could result in long-term damage to our
brand and competitive position. A successful produ ct liability claim against us could require us to
pay for substantial damages. Pro duct liability claims against us , whether or not successful, are
costly and time-consuming to defend. In the eve nt that our products prove to be defective, we
may be required to redesign or recall such produc ts. We cannot assure you that a product liability
claim will not be brought against us in the future. A product liability claim, with or without merit,
could result in significant adverse publicity against us, and could have a material adverse effect
on the marketability of our products and our repu tation, which in turn, could have a material
adverse effect on our business, financial cond ition and results of operations. Moreover, we may
not be fully indemnified or indemnified at al l if liabilities arise from faulty components
manufactured by our suppliers that are used in our products, or results from the faulty assembly.
Our product liability insurance to cover liabilitie s arising from product liability claims and
product recalls in the PRC may not be sufficient to cover potential liability claims. Inability to
obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential
product recalls and produc t liability claims could prevent or inhibit the commercialization of our
products or could result in a loss of customers and decrease in revenues, unexpected expenses and
a loss of market share. If any of our products are found to have reliability, quality or
compatibility problems, we will be required to acc ept returns, provide replacements, provide
refunds, or pay damages. We cannot assure you that as we continue distribution of our products,
we will be able to obtain or maintain adequate insurance coverage on acceptable terms, or that
such insurance will provide adequate coverage against all potential claims. In the event that our
exposure to liabilities exceeds the coverage of our insurance, we may still be required to incur
substantial amounts, which would materially and a dversely affect our busine ss, financial condition
and results of operations.
We may be subject to liabilities and disruption in operations in conn ection with accidents
that occur during the manufacturing proce ss at our production facilities due to, among
others, failure to comply with safety measures and procedures.
In the course of operations and production, we implement and require our employees to
comply with safety measures and procedures as s tipulated in our internal policies. Nevertheless,
there is no assurance that our safety measures and procedures are strictly followed by our
employees. As our manufacturing process is complicated and inevitably involves operation of
tools, equipment and machinery and use of chemi cal materials, accidents resulting in employee
injuries or even deaths may occur. Such acciden ts may result in disruption of our operation and
subject us to liabilities, and we may not have ade quate or sufficient insurance to cover such
liabilities, which could then adversely affect our business, results of operation and financial
condition.
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We may fail to effectively manage our distributors. Actions taken by our distributors in
violation of the framework agreements or sales guidelines could materially and adversely
affect our business, prospects and reputation.
We have limited control over the operations and actions of our distributors, all of whom, to
the best of our Directors ’ knowledge, are Independent Third Parties during the Track Record
Period. We rely on distribution agreements and sales guidelines. We have methods in place to
manage our distributors, including their complian ce with laws, rules, regulations and our policies.
For details, see ‘‘Business — Sales, Marketing and Customers — Sales and Distribution ’’ in this
prospectus. We cannot guarantee that we will be able to effectively manage our distributors, or
that our distributors would not breach our agreements and policies. If our distributors take one or
more of the following actions, our business, resu lts of operations, prospects and reputation may
be adversely affected:
 breaching the distribution agreements or our policies and measures;
 failing to maintain the requisite licenses, permits or approvals, or failure to comply
with applicable regulatory requir ements when selling our products; or
 violating anti-corruption, anti-bribery, competition or other laws and regulations of
China or other jurisdictions.
Any violation or alleged violation by our distri butors of the distribution agreements, sales
guideline or any applicable laws and regulations could result in the erosion of our goodwill, a
decrease in the market value of our brand and a n unfavorable public perc eption about the quality
of our products, resulting in a mate rial adverse effect on our busines s, financial condition, results
of operations and prospects.
We may not continue to be successful in develo ping and maintaining a cost-effective battery
manufacturing capability.
The production capacity of our lithium-ion batte ry and lead-acid battery was approximately
0.89 GWh and 2.76 GWh, respectively, for the five months ended May 31, 2025. To enhance our
competitiveness, we intend to expand our annual production capacity to meet expected growth in
demand for our batteries.
We continually engage in the development of manufacturing process capabilities and
expansion of our production capacity. In doing so, we may face significant product development
challenges, significant expense and inherent risks. Manufacturing batteries involves a series of
complex processes, and we may not be able to ma nufacture our products with sufficient quality
and quantity to meet our manufactur ing standards. Minor deviations in the manufacturing process
can cause substantial decreases in yield and in s ome cases result in no yield or cause production
to be suspended. We will need to make capital expenditures to purchase manufacturing equipment
for battery production and will also need to make significant investments in R&D to keep pace
with technological advances in energy storage technology.
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We cannot guarantee that we will realize the expected benefits of our capacity expansion, or
that we will achieve an adequate return on our capital and R&D investments. Any failure to
successfully develop and maintain cost-effec tive manufacturing capability may have a material
and adverse effect on our business and prospects.
Technological changes in the energy storage industry may bring about new and effective
energy storage products, rendering our inven tories, products in production or under R&D
uncompetitive or obsolete, which cannot be accu rately predicted nor fully mitigated despite
our best efforts in R&D.
The energy storage industry is characterized by evolving technologies and standards. These
technological evolutions and developments lead to improvement and upgrade of our products
from time to time. Our competitors may manufac ture energy storage products with better
performance indicators through their R&D ende avors. In order to maintain our market position,
keep pace with technological advances in the energy storage industry, and effectively compete in
the future, we need to invest significant resources in R&D. For the years ended December 31,
2022, 2023 and 2024, and the five months ended May 31, 2025, our research and development
expenses amounted to RMB100. 7 million, RMB112.8 million, RMB110.5 million and RMB55.2
million, respectively. In addition, we have be en actively engaging in the R&D of the next
generation of products and materials, which we c onsider crucial for us to maintain our leading
industry position and achieve sustain able development. For details, see ‘‘Business — Research &
Development — Our Key R&D Projects ’’ in this prospectus. We may not be able to adjust our
research and development direction in a timely manner in the face of the rapid technological
changes in the industry. There is no assurance that we will successfully roll out and
commercialize the next generation of our energy storage products and generate a return from
such research and development. If we fail to do so, our prospects, business, and results of
operations may be adversely affected.
Furthermore, according to Frost & Sullivan, the global energy storag e industry is expected
to include various categories of p roducts, including lithium-ion batteries, lead-acid batteries,
sodium-ion batteries, and others (such as flywheel energy storage and compressed air energy
storage). From 2024 to 2030, the gl obal installed capacity of lithium- ion energy storage batteries
i sp r o j e c t e dt og r o wf r o m2 2 7 . 4G W ht o1 , 4 7 1.3 GWh, with a CAGR of 36.5%, significantly
outpacing other technologies. During the same period, lead-acid energy storage batteries,
benefiting from their mature technology and high safety, are expected to achieve steady growth,
with new installed capacity increasing from 38.5 GWh to 61.7 GWh, with a CAGR of 8.2%.
Sodium-ion batteries, known for their abundant res ources, adaptability, and co st-effectiveness, are
projected to see their global new installed capac ity grow from initial commercialization to 263.3
GWh by 2030, with a CAGR of 142.3%. Other technologies, including flywheel energy storage
and compressed air energy storage, are expected to grow from 1.1 GWh in 2024 to 20.2 GWh in
2030, with a CAGR of 61.7%. Technological advancements in alternative energy storage methods
such as sodium-ion batteries, flywheel energy storage and compressed air energy storage will
offer customers a broader range of product choices. However, we cannot guarantee that our
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efforts to keep pace with technological changes can succeed or our products will continue to be
favored by our customers in the long term. If customers shift their preference to other energy
storage products, or if our products fail to prevail over other existing and emerging energy
storage products in the market competition, our bu siness, prospects, and financial position could
be adversely affected.
Our business is capital intensive. The sources of our future financing can be uncertain, and
our working capital can be unstable during certain quarters.
We operate in a capital-intensive industry that requires substantial capital and other long-
term expenditures, including expenditures for the purchase of equipment and construction of
production facilities. To the extent that we expa nd or add new production facilities, we expect to
fund the related financial commitments and other capital and operating expenses in cash from our
operations, banking facilities, and the net proc eeds from the Global Offering. However, we cannot
assure you that we will be able to generate sufficient cash from our operations or obtain the
necessary financing or that such financing will be at interest rates and on other terms that are
commercially reasonable and affordable to us or consistent with our expectations. Our ability to
obtain additional capital is subject to a variety of uncertainties, including our future financial
condition, results of operations and cash flows, g eneral market conditions for capital-raising
activities, and economic, political and other conditions in China, th e U.S. and other jurisdictions
where we operate. To the extent we cannot obtain f inancing for our expansion or acquisitions at
reasonable costs or at all in the future, our business may be adversely affected.
In addition, our expansions require us to mak e pre-construction preparation and trial
production input, as a result, during certain quarters we may incur higher working capital needs
that may affect our working capital sufficiency. We cannot assure you that we will not experience
any unforeseen circumstances that may adversely affect our working capital in the future. If that
happens, our business, financi al position, results of operations , prospects may be affected.
Our reputation is key to our business success. Negative news or publicity may adversely
affect our reputation, business and growth prospects.
Any negative news or publicity in relation to u s, or any of our Directors, management,
Controlling Shareholders and bus iness partners or counter-parties, or any of their respective
affiliates (including, where applicable, any business partner or counter-party thereof), among
others, whether or not they act on our behalf or otherwise utilize or share our brand name, and
even if proven untrue, could adversely affect our reputation, business and growth prospects.
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We cannot assure you that such negative news or publicity would not damage our reputation
or brand image. Given our specialized industry and market, negative news, publicity and word of
mouth could spread quickly and negatively impact our reputation, brand image or relationship
with third parties, which could have a material a dverse effect on our business, financial condition
and results of operations. Even if we are not a party to, not involved in, and not liable to these
litigations, disputes and allegations, we canno t assure you that any of such negative news or
publicity will not affect our reputation, brand i mage or relationship with third parties, which
could in turn have a material adverse effect on our business, financial condition and results of
operations.
Work stoppage, increases in labor cost and other labor related matters may have an adverse
effect on our businesses.
A good working relationship with our employees across our business lines is crucial to our
operations and success. We have not experienced any material work stoppages, strikes or other
major labor problems during the Track Record Period. However, there is no assurance that any of
such events will not arise in the future. If our employees were to engage in a strike or other work
stoppage, we could experience significant disruption of our operations and/or higher on-going
labor costs, which may have an adverse effect on our businesses, financial condition and results
of operations. As of May 31, 2025, we had 2,290 full-time employees. Some of our employees
are currently represented by labor unions. In addition, employees of some of our suppliers or
customers may become unionized in the future o r experience labor instability and we may not be
able to predict the outcome of any future labor negotiations. Any conflicts between us and our
employees ’ labor union or between our suppliers and customers and their respective unions could
have an adverse effect on our financial c ondition and results of operations.
For the years ended December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, our direct la bor costs amounted to RMB114.1 m illion, RMB116.9 million, RMB131.8
million, and RMB51.0 million, representing 3.4%, 3.4%, and 3.5%, and 3.2% of our total cost of
sales, respectively. In addition, labor costs i n regions where we opera te have generally been
increasing in recent years and could potentially continue to increase. If labor costs in these
regions continue to increase, our production costs will increase. We may not be able to pass on
these increased costs to customers by increasin g the selling prices of our products in light of
competitive pressure in the markets where we oper ate. In such circumstances, our profit margin
may decrease, which could have an adverse effe ct on our financial condition and results of
operations.
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Any failure to maintain an effective qua lity management system may have a material
adverse effect on our business, reputation, financial condition and results of operations.
Our product quality is critical to our succe ss. Therefore, we have a quality management
system in place. The effectiveness of our qua lity management system depends on a number of
factors, including the design of the system, th e equipment used, the qu ality of our staff and
related training programs and our ability to en sure that our employees adhere to our quality
management policies and guidelines. We are requ ired to comply with specific guidelines based on
product safety and restricted and hazardous materials laws and regulations that are applicable in
the jurisdictions into which our customers sell their products. Our safety standards for the
inspection of our products are also based on relevant national and industry standards. We cannot
assure you that our quality management system w ill continue to be effective or in compliance
with relevant laws and regulatio ns and standards. For details, see ‘‘Business — Quality Control ’’
in this prospectus. Any signifi cant failure in or deterioratio n of the efficacy of our quality
management system could result in us losing a ccreditations and requisite certifications or
qualifications, which could in turn have a material adverse effect on our business, financial
condition and results of operations.
Our operations and production depend on a stabl e, timely and adequate supply of utilities at
commercially reasonable prices.
We depend on the supply of utilities, such as power and water to maintain our production
processes and our operations. Our production volume and production costs are dependent on our
ability to source such utilities at acceptable pri ces and maintain a stable supply. The prices for
utilities are subject to price volatility attributab le to a number of factors which may be beyond
our control, including inflation, disruption in the global supply chain, supplier capacity
constraints, general economic conditions, commodity price fluctuations, demand from other
industries for the same materials, the availability of complementary and substitute materials, and
local and national regulatory requirements. Th ere can be no assurance that shortages of utilities
will not occur in the future or that we will be able to pass on related cost increases to our
customers. Significant fluctuations in such costs may have a material effect on our profitability if
we are unable to adjust the prices of our products accordingly, and may also harm our
competitive advantages with resp ect to the affected products.
We manufacture our products in certain pr ovinces in China and may deliver them to
various customer designated locations, and we outsource the delivery of our products to
logistics providers, which exposes us to various risks relating to long-distance transportation
of our energy storage products.
Our production plants are located in Jiangsu and Hubei provinces, China. For details, see
‘‘Business — Manufacturing and Production ’’ in this prospectus. The geographical separation of
our production plants in China and many of our customers necessitates constant long-distance
transportation of our energy storage products from Jiangsu and Hubei provinces. There is no
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assurance that (i) these logistics providers woul d operate in accordance with our instructions,
policies and business guidelines, or that their serv ice quality will not materially deteriorate, (ii)
we can maintain good relationships with those log istics providers, (iii) they will not unilaterally
increase their service prices, or (iv) there will not be any wrongdoing or misconduct by their
employees or by them which would materially and adversely affect their services. There is no
assurance that we can find reliable service providers who can meet our standards at scale. The
constant long-distance transportation of our energy storage products may also expose us to
various risks, including (i) increases in transporta tion costs, (ii) loss of energy storage products as
a result of any accidents that may occur in the transportation process, and (iii) delays in the
transportation of our energy stor age products as a result of any seve re weather conditions, natural
disasters or other conditions adversely affecting road traffic. Any of these risks could have a
material adverse effect on our business and results of operations.
We rely on third parties for various servi c e sa n dc o m p o n e n t si nc o n n e c t i o nw i t ho u r
business and any disruption in their supply or significant increase in their prices will
negatively affect our business.
During the Track Record Period, we relied on third-party service providers for services in
connection with our business, such as logistics a nd customs clearance. We obtain services from
third-party service providers who we believe are able to meet our specifications and requirements.
However, any natural or man-made disasters or other unanticipated catastrophic events, including
but not limited to adverse weather, fires, technica l or mechanical difficulties, storms, explosions,
earthquakes, strikes, acts of terrorism and wars could impair the operations of our suppliers and/or
disrupt our transportatio n channels and customs clearance pr ocedure, and impede our ability to
manufacture and deliver our products to customers in a timely manner. If the third-party service
providers do not perform satisfactorily, substantially reduce the amount and scope of services
provided to us, substantially increase the prices of their services or terminate their business
relationship with us, we may need to replace the third-party service providers or take other
remedial actions which could increase our costs of operations. As we do not have direct control
over the third-party service providers, if they become involved in the unauthorized provision of
services not complying with our requirements or that of our customers, our reputation in the
industry will be affected. Our reputation in the industry will also be adversely affected if the
third-party service providers have any wrongdoing or misconduct or do not comply with
applicable laws and regulations. In addition, we incorporate component s manufactured by third
parties into our products. If there are quality issu es with respect to these third-party components
included in our battery products, we may not discover the issue until after our products have been
shipped and installed. Further, we may have little or no recourse against these third-party
suppliers arising out of warranty claims made by our customers. If the components manufactured
by third parties could not satisfy our specification and quality standards, or if there is any delay
in delivering such components to us on time which may in turn delay our shipments of products,
our business, reputation and results of operations may be materially and adversely affected. This,
in turn, may materially and adversely affect ou r business, financial condition and results of
operations. Many components are at times subject to industry-wide shortages and significant
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commodity pricing fluctuations. There can b e no assurance that we will be able to extend or
renew the agreements that we have entered into for the supply of many raw materials, components
and products on similar terms, or at all. A numbe r of suppliers of components may suffer from
poor financial conditions, which can lead to bus iness failure for the supplier or consolidation
within a particular industry, further limiting our ability to obtain sufficient quantities of
components on commercia lly reasonable terms.
Our efforts in maintaining, developing and expanding our business requires marketing and
selling our products internationa lly, which poses inherent risks.
While we generated a substantial majority of our total revenues during the Track Record
Period from sales to customers located in the PRC, we also made sales to overseas customers in
countries such as Europe and North America countries/regions. For details, see ‘‘Financial
Information — Description of Major Componen ts of Our Results of Operations — Revenues By
Region ’’in this prospectus. While we expect the PRC will continue to be our primary market, we
may expand the sales of our products overseas, which will expose us to a number of risks,
including, but not limited to:
 fluctuations in foreign currency exchange rates;
 increased costs associated with maintainin g the ability to understand the local markets
and develop and maintain effective marketing and distributing presence in various
countries;
 providing customer service and support in these markets;
 difficulty with staffing and managing overseas operations;
 failure to develop and implement appropriate risk management and internal control
structures tailored to overseas operations;
 difficulty and cost relating to compliance with different commercial and legal
requirements of the overseas markets in which we offer or plan to offer our products;
 failure to obtain or maintain permits for our products or services in these markets;
 different safety concerns and measures needed to address accident related risks in
different countries and regions;
 inability to obtain, maintain or enforce intellectual property rights;
 unanticipated changes in prevailing economi c conditions and regulatory requirements;
 uncertainties and time requirement in long dist ance international t ransportation; and
 trade barriers such as export requirements, tariffs, taxes and other restrictions and
expenses.
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Moreover, we intend to establish overseas pro duction facilities in the future. The success of
our overseas expansion plans depends on whether we could adequately, timely and effectively
address the risks associated with overseas opera tions, such as failure to adopting different legal
framework and government policies, restrictions or requirements relating to foreign investments,
non-compliance with the requirements of applicab le sanctions, antibribery and related laws and
regulations, failure to protect our reputation fro m negative publicity against us, and limitations on
ability of non-nationals to reside and work in such countries. We may not be able to develop and
implement policies and strategies that will be effective in each location where we do business. A
change in one or more of the factors described above may have a material adverse effect on our
business, financial condition and results of operations.
We may experience delays and/or failures in obtaining and renewing relevant PRC or
overseas governmental approvals, licenses, permits or others required for our new
construction/expansion projects.
We are required to obtain various approvals, permits, licenses, and certificates throughout
multiple stages of our new construction/expansion p rojects. Generally, such approvals, licenses,
permits, or certificates are only issued or renewed after certain conditions have been satisfied. We
cannot assure you that we will not encounter obstacles toward fulfilling such conditions that delay
us in obtaining, or result in our failure to obtain , the required approvals. In the event that we
encounter significant delays in obtaining or renewing, the necessary government approvals for any
of our new construction/expansion projects, we will not be able to continue with our development
plans, and our business, financial condition, and r esults of operations may be adversely affected.
Furthermore, under the relevant PRC land and property laws and regulations, we were required to
obtain the real estate ownership certificates for o ur owned land and property, and to file the lease
agreements for our leased properties. Failure t o comply with the relevant laws and regulations
may subject us to certain fines and penalties. For details, see ‘‘Business — Properties ’’ in this
prospectus.
We could be adversely affected as a result of any sales we make to certain countries that are,
or become subject to, sanctions administered b y the United States, the European Union, the
United Kingdoms, the United Nations, Austra lia and other relevant sanctions authorities.
During the Track Record Peri od, we had sold our Chinese-origin lithium-ion battery and
lead-acid battery products directly to our customers in Afghanistan, Balkans, Belarus, Democratic
Republic of the Congo, Egypt, Hong Kong, Iraq, Lebanon, Libya, Mali, Myanmar, Russia
(excluding the Crimea, Kherson, Zaporizhzhia, and LPR/DPR regions), Somalia, Tunisia, Turkey,
Ukraine (excluding the Crimea, Kherson, Zaporizhzhia, and LPR/DPR regions) and Zimbabwe
(the ‘‘Relevant Regions ’’). The revenues generated from such sales to the Relevant Regions was
approximately RMB59.2 millio n, RMB84.0 million, RMB90.0 million and RMB7.9 million,
representing approximately 1.5%, 2.0%, 2.0% and 0.4% of our total revenues in 2022, 2023 and
2024, and the five months ended May 31, 2025, respectively. The United States and other
jurisdictions or organizations, including the European Union, the United Kingdom, the United
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Nations and Australia, have, thr ough executive order, legislatio n or other governmental means,
implemented measures that impose economic sanctions against the Relevant Regions or against
targeted industry sectors, groups of companies or persons, and/or organizations within the
Relevant Regions. However, none of the Relevant Regions were a Comprehensively Sanctioned
Country and none of our customers located in the Relevant Regions were identified on the
Specially Designated Nationals and Blocked Pe rsons List maintained by OFAC or the relevant
restricted parties lists maintained by the Europ ean Union, Australia and the United Nations. While
certain customers were listed on the Entity List ma intained by the BIS, all products sold to our
customers were Chinese-origin lithium-ion battery and lead-acid battery products that does not
subject to the EAR.
We have engaged Hogan Lovells, our International Sanctions Legal Advisor to perform
procedures to assess our compliance with International Sanctions laws and regulations and
evaluate our risk of exposure and potential penalties imposed under the International Sanctions
laws and regulations. As advised by our International Sanctions Legal Advisor who has performed
the procedures they consider necessary, our sales i nvolving the Relevant Regions denominated in
these transactions with customer s in the Relevant Regions were no t Primary Sanctioned Activities
for the purpose of the guidance in Chapter 4.4 of the Guide for New Listing Applicants issued by
the Stock Exchange, and the risk that we would face exposure to secondary U.S. sanctions is
remote. As such, it is unlikely that our activitie s would result in the imposition of sanctions on
the Relevant Persons. Further, given the scope of the Global Offering and the expected use of
proceeds as set out in this prospectus, our Intern ational Sanctions Legal Advisor is of the view
that the involvement by parties in the Global Offering will not implicate any applicable
International Sanctions on such parties, including our Company, our potential investors,
Shareholders, the Stock Exchange and its listing committee and group companies, and
accordingly the sanctions risk exposure to our Company, potential investors and Shareholders,
and persons who might, directly or indirectly, b e involved in permitting the listing, trading and
clearing of our Shares (including the Stock Ex change, its listing commi ttee and related group
companies) is remote. For more details on our business operations with customers in the Relevant
Regions subject to International Sanc tions, please refer to the sections headed ‘‘Business —
Business Activities with cust omers in Relevant Regions ’’in this prospectus.
However, sanctions laws and regulations are constantly evolving, and new persons and
entities are regularly added to the list of Sanc tioned Persons, export controls and sanctions
applicable to our customers may be expanded. Further, new requirements or restrictions could
come into effect which might increase the scrutiny on our business or result in one or more of our
business activities being deemed to have violat ed sanctions. There can be no assurance that our
future business will be free of any sanctions risks or our business will conform to the
expectations and requirements of the authorities o f the Relevant Jurisdictions. Our business and
reputation could be adversely affected if the aut horities of the Relevant Jurisdictions were to
determine that any of our future activities cons titutes a violation of the sanctions they impose or
provides a basis for a sanction designation of our Group.
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Our business, financial condition and results of operations may be materially and adversely
affected by international polic ies and international export controls and economic sanctions.
Certain foreign jurisdictions have imposed or may impose export controls, economic
sanctions or other trade-related measures in various forms (such as heavy tariffs or harsh trade
conditions) against certain countries, indivi duals and legal entities, which, from time to time,
prohibit or restrict export and import activities t o a certain extent. Export controls and economic
sanctions laws or regulations could change in a way that could affect our business, exports or
sales in other countries and/or could result in restrictions, penalties or fines.
Specifically, the recent U.S.-China trade ten sions have led to the introduction of higher
tariffs on various goods traded between the two countries, including high-technology goods,
semiconductors and electronics. There is a possi bility that the trade restrictions could expand if
the U.S. and China do not reach an agreement to resolve the issues. There is no assurance as to
how the U.S.-China trade tensions might develop or whether there will be any changes to the
scope and extent of goods that are or will be bein g subject to such export controls, sanctions,
tariffs, or new trade policies introduced by the two countries. We cannot predict the implications
of the ongoing U.S.-China trade tensions and the resulting impact on our industry and the global
economy. In addition, on August 9, 2 023, the Biden Administration issued the Executive Order
on Addressing United States Investments in Certain National Security Technologies and Products
in Countries of Concern ( ‘‘Reverse CFIUS EO ’’) granting the U.S. government the authority to
establish and enforce an outbound investment screening regime ( ‘‘Outbound Investment
Program ’’). On October 28, 2024, the Department of the Treasury issued the Provisions
Pertaining to U.S. Investments in Certain National Security Technologies and Products in
Countries of Concern (the ‘‘Final Rule ’’) to implement the President ’s Order of August 9, 2023.
The Final Rule has come into effect on January 2, 2025. We believe we are not a ‘‘covered
foreign person ’’under the Outbound Investment Program. However, there is no assurance that the
U.S. Department of Treasury will take the same view as ours. If we were to be deemed a
‘‘covered foreign person, ’’ and if U.S. persons engaged in a ‘‘covered transaction ’’ (each as
defined under the Final Rule) that involves the acquisition of our equity interests, such U.S.
persons may need to make a notification pursuan t to the Final Rule. If our ability to raise such
capital is significantly and negatively affected, it could be detrimental to our business, financial
condition and prospects. In such case, the val ue of our H Shares may significantly decline.
During the Track Record Period, our products are offered to customers across the world.
There is no assurance that our sales or our customers ’ sales of their products will not be subject to
the restrictions introduced by the U.S. Furthermo re, if we export our products to other countries
which are subject to sanctions or export controls in the future and/or if the scope of the export
controls or sanctions are expanded, our business, financial condition and results of operations may
be materially and adversely affected. Further, w e have no control over the countries to which the
customers will sell and/or export their end products. If the export sales of the customers ’ end
products are restricted, prohibited or made subje ct to any trade conditions under any international
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policies or international export controls or economic sanctions imposed by any jurisdictions, the
customers ’ demand in our products may drop and, as a r esult, our business, financial condition
and results of operations may be materially and adversely affected.
We are subject to anti-corruption, anti-bri bery, anti-money laundering, financial and
economic sanctions, and simila r laws, and non-compliance w ith such laws can subject us to
administrative, civil, and criminal penalties, collateral consequences , remedial measures, and
legal expenses, any of which could adversely a ffect our business, results of operations,
financial condition, and reputation.
We may be subject to anti-corruption, anti-brib ery, anti-money laundering, financial and
economic sanctions, and similar laws and regulations in various jurisdictions in which we conduct
activities. We have adopted policies and procedur es designed to ensure compliance by us and our
directors, officers, employees, r epresentatives, consultants, agents, customers and business
partners with applicable anti-corruption, anti-b ribery, anti-money laundering, financial and
economic sanctions, and similar laws and regulations. However, our policies and procedures may
not be sufficient, and our directors, officers, employees, representatives, consultants, agents,
customers and business partners could engage in improper conduct for which we may be held
responsible, which could materially and adversely affect our business, reputation, financial
condition, and results of operations.
Non-compliance with anti-corruption, anti-brib ery, anti-money laundering, or financial and
economic sanctions laws could subject us to whis tleblower complaints, adverse media coverage,
investigations, and severe administrative, civil a nd criminal sanctions, collateral consequences,
remedial measures, and legal expenses, all of which could materially and adversely affect our
business, reputation, fi nancial condition, and results of operations.
The success of our business depends on our abili ty to attract, train and retain highly skilled
employees and key personnel.
We have been, and will continue to be, heavily dependent on the continued services of our
senior management team. If we lose the services of any member of our senior management team,
we may not be able to find suitable replacements in a timely manner, at acceptable cost or at all,
and our business, results of operations, financial condition and prospects could be materially and
adversely affected. Our success also depends on our ability to attract and retain experienced and
highly trained personnel. However, competition t o hire highly qualified personnel is intense and
we cannot guarantee that we will be able to meet our staffing needs in the future. Any failure by
us to hire or replace a sufficient number of sk illed employees on a timely and effective basis
could have negative repercussions on our business, financial condition, results of operations and
prospects.
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We may not be able to obtain sufficient raw mat erials or certain key components in a timely
manner or on commercially reasonable terms.
We currently purchase certain key raw materials and components needed for our products
from third parties. Our current suppliers may be u nable to satisfy our future requirements of
quality and quantity of raw materials on a timely basis. For details, see ‘‘Business — Suppliers ’’
in this prospectus. Moreover, the prices of raw materials and components could fluctuate
significantly due to circumstances beyond our control. For details, see ‘‘ — R i s k sR e l a t i n gt oO u r
Business and Industry — We are exposed to price fluctuations of raw materials, and we may not
be able to adjust our prices to fully offset the increased costs of raw materials, which will
adversely affect our profit margins, res ult of operations and financial condition ’’in this section.
If our current suppliers are unable to satisfy our long-term requirements on a timely basis,
we may be required to seek alternative sources for necessary materials and components, produce
the raw materials or components in-house or redesign our proposed products to manufacture
available substitutes at reasonable cost. If we fail to do so, it will result in a significant delay in
our manufacturing and delivery of our products , which may result in liabilities of damages and
damage to our reputation, and will adversely a nd materially affect our business, results of
operations and financial condition.
We may be involved in legal or other proceedin gs arising out of our operations from time to
time and may face reputational risks, penalty risks and significant liabilities as a result.
We may be involved in disputes from time to time with various parties involved in our
business operations, including but not limited to our customers, suppliers, distributors, employees,
logistics service providers and banks. These disputes may lead to protests, legal or other
proceedings and may damage our reputation and divert our resources and management ’s attention.
Significant costs may have to be incurred in settlin g such disputes or defending ourselves in such
proceedings. If we are not successful in defending ourselves in such proceedings, we may be
liable for damages, the amount of which may be sign ificant. In addition, we may have compliance
issues in the course of our operations, which may subject us to administrative proceedings or
unfavorable decrees that may result in liabilities a nd cause other material adverse effects on our
business, results of opera tions and financial position.
Our insurance coverage may not cover all losses, and we may incur significant losses
resulting from operating hazards, product liability claims, project construction or business
interruptions.
Our operations involve the use, handling, generation, processing, storage, transportation and
disposal of hazardous mat erials, which may result in fires, explosions, spills and other unexpected
or dangerous accidents causing personal injuries or death, property damages, environmental
damages and business interruption. Our insurance on properties, equipment, environmental
liability and product liability are limited in sc ope and may not cover all claims relating to
personal injury, property or environmental damage arising from incidents on our properties or
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relating to our operations. For risk exposure not covered by our insurance policies, we share the
potential liability with counterparties in accordance with our agreements with such counterparties
and applicable laws and re gulations. For details, see ‘‘Business — Insurance ’’ in this prospectus.
Any occurrence of these or other incidents which are not insured under our existing insurance
policies could have a material adverse effect on ou r business, financial condition or results of
operations.
We are also exposed to risks associated with product liability claims in the event that the
use of our energy storage products results in injury. We may not have adequate resources to
satisfy a judgment if a successful claim is brought against us. In the event that potential claims
exceed the scope or amount of coverage under this insurance, our business could be materially
and adversely affected.
In addition, the normal operation of our production plants may be interrupted by accidents
caused by operating hazards, power supply disruptions, equipment failure, as well as natural
disasters. Any significant damage or interrupt ion to these production plants could still have a
material and adverse effect on our results of operations.
Particularly because we depend on a limited number of suppliers, we are vulnerable to
supply chain issues, including shortages of adequate raw materials, component and
equipment supply, cancellation or delay of pur chase orders, inflationary pressures and cost
escalation.
We depend on third-party suppliers for raw materials that are essential for our production.
We procure these materials and equipment from a limited number of suppliers. For the years
ended December 31, 2022, 2023 and 2024, and the five months ended May 31, 2025, purchases
from our five largest suppliers amounted to RMB1,273.1 million, RMB1,243.7 million,
RMB1,541.4 million, and RMB801.8 million, respec tively, accounting for 42.3%, 43.8%, 47.9%,
and 50.3% of our total purchases for the same years/period, respectively. During the same years,
our purchase from the largest supplier am ounted to RMB527.9 million, RMB468.7 million,
RMB663.4 million, and RMB404.3 m illion, respectively, accoun ting for 17.5%, 16.5%, 20.6%,
and 25.4% of our total purchase for the same years/period, respectively. The failure of any of
such suppliers, for whatever reason, to supply the materials and equipment that meet quality,
quantity and cost requirements in a timely ma nner could impair our ability to manufacture
products, increase costs, hinder compliance with sales agreements ’ terms and may result,
ultimately, in cancellation of purchase orders a nd potential liability for us. We may not be able to
turn to alternative sources on a timely basis or on commercially reasonable terms to deliver
products to customers in the re quired quantities and at prices that are profitable, which may
escalate the severity. There can be no assurance that our inventories will address all the supply
chain failures that may arise. Further, our manufacturing and suppliers ’ manufacturing and supply
chain may be subject to potential disruptions due to plant closure as a consequence of energy
shortage or other causes. Supply may also be inte rrupted by accidents, disasters, geopolitical
instability or other unforeseen events beyond our control.
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The search for alternative sou rces of supply to mitigate or solve the above problems may
increase our manufacturing costs. Likewise, increas ed integration of manufacturing processes to
lower costs could potentially damage our busine ss, results of operations and relationship with
customers. In any case, we may not be able to counteract this impact through price increases for
our products to transfer the increase to our cust omers at all, or through alternative sources of
supply, in spite of the possible execution of r emedial courses of action or fallback plans.
Problems of this kind could consequentially reduce our market share, damage our brand and lead
to legal disputes with customers. All of the afor ementioned factors could adversely impact our
business, results of operations and relationship with customers.
We may be subject to risks arising from our suppliers ’ import of raw materials and
components from overseas regions.
Some of our suppliers may import raw materials and components from overseas regions.
These imports are inherently subject to various external risks beyond our control, including but
not limited to changes in international trade po licies, customs procedures, tariffs, foreign
exchange volatilities and geopolitical tensions. Any disruption, delay, or increased cost associated
with such imported materials could erode the cost efficiency of our supply chain and thus may
compromise our production schedules, increase our manufacturing costs, and adversely affect our
business operations and financial position.
We may incur significant costs, from paying damages, or providing replacements or refund,
because of the warranties we provide for our products, and our provisions to cover future
potential claims under our product warranties may be insufficient.
For our battery products, we usually provide our customers with a warranty three to eight
years. For details, see ‘‘Business — Sales, Marketing and Customers — Sales Agreement ’’ in this
prospectus. We provide a provision for these potential warranty expenses, which takes into
account the Group ’s recent claims, past warranty data and the weight of all possible results and
their related probabilities. For the years e nded December 31, 2022, 2023 and 2024, and five
months ended May 31, 2025, our provisions f or product warranty were RMB30.7 million,
RMB36.5 million, RMB38.4 million, and RMB17.3 m illion, respectively, the upward trend from
2022 to 2024 of which was in line with the increase of our battery sales volume during the Track
Record Period. For details, see Note 31 to the Accountants ’ Report in Appendix I to this
prospectus. As we continue to upgrade our products design and introduce new models, there is no
assurance that future warranty claims will be consistent with past history, and in the event that we
experience a significant increase in warranty claims, there is no assurance that our provision will
be sufficient. This could have a material advers e effect on our business, financial condition and
results of operations.
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If we fail to implement our expansion plan as scheduled, or if such plan fails to achieve
expected benefits, our business and prospects could be materially and adversely affected.
We plan to invest in the construction of a lith ium-ion batteries production facility in
Southeast Asia for energy storage battery for data centers, so as to further develop our data center
business. For details, see ‘‘Future Plans and Use of Proceeds – Use of Proceeds ’’ in this
prospectus.
Constructing production facilities overseas r equires relevant knowledge and familiarity of
local conditions and practices. Given that we lack experiences of overseas expansion, our
expansion plan may not be implemented as scheduled. Any failure or delay in implementing our
expansion plan may result in a delay of seizing t he opportunities in the data center sector and
cultivate our second growth pillar. Moreover, our plans to increase our production capacity
require significant capital investment, and the actual costs of our expansion plan may exceed our
original estimates, which could materially and adversely affect the realization of expected return
on our expenditures. In addition, if we fail to fully utilize the additional production capacity due
to any adverse change to the market environment, technologies, and relevant policies, our
business, results of operations and financial cond ition could be materially and adversely affected.
We may not be able to timely fulfill our obligatio ns in respect of contract liabilities to our
customers or at all.
Contract liabilities are mainly advance payme nts from customers. A s of December 31, 2022,
2023 and 2024 and May 31, 2025, we had cont ract liabilities of RMB36.8 million, RMB63.0
million, RMB39.6 million and RMB39.9 million, re spectively. Our recognition of contract
liabilities as revenues is subject to future perform ance obligations and may not be representative
of revenues for future periods. The continued operation of our production sites and our production
safety may be substantially interrupted and mater ially and adversely affected due to a number of
factors, many of which are outside of our control. For details, see ‘‘ — R i s k sR e l a t i n gt oO u r
Business and Industry — We may be subject to liabilities and disruption in operations in
connection with accidents that occur during the man ufacturing process at our production facilities
due to, among others, failure to comply with safety measures and procedures ’’ in this section. As
a result of disruption to any of our production sites or any problems in manufacturing our
products, we may fail to fulfill contract obligations or meet market demand for our products, and
our results of operations, liquidity and finan cial position could be adversely affected.
We are subject to various risks rel ating to third-party payments.
During the Track Record Period, certain of our customers settled their payments with us
through third-party payors (the ‘‘Third-Party Payment Arrangement(s) ’’). During the Track
Record Period, the aggregate amount of third-party payments accounted for less than 1% of the
total payments we received from all customers for the same years, respectively. For details, see
‘‘Business — Third Party Payment ’’in this prospectus.
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We are subject to various risks relating to such Third-Party Payment Arrangements during
the Track Record Period, including possible claim s from third-party payors for return of funds as
they were not contractually indebted to us, and po ssible 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) institute d or brought against us in respect of third-party
payments, we will have to spend significant financial and managerial resources to defend against
such claims and legal proceedings, and our fina ncial condition and results of operations may, as a
result, be adversely affected.
We may need to provide impairment losses for in tangible assets, whi ch could negatively
affect the results of our operations and financial condition.
We had intangible assets of RMB7.4 million, RMB7.1 million, RMB8.3 million and
RMB7.8 million as of December 31, 2022, 2023 an d 2024 and May 31, 2025, respectively. Our
intangible assets mainly consist of software. For details, see ‘‘Financial Information — Discussion
of Certain Selected Items From The Conso lidated Statements of Financial Position — Other
Intangible Assets ’’in this prospectus.
However, the intangible assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the carrying value of
our intangible assets is considered to exceed its recoverable amount and is therefore determined to
be impaired in the future, we would be required to write down the carrying value or record a
provision of impairment loss for these intangible assets in our financial statements during the
period in which our intangible assets are deter mined to be impaired, and this impairment would
adversely affect our results of operations and our financial condition. While we did not recognize
substantial impairment loss for intangible a ssets during the Track Record Period, we cannot
assure you that there will be no such charges in the future and such impairment loss could
adversely affect our results of operations and financial conditions.
We may recognize impairment loss on our prepayments, other receivables and other assets.
We recorded prepayments, other receivables and other assets of approximately RMB85.4
million, RMB71.1 million, RMB87.6 million and RMB128.8 million as of December 31, 2022,
2023 and 2024 and May 31, 2025, respectively. During the Track Record Period, our
prepayments, other receivables and other assets primarily related to prepaid value-added tax,
prepayments for the purchase of raw material su ch as lead ingots, lead alloys and lithium iron
phosphate, which are necessary for our daily operations, as well as deposits, and other
receivables. For details, see ‘‘Financial Information — Discussion of Certain Selected Items from
the Consolidated Statements of Financial Position — Prepayments, Other Receivables and Other
Assets ’’ in this prospectus and Note 17 to the Accountants ’ Report in Appendix I to this
prospectus. We cannot assure you that there would not be any significant impairment charges on
our prepayments, deposits or other receivables in the future. If we record significant impairment
losses on such balances in the future, our busin ess, financial condition and results of operations
may be materially and adversely affected.
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We may not be able to enter into price adjustment mechanism for all of our agreement.
Some of our contracts may have a price adjustment mechanism, which allows adjustment of
price in certain circumstances. For details, see ‘‘Business — Sales, Marketing and Customers —
Sales and Distribution ’’ in this prospectus. However, we cannot guarantee that the price
adjustment clause could adequately cover the amount of increased costs. In the event that our
actual costs significantly exceed our estimated costs and the price adjustment mechanism is not
adequate to cover the increased costs, our financial conditions and results of operations could be
materially and adversely affected. In addition, we may not be able to enter into a price adjustment
mechanism for all of our agreements. If the costs of raw materials, labor, or other inputs rise, we
may be unable to pass these increases on to custom ers, leading to reduced profitability. Further,
competitors who can adjust their prices may ga in a market advantage, either by undercutting
prices or maintaining profitability when costs rise.
Our plants and fixed assets may require substantial investment and upgrading due to
depreciation or business growth.
Our plants and operations may require substan tial investment and upgrading from time to
time due to depreciation or business growt h, which may increase our costs. If we cannot
successfully recover such costs , our profitability may decrease. Additionally, the timely
completion of planned upgrades i s subject to a number of factors, including our ability to raise
and maintain sufficient funds for such upgrades , our ability to obtain the required licenses and
permits from government authorities, and the adequa te supply and timely delivery of products. If
upgrading is not completed in a timely manner, ou r operations may be temporarily restrained,
which may further materially and adversely affe ct our business, financial condition, results of
operations, and prospects.
We have granted, and may continue to grant, share incentives, which may result in
increased share-based payment expenses and negatively impact our results of operations.
We have adopted employee share scheme and employees of the Group receive remuneration
in the form of share-based payments. In 2022, 2023, 2024 and the five months ended May 31,
2025, we incurred share-based payment expe nses of RMB10.6 million, RMB20.2 million,
RMB22.5 million and RMB7.2 million, respectiv ely. We believe the granting of share-based
payment compensation is of significant impor tance to our ability to attract and retain key
personnel and employees, and we will continue to grant share incentives to employees in the
future. As a result, our expenses associated with share-based payment compensation may increase,
which may have an adverse effect on our results of operations.
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The uncertainty in global economic condition s, political instability, and changes in
diplomatic and trade relationships could negatively affect our operating results.
Our operating results are directly affected by the general global economic conditions of the
industries in which our major customers oper ate. Some of our business segments are highly
dependent on the economic and market conditio ns in each of the geographic areas in which we
operate. The uncertainty in global economic co nditions varies by geographic segment and can
result in substantial volatility in global cred it markets. For example, the current tensions in
international trade and rising political tensions , particularly those between the United States and
China, may materially and adversely impact our business, financial condition and results of
operations. Credit volatility could impact our work ing capital for manufacturing, or result in cost
changes or interruptions to suppliers whose components we rely upon if we are unable to access
the needed credit for our operations. These cond itions affect our business by reducing prices that
our customers may be able or willing to pay for o ur products or by reducing the demand for our
products, which could in turn negatively impact our sales and result in a material adverse effect
on our business, cash flow, results of operations and financial condition.
In addition, our business operations and finan cial performance could be adversely affected
by the political climate and diplomatic relations hips in the regions where we operate. Political
instability, such as government upheaval, civil un rest, or changes in leadership, can create an
unpredictable environment that may disrupt our supply chain, operations, and customer base.
Additionally, shifts in diplomatic relationships between countries can l ead to changes in trade
policies, tariffs, and sanctions, which could adv ersely affect our ability to import or export goods
and services.
We may form or seek additional collaborations in the future and may not realize any or all
benefits of such alliances.
We may in the future seek and form, strategic alliances or other collaborations, with
overseas partners that we believe will complement or augment our product development and R&D
efforts with respect to our product candidates that we may develop, as well as the services we
provide and may provide in the future. Any of these relationships may require us to incur non-
recurring and other charges, increase our near an d long-term expenditures, issue securities that
dilute the shares held by our existing Shareholders or disrupt our management and business.
Our strategic collaboration with partners involves numerous risks, which could adversely
affect our ability to recognize the benefits of the collaboration w ithin an acceptable timeframe or
at all. A collaboration partner may choose to del ay or terminate a partnership for a variety of
reasons, which include, but are not limited to, a lac k of financial resources to continue to fund the
collaboration, material disagreement between us and the partner, personnel changes in research
leadership and other management resulting in a loss of internal advocacy, or other strategic
realignment within the organization. Disputes may arise between us and our current or future
collaboration partners. Such disputes may cause delay or termination of the research, development
or commercialization of our produc t candidates, or may result in costly litigation or arbitration
that diverts management attention and resour ces. We face significan t competition in seeking
appropriate strategic partners and the negotiation process is time consuming and complex.
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Moreover, we may not be successful in our efforts t o establish a strategic partnership or other
alternative arrangements for our product candidates because they may be deemed to be at too
early of a stage of development for collaborative effort. Further, any agreement that we do enter
into may not result in the anticipated benefits.
We depend on information technology and other infrastructure that are exposed to certain
risks, including cyber security risks.
We rely on information technology systems an d network infrastructure that we manage or
that are managed by third parties with which we do business to collect, use, transmit, store,
dispose of, and otherwise process electronic information. For details, see ‘‘Business —
Information Technology ’’ in this prospectus. Our or our critical third parties ’ IT systems and
other infrastructure and the information processed in such IT systems could be affected by
cybersecurity incidents from a number of causes, including but not limited to, power outages,
computer and telecommunication failures, co mputer viruses, malware, attempts to gain
unauthorized access to data and systems, ransomware or other destructive software, manual or
usage errors, catastrophic events, natural disasters, and severe weather conditions. Attacks,
including those targeting IT systems, could severely disrupt business operations and result in
significant expenses to repair or remediate system damage. We have taken steps to protect our IT
systems and the information maintained in those systems, but we cannot guarantee attacks and
security incidents will not happen in the future. Global threat actors and terrorists have targeted
and will continue to target entities and projects lik e those of our clients in t he telecommunications
sector, including through disruptive attacks such as those involving ransomware. We cannot
guarantee the security or protection of our IT sy stems, information, or projects, and we have little
or no control over the IT systems and facilities of third parties on which our projects rely.
Our risk management and internal control systems, as well as the risk management tools
available to us, may not fully protect us agains t various risks inherent in our business.
We have implemented risk management and internal control systems and adopted risk
management tools available to us with respect to our business operations. However, there is no
assurance that our risk management, internal control systems, and risk management tools are
adequate or effective to fully protect us against the potential risks inherent in our business. In the
event that we fail to identify and deal with any poten tial risks or internal cont rol deficiencies, our
business, results of operations, and prospects may be materially and adversely affected.
Further, the successful implementation of our risk management and internal control systems
depends on our management, employees, and subcontractors. There is no assurance that our
management, employees, and subcontractors will strictly observe and adhere to relevant measures
and policies. There is also no assurance that our management, employees, and subcontractors will
be able to carry out relevant measures and policies without human errors or mistakes. In addition,
as our business expands, we may have to adopt and modify our risk management and internal
control measures and policies in a timely manner in response to our business growth. Failure to
do so may result in material and adverse effects on our business and results of operations.
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Compliance with environmentally safe produc tion and construction and renewable energy
development regulations can be costly, and non -compliance with such regulations may result
in adverse publicity and could have a material a dverse effect on our business and results of
operations.
Our business and/or operational activities, su ch as the production and sales of our products,
storage and transportation of our products and raw materials, are governed by laws and
regulations, adminis trative determinations, and similar con straints, especially the extensive
environmental, handling of hazardous substances, chemical using laws and regulations.
Moreover, we are required to obtain construc tion permits before commencing constructing
production plants, and obtain the approvals from PRC environmental protection authorities before
commencing commercial operations of our production plants. We are also required to comply
with renewable energy development regulations and directives. In addition, compliance with the
environmentally safe production and construction and renewable energy development regulations
can be economically costly and time consuming, which may divert the capacity of our Directors
and management for operation of our business, in turn adversely affect our business operation and
financial performance.
We are subject to Environmental, Social and Governance ( ‘‘ESG’’) laws and regulations, and
any failure to comply with such requiremen ts may cause negative impact on our business
operation.
We are subject to various ESG laws and regulations by governing bodies, including the
Stock Exchange once we become a public compan y, and regulatory authorities in China. For
details, please see ‘‘Regulatory Overview ’’in this prospectus. We must adapt to new and evolving
regulatory measures under applicable laws and changing social trends concerning ESG risks.
However, these laws, regulations and policies are evolving and investors increasingly focus on
ESG issues and tend to incorporate ESG performance into their investment decisions, while
customers are becoming more environmentally conscious, preferring products with green and
environmentally friendly design and production. In response, we monitor environmental and
climate-related risks that may impact on our business, strategy and financial performance and
evaluate the magnitude of the resulting impact ove r the short-, medium- and long-term horizons.
We also monitor a wide range of indicators to mana ge our environmental and climate-related risks
arising from our operations and are committed to p roviding adequate support to our employees to
nurture a friendly and inspirational corporate culture. Our efforts to comply with new and
changing laws, regulations and social trends may result in increased general and administrative
expenses and a diversion of management tim e and attention from operating activities to
compliance activities, which may adversely affe ct our business, financial condition and results of
operations.
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Changes to or the implementation of governme nt policies towards energy storage batteries
c o u l dh a v ea na d v e r s ei m p a c to no u ri n d u s t r ya n do u rb u s i n e s so p e r a t i o n .
Improper handling during the manufacturing, s torage and recycling of batteries can lead to
environmental pollution. In response, PRC government has adopted relevant laws, regulations and
policies. On December 26, 2016, Ministry of Envi ronmental Protection issued the Technical
Policy for Pollution Prevention and Cont rol in Lead-Acid Battery Production （《鉛蓄電池再生及
生產污染防治技術政策》）and Recycling and the Technical Po licy for Pollution Prevention and
Control of Waste Batteries （《廢電池污染防治技術政策》）. These policies provide technical
guidance for environment management, environmental impact assessments, and pollution
prevention in the lead-acid battery industry, a s well as for the environmental management and
pollution control of waste batteries. In additio n, on April 29, 2020, Standing Committee of the
National People ’s Congress (NPC) approved the revised Solid Waste Pollution Prevention and
Control Law of the People ’s Republic of China （《中華人民共和國固體廢物污染環境防治法》
（2020 修訂））, which established the extended product lia bility for lead-acid batteries. lt requires
producers of lead-acid batteries to establish o r commission recycling s ystems that match their
product sales volume to ensure proper disposal of used products.
We cannot guarantee that our business operations and financial performance will not be
adversely affected if PRC authorities tighten indus try regulations by imposing stricter emission
standards on energy storage batte ries industry. Additionally, should there be any stricter standards
or tightened regulations with respect to energy storage batteries industry in other countries where
our products are mainly sold, our operations could also be adversely affected. This could lead to
increased compliance costs and potential market r estrictions, further impacting our financial
stability and operational efficiency.
We face risks related to health epidemics, natural disasters and other catastrophic events,
which could have a material adverse effect on our business and results of operations.
Health epidemics may cause a long-term adverse impact on the economy and social
conditions, which may have an indirect impact on ou r industry and cause temporary suspension of
projects and shortage of labor and raw materials. Our delivery of products may also be disrupted,
and our customers may cancel their orders due to potential delays in delivery. The longer supply
cycle may also have an adverse impact on our operations and production.
Outbreaks of contagious diseases and other adverse public health developments around the
world would have a material adverse effect on our business operations. These could include our
ability to travel or ship our products as well as t emporary closure of our production plants. Such
closures or travel or shipment restrictions would severely disrupt our business operations and
adversely affect our financial condition and results of operations.
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RISKS RELATING TO DOING BUSINESS IN THE PLACES WHERE WE OPERATE
Changes in economic, political and social conditions could have a material adverse effect on
our business and operations.
We are headquartered in Jiangsu Province, China and most of our operations are conducted
in China. Accordingly, our business, financia l condition and results of operations may be
influenced by the economic, political a nd social conditio ns in China. China ’s energy storage
market in general is affected by macro-economic factors, including changes in international,
national, regional and local economic conditions, employment levels, consumer demand and
discretionary spending. The PRC government has implemented various measures to encourage,
and to guide, the economic growth and the allocation of resources, some of which may require
additional time for us to adjust to or to take advantage of.
New legislations or changes in the PRC regulatory requirements regarding the end markets
of our products may affect our business operations and prospects.
Our products are used in various application sce narios, including telecom base stations, data
centers and electrical energy storage settings. New legislations or changes in the PRC regulatory
requirements regarding these end markets may aff ect our business, financial condition, results of
operations and prospects. For example, the PRC government has promulgated, amended and
updated a number of legislations in relation to the energy storage market.
However, these policies are subject to certain limits as well as changes that are beyond our
control, and we cannot assure you that future changes, if any, would be favorable to our business
or financial condition. We may need to change or adapt our business focuses from time to time in
response to the new rules and regulations regarding the end markets of our products, but we may
also not be able to do so timely and efficiently. Any new legislations or changes in the PRC
regulatory requirements could materially and a dversely affect our busin ess, financial condition
and results of operations.
We are subject to numerous laws, regulations and policies at the national, regional and local
levels of government in the markets where we do business.
We are subject to a variety of laws and regul ations in the markets where we do business,
some of which may conflict with each other and all of which are subject to change. These laws
and regulations include energy regulations , export and import restrictions, tax laws and
regulations, environmental regulations, labor laws, supply chain laws and regulations and other
government requirements, approvals, permits and licenses. We also face trade barriers and trade
remedies such as export requirements, tariffs, taxes and other restrictions and expenses, including
antidumping and countervailing duty orders, whic h could increase the prices of our products and
make us less competitive in some countries wher e we sells our products to and may have impact
on our business and financial performance.
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In the countries where we do business, the market for our energy storage products is heavily
influenced by national, state and local government regulations and policies concerning the energy
storage industry. These regulations and policies c ould deter further investment in the research and
development of renewable energy sources, which could result in a significant reduction in the
potential demand for our products.
We expect that our products and their downstream application will continue to be subject to
national, state and local regulations and policies relating to safety, construction, environmental
protection, and other related matters. Any new r egulations or policies pertaining to our energy
storage products may result in significant add itional expenses to us and customers, which could
cause a significant reduction in demand for our products.
Failure to comply with evolving governmental regulations and other legal obligations
concerning data protection and cybersecurity may materially and adversely affect our
business, as we routinely collect, store and use data during the conduct of our business.
We are subject to various regulatory requirements relating to cybersecurity and data privacy,
including the PRC Data Security Law （《中華人民共和國數據安全法》）, the Cybersecurity Law of
PRC（《中華人民共和國網絡安全法》）, the Personal Information Protection Law of the PRC （《中
華人民共和國個人信息保護法》）and Regulations on Network Data Security Management 《網絡
數據安全管理條例》）(together, the ‘‘Data Security Regulations ’’). Should our data processing
activities be subject to these laws and regula tions, we are required to ensure that our data
processing activities are carried out in a lawful, leg itimate, specific and clear manner. Pursuant to
the Personal Information Protection Law of the P RC, a service provider shall obtain the consent
of the person whose data is gathered when collect ing and using personal information and shall
comply with other circumstances as prescribed by laws and regulations.
As of the Latest Practicable Date, we have not been notified of being classified as a critical
information infrastructure operator ( ‘‘CIIO ’’), we have not received any inquiry, notice, warning
from any PRC government authorities, and have not been subject to any investigation, sanctions
or penalties made by any PRC government authoritie s regarding national security risks caused by
our business operations or the Listing. In additio n, China Certification Center for Information
Security ( ‘‘CCRC ’’) confirmed to us during a telephonic consultation in May 2024 that the term
of ‘‘listing abroad ’’（國外上市）under the Cybersecurity Review Measures does not apply to
listing in Hong Kong, and thus we are not requir ed to proactively submit an application for
cybersecurity review for our Listing in Hon g Kong. As the definitions for terms such as ‘‘affect or
may affect national security ’’ are broad, and there remains uncertainty how these rules will be
enacted and interpreted, we cannot guarantee that the Cybersecurity Review Measures and
Regulations on Network Data Security Manageme nt will not be interpreted in a way that will
adversely affect us.
Our PRC Data Compliance Counsel is of the view that we were not required to apply for
cybersecurity review. In addition, the PRC Data Compliance Counsel is of the view that during
the Track Record Period and up to the Latest Practicable Date, after the completion of
rectification, we are in compliance with the cu rrently effective and applicable PRC laws on
cybersecurity and data security.
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In addition, regulatory requirements on cybersecurity and data privacy are constantly
evolving and can be subject to v arying interpretations or significant changes, resulting in
uncertainties about the scope of o ur responsibilities in that regard. We may also be subject to
additional or new laws and regulations regarding the protection of personal information and
important data or privacy related matters in connection with our methods for data collection,
analysis, storage and use. If we are unable to comply with the applicable laws and regulations or
effectively address data privacy and protection c oncerns, such actual or alleged failure could
damage our reputation, discourage customers from purchasing our products and subject us to
significant legal liabilities.
Payment of dividends or gains from the sale or other disposition of our H Shares is subject
to taxation under PRC law.
Non-PRC resident individual holders of H Shares whose names appear on the register of
members of H Shares ( ‘‘Non-PRC Resident Individual Holders ’’) are subject to the PRC
individual income tax on dividends received from us. Pursuant to the Circular on Questions
Concerning the Collection of Individual Income Tax Following the Repeal of Guo Shui Fa [1993]
No. 045 (Guo Shui Han [2011] No. 348) （《關於國稅發[1993]045 號文件廢止後有關個人所得稅
徵管問題的通知》）（國稅函[2011] 348 號）dated June 28, 2011 and issued by the SAT of the
PRC, the tax rate applicable to dividends paid to Non-PRC Resident Individual Holders of H
Shares varies from 5.0% to 20.0%, 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 20.0% withholding tax on dividends received from us. In addition, under
the Individual Income Tax Law of the PRC （《中華人民共和國個人所得稅法》）and its
implementation regulations, Non-PRC Resident Individual Holders of H Shares are subject to
individual income tax at a rate of 20.0% on gains r ealized upon the sale or other disposition of H
Shares. Based on our knowledge, as of the Latest P racticable Date, the PRC tax authorities have
not in practice sought to collect individual income tax on such gains. If such tax is collected in
the future, the value of such individual holders ’ investments in H Shares may be materially and
adversely affected.
Under the Enterprise Income Tax Law of the PRC （《中華人民
共和國企業所得稅法》）(‘‘EIT
Law’’) and its implementation regulations, a non-PR C resident enterprise is generally subject to
enterprise income tax at a rate of 10.0% with re spect to its PRC-sourced income, including
dividends received from a PRC company and g ains derived from the disposition of equity
interests in a PRC company. This rate may be reduced under any special arrangement or
applicable treaty between the PRC and the jurisd iction in which the non-PRC resident enterprise
resides. Pursuant to the Circular on Questions Concerning Withholding of Enterprise Income Tax
for Dividends Distributed by Resident Enterprises in China to Non-resident Enterprises Holding
H-shares of the Enterprises (Guo Shui Han [2008] No. 897) （《關於中國居民企業向境外H股非居
民企業股東派發股息代扣代繳企業所得稅有關問題的通知》（國稅函 [2008]897 號））promulgated
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by the SAT on November 6, 2008, we intend to withhold tax at 10.0% from dividends payable to
non-PRC resident enterprise holders of H Shares (including HKSCC Nominees). Non-PRC
resident enterprises that are entitled to be taxed at a reduced rate under an applicable income tax
treaty or arrangement will be required to appl y to the PRC tax authorities for a refund of any
amount withheld in excess of the applicable treaty rate, and payment of such refund will be
subject to the PRC tax authorities ’ approval. There are uncertainties as to the interpretation and
implementation of the EIT Law and its implementa tion rules by the PRC tax authorities, including
whether and how enterprise income tax on gains derived upon the sale or other disposition of H
Shares will be collected from non-PRC resident enterprise holders of H Shares. If such tax is
collected in the future, the value of such non-PRC resident enterprise holders ’ investments in H
Shares may be materially and adversely affected.
U n d e rt h eE I TL a w ,w em a yn o tb ec l a s s i f i e da sa‘‘high and new-technology enterprise ’’ of
the PRC. Such classification could result in unfavorable tax consequences.
During the Track Record Period, some of our subsidiaries were entitled to preferential
income tax rates pursuant to the relevant tax regulations. For example, during the Track Record
Period, certain entities within our Group enjoye d preferential EIT tax rate of 15% as they were
High and New Technology Enterprise (HNTE). For details, see Note 10 to the Accountants ’
Report in Appendix I to this prospectus. Preferen tial tax treatments and other incentives granted
to us by PRC governmental authorities are subj ect to review and renewal and may be adjusted or
revoked in the future. We cannot guarantee th at the preferential tax treatments and other
incentives to which our PRC s ubsidiaries are currently entitled would be kept valid or
successfully renewed. There can be no assurance that the local tax authorities will not, in the
future, change their positio n and discontinue any of our current tax treatments. The
discontinuation of any of our current tax treatme nts could materially increase our tax obligations
and adversely impact our net income.
Any decrease or discontinuation of tax rebate towards exported goods may have a negative
effect on our profitability.
According to the Notice of the Ministry of Finance and the SAT on the Value-Added Tax
and Consumption Tax Policy for Labor Services of Exported Goods （《財政部、國家稅務總局關
於出口貨物勞務增值稅和消費稅政策的通知》）issued by Ministry of Finance and the SAT on 25
May 2012, revised on December 9, 2014 and January 20, 2020, unless otherwise provided by law,
export goods and services are subject to the exemption and refund of VAT policies.
Subject to the relevant PRC laws, we are entitled to a rebate of VAT from the PRC tax
authority in connection with our export sales for our products. The tax rebate comprised a refund
of VAT incurred on the raw materials we used for production of our products in the PRC, which
are subsequently exported to overseas countries. For the years ended December 31, 2022, 2023
and 2024, and the five months ended May 31, 2025, our tax rebate amounted to approximately
RMB65.5 million, RMB106.5 million and RMB68. 6 million and RMB16.1 million, respectively.
We cannot assure you that the PRC governmental p olicies on tax rebate will not change or that
the current policies we enjoy will not be cance lled. If there is any reduction, suspension,
discontinuation or cancellatio n of tax rebate which may advers ely affect the recoverability of our
value-added tax recoverable, our business, financial cond ition and profitability would be
adversely affected.
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It may be difficult to effect service of process upon us or our Directors or executive officers
who reside in the PRC or to enforce against them in the PRC any judgments obtained from
non-Chinese courts.
We are a company incorporated under the laws of the PRC and a majority of our assets and
subsidiaries are located in the PRC. The majority of our Directors, Supervisors and senior
management reside within the PRC. The assets of these Directors, Supervisors and senior
management also may be located within the PRC. As a result, it may not be possible to affect
service of process upon most of our Directors, Supervisors and senior management outside the
PRC. The PRC does not have treaties providing for the reciprocal recognition and enforcement of
judgments of courts in the United States, the U nited Kingdom, Japan or most other western
countries. However, judgments rendered by Hong Kong courts may be recognized and enforced in
the PRC if the requirements set forth by the Arrangements for Reci procal Recognition and
Enforcement of Judgments in Civil and Commerc ial Cases between Courts of the Mainland and
Hong Kong Special Administrative Region ( 《最高人民法院關於內地與香港特別行政區法院相互
認可和執行民商事案件判決的安排》) are met. Therefore, recognition and enforcement in the PRC
of judgments of a court in any of these jurisdictions other than Hong Kong in relation to any
matter not subject to binding arbitration provisions may be difficult or impossible.
Although we will be subject to the Listing Rules and the Codes on Takeovers and Mergers
and Share Repurchases of Hong Kong upon the listing of our H Shares on the Stock Exchange,
the holders of H Shares will not be able to bring ac tions on the basis of violations of the Listing
Rules and must rely on the Stock Exchange to enfo rce its rules. The Listing Rules and the Codes
on Takeovers and Mergers and Share Repurchases of Hong Kong do not have the force of law in
Hong Kong.
Restrictions on foreign currency conversion may adversely affect our business and results of
operations and our ability to remit dividends.
The conversion of RMB is subject to applicab le laws and regulations in the PRC. It cannot
be guaranteed that under a certain exchange rate, we will have sufficient foreign exchange to meet
our foreign exchange requirements. Under the current PRC foreign exchange control system,
foreign exchange transactions under the current account conducted by us, including the payment
of dividends, do not require advance approval from the SAFE, but we are required to present
documentary evidence of such transactions and conduct such transactions at designated foreign
exchange banks within China that have the licenses to carry out foreign exchange business.
Under existing foreign exchange regulations, following the completion of the Global
Offering, we will be able to pay dividends in fore ign currencies without prior approval from the
SAFE by complying with certain procedural requirements. However, there is no assurance that
these foreign exchange policies regarding pa yment of dividends in foreign currencies will
continue in the future. In addition, any insufficiency of foreign exchange reserve may restrict our
ability to obtain sufficient foreign exchange for dividend payments to shareholders or to satisfy
any other foreign exchange requirements, or to capitalize our capital expenditure plans, and even
our business, operating results and f inancial condition, may be affected.
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Certain of our practices with respect to social insurance and housing provident fund
contribution may subject us to penalties.
We are required by PRC labor laws and regulations to pay various statutory employee
benefits, including pensions insurance, medical insurance, work-related injury insurance,
unemployment insurance, maternity insurance and housing fund, to designated government
agencies for the benefit of our employees. Companies registered and operating in China are
required under the Social Insurance Law of the PRC （《中華人民共和國社會保險法》）,t h e
Provisional Regulations for the Collection and Payment of Social Insurance Premiums （《社會保險
費徵繳暫行條例》）and the Regulations on Management of Housing Fund （《住房公積金管理條
例》）to apply for social insurance registration and housing fund deposit registration within 30
days of their establishment and to pay for their employees different social insurance including
pension insurance, medical insurance, work-related injury insurance, unemployment insurance and
maternity insurance and housing provident fund to the extent required by law.
During the Track Record Period and up to the Latest Practicable Date, we used third-party
human resources agencies to make social insurance and housing provident fund contributions on
behalf of us for some of our employees. We cannot assure you that the relevant government
authorities will deem such practice to be fully comp liant with the relevant labor laws. In addition,
during the Track Record Period and up to the Late st Practicable Date, we did not make full social
insurance and housing provident fund contribution for certain employees in strict compliance with
relevant laws and regulations. For details, see ‘‘Business — Employees — Social Insurance and
Housing Provident Fund Contributions ’’ in this prospectus. As a result, we may be required by
competent authorities to pay the outstanding amount, and could be subject to late payment
penalties or enforcement application made to t he court. In 2022, 2023 and 2024, and the five
months ended May 31, 2025, our shortfall of contribution to social insurance and housing
provident funds amounted to RMB16.9 m illion, RMB27.7 million, RMB30.2 million and
RMB14.8 million million and we have made full provi sion for the shortfall of contribution to
social insurance and housing provident funds.
As advised by our PRC Legal Advisor, in the e vent that (i) the relevant PRC authorities may
demand us to pay the outstanding social insurance funds, or (ii) the relevant government
authorities find our historical arrangement of eng aging the third-party human resources service
providers to pay social security funds and housing provident funds for some employees to be non-
compliant with applicable laws and regulatio ns, the relevant PRC authorities may demand us to
pay the outstanding social insurance funds within a stipulated deadline and we may be liable for a
late payment fee equal to 0.05% of the outstanding amount for each day of delay; if we fail to
make such payments, we may be liable for a fine of one to three times the amount of the
outstanding contributions. In respect of the outstanding housing provident fund contributions, we
may be demanded by the relevant PRC authoritie s to pay the underpaid amount to the housing
provident fund within a prescribed time limit, fa iling which we may be subject to the compulsory
enforcement by the People ’sC o u r t .
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As of the Latest Practicable Date, we had not been subject to any administrative penalties
for the aforementioned matters, nor were we aware of any material employee complaint or dispute
with respect to social insurance or housing provident fund contribution. However, we cannot
assure you that we will not receive any complaint, penalty or enforcement action for our historical
practices with respect to social insurance and housing provident fund contributions and we cannot
assure you that the competent government author ities will not require us to settle the outstanding
amount within the specified time limit or impose late payment penalties on us. If we are otherwise
subject to investigations related to non-com pliance with labor laws and are imposed severe
penalties or incur significant legal fees in connec tion with labor law disputes or investigations,
our financial condition and results of operations could be adversely affe cted. For details, see
‘‘Business — Employees — Social Insurance and Housing Provident Fund Contributions ’’ in this
prospectus.
We may be subject to fines or other penaltie s under the PRC Labor Contract Law, which
may adversely affect our busines s, profitability and reputation.
During the Track Record Period, we engaged third-party employment agencies to dispatch
contract workers. On December 28, 2012, the Labor Contract Law of the PRC （《中華人民共和國
勞動合同法》）was amended to impose more stringent requirements on labor dispatch and such
amendments became effective on July 1, 2013. For example, the number of dispatched contract
workers that an employer hires may not exceed a certain percentage of its total number of
employees, to be decided by the Ministry of Hum an Resources and Social Security, and the
dispatched contract workers may only engage in temporary, auxiliary or substitutable work.
According to the Interim Provisions on Labor Dispatch （《勞務派遣暫行規定》）promulgated by
the Ministry of Human Resources and Social Security on January 24, 2014, which became
effective on March 1, 2014 (the ‘‘Interim Provisions ’’), the number of dispatched contract
workers hired by an employer shall not exceed 10% of the total number of its employees
(including both directly hired employees and dispatched contract workers). The Interim Provisions
further require the employer that is not in compliance with the above provisions to formulate a
plan to reduce the number of its dispatched contract workers to below 10% of the total number of
its employees. In addition, an employer is not p ermitted to hire any new dispatched contract
worker until the number of its dispatched contract workers has been reduced to below 10% of the
total number of its employees. The employers who fail to comply with the relevant requirements
on labor dispatch shall be orde red by the labor administrative authorities to make correction
within a stipulated period. Where the necessa ry correction is not made within the stipulated
period, the employers may be subject to a penalty ranging from RMB5,000 to RMB10,000 per
dispatched worker exceeding the 10% threshold.
The number of dispatched contract workers once exceeded 10% during the Track Record
Period. Based on the total number of employees and number of dispatched contract workers at the
end of each month, the average percentage of dispatched contract workers at our Company was
10.2% in 2022; the average percentage of dispatched contract workers at our subsidiary
Shuangdeng Front was 28.0% in 2022. We have taken active measures to address this issue by
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converting labor-dispatched employees into regular employees, thereby reducing the proportion of
labor-dispatched workers. Since December 2022 and up to the Latest Practicable Date, the number
of dispatched staff of our Company and each of our subsidiaries did not exceed the threshold of
10% as required by the Interim Provisions. These dispatched staff were mainly hired for positions
with supporting nature. For details, see ‘‘Business — Employees — Dispatched Staff ’’ in this
prospectus.
Even though we had not received any notice of warning or been subject to any
administrative penalties or other disciplinar y actions from relevant PRC authorities, we cannot
assure you that the relevant PRC authorities will not take actions retrospectively against us for
our past practice. Such actions may adversely a ffect our business, results of operations and
reputation. If we decide to increase our number of dispatched workers in the future and are found
to be in violation of the rules regulating dispatc hed contract workers, we may be subject to fines
and penalties. Such penalties may adversely a ffect our business, results of operations and
reputation.
As the interpretation and implementation of the Labor Contract Law, the Social Insurance
Law and other labor related regulations (the ‘‘labor-related laws and regulations ’’) continually
evolve, we cannot assure you that our employment practices do not and will not violate labor-
related laws and regulations in the PRC, which may subject us to labor disputes or government
investigations. If we are deemed to have violated relevant labor-related laws and regulations, we
could be required to provide additional compensation to our employees and our business,
financial condition and results of operations could be mater ially and adversely affected.
Present or future environmental, safety and occupational health laws and regulations in the
PRC may have a material adverse effect on our business, financial condition and results of
operations.
Our business is subject to certain PRC laws and r egulations relating to environmental, safety
and occupational health matters. Under these laws and regulations, we are required to maintain
safe production conditions and to protect the o ccupational health of our employees. While we
have conducted periodic inspections of our operating facilities and carry out equipment
maintenance on a regular basis to ensure that our operations are in compliance with applicable
laws and regulations, we cannot assure you that we will not experience any material accidents or
worker injuries in the course of our ma nufacturing process in the future.
In addition, our manufacturing process produc es pollutants such as waste water, waste gas.
The discharge of waste water and other polluta nts from our manufacturing operations into the
environment may give rise to liabilities that m ay require us to incur costs to remedy such
discharge. We cannot assure you that all situations that will give rise to material environmental
liabilities will be discovered or any environmenta l laws adopted in the future will not materially
increase our operating costs and other expense. Should the PRC impose stricter environmental
protection standards and regulations in the future, we cannot assure you that we will be able to
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comply with such new regulations at reasonable costs, or at all. Any increase in production costs
resulting from the implementation of additional env ironmental protection measures and/or failure
to comply with new environmental laws or regul ations may have a material adverse effect on our
business, financial condition or results of operations.
Fluctuations in exchange rates could adversely affect our results of operations.
We derive a growing portion of our sales from international customers. Therefore, a portion
of our total revenues have been denominated in foreign currencies. Our sales outside China
represented 16.6%, 21.8%, 19.8%, and 17.1% of our total revenues in 2022, 2023 and 2024, and
the five months ended May 31, 2025, respectivel y. As a result, we face risks resulting from
currency exchange rate fluctuations. We incurred a net foreign exchange gain of RMB17.5
million, RMB12.3 million, RMB10.6 million and RMB3.7 million for th e years ended December
31, 2022, 2023 and 2024, and the five months ended May 31, 2025, respectively. We cannot
predict the impact of future exchange rate fluc tuations on our results of operations and may incur
net foreign currency losses in the future.
Any failure to comply with PRC regulations re garding our share incentive plans may subject
the PRC plan participants or us to fines and other legal or administrative sanctions.
The SAT has issued relevant rules and regulations concerning employee share incentives.
Under these rules and regulations, our employees working in the PRC will be subject to PRC
individual income tax upon the exercise of the share options or grant of the restricted shares. Our
PRC subsidiaries have obligations to file docume nts with respect to the granted share options or
restricted shares with relevant tax authorities a nd to withhold individual income taxes for their
employees upon the exercise of the share options or grant of the restricted shares. If our
employees fail to pay, or we fail to withhold, their individual income taxes according to relevant
rules and regulations, we may face sanctions im posed by competent governmental authorities.
Also, pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for
Domestic Individuals Participating in the Stock Incentive Plan of an Overseas Listed Company, or
SAFE Circular 7, issued by SAFE in February 2012, employees, directors, supervisors and other
management members participating in any stoc k incentive plan of an overseas publicly listed
company who are PRC residents or who are non-PRC residents residing in China for a continuous
period of not less than one year, subject to limited exceptions, are required to register with SAFE
through a domestic qualified agent, which co uld be a PRC subsidiary of such overseas listed
company, and complete certain other procedures. After our company becomes an overseas listed
company upon completion of the Global Offering, we and our directors, executive officers and
other employees who are PRC residents and who have been granted share-based awards may
follow SAFE Circular 7 to register with SAFE or its local counterparts. We will make efforts to
comply with these requirements upon completion of our Global Offering. However, there can be
no assurance that they can successfully regist er with SAFE in full compliance with the rules.
Failure to complete the SAFE registrations may s ubject them to fines and legal sanctions and may
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also affect the ability to make payments under our share incentive plans or receive dividends or
sales proceeds related thereto or our ability to contribute additiona l capital to our wholly foreign-
owned enterprises in China and limit our wholly foreign-owned enterprises ’ ability to distribute
dividends to us.
Our legal right to use certain leased properties could be challenged or restricted.
Lessors had not provided title certificates of 16 properties we leased as of the Latest
Practicable Date. Despite the lack of certain title ce rtificates of our leased properties, those leased
properties are easily replaceable and do not serv e as the primary production and operation sites
for us. According to the relevant PRC laws and regulations and as advised by our PRC Legal
Advisor, our rights as occupant of these properties may be adversely affected due to the absence
of the relevant building ownersh ip certificates. For details, see ‘‘Business — Properties ’’ in this
prospectus. We cannot assure you that the landlord of these properties have the right to lease the
relevant property to us. As advised by our PRC Legal Advisor, we may not be able to continue to
use such property if the ownership of the property we have leased and/or the validity of such
lease is challenged by third parties. In such a scen ario we will have to relocate to other premises,
which could result in additional costs. Should d isputes arise due to title encumbrances to such
properties or government action, we may encoun ter difficulties in continuing to lease such
properties and may be required to relocate in the future.
We may be subject to fines for failure to register some of our leases.
As of the Latest Practicable Date, we had no t obtained proper lease registration for 19
leased properties, primarily due to the difficulty of procuring our lessor ’s cooperation to register
the lease. As advised by our PRC Legal Advisor, the non-registration of the property lease will
not affect the validity of the lease contract and relevant legal rights under the contract, but
relevant local housing authorities may requi re us to complete the registration within the
prescribed period and we may be subject to pe nalties of RMB1,000 to RMB10,000 as a result of
the non-registration for each of the property. For details, see ‘‘Business — Properties ’’ in this
prospectus.
We may be subject to fines for using leased p roperties in a manner that differs from the
purpose of title certificate.
As of the Latest Practicable Date, one of the p roperties we leased, with a total GFA of 88.68
square meters is being used for commercial purpo ses, which differs from the usage stated in the
title certificate, where the property is recorded as residential. Acco rding to the relevant PRC laws
and regulations and as advised by our PRC Legal Advisor, properties with a change in usage
cannot be leased; otherwise, a fine of up to RMB 5,000 may be imposed, and if there is illegal
income, a fine of between one to three times th e illegal income may be imposed, not exceeding
RMB30,000. Therefore, the lessor faces the risk of being required to rectify the situation within a
specified period and being fined, and we face the risk of being unable to continue using the
leased property. For details, see ‘‘Business — Properties ’’in this prospectus.
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A n yd i s p u t eo rc l a i mi nr e l a t i o nt ot h e s ep r o p e r t i e sc o u l dr e s u l ti nu sh a v i n gt or e l o c a t ea n d
obtain alternative accommodation for certain of our employees. If our right to use these properties
is challenged, we would need to seek alternative p roperties on short notice and incur relocation
costs, and there is no guarantee that we would be a ble to find suitable alternative properties on
reasonable commercial terms, or at all. Any relocation could lead to disruptions to our operations
and may have an adverse effect on our business, fi nancial condition, results of operations and
prospects.
We may be subject to additional regulato ry requirements relating to new laws and
regulations in connection with overseas lis tings issued by PRC government authorities.
On February 17, 2023, the CSRC issued the Trial Measures for the Administration on
Overseas Securities Offering and Listing by Domestic Companies （《境內企業境外發行證券和上
市管理試行辦法》）and five supporting guidelines, which came into effect on March 31, 2023 (the
‘‘Overseas Listing Regulations ’’). The Overseas Listing Regula tions are applicable to overseas
securities offering and listing conducted by issu ers who are (i) companies incorporated in the
PRC ( ‘‘PRC domestic companies ’’) and (ii) companies incorporated overseas with substantial
operations in the PRC. The Overseas Listing Regulations lay out the arrangements for regulatory
filings for both direct and indirect overseas offe rings, and clarify the determination criteria for
indirect overseas offerings in overseas markets. The Overseas Listing Regulations stipulate that
such issuer shall fulfill the filing procedure s within three working days after it makes an
application for offering and listing in an oversea s stock market. According to the Overseas Listing
Regulations, we, as a PRC domestic company see king to issue and list securities in overseas
markets, are required to fulfill the filing procedure with the CSRC within three working days after
submitting the application documents to the overs eas supervisory authorities and report relevant
information. For details, see ‘‘Regulatory Overview — Laws and Regulations Relating to
Overseas Issuance/Listing of Securities ’’in this prospectus.
The Overseas Listing Regulations may subject us to additional compliance requirements in
the future, and we cannot assure you that we will be able to get clearance of our filing procedures
under the Overseas Listing Regulations on a timely basis, or at all. Any failure on our part to
fully comply with the new regulatory requiremen ts may significantly limit or completely hinder
our ability to continue to sell our securities to investors, cause significant disruption to our
business operations, and severely damage our reputation, which could affect our financial
condition and results of operations and cause our securities to decline in value or become
worthless.
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RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares and the liquidity and market price
of our H Shares may be volatile.
Prior to the completion of the Global Offering, there has been no public market for our H
Shares. There can be no guarantee that an active trading market for our H Shares will develop or
be sustained after the completion of the Global Offering. The Offer Price is the result of
negotiations between our Company and the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Underwriters), which may not be indicative of the price at which
our H Shares will be traded following completion of the Global Offering. The market price of our
H Shares may drop below the Offer Price at any time after completion of the Global Offering.
The trading price and trading volume of our H Shares may be volatile, which could result in
substantial losses to you.
The trading price and trading volume of our H Shares may be volatile and could fluctuate
widely in response to factors beyond our control, including general market conditions of the
securities markets in Hong Kong, China, the United States and elsewhere in the world. In
particular, the performance and fluctuation of the market prices of other companies with business
operations located mainly in mainland China that have listed their securities in Hong Kong may
affect the volatility in the price of and trading volumes for our H Shares. A number of mainland
China-based companies have listed their secur ities, and some are in the process of preparing for
listing their securities, in Hong Kong. Some of t hese companies have experienced significant
volatility, including significant price declines after their initial public offerings. The trading
performances of the securities of these companies a t the time of or after their offerings may affect
the overall investor sentiment towards mainland China-based companies listed in Hong Kong and
consequently may impact the trading performance of our H Shares. Pursuant to the applicable
PRC law, within the 12 months following the Listin g Date, all existing Shareholders (including
the Pre-IPO Investors) could not dispose of any of the Shares held by them. Due to such lock-up
requirement, the liquidity and trading volume o f the H Shares in the short-term following the
Global Offering may be significan tly affected. These factors may significantly affect the market
price and volatility of our H Shares, regardl ess of our actual operating performance.
You may incur immediate and significant diluti on and may experience further dilution if we
i s s u ea d d i t i o n a lHS h a r e si nt h ef u t u r eo ri ft h eO f f e rP r i c eo fo u rHS h a r e si sh i g h e rt h a n
our consolidated net tangible book value per H Share.
If the Offer Price of our H Shares is higher than the net tangible book value per H Share of
our H Shares immediately prior to the Global Offering, purchasers of our H Shares in the Global
Offering will experience an immediate dilution i n pro forma net tangible book value. If we issue
additional H Shares in the future, purchasers of our H Shares in the Global Offering may
experience further dilution in their shareholding percentage.
RISK FACTORS
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Our historical dividends may not be indicative of our future dividend policy, and there can
be no assurance that we will declare and distribute any dividends in the future.
Our ability to declare future dividends will de pend on the availability of dividends, if any,
received from us and our other PR C operating subsidiaries. Under PRC law and the constitutional
documents of our PRC operating subsidiaries, dividends may be paid only out of distributable
profits, which refer to after-tax profits as determined under PRC GAAP less any recovery of
accumulated losses and required allocations to st atutory capital reserve funds. Any distributable
profits that are not distributed in a given year are retained and become available for distribution
in subsequent years. The calculation of our distributable profits under PRC GAAP differs in
certain respects from the calculation under IF RS. In addition, as stipulated by our Articles,
distributable profits are recognized as our net profit determined under PRC GAAP or IFRS,
whichever is lower, less any recovery of accumulated losses and appropriations to statutory and
other reserves that we are required to make. As a result, our Company and our PRC operating
subsidiaries may not be able to pay a dividend in a given year if our Company or our PRC
operating subsidiaries do not have distributab le profits as determined under PRC GAAP even if
they have profits as determined under IFRS. For details, see ‘‘Financial Information —
Dividends ’’ in this prospectus and Note 11 to the Accountants ’ Report in Appendix I to this
prospectus.
There can be no assurance that future dividends will be declared or paid. The declaration,
payment and amount of any future dividends are subject to the discretion of our Directors, after
taking into account our results of operations , financial condition, cash requirements and
availability and other factors as they may deem relevant, and subject to the approval at a
Shareholders ’ meeting. We may not have sufficient or any profits to enable us to make dividend
distributions to our Shareholders in the future, ev en if our financial statements indicate that our
operations have been profitable.
We may need additional capital, and the sale or issue of additional Shares or other equity
securities could result in additional dilution to our Shareholders.
Notwithstanding our current cash and cash equivalents and the net proceeds from the Global
Offering, we may require additional cash resou rces to finance our continued growth or other
future developments. We cannot assure you that financing will be available in the amounts or on
terms acceptable to us, if at all. If we fail to raise additional funds, we may need to sell additional
equity securities, which could result in additional dilution to our Shareholders.
Our Controlling Shareholders may have substa ntial influence over our Company and their
interests may not be aligned with the interests of other Shareholders.
Our Controlling Shareholders have significan t influence over our operations and business
strategies, and may have the ability to require our Group to effect corporate actions according to
their own desires by virtue of their shareholdi ng in our Group. The interests of our Controlling
Shareholders may not always coincide with the best interests of other Shareholders. If the
RISK FACTORS
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interests of any of our Controllin g Shareholders conflict with the i nterests of other Shareholders,
or if any of our Controlling Shareholders choose s to cause our business to pursue strategic
objectives that conflict with the interests of other Shareholders, our Group or those other
Shareholders ’ interests may be adversely affected as a result.
In addition, there is no guarantee that the Cont rolling Shareholders will not dispose of their
Shares following the expiration of their respectiv e lock-up periods after the Global Offering. We
cannot predict the effect, if a ny, of any future sales of the Shares by any of its Controlling
Shareholders, or that the availability of the Sha res offered by any of the Controlling Shareholders
for purchase may have on the market price of the Shares. Sales of a substantial number of Shares
by any of our Controlling Shareholders or the market perception that such sales may occur could
materially and adversely affect the p revailing market price of the Shares.
Facts, forecasts and statistics in this Prospe ctus relating to the PRC and global economy and
the energy storage industry derived from var ious official government sources may not be
fully reliable.
Certain facts, forecasts and statistics in this document relating to the PRC and global
economy and the industries in which we operate are obtained from various official government
sources that we believe are reliable. Howeve r, there can be no guarantee of the quality or
reliability of these sources. Neither we, the Joint S ponsors nor our or their respective affiliates or
advisors have verified the facts, forecasts and statistics nor ascertained the underlying economic
assumptions obtained from these sources. Due to possibly flawed or ineffective collection
methods or discrepancies between published information and market practice and other problems,
the statistics in this document relating to the P RC, the global economy and the industry in which
we operate may be inaccurate or may not be co mparable to statistics produced for other
economies and should not be unduly relied upon. As such, no representation as to the accuracy of
such facts, forecasts and statistics obtained from various sources is made. Moreover, these facts,
forecasts and statistics involve risk and uncertainties and are subject to change based on various
factors and should not be unduly relied upon. Furthermore, there can be no assurance that they
are stated or compiled on the same basis, or with the same degree of accuracy. Therefore, you
should not unduly rely upon the industry facts, forecasts and statistics contained in this document.
Future sales or perceived sales of substantial amounts of our H Shares in the public market
could have a material adverse effect on the p rice of our H Shares and our ability to raise
additional capital in the future.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our H Shares or other securities rela ting to our H Shares in the public market, or the
issuance of new shares or other securities, or th e perception that such sales or issuances may
occur. Future sales, or anticipated sales, of subs tantial amounts of our securities, including any
future offerings, could also materially and advers ely affect our ability to raise capital at a specific
RISK FACTORS
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time and on terms favorable to us. In addition, our Shareholders may experience dilution in their
holdings if we issue more securities in the future. N ew shares or shares-linked securities issued by
us may also confer rights and privileges that take priority over those conferred by the H Shares.
Future sale or major divestm ent of Shares by our Controllin g Shareholders may materially
and adversely affect the prevailing market price of our H Shares.
Our Shares held by our Controlling Shareholder s are subject to certain lock-up periods. For
details, see ‘‘Underwriting ’’ in this prospectus. However, there is no assurance that after the
restrictions of the lock-up periods expire, our Controlling Shareholders will not dispose of any
Shares. Sale of substantial amounts of our Share s in the public market, or the perception that
these sales may occur, may materially and adve rsely affect the prevailing market price of our H
Shares.
We have significant discretion as to how we will use the proceeds of the offering, and you
may not necessarily agree with how we use them.
Our management may spend the net proceeds from the Global Offering in ways you may not
agree with or that do not yield a favorable retu rn to our Shareholders. For details, see ‘‘Future
Plans and Use of Proceeds — Use of Proceeds ’’ in this prospectus. However, our management
will have discretion as to the actual applicatio n of our net proceeds. You are entrusting your
funds to our management, whose judgment you must depend on, for the specific uses we will
make of the net proceeds from this Global Offering.
If securities or industry analysts do not pub lish research reports about our business, or if
they adversely change their recommendations regarding our Shares, the market price and
trading volume of our H Shares may decline.
The trading market for our H Shares will depend in part on the research and reports that
securities or industry analysts publish about us or our business. If research analysts do not
establish and maintain adequate research coverage or if one or more of the analysts who covers us
downgrades our H Shares or publishes inaccurate or unfavorable research about our business, the
market price for our H Shares would likely decline. If one or more of these analysts cease
coverage of our company or fail to publish repor ts on us regularly, we could lose visibility in the
financial markets, which, in turn, could cause the market price or trading volume for our H Shares
to decline.
You should read the entire Prospectus carefully and should not rely on any information
contained in press articles or other media regarding us and the Global Offering.
We strongly caution you not to rely on any infor mation contained in press articles or other
media regarding us and the Global Offering. Prior to the publication of this Prospectus, there has
been press and media coverage regarding us, our business, our industry and the Global Offering.
There may be additional media coverage regardin g us, our business, our industry and the Global
RISK FACTORS
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Offering subsequent to the date of this Prospectus but prior to the completion of the Global
Offering. Such press and media coverage may inclu de references to certain information that does
not appear in this Prospectus, including certa in operating and financial information and
projections, valuations and other information. None of us or any other person involved in the
Global Offering has authorized the disclosure of a ny such information in the press or media and
none of us accepts any responsibility for any such press or media coverage or the accuracy or
completeness of any such information or publication. Our Company, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, any of our and their respective
directors, supervisors, officers, representatives, employees, advisors or any other persons or
parties involved in the Global Offering make no representation as to the appropriateness,
accuracy, completeness or reliability of any suc h information or publication. To the extent that
any such information is inconsistent or confl icts with the informati on contained in this
Prospectus, our Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, any of our and their respective directors, supervisors, officers, representatives,
employees, advisors or any other persons or parties involved in the Global Offering disclaim
responsibility for it, and you should not rely on such information.
Forward-looking statements contained in this document 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. You 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 r esult, the forward-looking statements based
on those assumptions could also be incorrect. In light of these and other risks and uncertainties,
the inclusion of forward-looking statements in this Prospectus should not be regarded as
representations or warranties by us that our plan s 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 Global Offering, our Company has sought and has been granted the
following waivers from strict compliance with th e relevant provisions of the Listing Rules:
WAIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the L isting Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Our headquarters and the substantial majority of our business operations are based, managed
and conducted in the PRC. As our executive Directors play very important roles in our business
operations, it is in our best interest for them to be based in the places where our Group has
significant operations. We consider it practically difficult and commercially unreasonable for us to
arrange for two executive Directors to ordinarily reside in Hong Kong, whether by relocating our
executive Directors to Hong Kong or by appointing a dditional executive Directors. Therefore, we
do not have, and in the foreseeable future will not have, sufficient management presence in Hong
Kong to satisfy the requirements under Ru les 8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong
Stock Exchange has granted us, a waiver from strict compliance with the requirements under
Rules 8.12 and 19A.15 of the Listing Rules, provided that our Company implements the
following arrangements:
(a) we have appointed Ms. He Rong （賀蓉）(an executive Director) and Mr. Tam Ka Lung
（譚家龍）(a joint company secretary of the Company) as our authorized representatives
(the ‘‘Authorized Repr esentatives ’’) pursuant to Rule 3.05 of the Listing Rules. Mr.
Tam Ka Lung （譚家龍）is ordinarily resident in Hong Kong. The Authorized
Representatives will act as our Company ’s principal channel of communication with
the Hong Kong Stock Exchange. The Authorized Representatives will be readily
contactable by phone, facsimile and email to promptly deal with enquiries from the
Hong Kong Stock Exchange, and will also be available to meet with the Hong Kong
Stock Exchange to discuss any matter within a reasonable period of time upon request
of the Hong Kong Stock Exchange;
(b) when the Hong Kong Stock Exchange wishes to contact our Directors on any matter,
each of the Authorized Representatives will have all necessary means to contact all of
our Directors (including our independent non-executive Directors) promptly at all
times. Our Company will also inform th e Hong Kong Stock Exchange promptly in
respect of any changes in the Authorized Representatives. We have provided the Hong
Kong Stock Exchange with the contact details (i.e. mobile phone number, office phone
number, email address and facsimile number (if available)) of all Directors to facilitate
communication with the Hong Kong Stock Exchange;
WAIVERS FROM STRICT COMPL IANCE WITH THE LISTING RULES
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(c) all Directors who do not ordinarily reside in Hong Kong possess or can apply for valid
travel documents to visit Hong Kong and can meet with the Hong Kong Stock
Exchange within a reasonable period upon the request of the Hong Kong Stock
Exchange;
(d) we have appointed Orient Capital (Hong Kong) Limited as our compliance advisor (the
‘‘Compliance Advisor ’’) upon Listing pursuant to Rule 3A.19 of the Listing Rules for
a period commencing on the Listing Date and ending on the date on which we comply
with Rule 13.46 of the Listing Rules in respect of our financial results for the first full
financial year commencing after the Listin g Date. The Compliance Advisor will have
access at all times to the Authorized Representatives, our Directors and our senior
management as prescribed by Rule 3A.23 of the Listing Rules, who will act as the
additional channel of communication with the Hong Kong Stock Exchange when the
Authorized Representatives are not available; and
(e) meetings between the Hong Kong Stock Exchange and our Directors can be arranged
through the Authorized Representatives or the Compliance Advisor, or directly with
our Directors within a reasonable time frame.
WAIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARY
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary
who, by virtue of his/her academic or professional qualifications or relevant experience, is, in the
opinion of the Hong Kong Stock Exchange, capable of discharging the functions of the company
secretary. Note 1 to Rule 3.28 of the Listing Rules provides that the Hong Kong Stock Exchange
considers the following academic or profes sional qualifications to be acceptable:
(a) a member of The Hong Kong Char tered Governance Institute;
(b) a solicitor or barrister as defined in the Le gal Practitioners Ordinance (Chapter 159 of
the Laws of Hong Kong); and
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further provides that the Hong Kong Stock
Exchange considers the following factors in assessing the ‘‘relevant experience ’’of the individual:
(a) length of employment with the issuer and o ther issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
SFO, the Companies Ordinance, the Comp anies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
WAIVERS FROM STRICT COMPL IANCE WITH THE LISTING RULES
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(c) relevant training taken and/or to be ta ken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Pursuant to Chapter 3.10 of the Guide, the Stock Exchange will consider a waiver
application by an issuer in relation to Rules 3. 28 and 8.17 of the Listing Rules based on the
specific facts and circumstances. Factors that will be considered by the Stock Exchange include:
(a) whether the issuer has principal busines s activities primarily outside Hong Kong;
(b) whether the issuer was able to demonstrate the need to appoint a person who does not
have the Acceptable Qualification (as defined under Note 1 to Rule 3.28 of the Listing
Rules) nor Relevant Experience (as defined under Note 2 to Rule 3.28 of the Listing
Rules) as a company secretary; and
(c) why the directors consider the individual to be suitable to act as the issuer ’s company
secretary.
Further, pursuant to Chapter 3.10 of the Guide, such waiver, if granted, will be for a fixed
period of time (the ‘‘Waiver Period ’’) and on the following conditions:
(a) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required u nder Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary throughout the Waiver Period; and
(b) the waiver can be revoked if there are ma terial breaches of the Listing Rules by the
issuer.
Our Company has appointed Ms. He Rong （賀蓉）(‘‘Ms. He ’’) our executive Director, chief
financial officer and secretary of the Board, as one of our joint company secretaries. She has
extensive experience in board and corporate management matters but presently does not possess
any of the qualifications under Rules 3.28 and 8.17 of the Listing Rules, and may not be able to
solely fulfill the requirements of the Listing Rules. Therefore, we have appointed Mr. Tam Ka
Lung（譚家龍） (‘‘Mr. Tam ’’), a fellow member of the Association of Chartered Certified
Accountants, who fully meets the requirements stipulated under Rules 3.28 and 8.17 of the
Listing Rules to act as the other joint company secretary and to provide assistance to Ms. He for
an initial period of three years from the Listing Date to enable Ms. He 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.
WAIVERS FROM STRICT COMPL IANCE WITH THE LISTING RULES
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Given Mr. Tam ’s professional qualification and expe rience, he will be able to explain to
both Ms. He and us the relevant requirements under the Listing Rules and other applicable Hong
Kong laws and regulations. Mr. Tam will also a ssist Ms. He in organizing Board meetings and
Shareholders ’ meetings of our Company as well as other matters of our Company which are
incidental to the duties of a company secretary. Mr. Tam is expected to work closely with Ms. He
and will maintain regular contact with Ms. He. In addition, Ms. He will comply with the annual
professional training requirement under Rule 3.29 of the Listing Rules to enhance her knowledge
of the Listing Rules during the three-year period from the Listing Date. She will also be assisted
by our compliance advisor and our legal advisors as to the Hong Kong laws on matters in relation
to our ongoing compliance with the Listing Rules and the applicable laws and regulations.
Since Ms. He does not possess the formal qualifications required of a company secretary
under Rule 3.28 of the Listing Rules, we have applied to the Hong Kong Stock Exchange for, and
the Hong Kong Stock Exchange has granted , a waiver from strict compliance with the
requirements under Rules 3.28 and 8.17 of the Listing Rules such Ms. He may be appointed as a
joint company secretary of our Company. The wai ver is valid for an initial period of three years
from the Listing Date on the conditions that (a) Ms. He must be assisted by Mr. Tam who
possesses the qualifications and experience required under Rule 3.28 of the Listing Rules; and (b)
the waiver will be revoked immediately if and when Mr. Tam ceases to provide assistance to Ms.
He as a joint company secretary or if there are material breaches of the Listing Rules by our
Company.
Before the expiration of the initial three-year p eriod, the qualifications of Ms. He will be re-
evaluated to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the
Listing Rules can be satisfied and whether the n eed for ongoing assistance will continue. We will
liaise with the Hong Kong Stock Exchange to e nable it to assess whether Ms. He, having
benefited from the assistance of Mr. Tam for the preceding three years, will have acquired the
skills necessary to carry out the duties of a compan y secretary and the relevant experience within
the meaning of Note 2 to Rule 3.28 of the Listing Rules so that a further waiver will not be
necessary.
PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
We have entered into and will continue to e ngage in certain transactions which would
constitute continuing connected transactions for our Company under the Listing Rules upon
Listing. We have applied to the Stock Exchange for, and the Stock Exchange has granted us, a
waiver from strict compliance with certain re quirements set out in Chapter 14A of the Listing
Rules for such continuing connected transaction. For details, see ‘‘Connected Transactions ’’ in
this prospectus.
WAIVERS FROM STRICT COMPL IANCE WITH THE LISTING RULES
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DIRECTORS ’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed Director who is named as
such in this prospectus) collectively and in dividually accept full responsibility, includes
particulars given in compliance with the Compani es (Winding Up and Miscellaneous Provisions)
Ordinance, the Securities and Futures (Stock M arket Listing) Rules (Cap 571V of the Laws of
Hong Kong) and the Listing Rules for the purpose of giving information to the public with regard
to our Group. Our Directors, having made all reas onable enquiries, confirm that, to the best of
their knowledge and belief, the inf ormation contained in this prospectus is accurate and complete
in all material respects and not misleading or deceptive, and there are no other matters the
omission of which would make any statement in this prospectus misleading.
CSRC FILING
According to the Overseas Listing Trial Measures, we are required to complete the filing
procedures with the CSRC in connection with th e proposed Listing. We submitted a filing to the
CSRC to apply for listing of the H Shares on the Stock Exchange and the Global Offering and the
conversion of 83,495,700 Unlisted Shares into H Shares. The CSRC confirmed our completion of
filing on June 12, 2025. As advised by our PRC Legal Advisor, our Company has completed all
necessary filings with the CSRC for the listing of the H Shares on the Stock Exchange.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in co nnection with the Hong Kong Public Offering,
which forms part of the Global Offering. The Global Offering comprises the Hong Kong Public
Offering of initially 5,856,000 Offer Shares and th e International Offering of initially 52,701,000
Offer Shares (subject to, in each case, reallocation on the basis referred to under ‘‘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 our H Shares on the Stock Exchange is sponsored by the Joint Sponsors and
the Global Offering is managed by the Overall Coordinators. The Hong Kong Public Offering is
fully underwritten by the Hong Kong Underwr iters pursuant to the Hong Kong Underwriting
Agreement. The International Offering is expect ed to be fully underwritten by the International
Underwriters pursuant to th e terms of the International Underwriting Agreement which is
expected to be entered into on or before Friday, August 22, 2025. Further information regarding
the Underwriters and the Underw riting Agreements are set out in ‘‘Underwriting ’’ in this
prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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The Offer Shares are offered solely on the basis of the information contained and
representations made in this prospectus and o n the terms and subject to the conditions set out
herein and therein. No person is authorized to g ive any information in connection with the Global
Offering or to make any representation not contained in this prospectus, and any information or
representation not contained herein must not be relied upon as having been authorized by our
Company, the Joint Sponsors, the Joint Overall Coordinators, the Joint Global Coordinators, the
Joint Lead Managers, the Joint Bookrunners, the Underwriters, any of their respective directors,
officers, employees, advisors, agents or representatives, or any other persons or parties involved
in the Global Offering.
Neither the delivery of this prospectus nor an y subscription or acquisition made under it
shall, under any circumstances, create any i mplication that there has been no change or
development in our affairs since the date of thi s prospectus or that the information in this
prospectus is correct as of any date subsequent to the date of this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
For details, see ‘‘Structure of the Global Offering ’’and ‘‘Underwriting ’’in this prospectus.
PROCEDURES FOR APPLICATIO N FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong O ffer Shares are set out in the section headed
‘‘How to Apply for the Hong Kong Offer Shares ’’in this prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his/her ac quisition of Hong Kong Offer Shares to, confirm
that he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares
described in this prospectus.
No action has been taken to permit a public offe ring of the Offer Shares or the distribution
of this prospectus in any jurisdiction other th an Hong Kong. Accordingly, without limitation to
the following, this prospectus may not be used for the purpose of, and does not constitute, an
offer or invitation in any jurisdiction or in any circ umstances 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 for
subscription. The distribution of this prospectu s and the offering and sale of the Offer Shares in
other jurisdictions are subject to restrictio ns 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 a n exemption therefrom. In particular, the Offer
Shares have not been offered and sold, and will not be offered and sold, directly or indirectly, in
the PRC or the United States.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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APPLICATION FOR LISTING OF THE H SHARES ON THE HONG KONG STOCK
EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any H
Shares which may be issued pursuant to the e xercise of the Over-allotment Option).
Dealings in the H Shares on the Hong Kong Stock Exchange are expected to commence on
Tuesday, August 26, 2025. No part of our Shares or loan capital 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
as of the Latest Practicable Date.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any a pplication will be invalid if the listing of, and
permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before the
expiration of three weeks from the date of the c losing 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 or on behalf of the Hong Kong Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, an d permission to deal in, the H Shares on the
Hong Kong Stock Exchange and compliance with the stock admission requirements of HKSCC,
the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H Shares on
the Hong Kong Stock Exchange or on any other date as determined by HKSCC. Settlement of
transactions between participants of the Hong K ong Stock Exchange is required to take place in
CCASS on the second settlement day after any t rading day. All activities under CCASS are
subject to the General Rules of HKSCC and the HKSCC Operational Procedures in effect from
time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional advisors for
details of the settlement arrangements as such arra ngements may affect their rights and interests.
H SHARE REGISTER AND HONG KONG STAMP DUTY
All of the Offer Shares will be registered on our register of members of H Share to be
maintained by our H Share Registrar, Computershare Hong Kong Investor Services Limited in
Hong Kong. Our principal register of members will be maintained by us at our headquarters in the
PRC.
Dealings in the H Shares registered on the H Share register of members of our Company in
Hong Kong will be subject to Hong Kong stamp duty.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Unless determined otherwise by our Company, dividends payable in respect of our H Shares
will be paid to the Shareholders listed on the H Share register of our Company in Hong Kong, by
ordinary post, at the Shareholders ’ risk, to the registered address of each Shareholder of our
Company.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering ar e recommended to consult their professional
advisors as to the taxation implications of subscr ibing for, purchasing, holding or disposal of,
and/or dealing in the H Shares or exercising r ights attached to them. None of us, the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their
respective directors, officers, employees, partners, agents, advisors or representatives 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 subscr iption, purchasing, holding, disposition of, or
dealing in, the H Shares or exercising any rights attached to them.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless indicated otherwise, being the PBOC r ate prevailing on the Latest Practicable Date,
(i) the translations between Renminbi and U.S. dollars were made at the rate of RMB7.1382 to
US$1.00; (ii) the translations between Hong Kong dollars and Renminbi were made at the rate of
RMB1.00 to HK$1.0997; and (iii) the translation s between U.S. dollars and Hong Kong dollars
were made at the rate of HK$7.8496 to US$1.00.
No representation is made that the amounts denominated in one currency could actually be
converted into the amounts denominated in ano ther currency at the rates indicated or at all.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. For ease of reference, the names of the Chinese laws and regulations,
government authorities, institutions, natural pe rsons or other entities (including certain of our
subsidiaries) have been included in this prospectus in both the Chinese and English languages. In
the event of any inconsistency, the Chinese version shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies between totals and sums of amounts listed in any table,
chart or elsewhere in this prospectus are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 107 –


--- page 119 ---
DIRECTORS
Name Address Nationality
Executive Directors
Dr. Yang Rui （楊銳） Room 701, Building 10
Meihao Jiayuan, No.298 Nanjing Road
Jiangyan District
Taizhou City, Jiangsu Province
PRC
Canadian
Dr. Yang Baofeng （楊寶峰） Room 105, Building 57
Zhongtian Yuyuan
Sanshui Street, Jiangyan District
Taizhou City, Jiangsu Province
PRC
Chinese
Ms. He Rong （賀蓉） Flat 8-1206, Phase 1
China Resources International
99 Gulou South Road
Hailing District
Taizhou City, Jiangsu Province
PRC
Chinese
Non-executive Director
Mr. Qian Shan ’gao（錢善高） Group 17
Liangxu Zhenjiang Village
Hailing District, Taizhou City
Jiangsu Province
PRC
Chinese
Independent non-executive Directors
Dr. Yin Junming （殷俊明） Room 1802, Building 5
Huijing International
No. 50 Yue ’an Street
Jianye District, Nanjing City
Jiangsu Province
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 120 ---
Name Address Nationality
Dr. Wang Jin （王進） Room 202, Unit 3
2nd Floor, Building 2
No. 39 Landianchang South Road
Haidian District
Beijing
PRC
Chinese
Dr. Wang Xi （王熹） Flat D 51/F
Tower 11, The Palazzo
2 8L o kK i n gS t r e e t
Sha Tin New Territories
Hong Kong
Chinese
SUPERVISORS
Mr. Lou Zhiqiang （樓志強） Room 1105, Building 13
Dongfang Buye Cheng
Jiangyan District
Taizhou City, Jiangsu Province
PRC
Chinese
Ms. Sun Caiyun （孫彩雲） Room 01, Building 16
Meihao Jiayuan, No.298 Nanjing Road
Jiangyan District
Taizhou City, Jiangsu Province
PRC
Chinese
Mr. Huang Xuegong （黃學工） Room 204, Building 3
Houbao Xinyu, Shengao Town
Jiangyan City, Jiangsu Province
PRC
Chinese
For details, see ‘‘Directors, Supervisors and Senior Management ’’in this prospectus.
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
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--- page 121 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Sponsor-Overall Coordinators China Intern ational Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 110 –


--- page 122 ---
Overall Coordinators China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Joint Global Coordinators China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 111 –


--- page 123 ---
Joint Bookrunners China Internatio nal Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3G a r d e nR o a d
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Livermore Holdings Limited
Unit 1214A
12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
C h i n aG a l a x yI n t e r n a t i o n a lSecurities (Hong Kong) Co.,
Limited
2 0 FW i n gO nC e n t r e
111 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 112 –


--- page 124 ---
Joint Lead Mangers China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3G a r d e nR o a d
Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Livermore Holdings Limited
Unit 1214A
12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
C h i n aG a l a x yI n t e r n a t i o n a lSecurities (Hong Kong) Co.,
Limited
2 0 FW i n gO nC e n t r e
111 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 113 –


--- page 125 ---
Capital Market Intermediaries China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen ’sR o a dC e n t r a l
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3G a r d e nR o a d
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Livermore Holdings Limited
Unit 1214A
12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
C h i n aG a l a x yI n t e r n a t i o n a lSecurities (Hong Kong) Co.,
Limited
2 0 FW i n gO nC e n t r e
111 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
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--- page 126 ---
Legal Advisors to the Company As to Hong Kong and U.S. laws:
O’Melveny & Myers
31/F, AIA Central
1 Connaught Road Central
Hong Kong
As to PRC law:
JC Master Law Offices
9/F, National Water Resources Building
Qingjiang South Rd. No. 70
Nanjing, Jiangsu Province
PRC
As to International Sanctions laws:
Hogan Lovells
11/F, One Pacific Place
88 Queensway
Hong Kong
Legal Advisors to the Joint
Sponsors and Underwriters
As to Hong Kong and U.S. laws:
Latham & Watkins LLP
18/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
Zhong Lun Law firm
22-31/F, South Tower of CP Center
20 Jin He East Avenue, Chaoyang District
Beijing
PRC
Auditors and Reporting
Accountants
Ernst & Young
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King ’sR o a d
Quarry Bay, Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai
Branch Co.
Room 2504, Wheelock Square
1717 West Nanjing Road
Jing ’an District
Shanghai
PRC
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 115 –


--- page 127 ---
Receiving Banks Industrial and C ommercial Bank of China (Asia)
Limited
33/F., ICBC Tower
3G a r d e nR o a d
Central
Hong Kong
Agricultural Bank of China Limited Hong Kong Branch
(Incorporated in the People ’s Republic of China with
limited liability)
25/F, Agricultural Bank of China Tower
50 Connaught Road Central
Central
Hong Kong
Bank of China (Hong Kong) Limited
1G a r d e nR o a d
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIE S INVOLVED IN THE GLOBAL OFFERING
– 116 –


--- page 128 ---
Registered Office No. 999 Tianmu West Road
Jiangyan Economic Development Zone
Taizhou City, Jiangsu Province
PRC
Headquarters and Principal Place
of Business in the PRC
No. 999 Tianmu West Road
Jiangyan Economic Development Zone
Taizhou City, Jiangsu Province
PRC
Principal Place of Business in
Hong Kong
Room 504, 5/F
Cheong Tai Commercial Building
6 0 - 6 6W i n gL o kS t r e e t ,S h e u n gW a n
Hong Kong
Company Website www.shuangdeng.com.cn
(
Information contained on th is website does not form part
of this prospectus )
Joint Company Secretaries Ms. He Rong （ 賀蓉）
Flat 8-1206, Phase 1
China Resources International
99 Gulou South Road
Hailing District, Taizhou C ity, Jiangsu Province,
PRC
Mr. Tam Ka Lung （ 譚家龍）
(Fellow member of the Association of Chartered Certified
Accountants and member of the Hong Kong Institute of
Certified Public Accountants)
Room 504, 5/F
Cheong Tai Commercial Building
6 0 - 6 6W i n gL o kS t r e e t
Sheung Wan
Hong Kong
CORPORATE INFORMATION
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--- page 129 ---
Authorized Representatives Ms. He Rong （ 賀蓉）
Flat 8-1206, Phase 1
China Resources International
99 Gulou South Road
Hailing District, Taizhou City Jiangsu Province,
PRC
Mr. Tam Ka Lung （ 譚家龍）
(Fellow member of the Association of Chartered
Certified Accountants and member of the Hong Kong
Institute of Certified Public Accountants)
Room 504, 5/F
Cheong Tai Commercial Building
60–66 Wing Lok Street
Sheung Wan
Hong Kong
Audit Committee Dr. Yin Junming （殷俊明）(
Chairman )
Dr. Wang Jin （王進）
Mr. Qian Shan ’gao（錢善高）
Remuneration Committee Dr. Wang Jin （王進）(Chairman )
Dr. Yang Rui （楊銳）
Dr. Yin Junming （殷俊明）
Nomination Committee Dr. Wang Jin （王進）(Chairman )
Dr. Yin Junming （殷俊明）
Dr. Yang Rui （楊銳）
Strategy Committee Dr. Yang Rui （楊銳）(Chairman )
Dr. Yang Baofeng （楊寶峰）
Dr. Wang Xi （王熹）
Compliance Advisor Orient Capital (Hong Kong) Limited
28/F-29/F
100 Queen ’s Road Central
Central, Hong Kong
CORPORATE INFORMATION
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--- page 130 ---
H Share Registrar Computershare Ho ng Kong Investor Services Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen ’sR o a dE a s t
Wai Chai
Hong Kong
Principal Bankers
Agricultural Bank of China Taizhou Shuangdeng Branch
Building 32, Commercial Street
Jiangyan District
Taizhou City, Jiangsu Province
PRC
CORPORATE INFORMATION
– 119 –


--- page 131 ---
The information and statistics presented in this section and other sections of this
prospectus, unless otherwise indicated, were extracted from different official government
publications and other publications, and from the industry report prepared by Frost &
Sullivan, an independent market research an d consulting company that was commissioned
by us, in connection with this Global Offering. The information from official government
sources has not been independently verifie d by us, the Joint Sponsors, the Sponsor-
Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, t he Underwriters, the Capital Market
Intermediaries, any of their respective direct ors, supervisors and advisors, or any other
persons or parties involved in the Global Offe ring, and no representation is given as to its
accuracy.
SOURCES OF INFORMATION
We have engaged Frost & Sullivan, an independe nt market research co nsultant, to analyze
the global and China energy storage market and prepare a report for use in this prospectus, for
which we have agreed to pay an engagement fee of RMB600,000. Frost & Sullivan is an
independent global consulting firm founded in 1961 in New York and its services include, among
others, industry consulting, market strategic cons ulting and corporate training. Frost & Sullivan
has conducted detailed primary research which invo lved discussing the status of the industry with
certain leading industry participants and conducting interviews with relevant parties. Frost &
Sullivan has also conducted secon dary research which involved reviewing company reports,
independent research reports and data based on its own research database. Frost & Sullivan
obtained the figures for the estimated total mar ket size from historical data analysis plotted
against macroeconomic data as well as considered the above-mentioned industry key drivers. Its
market engineering forecasting methodology integrates several forecasting techniques with the
market engineering measurement-based system and relies on the expertise of the analyst team in
integrating the critical market elements investig ated during the research phase of the project.
These elements primarily include expert-opinion forecasting methodology, integration of market
drivers and restraints, integration with the m arket challenges, integration of the market
engineering measurement trends and integratio n of econometric variables. The Frost & Sullivan
Report is compiled based on the following assu mptions: (i) the social, economic and political
environment of the globe and mainland China is likely to remain stable in the forecast period; and
(ii) related industry key drivers are likely to drive the market in the forecast period.
Unless otherwise stated, all data and forecast s contained in this section have been derived
from the Frost & Sullivan Report and were based on desktop research, expert interviews, and
analysis and estimates by Frost & Sullivan. Our Directors confirm that, having exercised
reasonable care, there have been no adverse changes in market information, taken as a whole
since the date of the Frost & Sullivan Report, that would materially limit, contradict, or adversely
affect these data.
INDUSTRY OVERVIEW
– 120 –


--- page 132 ---
OVERVIEW OF THE GLOBAL AND CHINA ENERGY STORAGE MARKET
Definition and Classification of Energy Storage
Energy storage refers to the storage of electric energy, encompassing technologies and
measures that use chemical or physical methods to store electricity and release it when needed.
Energy storage technologies mainly encompass electrochemical and mechanical energy
storage technologies. Electrochemical energy storage technologies can be further categorized into
lithium-ion battery, lead-acid ba ttery, sodium-ion battery, and other types. Mechanical energy
storage technologies can be further divided into flywheel energy storage and compressed air
energy storage. Energy storage technologies have broad applications in telecom and data center
side, as well as in the electrical side, which is further divided into the power side and user side.
In 2024, the market size of the global energy storage market by added installed capacity
reached approximately 268.3 GWh. Electrochemi cal energy storage technologies such as lithium-
ion batteries, lead-acid batteries, and sodium-ion batteries, dominate the market by occupying
over 99% of the energy storage market share by added installed capacity.
Overview of Energy Storage Batteries by Product
Different characteristics align lithium-ion and lead-acid batteries with distinct downstream
market segments in the energy storage market. Wh ile lead-acid batteries remain a safe, reliable
and cost-effective choice for traditional applicat ions, the performance characteristics of lithium-
ion batteries are driving their adoption in more diversified scenarios.
Differing requirements of core customers in telecom base stations and data centers drive the
distinct usage and applications of lithium-ion and lead-acid batteries, a s each technology aligns
with specific performance chara cteristics suited to their needs. Lead-acid batteries, with high
safety level and mature recycling value chain, dominate traditional applications like emergency
backup power. Meanwhile, lithium-ion batteries , with their advantages in energy density, life
cycle, and adaptability, are increasingly being ad opted for high energy consuming base stations
and evolving data center energy needs, especially for sustainable electricity supply.
Energy Storage Industry Value Chain
The upstream of the energy storage industry pri marily focuses on lithium-ion and lead-acid
battery raw materials, including cathode materia l/positive plates, anode material/negative plates,
separator, electrolyte, and other key elements. These materials significantly influence the overall
quality and performance of batteries.
INDUSTRY OVERVIEW
– 121 –


--- page 133 ---
The midstream of the energy storage industry mainly involves battery cells, battery packs,
and energy storage systems. Batte ry manufacturing is a multi-step pr ocess that includes electrode
manufacturing, cell assembly, training, aging a nd testing. Battery cells are assembled through
notching, stacking and pouch assembly. Battery packs are assembled from these cells,
incorporating additional components for safety an d performance. Energy storage systems involve
developing backend systems to precisely contro l and monitor batteries, ultimately integrating
these systems with battery packs into final products.
The downstream segment covers end applicatio ns, including the data center, telecom, and
electrical energy storage. For data centers and telecom applications, these new information
infrastructures are characterized by high pow er consumption and stable power supply, thus
boosting energy storage demand. Among the electrical energy storage side, commercial,
industrial, and residential use can effectively achieve power supply and demand balance and
reduce the load pressure from the power side.
Value Chain Analysis of Energy Storage Market
VqtusfbnUpstream NjetusfbnMidstream EpxotusfbnDownstream
Battery Manufacturing End ApplicationsBattery Material
User Side
Power Side
Power Generation Side
Grid Side
Battery Cell
Energy Storage System
Battery Pack
Commercial &
Industrial Use
Residential Use
Data Center & Telecom
Side
Data Center
Telecom
Electrical Energy
Storage Side
Cathode Material / Positive Plates
Anode Material / Negative Plates
Separator
Electrolyte
……
Source: Frost & Sullivan
Market Size of Global and China Energy Storage Market by Added Installed Capacity
Under the global coalition for carbon neutra lity, reducing greenhouse gas emissions and
promoting the development of renewable energy has become an international consensus. At the
same time, geopolitical tensions and fluctuations in fossil fuel prices have also prompted countries
to seek more stable and sustainable energy supplie s. With continuous technological advancements,
the cost of renewable energy has been steadily decreasing in recent years, further driving market
demand for renewable energy. In 2024, the proportion of renewable energy power generation
surpassed 35% of the global total power genera tion for the first time. Looking ahead, with the
accelerating of energy structure transforma tion to solar and wind energy and continuous
development of renewable energy technologies, it is projected that the market share of renewable
energy power generation among the global power generation structure will reach over 45% by
2030 and approximately 70% by 2050, respectively.
INDUSTRY OVERVIEW
– 122 –


--- page 134 ---
Proportion of Clean Energy among the Global Power Generation
Structure, 2024, 2030E & 2050E
Solar
Wind
Hydropower
Other Renewables
Nuclear
Fossil Fuel
9.4%
14.0%
9.3%
55.5%
8.7%
3.1%
2024
16.0%
14.3%
13.1%
45.0%
2.9%
8.7%
E0502E0302
33.2%
26.8%
8.0%
22.0%
7.5%
2.5%
Source: International Energy Agency (IEA), Frost & Sullivan
The market size of global energy storage by ad ded installed capacity increased from 39.9
G W hi n2 0 2 0t o2 6 8 . 3G W hi n2 0 2 4a taC A G Ro f6 1 . 1 % .E n e r g ys t o r a g ep l a y sak e yr o l ei n
many countries ’ energy strategy by meeting the demands fo r stability, cost-effectiveness, and
environmental sustainability. It strengthens energy self-sufficiency, flexibility, and security, while
also contributing to lower electricity costs. As such, driven by the supportive government
policies, cost reduction of energy storage batteries, the growing adoption of renewable energy, as
well as the heightened awareness of energy storage, it is forecasted that the market size of global
energy storage by added installed capacity will increase from 268.3 GWh in 2024 to 1,816.5
GWh in 2030, representing a CAGR of 37.5%.
In 2024, energy storage market in Asia Pacific (excluding mainland China) and EMEA
regions reached added installed capacity of 26.5 GWh and 35.0 GWh, occupying 9.9% and 13.0%
of the total global market, respectively. Countries in these regions have introduced and
implemented multiple measures to promote the de velopment of the energy storage market. For
example, India has launched a subsidy progr am worth up to 4 GWh to enhance the flexibility of
its energy system and facilitate a higher integra tion of renewable energy into the grid. While
Southeast Asia has made significant strides in renewable energy generation, the region ’sp o w e r
grid infrastructure has been relatively slow t o develop. Thus, energy storage batteries are
necessary to provide grid regula tion and expansion. In the European market, lithium-ion energy
storage battery has been increas ingly dominating the market. For the Nordic market, the initiative
of European countries sharing reserve capacity e ffectively utilizes energy storage systems, which
will reduce costs for both energy storage system operators and consumers, thereby promoting the
development of the Nordic energy storage marke t. For the African market, energy storage market
is still in its infancy. African abundant renewable energy resources will facilitate the rapid growth
of the energy storage industry.
INDUSTRY OVERVIEW
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--- page 135 ---
Added Installed Capacity of Global Energy Storage, Breakdown of Energy Storage Technologies, 2020-2030E
GWh
1.8 4.0 5.3 41.6
263.348.6227.4
360.2
505.9
691.5
907.7
1,164.8
1,471.3
0
300
600
900
1,200
1,500
1,800
2,100
21.9
0.0
0.7
2021
80.828.8
0.0
2022
123.9
32.2
0.0
1.5
2023
38.5
1.3
1.1
2024
44.45.2
2025E
18.8
2026E
53.221.3 7.1
2027E
57.2 86.49.7
2028E
60.9
160.5
13.9
2029E
61.7
20.218.5
39.9 62.9 111.5 157.7
268.3
413.7
578.6
2030E
1,061.0
1,400.2
1,816.5
0.0
0.1
2020
40.2
793.4
Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
Others (e.g.,  Flywheel Energy Storage,
Compressed Air Energy Storage, etc)
CAGR 2024-2030ECAGR 2020-2024
36.5%80.8%
8.2%20.1%
142.3%223.2%
61.7%82.6%
37.5%61.1%Total
Source: International Energy Ag ency (IEA), China Energ y Storage Alliance(CNESA), Frost & Sullivan
Supported by the massive downstream demand, mature industrial chain layout and favorable
policies, China has solidified its position as the global leader in energy storage installation,
boasting an impressive added installed capacity of 161.0 GWh in 2024, which constituted
approximately 60.0% of the total added installed capacity worldwide in the same year. Looking
ahead to 2030, China is projected to maintain its dominance, accounting for approximately 64.0%
of the total added installed capacity of energy storage globally.
Added Installed Capacity of China Energy Storage, Breakdown of Energy Storage Technologies, 2020-2030E
0.634.2 72.3 131.4 209.327.6
58.0
138.2
215.0
302.2
414.2
544.1
698.8
901.8
0
300
600
900
1,200
0.0
2020
15.212.8
0.0
0.1
2021
28.816.4
0.0
0.4
2022
17.5
0.3
0.6
2023
21.01.2 0.6
2024
25.04.7
GWh
2025E
11.1 16.53.9
2026E
30.4
11.4 5.6
2027E
32.9
7.9
2028E
35.5
0.0
2029E
37.7
13.9
2030E
22.4 28.2 45.6
10.2
161.0
247.2
350.2
486.1
657.1
875.9
1,162.8
76.3
Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
Others (e.g.,  Flywheel Energy Storage,
Compressed Air Energy Storage, etc)
CAGR 2024-2030ECAGR 2020-2024
36.7%88.1%
10.2%16.6%
136.4%347.2%
69.4%159.6%
39.0%63.7%Total
Source: China Energy Storage Allia nce (CNESA), Frost & Sullivan
INDUSTRY OVERVIEW
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--- page 136 ---
Supply-demand Dynamics of Energy Storage Battery
The upstream industries of lithium-ion and lead-acid energy storage battery providers
involve with the supply of main raw material i ncluding lithium carbonate and lead ingots,
respectively. Lithium carbonate production is primarily driven by downstream demand, and most
companies adopt a make-to-order model. With the surging demand for downstream new energy
vehicles and energy storage systems, China ’s lithium carbonate production volume witnessed an
significant increase from 171 thousand tons in 2020 to 379 thousand tons in 2022, primarily
driven by robust downstream demand. At the beginning, the growth rate of production capacity is
lower than demand, and the supply shortage led to an increase in the price from RMB48.0
thousand per ton in 2020 to over RMB482.4 thousand per ton in 2022. In 2023, China ’s lithium
carbonate production volume further increased to 518 thousand tons, while price decreased to
RMB272.3 thousand per ton following with the balance between supply and demand.
Furthermore, the growth momentum continued in 2024, with lithium carbonate production
volume amounted to 696 thousand tons in 2024 . The production of lead ingots is primarily
influenced by national policies, the release of smelting capacity, and downstream demand. With
the establishment of a nationwide lead resource recycling system and a recycling lead system,
China ’s lead ingot production volume has shown a steady year-on-year growth trend. In 2023,
China ’s lead ingot production volume reached approxi mately 6.6 million tons, compared with 5.6
million tons in 2020, representing a CAGR of 5.6% from 2020 to 2023. The price remained
relatively stable within the range from RMB14.0 thousand per ton to RMB17.5 thousand per ton.
In 2024, global capacity contraction of mining and smelting led to the increase of lead ingot price
to RMB16.9 thousand per ton compared to RMB15.6 thousand per ton in 2023.
The downstream market demand for lithium-ion a nd lead-acid energy sto rage batteries in the
energy storage industry is primarily driven by the energy transition to a low-carbon energy
system, the growth in the number of telecom base stations and data center racks. During the
energy transition, energy storage technologies play a crucial role in minimizing energy waste
caused by fluctuations in renewable energy supply. In 2024, the proportion of renewable energy
power generation surpassed 35% of the global total power generation for the first time. Looking
ahead, with the accelerating of energy structure transformation to solar and wind energy and
continuous development of renewable energy technologies, it is projected that the market share of
renewable energy power generation among the glo bal power generation structure will reach over
45% by 2030. Thus, fueled by the su stained growth in market demand of transition to low-carbon
energy system, it is forecast that the market size of global electrical energy storage by added
installed capacity will increa se from 207.9 GWh in 2024 to 1,506.8 GWh in 2030, representing a
CAGR of 39.1%.
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In the telecom industry, since the inception of 5G telecom base stations, they have rapidly
become the mainstream in global telecom base s tation market, depending on its faster speeds,
lower latency, increased capacity as well as enhanced connectivity. Thus in 2024, the cumulative
volume of global 5G telecom base stations has r eached 6.5 million units, presenting a CAGR of
56.5% from approximately 1.1 million units in 202 0. Till 2030, the cumulative volume of global
5G telecom base stations is expected to reach 22.4 million units, presenting a CAGR of 22.8%
from 2024. As the demand for replacement of existing telecom base stations rises, the added
installed capacity of global te lecom energy storage is expected to reach 100.2 GWh in 2030,
representing a CAGR of 14.8% from 43.9 GWh in 2024.
The surge in demand for data center energy stora ge batteries is propelled by the proliferation
of artificial intelligence (AI) and big data analy tics, driven by the increasing complexity and scale
of AI algorithms. Consequently , the global number of data center racks surged from 12.5 million
units in 2020 to 33.9 million units in 2024, exhibiting a CAGR of 28.3%. With the rapid
advancement of AI technology and increase in computational capacity from data center racks, it is
anticipated that the global number of data center racks will reach 181.3 million units by 2030,
growing at a CAGR of 32.3% from 2024. To ensure reliable power supply and enhance energy
efficiency through sustainable energy supply, added installed capacity of global data center
energy storage is expected to further increase to 209.4 GWh by 2030 from 16.5 GWh in 2024,
representing a CAGR of 52.7% from 2024 to 2030.
The following chart sets forth the amount of demand and supply of energy storage batteries
in global market during the years indicated.
Global Electrical Energy Storage Lithium-ion Battery Production and
Sales Volume, 2021-2024
Global Telecom and Data Center Energy Storage Battery Production
and Sales Volume, 2021-2024
35.0
43.8
51.9
57.6
37.7
42.6
50.8
60.4
0
10
20
30
40
50
60
70
Thousand Tonne
2021 2022 2023 2024
Production Volume  Sales Volume
20.2
62.3
166.0
216.0
24.2
66.6
105.1
205.0
0
20
40
60
80
100
120
140
160
180
200
220
Thousand Tonne
2021 2022 2023 2024
Production Volume  Sales Volume
Notes: Proportion for global production volume and sales volume of electrical energy storage lead-acid battery is relatively
small.
Source: China Energy Storage Alliance (CNESA), I nterviews with Industry Experts, Frost & Sullivan
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Within the telecom base and data center energy s torage segment, the ratio of sales volume to
production volume ( ‘‘sale-to-production ratio ’’) remained above 97% during the Track Record
Period. For electrical energy storage lithium-ion b atteries, the sale-to-production ratio varied
during this period, with a notable dip in 2023. This was primarily due to supply expansion driven
by strong demand growth in prior years, coupled with a lag in adjusting production levels to align
with the slower demand growth seen in 2023. Ad ditionally, timing mismatches related to the
construction cycle contributed to the lower ratio. This supply-demand dynamic gradually returned
to normal in 2024, as evidenced by the sales-to-production ratio reaching 94.9% in the 2024.
The following chart sets forth the amount of demand and supply of primary raw materials in
global market during the years indicated.
47.2
65.6
99.0
119.7
49.8
73.6
90.2
116.0
0
10
20
30
40
50
60
70
80
90
100
110
120
Thousand Tonne
2021 2022 2023 2024
Production Volume
Global Lead Ingots Production and Sales Volume, 2021-2024Global Lithium Carbonate Production and Sales Volume, 2021-2024
12.9 12.4
13.3 13.212.8 12.5
13.3 13.1
0
2
4
6
8
10
12
14
Thousand Tonne
2021 2022 2023 2024
Sales Volume Production Volume Sales Volume
Source: National Bureau of Statistics, China Non-Ferrous Metals Fabrication Industry Association (CNFA), Shanghai
Metals Market (SMM), Interviews w ith industry experts, Frost & Sullivan
OVERVIEW OF GLOBAL AND CHINA TELECOM AND DATA CENTER ENERGY
STORAGE MARKET
The telecom and data center industries are highly interrelated in terms of technological
foundation, application scenarios, and market demand, mutually supporting each other to drive the
development of the modern information society. The telecom industry is responsible for data
transmission and exchange, ensuring that infor mation is transmitted quickly and reliably, while
data center processes and analyzes these large volumes of data. Both telecom and data center
require extensive infrastructure, high bandwidth, and low-latency network support, and rely on
technological innovation and security protection. With the increase in smart devices and internet
users, market demand drives the development of these two industries, which together support
intelligent decision-making, optimize network performance, a nd improve service quality. The
development of telecom and data center energy storage industry is crucial for various purposes,
including (i) ensuring the stable operation of data centers and telecom networks, preventing data
loss and communication interruptions; (ii) enhancing energy efficiency and reducing energy
waste; (iii) lowering operating costs by storing e lectricity during off-peak hours and using it
during peak times; supporting the application o f renewable energy by providing stable power
supply, thus contributing to green development; responding to emergencies and unexpected
situations to ensure business continuity and re liability; and (iv) promo ting the development of
smart grids, enabling flexible power scheduling and management to provide more reliable power
guarantees for the telecom and data center industries.
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Overview of Global and China Telecom Energy Storage Market
Telecom energy storage refers to the use of energy storage systems to provide backup power
or supplementary energy to ensure the continuous operation of telecom base stations. Energy
storage solutions, especially energy storage sys tems, are crucial for maintaining communication
networks during power outages or fluctuations, ensuring uninterrupted connectivity and reliable
communication services. In 2024, the cumulative volume of global 5G telecom base stations has
reached 6.5 million units, presenting a CAGR of 56.5% from 2020. China accounted for 65.1% of
the cumulative volume of global 5G telecom base stations in 2024. The construction of China ’s
new 5G base station experience d a decline from 2022 to 2024 according to MIIT, falling from
887 thousand units to 874 thousand units. This l ed to a decrease in added installed capacity of
energy storage for newly built 5G telecom base stations in China, slowing down the growth of
China ’s 5G telecom base station energy storage markets. In recent years, some countries and
regions have faced issues with unstable power supply, including power outages and voltage
fluctuations, impacting the normal operation of t elecom base stations. To ensure the reliability,
stability, and continuity of telecom networks, th e demand for stable and reliable power supplies
for base stations has also increased.
Market Size of Global and China Telecom Energy Storage Market
The added installed capacity of global telecom energy storage increased from 25.1 GWh in
2020 to 43.9 GWh in 2024, representing a CAGR of 15.0%. By 2030, the added installed
capacity of global telecom energy storage is expected to reach 100.2 GWh, representing a CAGR
of 14.8% from 2024. In 2024, China accounted for 55.8% of the global increase in added
installed telecom energy storage capacity.
The added installed capacity of China telecom energy storage, including newly and
replacement, increased from 16.5 GWh in 2020 to 24.5 GWh in 2024, representing a CAGR of
10.4%. By 2030, the added installed capacity of China telecom energy storage is expected to
reach 54.2 GWh, representing a CAGR of 14.2% from 2024. Based on the application, the added
installed capacity can be divided into those for newly built base stations and those for
replacement in existing base stations. In China ’s 5G telecom base station energy storage market,
newly built demand dominates the replacement, and However, from 2022 to 2024, the newly built
demand in China has experienced a contraction, resulting from the slowdown in the construction
of new 5G telecom base stations in China. Among this market, the added installed capacity of
energy storage for newly built 5G telecom base stations in China fell from 15.3 GWh in 2022 to
12.8 GWh in 2024. This caused the growth of this sector in China to be slower than the global
market, with China ’s share dropping from 68.1% in 2022 to 59.6% in 2024 and thus resulting in
China ’s share of added installed capacity of telecom energy storage in global market declining
from 60.8% in 2022 to 55.8% in 2024.
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Added Installed Capacity of Newly Built 5G Telecom Energy Storage in Mainland China,
2020-2030E
CAGR 2024-2030ECAGR 2020-2024
4.7%2.8%Newly Built 5G Telecom Energy Storage in Mainland China
11.5
14.3
15.3 14.9
12.8
13.8
14.9
15.8
16.6 17.2 16.9
0
2
4
6
8
10
12
14
16
18
GWh
2030E2029E2028E2027E2026E2025E20242023202220212020
Source: Interviews with Industry Experts, Frost & Sullivan
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In populous Asia Pacific nations like India and Indonesia, telecom energy storage is
indispensable given the impending rapid deployment of telecom base stations and the inadequacy
of existing power grids. Thus, the added insta lled capacity of telecom energy storage in Asia
Pacific excluding mainland China is expected to increase from 10.9 GWh in 2024 to 27.9 GWh in
2030, representing a CAGR of 16.9%.
In the EMEA market, the development of 5G and overall telecom industry in Europe is
mature and gradually advancing, while other E MEA regions are still in the early stages of 5G
commercialization, possessing significant development poten tial. Thus, the added installed
capacity of telecom energy storage in EMEA is expected to increase from 5.4 GWh in 2024 to
11.6 GWh in 2030, representing a CAGR of 13.7%.
Added Installed Capacity of Telecom Energy Storage (Global and Mainland China), Breakdown of Energy Storage Technologies, 2020-2030E
8.5 8.6 10.9 11.0 12.8 14.6
0.1 0.3 0.6
8.0 10.5 9.1 10.5
11.6
12.5
15.5 16.5 17.2 18.4 18.5
14.3
16.6
19.2
24.4
33.4
0
5
10
15
20
25
30
35
40
45
50
55
GWh
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
1.0
2029E
2.3
2030E
16.5
19.1 20.0 21.5
24.4
27.1
29.9
33.4
37.0
43.8
54.2Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
CAGR 2024-2030ECAGR 2020-2024
19.2%9.8%
6.3%11.0%
--
14.2%10.4%Total
14.4 15.2 19.4 20.0 23.3 26.4
0.3 0.7 1.2
10.7 15.6 13.6 17.7
20.6
22.9
28.5 30.8 33.1 36.1 37.1
26.8
31.7
37.6
46.4
59.2
0
10
20
30
40
50
60
70
80
90
100
110
GWh
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
2.0
2029E
4.0
2030E
25.1
30.8 32.9
37.8
43.9
49.3
55.6
63.2
71.9
84.5
100.3
Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
CAGR 2024-2030ECAGR 2020-2024
19.2%17.9%
8.1%12.7%
--
14.8%15.0%Total
Source: China Energy Storage Alliance (CNESA), I nterviews with Industry Experts, Frost & Sullivan
In terms of technical routes, lead-acid batteries have previously taken a larger share of the
market for global telecom energy storage w ith relatively good reliability and temperature
tolerance. Recently, with the fast constructio n of 5G telecom base stations, the proportion of
lithium-ion batteries is increasing steadily to m eet the needs of 5G base station construction with
higher speed and larger capacity. Lithium-ion b atteries generally have higher energy density,
faster charging speeds, and lower self-discharge rate. Looking ahead, lead-acid batteries, with
strengths in wide temperature ran ge adaptability, good reliability, high safety level, and mature
technology, are projected to gr ow alongside with lithium-ion ba tteries in the telecom energy
storage industry. The established recycling system of lead-acid batteries supports its shift towards
low-carbon development. By 2030, it is foreca sted that lithium-ion batteries will account for
59.1% of the global telecom energy storage mark et by added installed cap acity, while lead-acid
batteries will maintain with market share of 37.0% in global market.
Thus, in the telecom energy storage market , lithium-ion batteries are increasingly
implemented in base stations requiring hig h discharge rate and high energy consuming
application scenarios. Lead-acid batteries s till maintain its position in telecom energy storage
market especially in some central area depending on their safety, reliability and maturity. In 2024,
the market shares of lithium-ion batte ries and lead-acid batteries in China ’s telecom energy
INDUSTRY OVERVIEW
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storage market by added installed capacity reached 47.5% and 52.5%, respectively. By 2030, the
market shares of lithium-ion batteries and lead-aci d batteries by added installed capacity in China
are expected to reach 61.7% and 34.1%, respectively.
Overview of Global and China Data Center Energy Storage Market
The development of data center energy storage is significantly shaped by the increasing
energy demands of data centers, fueled by the ri se of AI and big data analytics. The escalating
complexity and scale of AI algorithms necessita te immense computational resources, leading to
heightened energy consumption across traditional and modern computing platforms like cloud and
edge computing.
The global number of data center racks su rged from 12.5 million units in 2020 to 33.9
million units in 2024, exhibiting a CAGR of 28 .3%. With the rapid advancement of AI
technology and its expanding applications across various industries, it is anticipated that the
global number of data center racks will reach 181.3 million units by 2030, growing at a CAGR of
32.3% from 2024. China, serving as a primary driver of global data center expansion, accounted
for 32.2% of global number of data center r acks in 2024. With additional support from the
government, it is projected that the number of d ata center racks in China will reach 61.3 million
by 2030, representing a CAGR of 33.3%.
The increase in computational capacity from data center racks has exerted significant
pressure on the energy requirements for data centers. The proportion of data center electricity
demand in the global electricity demand is expected to increase from 4.0% in 2024 to 10.1% in
2030. Such a surge in energy needs poses challenges to existing energy supply systems,
necessitating the adoption of ene rgy storage technologies to ensure the stability of the power
supply and enhancing energy efficiency within data centers. As the focus within the data center
sector shifts towards addressing these energy challenges alongside computational demands, energy
storage supports data center operations and contributes to broader goal of sustainable electricity
supply by improving energy efficiency and facilita ting integration with renewable energy sources.
The growth of the data center energy storage s ector is thus essentia l for the sustainable
development of data center infrastructure.
Market Size of Global and China Data Center Energy Storage Market
In the data center industry, there ’s a growing emphasis on deploying energy storage
solutions to ensure reliable power supply and e nhance energy efficiency through sustainable
energy supply. Added installed capacity of global data center energy storage increased from 4.0
GWh in 2020 to 16.5 GWh in 2024, representing a CAGR of 43.0%, and it is expected to further
increase to 209.4 GWh by 2030, representing a CAGR of 52.7% from 2024 to 2030. The added
installed capacity of China data center energ ys t o r a g ei n c r e a s e df r o m2 . 9G W hi n2 0 2 0t o8 . 0
GWh in 2024, representing a CAGR of 29.2%, and it is expected to further increase to 101.6
GWh by 2030, representing a CAGR of 52.8% from 2024 to 2030. The accelerated deployment of
data centers and enhanced demand for sustainable energy supply will further fuel the robust
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growth of the data center energy storage market in Asia Pacific excluding mainland China and
EMEA. The added installed capacity of data center energy storage in Asia Pacific excluding
mainland China and EMEA is expected to increase from 1.7 GWh and 1.3 GWh in 2024 to 22.1
GWh and 10.9 GWh by 2030, representing CAGRs of 52.7% and 42.8%, respectively.
Added Installed Capacity of Data Center Energy Storage (Global and China), Breakdown of Energy Storage Technologies, 2020-2030E
CAGR 2024-2030ECAGR 2020-2024
157.3%125.8%
10.7%28.2%
--
--
52.8%29.2%China
CAGR 2024-2030ECAGR 2020-2024
113.9%100.8%
7.6%40.0%
--
--
52.7%43.0%Global
12.0 14.7 17.2 1.2 2.6 5.10.4 0.6 1.1 1.8 4.2 0.3
0.9 10.219.2 21.3 22.7 23.3 22.99.5
21.1
43.0
88.6
0
20
40
60
80
100
120
140
160
180
200
220
6.5
2021
9.0
2022 2023 2024 2025E
0.2
2026E
0.5
2027E
2.30.1
2028E
5.23.8
2029E
171.2
2020 2030E
4.0
GWh
9.6 13.1 16.5 21.4
6.9
43.8
69.2
119.7
209.4
29.1
Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
Others
5.3 6.0 7.7 9.4 0.1 0.3 0.9 2.00.3 1.0 7.911.2 13.0 14.2 14.6
14.27.3
16.6
37.0
75.5
0
10
20
30
40
50
60
70
80
90
100
110
4.3
2021
0.00.0
2022
0.1
2023 2024 2025E
2.8
0.2
2026E
0.70.0
2027E
1.72.9
2028E
4.0
2020 2029E
4.0
2030E
2.9
GWh
5.4 6.1 8.0 10.4
4.3
21.3
33.4
57.6
101.6
14.3
Lithium-ion Battery
Lead-acid Battery
Sodium-ion Battery
Others
Source: Interviews with Industry Experts, Frost & Sullivan
Lead-acid batteries are relatively mature in technology and industry value chain with high
safety level compared to other battery types, making them suitable for multiple application
scenarios in data centers, especially under the scenario with high instantaneous discharge rate. In
2024, lead-acid batteries still do minated the data center energy sto rage market, with global market
share of 89.2% by added installed capacity. Looking ahead, the global data center energy storage
market is poised for significant expansion. The accelerating global demand for data center,
together with lead-acid battery ’s high technological maturity and superior instantaneous discharge,
will continue to drive steady market growth of l ead-acid batteries, achieving the CAGR of 7.6%
in the global data center energy storage market by added installed capacity from 2024 to 2030. By
2030, proportion for added insta lled capacity of lithium-ion battery among data center energy
storage market is expected to account for 81.8% g lobally, driving by renewable energy initiatives
utilization for electricity peak shaving and valle y filling. Besides lithium-ion batteries, other
battery types, such as sodium-ion batteries, which are still in the early stages of adoption but offer
benefits like abundant resources and lower costs, show promising potential as technology
advances.
Therefore, in the data center energy storage market, lead-acid batteries are valued for their
high safety level and mature technology to provide reliable backup power, particularly for large-
scale data center applications. Lithium-ion batteri es are valued for their longer life cycle to handle
peak shaving and valley filling, supporting the sust ainable electricity supply. In 2024, the market
shares of lithium-ion batteries an d lead-acid batteries in China ’s data center energy storage market
by added installed capacity reached 3.3% and 96.7%, respectively. By 2030, the market shares of
lithium-ion batteries and lead-acid batteries by added installed capacity in China are expected to
74.3% and 14.0%, respectively.
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OVERVIEW OF GLOBAL AND CHINA ELECTRICAL ENERGY STORAGE INDUSTRY
The electrical energy storage industry includes (i) the power side, including power
generation side and grid side, and (ii) the use r side, including commercial, industrial, and
residential uses. Power generation and grid-side energy storage have higher capacity and larger
scales, and they have experienced rapid development over the past few years as their economies
of scale have been readily formed. User-side energy storage features low capacity and is usually
applied with distributed power generation equip ment. Meanwhile, user-side energy storage
generally requires precise management, which can adapt to the different consumption habits of the
downstream users and enhance energy consumption efficiency.
In line with the development trend of global e nergy storage industry, the market size of
global electrical energy storage by added installed capacity increased from 10.8 GWh in 2020 to
207.9 GWh in 2024 at a CAGR of 109.5%. It is forecast that the market size of global electrical
energy storage by added installed capacity will increase to 1,506.8 GWh in 2030, representing a
CAGR of 39.1% from 2024 to 2030. The market size of China electrical energy storage by added
installed capacity increased from 3.1 GWh in 2020 to 128.6 GWh in 2024 at a CAGR of 153.8%.
It is expected that the market size of China electrical energy storage by added installed capacity
will increase to 1,007.0 GWh in 2030, representing a CAGR of 40.9% from 2024 to 2030. In the
realm of energy storage technologies, lithium-io n batteries will remain as the predominant types,
representing 82.4% of the total added installed capacity of the global electrical energy storage
industry in 2030, followed by sodium-ion batteries.
MARKET DRIVERS OF GLOBAL AND CHINA ENERGY STORAGE MARKET
Industry Demand from Telecom Networks and Data Centers: In the era of 5G telecom,
artificial intelligence (AI), and big data, the industry ’s demand for energy storage is driven by the
significant increase in power requirements needed for the vast transmission, storage, and
processing of data from telecom networks and data centers.
On the one hand, there will be increased demand from telecom networks, driven by its rapid
expansion and development. As modern communication infrastructure evolves, the demand for
energy increases, necessitating robust solutions to ensure continuous and reliable service delivery.
Furthermore, within the telecom energy storage industry, the commercial rollout and expansion of
5G networks have significantly amplified the power requirements of communication bases.
Known for its ultra-fast response times and m inimal latency (unde r one millisecond), 5G
technology has become the dominant station type in markets like China. By 2030, China is
expected to deploy an additional 8.0 million 5G bas e stations, bringing the total to approximately
12.2 million.
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On the other hand, there will be increased dema nd from data centers, attributable to the
relevant workloads, such as AI and high-perfo rmance computing (HPC) . Implementing these
workloads often requires changes to rack and b ackup power infrastructure to ensure efficient,
secure, and continuous power supply. In the future, with widespread deployment, accelerated
adoption, and application of AI will further accel erate the implementation of data centers. It is
projected that the global number of data center racks will reach 181.3 million units by 2030,
growing at a CAGR of 32.3% from 2024.
Energy Transition : The energy transition aims to shift to a low-carbon energy system by
enhancing energy efficiency, decarbonizing power generation, and electrifying the economy to
achieve net-zero carbon dioxide emissions. Key pathways involve transitioning from traditional
high-pollution energy sources to renewable energy like solar, wind, hydropower, etc.. Energy
storage technologies play a crucial role in min imizing energy waste caused by fluctuations in
renewable energy supply. The energy transitio n is a global growing trend. At the end of 2024,
more than 150 countries have made commitments to reach carbon neutrality in the mid-21st
century, covering over 80% of global carbon dioxide emissions. In particular, China has set the
‘‘dual carbon ’’ target, aiming to achieve peak carbon dioxide emissions before 2030 and strive to
reach carbon neutrality before 2060. These initia tives taken by multiple countries have accelerated
the development of the new energy and energy storage markets. Specifically, in telecom and data
center energy storage sector, electricity cost s constitute a significant portion of operational
expenses for data centers and telecom operations, accounting for approximately 60% and 30% of
their total operating costs, respectively. The integration of renewable energy infrastructures, such
as PV, is reducing electricity expenses, while energy storage systems ensure uninterrupted
operation for base stations and data centers.
Regulatory Support: Regulatory frameworks and government support mechanisms, such as
subsidies, tax incentives, and financial incentives for investments in energy storage projects,
reduce upfront costs and accelerate market uptake, thus driving the adoption and deployment of
energy storage systems. In European Union, energy storage has played an important role in the
European Green Deal and the Fit for 55 policy p ackage, a set of policy initiatives aimed at
ensuring the steps to carbon neutra lity. These measures accelerate the adoption for the installation
of renewable energy plants and co-located energy storage. Regulatory reforms in China, such as
streamlined permitting processes and grid interconnection standards, further facilitate the
deployment of energy storage systems, enabling faster project development and implementation.
For example, in August 2021, the PRC National Development and Reform Commission and the
National Energy Administration issued the ‘‘Notice on encouraging renewable electricity
generation enterprises to self-build or purch ase peak shaving capacity to increase the grid-
connected scale ’’（《關於鼓勵可再生能源發電企業自建或購買調峰能力增加並網規模的通知》）,
encouraging power generation enterprises to increase the grid-connected scale of renewable
energy power generation installations through sel f-building or purchasing peak adjusting energy
storage capabilities. As of December 31, 2024, more than 20 provinces, autonomous regions, and
municipalities in China have issued regional po licies related to the mandatory deployment of
energy storage alongside renewable energy projects. Operators of telecom base stations and data
centers, with their extensive site resources and reliance on substantial energy storage for backup
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power, are poised to reap significant benefits fro m this policy. Data centers, in particular, are
under increasing pressure to address their high energy consumption and rapidly growing demand
for computing power by promoting green electricity usage and reducing carbon emissions. Thus,
the installed data center energy storage capacity equipped with sustainable electricity supply
functions is projected to reach 80.3 GWh by 2030, with a CAGR of 204.9% from 2024. In
addition, the bidding policies of the Chinese telecom base station industry have undergone several
major changes from 2020 to 2024, which have continued to impact the mechanisms and costs of
energy storage projects. Furthermore, government-funded research and development programs
spur technological innovation in energy storage technologies, driving down costs and improving
performance.
Increased Efficiency and Declining Costs: Increased efficiency and declining costs of
electric energy storage technologies are primary drivers behind their increasing adoption and
integration into modern energy systems. Technological advancements, including improvements in
battery materials & structure, manufacturing processes, and energy management systems, have led
to higher efficiency, longer lifespan, and enhanced safety features, contributing to the cost
reductions in energy storage products. Driven b y growing demand and larger production facilities,
economies of scale allow manufacturers to spread fixed costs. For instance, the average price of
lithium-ion batteries decreased from RMB1. 57/Wh in 2022 to RMB0.63/ Wh in 2024, dropped by
64.3%. These declining costs make energy storage solutions increasingly viable for a wide range
of applications, accelerating the transition tow ards a more sustainable, flexible, and resilient
energy system.
DEVELOPMENT TRENDS OF GLOBAL AND CHINA ENERGY STORAGE MARKET
AI and Big Data Technology Stimulate Market Demand: Integrating AI and big data
technology into various sectors has catalyzed a surge in market demand for computational power
and energy, stimulating the growth of the data cen ter energy storage market. The share of global
electricity demand attributed to the electricity demand from data centers is expected to rise from
4.0% in 2024 to 10.1% in 2030. AI and big data applications, known for their intensive data
processing needs, require vast amounts of computational power and continuous and reliable
energy sources to operate efficiently. This dependency on constant power supplies makes energy
storage a critical component in the infrastru cture supporting these technologies.
Diversification and Parallel Dev elopment of Technical Routes: Since lithium-ion batteries
boast higher energy density and longer life cycle and lead-acid batteries are relatively more
mature in industry value chain, the energy storage industry, especially in data center and telecom
sectors, will witness the parallel development of lithium-ion, lead-acid and other multiple battery
technologies, providing diversification of battery options and further improving energy storage
performance. Lithium-ion battery will contribute to the major grow th potential while lead-acid
battery will still represent as one of the mainstream applications. A mong other technical routes of
batteries, sodium-ion batteries are expected to i ncrease their energy storage market share due to
their rich raw material resources, suitab ility for cold regions and high efficiency.
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Continual Improvement on Battery Perf ormance and Cost Reductions Through
Technological Advancements: The continuous advancements in technology and corresponding
reductions in costs have significantly enhanced the performance and reliability of energy storage
technologies, leading to decreased costs. This i mprovement in competitiveness promotes further
market development and the application of energ y storage solutions. One of the breakthroughs in
this domain is the development of battery discharg e rate in different working environment, since
the energy storage system in data center requires superior high-rate performance to satisfy
instantaneous backup power demand in a short tim e period. Further, leading market participants
engage in the research and development of solid-state battery technology, providing safer, higher
energy density and longer life cycle options to meet diverse customer requirements. These
technologies help lower energy costs and carbon footprints, supporting the broad application in
energy storage markets.
ENTRY BARRIER OF GLOBAL AND CHINA ENERGY STORAGE MARKET
Customer Recognition Barriers: In the energy storage indust ries, customer recognition
barriers can be critical for new entrants, especia lly when the primary downstream customers in the
telecom and data center energy storage market include large telecom state-owned operators and
equipment manufacturers, and large technology companies. These organizations command vast
customer resources and substantial market shares, setting stringent requirements for their suppliers
across multiple dimensions. They expect high product q uality, cost-effectiveness, reliable delivery
capacities, robust service suppor t, compliance with regulations, a nd commitment to sustainability.
To successfully navigate these barriers and secu re trust and collaboration opportunities from such
large-scale customers, suppliers must not only o ffer products and services that meet these high
standards but also demonstrate reasonable pricing and cost structures to meet their customized
needs.
Capital Investment Barriers: Capital investment barriers in the energy storage industries
are primarily due to the substantial financial ou tlay required for equipment procurement, system
integration, and ongoing operations and mainten ance. The initial costs associated with setting up
production capacity of advanced energy storage systems that can handle the high demands of
telecom and data center products are considerable. These systems not only need to be robust to
ensure continuity in telecom and data center ma r k e t s ,b u tt h e ya l s on e e dt ob es o p h i s t i c a t e d
enough to integrate seamlessly with existing digita l and energy infrastructures. Additionally, the
operational costs, including the maintenance of complex systems that are essential for energy
efficiency and reliability, further escalate the inv estment needed. Conseque ntly, only enterprises
with robust financial backing are typically able to enter the market and compete effectively.
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Technological Barriers: The energy storage industry faces significant technological barriers
that stem primarily on sophisticated battery technology, energy management systems, and
intelligent control algorithms. Companies that possess core technologies and patents enjoy
significant competitive advantages in the market, d elivering superior high-rate performance with
better safety level and cost-effe ctiveness. Additionally, developi ng or acquiring these technologies
entails substantial investment in research and development, often coupled with the need to
navigate global complex patent landscapes and regulatory standards. The integration of these
technologies into existing in frastructure demands not only t echnical adaptability but also
compatibility with diverse global energy stora ge standards. As a result, the technological
complexity not only restricts market entry but al so challenges the scala bility and adaptability of
solutions within this sector.
COMPETITIVE LANDSCAPE OF THE GLOBAL ENERGY STORAGE MARKET
Competitive Landscape of the Global Telecom and Data Center Energy Storage Market
According to Frost & Sullivan, the global te lecom and data center energy storage battery
market is competitive. In 2024, the total global added installed capacity for energy storage
batteries in telecom and data center application reached 60.4 GWh, with the top five players
holding a combined market share of approximately 40.7%. Our Group achieved a shipment
volume of 6.7 GWh, ranking the first among global telecom and data center energy storage
battery providers, with the market share of 11.1%.
Top 5 Global Telecom and Data Center Energy Storage Battery Providers, 2024
Ranking
1
2
3
4
5
Market Share
11.1%
8.3%
7.8%
7.6%
6.0%
6.7
5.0
4.7
4.6
3.6
Our Group
Company A
Company B
Company C
Company D
Company Shipment Volume (GWh)
Source: Interviews with Industry Experts, Frost & Sullivan
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According to Frost & Sullivan, the telecom and data center energy storage battery market in
China is relatively competitive. In 2024, the tota l in China added installed capacity for energy
storage batteries in telecom and data center ap plication reached 32.4 GWh, with the top five
players holding a combined market share of approximately 45.9%. Our Group achieved a
shipment volume of 5.4 GWh, ranking the first among telecom and data center energy storage
battery providers in China, with the market share of 16.6%.
According to Frost & Sullivan, in 2024, we ranked first in terms of shipment volumes in the
global telecom base station energy storage market. In 2024, our market share in the global
telecom market reached 9.2%. Ac cording to Frost & Sullivan, in 2024, we ranked first among
Chinese companies in terms of shipment volumes in the global data center energy storage market.
In 2024, our market share in the global data center market reached 16.1%.
Top 5 Telecom and Data Center Energy Storage Battery Providers in China, 2024
Ranking
1
2
3
4
5
Market Share
16.6%
9.3%
8.6%
6.2%
5.2%
5.4
3.0
2.8
2.0
1.7
Our Group
Company A
Company D
Company E
Company F
Company Shipment Volume (GWh)
Notes:
(1) Sales to Chinese energy storage battery customers are counted as shipment volume in China.
(2) Established in 1999, Company A is a Chinese company with its shares listed on the Hong Kong Stock Exchange.
The company is a global leader in battery manufacturing, focusing on the production of lithium batteries and lead-
acid batteries.
(3) Established in 1947, Company B is a listed Indian-based company specializing in the production and sales of lead-
acid batteries, with its products wid ely used in automotive, industrial, and renewable energy sectors.
(4) Established in 2000, Company C is a U.S.-based company with its shares listed on the New York Stock Exchange,
specializing in the design, man ufacturing, and sales of lithium-ion and le ad-acid batteries and power systems, with
its products widely used in telecommunications, data centers, industrial equipment, and renewable energy sectors.
(5) Established in 1994, Company D is a Chinese compan y with its shares listed on the Shenzhen Stock Exchange,
specializing in the research, production, and sales of lead -acid and lithium batteries, w ith its products widely used
in power, energy storage, and industrial sectors.
(6) Established in 1998, Company E is a Chinese company with its shares listed on the Shenzhen Stock Exchange,
specializing in providing backup power, energy storage solutions, power supply systems, and renewable energy
system solutions, with its lithium-ion a nd lead-acid battery prod ucts widely used in telecom, data center, and power
sectors.
(7) Established in 1996, Company F is headquartered in China with its shares listed on the Shanghai Stock Exchange.
The company is specializing in integrated power trans mission and distribution, wi th its products focusing on
lithium-ion energy stora ge battery solutions.
Source: Interviews with Industry Experts, Frost & Sullivan
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Competitive Landscape of the Global Electrical Energy Storage Market
The global electrical energy storage market is characterized by a relatively fragmented
competitive landscape, with more than 10,000 ex isting and startup companies in the industry,
covering products including energy storage ba tteries, battery management systems, power
conversion system, etc.
Success in this market is driven by several key factors: (i) customer recognition plays a
crucial role, as trusted brands in this market are more likely to secure long-term customers; (ii)
product reliability is also paramount, as energy storage battery must meet high standards of
performance and safety; (iii) maintaining a co st advantage is vital for staying competitive,
particularly in a price-sensitive market; and (iv ) the ability to expand into international markets is
essential for growth, as global demand for energy storage solutions continues to rise, driven by
the transition to renewable energy and the need for grid stability.
Our Group has established various competi tive strengths in the global energy storage
market. According to Frost & Sullivan, in 202 4, we ranked the twelfth among global energy
storage battery providers in terms of added installed capacity, achieving a market share of 2.5%.
For details, see ‘‘Business — Our Strengths ’’in this prospectus.
BATTERY AND RAW MATERIALS PRICE ANALYSIS
The price of lithium carbonate significantly aff ects the average selling price of lithium-ion
batteries. Similar to the trend of lithium carbona te, the average market prices of lithium-ion
batteries decrease from RMB1.57/Wh in 2022 to RMB0.63/Wh in 2024. In the future, the price of
lithium carbonate is expected to be relatively st abilized following with a slight decrease due to
softening demand sentiments in the long term. Reg arding the future price trend of lithium-ion
batteries, more advanced battery technology and improved economies of scale will play a
significant role in further reducing costs. Thus, i t is expected that the average price of lithium-ion
batteries will be at the range from RMB0.55/Wh to RMB0.75/Wh in the next two years, while the
price fluctuation trajectory is similar to that of raw materials, especially lithium carbonate.
The price of lead ingots significantly aff ects the average selling price of the Group ’sl e a d -
acid battery products. Similar to the trend of lead ingots, the average market prices of lead-acid
batteries fluctuate from RMB0.47/Wh in 2020 to RMB0.54/Wh in 2024. Compared to lithium-ion
batteries, lead-acid batteries enjoy a stable recy cling supply chain. With cu rrent recycling costs of
lead-acid batteries remaining at RMB0.25/W h to RMB0.30/Wh, future prices will be largely
influenced by the recycling system and lead ingot p rices, thus the price of lead-acid batteries is
likely to exhibit a gentle decrease due to its rela tively low recycling costs. The average price of
lead-acid batteries is expected to be relativel y stable and remain at the range from RMB0.46/Wh
to RMB0.56/Wh in the next two years, while the price fluctuation trajectory is similar to that of
raw materials, especially lead ingots.
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2019
Average Price Trends of Lithium-ion Batteries and Lead-acid Batteries (China), 2019-2024 Q4
1.29
1.09
0.73
0.63 0.58 0.56
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
RMB/Wh
1.40
1.15
1.57
Lithium-ion Batteries
0.47 0.48
0.52 0.51
0.52 0.54 0.55 0.53
0.0
0.1
0.2
0.3
0.4
0.5
0.6
RMB/Wh
0.55
Lead-acid Batteries
2020 2021 2022 2023 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2019 2020 2021 2022 2023 2024 Q1 2024 Q2 2024 Q3 2024 Q4
Note: The average price of lithium-ion batteries refer to the average price of 2-hour lithium-ion battery energy storage
system.
Source: Frost & Sullivan
The prices of key raw materials are primarily driven by market supply and demand, as well
as inventory levels. For lithium carbonate, main ra w material of lithium-ion batteries, due to the
limited and slow-growing production capacity and surge in demand from ESS and NEVs from
2020 to 2022, the average price escalated from RMB48.0 thousand per ton to over RMB482.4
thousand per ton. The surge in demand for ESS has been driven by a combination of renewable
energy transformation and electrification, mature technology and cost decrease, and favorable
policies, in both China and overseas. Attributable to the balancing between supply and demand,
the average price of lithium carbonate dropped to RMB272.3 thousand per ton in 2023. The price
plunged mainly due to the increase in capacity an d inventory level of lithium carbonate. Further
in 2024, continuous rise in inventory level of lithium carbonate accelerated the drop in average
price of lithium carbonate to RMB95.9 thousand p er ton. As the supply and demand relationship
gradually reaches equilibrium in the future, produ ction capacity utilization rates of this industry
will rise. Under the premise of economic stability , the price of lithium carbonate will tend to be
stabilized and decrease slightly, and it is exp ected to fluctuate within the range of RMB70
thousand per ton to RMB110 thousand per ton in the next two years.
Lead ingots, the primary raw material of lead -acid battery, account for nearly 60% of the
total cost of lead-acid batteries, substantially infl uencing the price of lead-acid battery. After the
short-term price drop of lead ingots in 2019, from 2020 to 2023, the price of lead ingots has
shown a steady increase and price of lead ingot maintained at the price range from RMB14.0
thousand per ton to RMB17.5 thousand per ton. In 2024, due to the tight supply-demand
relationship of lead ingots and the continued gro wth of lead demand in the battery industry, rise
in the average price of lead ingots to RMB16.9 th ousand per ton led to the increase in the price of
lead-acid batteries. With the continuous establis hment of the lead recycling system, the price of
lead ingots is projected to decrease steadily and revert to the price level between 2020 and 2023.
0
100
200
300
400
500
600
Thousand RMB/Ton
2019Q2
Lithium Carbonate
0.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
Thousand RMB/Ton
Lead Ingots
2019Q4 2020Q2 2020Q4 2021Q2 2021Q4 2022Q2 2022Q4 2023Q2 2023Q4 2024Q2 2024Q4 2019Q2 2019Q4 2020Q2 2020Q4 2021Q2 2021Q4 2022Q2 2022Q4 2023Q2 2023Q4 2 024Q2 2024Q4
Average Price Trends of Main Raw Materials of Lithium-ion Batteries and Lead-acid Batteries in China, 2019 Q1-2024 Q4
Source: Frost & Sullivan
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We are subject to PRC laws, regulations and regulatory documents that affect various
aspects of our business. This section summarizes (i) a description of the principal PRC
governmental authorities that have jurisdiction over our current busine ss; and (ii) the principal
PRC laws, regulations and regulatory documents that we believe are relevant to our business
activities.
Major Regulatory Organizations
We are principally engaged in the research and development, production and sale of energy
storage batteries, mainly lead-acid energy sto rage batteries and lithiu m-ion energy storage
batteries, which are mainly used in the fields of telecommunications base station energy storage,
data center energy storage and power storage. In addition to being subject to the supervision and
management of the organizations that generally regulate companies in the PRC, our business
activities in the PRC are mainly regulated by the National Development and Reform Commission
of the People ’s Republic of China ( ‘‘NDRC ’’) and the Ministry of Industry and Information
Technology ( ‘‘MIIT ’’) and the National Energy Administration of the People ’s Republic of China.
The NDRC provides macro guidance and regulation on the development of the industry, and
is mainly responsible for formulating and organising the implementation of national economic and
social development strategies, medium and long-term plans and annual plans, as well as proposing
objectives and policies on national economic devel opment, price level regulation and optimization
of major economic structures.
The MIIT carries out industrial planning and supervision over the development of the
industry, it is mainly responsible for formulating and implementing various industrial plans and
regulations, promoting the development of major technology and equipment and independent
innovation, promoting strategic adjustment and upgrading of indus trial structure, formulating and
organizing the implementation of technical norms and standards for the industry, as well as
monitoring the daily operation of the industry.
The National Energy Administration ( ‘‘NEA’’) provides policy guidance and direction for
the development of the industry, and is mainly responsible for formulating and organising the
implementation of energy development strategies , plans and policies, promoting the reform of the
energy system and formulating the relevant reform proposals, and co-ordinating major issues in
energy development and reform.
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Major Industrial Policies Relating t o our Business Activities in the PRC
According to the ‘‘Standard Conditions for Lead Storage Battery Industry ’’（《鉛蓄電池行業
規範條件》）promulgated by the MIIT on December 10, 2015 and effective from December 25,
2015, the lead-acid battery industry in China is re gulated to promote the sustainable, healthy and
coordinated development of the lead-acid battery and its lead-containing parts and components
production industry in China and to regulate investment of the industry, among which, the
production projects for the new types of lead storage battery such as coiled type, bipolar type, and
lead-carbon batteries (super batteries), or the produ ction projects using continuous type (expanded
mesh, punched mesh, continuous casting and rolling, etc.) electrode plate manufacturing process,
are not subject to the restriction of production capacity.
In order to smoothly implement the ‘‘Standard Conditions for Lead Storage Battery
Industry ’’, the MIIT promulgated on December 10, 2015 and put into effect on December 25,
2015, the ‘‘Measures for the Administration of the Announcement of the Standard for Lead
Storage Battery Industry ‘‘（《鉛蓄電池行業規範公告管理辦法》）, which stipulates that the
competent departments of industry and information technology at the provincial level are
responsible for accepting the announcement applic ations submitted by lead-acid battery
enterprises in their respective regions in accordance with the ‘‘Standard Conditions for Lead
Storage Battery Industry ’’ as well as the provisions of relevant laws, regulations and industrial
policies, as well as conducting preliminary exami nation of the application materials submitted by
the enterprises, and reporting the results of the preliminary examination to MIIT, which is
responsible for the management of the lead-acid battery industry standardization announcement in
the whole country.
According to the ‘‘14th Five-Year Plan ’’ for the Development of the Information and
Communications Industry （「十四五」《信息通信行業發展規劃》）promulgated and implemented
by the MIIT on November 1, 2021, the world ’s largest 5G independent network will be built
during the ‘‘14th Five-Year Plan ’’period, and full coverage of citie s and towns, basic coverage of
administrative villages, and key ap plication scenarios will be deep ly achieved, and basic coverage
of cities and villages by gigabit fiber optic network.
A c c o r d i n gt ot h e‘‘Standard Conditions for Lithium-Ion Battery Industry ‘‘（《鋰離子電池行業
規範條件》）promulgated by the MIIT on June 18, 2024 and effective from June 20, 2024,
lithium-ion battery enterprises and projects shou ld comply with the requirements of the national
laws and regulations on the exploitation and use of resources, ecological and environmental
protection, energy conservation management, safe production, etc., and the requirements of the
national industrial policy and relevant industrial planning and layout, as well as the requirements
of the local national spatial and ecological environmental protection special planning.
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In order to smoothly implement the ‘‘Standard Conditions for Lithium-Ion Battery
Industry ’’,t h e ‘‘Administrative Measures for the Annou ncement of Standard Conditions for
Lithium Ion Battery Industry (2024 Edition) ’’（《鋰離子電池行業規範公告管理辦法（2024 年本）》）
were promulgated by the MIIT on June 18, 2024 and effective from June 20, 2024, which
stipulate that the competent departments of industry and information technology at the provincial
level shall be responsible for the acceptance, verification and reporting of the announcement of
the lithium-ion battery industry in the local re gion, and shall supervise and inspect the
implementation of the standard conditions. The MIIT is responsi ble for the management of the
national lithium-ion battery indu stry standard announc ement, organising the review, sampling,
publicity and announcement of the application materials reviewed and recommended by the
provincial competent departments of the industry, as well as the dynamic management of the list
of lithium-ion battery indus try standard announcement.
According to the ‘‘Implementation Plan for the Development of New Energy Storage in the
14th Five-Year Plan ’’（《「十四五」新型儲能發展實施方案》）promulgated by the NDRC and the
NEA and put into effect on January 29, 2022, the key tasks of new energy storage development in
the 14th Five-Year Plan are deployed in the key areas of technological innovation, pilot
demonstration, large-scale d evelopment, institutional mechanism, policy protection and
international cooperation. It is planned that by 2025, the new type of energy storage will move
from the early stage of commercialization to the st age of large-scale development, with conditions
for large-scale commercial application, a basica lly complete standards system, an increasingly
complete industrial system, and a basically ma ture market environment and business model.
Among them, the performance of electrochemical energy storage technology will be further
improved, and the system cost will be reduced by more than 30%; by 2030, the new energy
storage will be fully marketed and developed.
On January 3, 2023, the MIIT, the Ministry of Education, the Ministry of Science and
Technology, the People ’s Bank of China, the China Bank Insurance Regulatory Commission
(withdrawn), and the NEA promulgated and implemented the ‘‘Guiding Opinions on Promoting
the Development of Energy Electronics Industry ’’（《關於推動能源電子產業發
展的指導意見》）,
where the opinion urged to strengthen the new type of energy storage batteries industrialization
technology research, and to promote the application of advanced energy storage technologies and
products on a large scale. Research breakthroughs in ultra-long life and high security battery
system, large-scale large-capacity high-efficiency energy storage, mobile energy storage for
vehicles and other key technologies, accelerate the research and development of solid-state
batteries, sodium-ion batteries, hydrogen st orage/fuel cells and other new batteries.
A c c o r d i n gt ot h e‘‘Key Points of Energy Regulation in 2023 ’’（《2023 年能源監管工作要點》）
promulgated and implemented by the NEA on January 4, 2023, it is required to further give full
play to the function of the electricity market me chanism. The market will play a decisive role in
resource allocation, effectively reflect the time and space value of electricity resources,
continuously expand the scale of new energy participation in market-based trading, and
continuously guide the participation of virtu al power plants, new types of energy storage and
other new types of entitie s in system regulation.
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A c c o r d i n gt ot h e‘‘Work Plan for Stable Growth of Light Industry (2023-2024) ’’（《輕工業穩
增長工作方案（2023-2024 年）》）promulgated and implemented by the MIIT, the NDRC and the
Ministry of Commerce (MOFCOM) on July 19, 2023, the plan accelerates the research and
application of key technologies and materials in the fields of lead storage batteries, lithium-ion
batteries, primary batteries, and other fields, focusing on the enhancement of energy density of
batteries and the reduction of thermal runaway. Hi gh-security lithium-ion batteries, lead-carbon
batteries, sodium-ion batteries and other prod ucts shall be vigorously developed, and their
application in new energy vehicles, energy storage, telecommunications and other fields shall be
expanded. A platform for industrial supply and demand co-operation will be built and the battery
industry and the downstream industries, such as electric bicycles will be promoted to strengthen
the connection of technology, products and services, and to promote the integration and
development.
A c c o r d i n gt ot h e‘‘Guiding Catalogue for Industrial Str uctural Adjustment (2024 Edition) ’’
（《產業結構調整指導目錄（2024 年本）》）(‘‘Catalogue (2024 Edition) ’’) promulgated by the
NDRC on December 27, 2023 and effective from February 1, 2024, the Catalogue (2024 Edition)
consists of three categories of encouraging, res tricting and eliminating, among which lithium-ion
batteries, sealed lead storage batteries with new s tructures (bipolar, lead-cloth, coiled, tubular,
etc.), are listed as the encouraged ca tegory in the Catalogue (2024 Edition).
Laws and Regulations Relating to Foreign Investment
The Standing Committee o f the National People ’s Congress promulgated the Company Law
of the People ’s Republic of China （《中華人民共和國公司法》）(the ‘‘Company Law ’’)o n
December 29, 1993, which came into effect on July 1, 1994, and the Company Law has been
through the 1999 amendment, 2004 amendment, 2005 amendment, 2013 amendment, 2018
amendment and 2023 Amendments for a total of six amendments. The latest round of amendments
to the law was passed on December 29, 2023 and implemented on July 1, 2024. The Company
Law provides for the registration of companies , the establishment and organisation of limited
liability companies, the transfer of equity of lim ited liability companies, the establishment and
organisation of joint stock limited companies, the issuance and transfer of shares of joint stock
limited companies, the special provisions on the organisation of state-funded companies, the
qualifications and obligations of directors, supervisors and senior management of a company,
corporate bonds, the company ’s finance, accounting, mergers, divisions, capital increases, capital
reductions, dissolution and liquidation of the company, branches of the foreign company, and
legal liabilities. Unless otherwise provided by t he law on foreign investment, the Company Law
shall also apply to foreign-invested companies.
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On March 15, 2019, the National People ’s Congress ( ‘‘NPC’’) promulgated the ‘‘Foreign
Investment Law of the People ’s Republic of China ’’（《中華人民共和國外商投資法》）,w h i c hc a m e
into force on January 1, 2020. On December 26, 2019, the State Council promulgated the
‘‘Implementation Rules of the Foreign Investment Law of the People ’s Republic of China ’’（《中華
人民共和國外商投資法實施條例》）, which came into force on January 1, 2020. The MOFCOM
and the State Administration for Ma rket Supervision (SAMS) issued the ‘‘Measures for the
Reporting of Foreign Investment Information ’’（《外商投資信息報告辦法》）on December 30,
2019, which came into effect on January 1, 2020. Commencing from January 1, 2020, in the
event a foreign investor conducts investment ac tivities directly or indirectly within the PRC, the
foreign investor or foreign-invested enterprise shall report investment information to the
competent department of commerce in accordance with the laws and regulations on foreign
investment.
A c c o r d i n gt ot h e‘‘Provisions on Guiding the Orientation of Foreign Investment ’’（《指導外
商投資方向規定》）
issued by the State Council on February 11, 2002 and effective on April 1,
2002, the ‘‘Special Administrative Measures for Foreig n Investment Entry (Negative List) (2024
Edition) ’’（《外商投資准入特別管理措施（負面清單）（2024 年版）》）issued by the NDRC and the
Ministry of Commerce on September 6, 2024 and effective from November 1, 2024, and the
‘‘Encouraging Foreign Investment Industries Catalogue (2022 Edition) ’’（《鼓勵外商投資產業目錄
（2022 年版）》）issued by the NDRC and the Ministry of Commerce on October 26, 2022 and
effective from January 1, 2023, there are four types of foreign investment projects. Foreign
investment projects can be classified into four cat egories: encouraged, permitted, restricted and
prohibited.
Laws and Regulations Relating to Outbound Investment
On September 6, 2014, the Ministry of Commerce promulgated the ‘‘Administrative
Measures for Outbound Investment ’’（《境外投資管理辦法》）, which came into effect on October
6, 2014. According to the Administrative Measures for Outbound Investment, outbound
investment refers to the act of an enterprise esta blished by law within the territory of the PRC to
own a non-financial enterprise or to acquire the ownership, control, operation and management
rights and other interests in an existing non-financial enterprise through new establishment,
merger and acquisition or other means. Outbound i nvestment by enterprises involving sensitive
countries and regions as well as sensitive industrie s shall be subject to approval and management.
For enterprises in other cases of outbound investment, file management shall be implemented.
Local enterprises shall report to the competent provincial departments of commerce for record.
The Ministry of Commerce and the provincial competent department of commerce shall issue the
‘‘Certificate of Enterprise Outbound Investment ’’（《企業境外
投資證書》）to the enterprises that
have been filed or approved.
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On December 26, 2017, the NDRC promulgated the ‘‘Administrative Measures for Outbound
Investment of Enterprises ’’（《企業境外投資管理辦法》）, which came into effect on March 1,
2018. According to the Administrative Measure s for Outbound Investment of Enterprises,
outbound investment refers to i nvestment activities in which a d omestic enterprise in the PRC,
directly or through a foreign enterprise it controls, obtains ownership, control, operation and
management rights and other relevant intere sts in a foreign country by way of investment of
assets, interests or provision of financing and guarantee. When an investment entity launches an
outbound investment, it shoul d fulfil the procedures for approval and filing of outbound
investment projects, report relevant informatio n and cooperate with supervision and inspection.
The NDRC promulgated the ‘‘Catalogue of Sensitive Industries f or Outbound Investment (2018
Edition) ’’（《境外投資敏感行業目錄（2018 年版）》）on January 31, 2018, which came into effect on
March 1, 2018, detailing the catalogue of sensitive industries.
Laws and Regulations Relating to Environmental Protection
According to the ‘‘Environmental Protection Law of the People ’s Republic of China ’’（《中華
人民共和國環境保護法》）promulgated by the Standing Committee of the NPC on December 26,
1989 and last amended on April 24, 2014, production operators shall prevent and reduce
environmental pollution and ecological damage, and shall bear the responsibility for the damage
caused in accordance with the law. According to the ‘‘Environmental Protection Law ’’ and the
‘‘Regulation on Administra tion of Discharge Permits ’’（《排污許可管理條例》）issued by the State
Council on January 24, 2021 and ef fective from March 1, 2021, ente rprises, institutions and other
production operators implementing the administration of discharge permits shall discharge
pollutants in accordance with the requirements of the discharge permits; and shall not discharge
pollutants without obtaining the discharge pe rmits. The competent authorities in charge of
environmental protection impose different admini strative penalties on individuals or enterprises in
violation of the Environmental Protection Law.
According to the ‘‘Environmental Impact Assessment Law of the People ’s Republic of
China ’’（《中華人民共和國環境影響評價法》）, which came into effect on September 1, 2003 and
was amended on July 2, 2016 and December 29, 2018 respectively, and the Regulations on
Environmental Protection Management of Construction Projects, which came into effect on
November 29, 1998 and was amended on July 16, 2017, in the event the implementation of a
construction project is likely to affect the envi ronment, the construction unit shall submit an
environmental impact report (form) or environmental impact application form to the
environmental protection department concerne d. For construction projects that are required by
law to prepare an environmental impact report (form), the environmental impact assessment
document of the construction project should be approved by the administrative department in
charge of environmental protection, otherwise the construction shall not commence. Upon
completion of the construction project, the co nstruction unit shall, in accordance with the
standards and procedures stipulated by the administrative department in charge of environmental
protection, carry out acceptance of the ancillary e nvironmental protection facilities and prepare an
acceptance report.
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Laws and Regulations on Work Safety
According to the ‘‘Safety Production Law of the People ’s Republic of China ’’（《中華人民共
和國安全生產法》）, which came into effect on November 1, 2002 and was last amended on June
10, 2021 and came into effect on September 1, 2021, production and operation units must
strengthen the management of production safety, establish and improve the system of
responsibility for safety, and ensure a safe production environment. China establishes and
implements a system of accountability for produc tion safety accidents. If a production and
operation unit fail to comply with the provisions of the Safety Production Law of the People ’s
Republic of China, the safety and production supervision and management department may order
rectification, impose a fine, or order it to suspend production and business for rectification, or
revoke the relevant license.
Some of the chemical raw materials required for the production of the Company ’s products,
such as anhydrous ethanol and sulphuric acid, are dangerous chemicals. According to the
‘‘Regulations on the Safety Management of Hazardous Chemicals ’’（《危險化學品安全管理條
例》）(which came into effect on March 15, 2002 and was amended on March 2, 2011 and
December 7, 2013 respectively), the production, storage, use, operation and transportation of
dangerous chemicals shall comply with the safety management regulations. Dangerous chemical
units should have the safety conditio ns required by laws, administr ative regulations, national
standards and industrial standards, establish and improve safety management rules and regulations
and post safety responsibility systems, and provi de safety education, legal education and post
technical training for employees.
Laws and Regulations Relating to Product Quality
A c c o r d i n gt ot h e‘‘Civil Code of the People ’s Republic of China ’’（《中華人民共和國民法
典》）, which came into effect on January 1, 2021, Chapter IV – Product Liability of ‘‘Part VII –
Tort Liability ’’ stipulates that if a defective product causes damage to another person, the
producer of the product shall be liable for the infringement. Including: ‘‘If the defective products
cause damage to others, the infringed person may claim compensation from the producer of the
products, or from the seller of the products ’’;
‘‘If the defective products are caused by the
producer, the seller shall have the right to recover the damages from the producer after the
compensation is made. ’’
According to the ‘‘Product Quality Law of the People ’s Republic of China ’’（《中華人民共和
國產品質量法》）, which came into effect on September 1, 1993 and was last amended on
December 29, 2018, the production and sale of products within the territory of the People ’s
Republic of China must comply with the Law. P roducers and sellers shall establish a sound
internal quality management system, strictly implement the post quality standards, quality
responsibility and corresponding assessment me thods, and bear the responsibility for the quality
of products in accordance with the provisions of the Law.
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Laws and Regulations Relating to Import and Export of Goods
A c c o r d i n gt ot h e‘‘Administrative Provisions of the Customs of the People ’s Republic of
China on Record-filing of Customs Declaration Entities ’’（《中華人民共和國海關報關單位備案管
理規定》）promulgated by the General Administrat ion of Customs of the PRC on November 19,
2021, which came into effect on January 1, 2022, the consignees and consignors of imported and
exported goods and the declaration enterprises a pplying for the filing of declaration entities shall
obtain the qualification of market entities; a mong them, the consignees and consignors of
imported and exported goods applying for the f iling of declaration entities shall also obtain the
filing of declaration units of operators of foreig n trade. If the consigne e or consignor of imported
or exported goods or the declara tion enterprise has already app lied for the filing of declaration
entities, its branch orga nizations meeting the conditions in the preceding paragraph may also
apply for the filing of declaration entities.
Laws and Regulations Relating to Employment
A c c o r d i n gt ot h e‘‘Labour Contract Law of the People ’s Republic of China ’’（《中華人民共和
國勞動合同法》）, which came into effect on January 1, 2008 and was last amended on December
28, 2012 and came into effect on July 1, 2013, and the ‘‘Implementation Regulations of the
Labour Contract Law of the People ’s Republic of China ’’（《中華人民共和國勞動合同法實施條
例》）, which came into effect on September 18, 2008, the establishment of labour relationship
between employers and workers, as well as the conclusion, performance, termination and variation
of labour contracts, etc., are stipulated in the regulations accordingly. When a labour relationship
is established, a written labour contract shall b e concluded. If a labour relationship has been
established but a written labou r contract has not been conclude d at the same time, the employer
shall conclude a written labour contract w ithin one month from the date of employment.
According to the ‘‘Social Insurance Law of the People ’s Republic of China ’’（《中華人民共和
國社會保險法》）which came into effect on July 1, 2011 and was amended on December 29,
2018, the ‘‘Provisional Regulations on the Colle ction of Social Insurance Premiums ’’（《社會保險
費徵繳暫行條例》）which came into effect on January 22, 1999 and was amended on March 24,
2019, the ‘‘Provisional Measures for Maternity Insurance of Employees of Corporations ’’（《企業
職工生育保險試行辦法》）which came into effect on January 1, 1995, the ‘‘Regulation of
Insurance for Labour Injury ’’（《工傷保險條例》）which came into effect on January 1, 2004 and
was amended on December 20, 2010, and the ‘‘Regulations on the Administration of Housing
Provident Fund ’’（《住房公積金管理條例》）which came into effect on April 3, 1999 and was
amended on March 24, 2002 and March 24, 2019 respectively. Employers are required to pay
basic old-age insurance, unemployment insuranc e, basic medical insurance, work-related injury
insurance, maternity insurance and housing provident fund for their employees. Employers that do
not apply for the relevant procedures or do not pay in full on time, relevant administrative
departments shall order to make corrections or make supplemental payments. Employers who fail
to make corrections within the prescribed period f or social insurance registration, the employer
will be fined. Employers who fail to pay the social insurance premiums within the prescribed
REGULATORY OVERVIEW
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period, the relevant administrative department s hall impose a fine. Employers who fail to register
for the housing provident fund or who fail to apply for the establishment of housing provident
fund accounts for their employees, shall be fined. Employers who fail to pay the housing
provident fund after the deadline, may be subject to the People ’s Court compulsory execution.
Laws and Regulations Relating to Intellectual Property Rights
Copyright and Software Registration
The Standing Committee of the NPC promulgated the ‘‘Copyright Law of the People ’s
Republic of China ’’（《中華人民共和國著作權法》）in 1990, which was amended in 2001, 2010
and 2020. The Copyright Law of the People ’s Republic of China provides that Chinese citizens,
legal persons or unincorporated organizations shall enjoy copyright in their works (including
computer software) in accordance with this Law, regardless of whether they are published or not.
The Copyright Law of the People ’s Republic of China aims to encourage the creation and
dissemination of works that are beneficial to the c onstruction of socialist spiritual civilization and
material civilization, and to promote the devel opment and prosperity of socialist culture and
science.
The ‘‘Regulations on the Protection of Computer Software ’’（《計算機軟件保護條例》）
promulgated by the State Council on June 4, 1991 and amended in 2001, 2011 and 2013
respectively, aims to protect the rights and interests of the copyright owners of computer
software, regulate the interests in the development, dissemination and use of computer software,
encourage the development and application of computer software, and promote the development
of the software industry and the informatiza tion of the national economy. According to the
Regulations on the Protection of Computer Softw are, Chinese citizens, legal persons or other
organizations shall enjoy the copyright of the software developed by them, regardless of whether
it is published or not, in accordance with this Or dinance. Software copyright holders may apply
for registration with the software registration organizations recognised by the copyright
administration department of the State Council. The certificate of registration issued by the
software registration organisation is t he preliminary proof of registration.
The ‘‘Measures for the Registration of Computer Software Copyrights ’’（《計算機軟件著作權
登記辦法》）promulgated by the National Copyright Administration (NCA) on February 20, 2002,
which came into effect on the same day, provide for the registration of software copyrights and
the registration of software copyright licensing contracts and transfer contracts. The NCA, as the
competent authority in charge of the administrat ion of software copyright registration in China,
recognises the China Copyright Protection Centre as the software registration authority. China
Copyright Protection Centre issues registration cer tificates to the computer software applicants for
computer software in line with the ‘‘Measures for the Registration of Computer Software
Copyrights ’’and ‘‘Regulations on the Protection of Computer Software. ’’
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Trademark
Trademarks are protected by the ‘‘Trademark Law of the People ’s Republic of Chin ’’（《中華
人民共和國商標法》）a promulgated on August 23, 1982 and last amended on April 23, 2019, and
the Regulations for the Implementation of the ‘‘Trademark Law of the People ’s Republic of
China ’’（《中華人民共和國商標法實施條例》）promulgated on August 3, 2002 and amended on
April 29, 2014 by the State Council. The Trademark Office handles the registration of trademarks
and grants the registered trademarks for a period of ten years, which may be renewed for another
ten years upon application by the trademark owner. Trademark licence agreements must be filed
with the Trademark Office. The Trademark Law of the People ’s Republic of China adopts the
‘‘first-to-file ’’ principle for trademark registration. For the same or similar goods or services, if
the trademark applied for registration is identi cal or similar to another trademark that has been
registered or preliminarily approved for use, the application for trademark registration may be
rejected. Anyone who applies for trademark regis tration shall not infringe upon the existing prior
rights of others, nor shall he or she use improper means to preempt the registration of a trademark
that has already been used by others and has a certain degree of influence.
Patents
The ‘‘Patent Law of the People ’s Republic of China ’’（《中華人民共和國專利法》）was
promulgated by the Standing Committee of t he NPC on March 12, 1984 and last amended on
October 17, 2020. Inventions, utility models and des igns for which patents are granted shall fulfil
the three conditions of novelty, creativity and u tility. Patents are not granted for scientific
discoveries, rules and methods of intellectual activity, methods of diagnosis and treatment of
diseases, species of animals and plants, or substances obtained by nuclear transformation. The
Patent Office of the State Intellectual Property O ffice receives, examines and approves patent
applications. The term of a patent for an inve ntion is 20 years, the term of a patent for a utility
model is 10 years, and the term of a patent for a design is 15 years, counting from the date of
application. Unless otherwise provided by law, third party users must obtain the permission of the
patent owner or an appropriate licence to us e the patent, otherwise it will constitute an
infringement of the patent holder ’s rights.
Domain Name
According to the ‘‘Administrative Measures f or Internet Domain Names ’’（《互聯網域名管理
辦法》）promulgated by the MIIT on August 24, 2017 and effective from November 1, 2017,
domain name registration services are in principle subject to the principle of ‘‘first application,
first registration. ’’ Domain names registered and used by any organisation or individual shall not
contain any content prohibited by laws and administrative regulations. Applicants for domain
name registration shall provide domain name registration information such as true, accurate and
complete identity information of the domain name holder to the domain name registration service
provider.
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Laws and Regulations Relating to Foreign Exchange
According to the ‘‘Administrative Regulations of the People ’s Republic of China on Foreign
Exchange ’’（《中華人民共和國外匯管理條例》）promulgated by the State Council on January 29,
1996 and last amended on August 5, 2008, as well as various regulations promulgated by the
State Administration o f Foreign Exchange ( ‘‘SAFE ’’) and other PRC regulatory authorities,
foreign currencies can be converted or paid into or out of two different kinds of accounts, namely,
the current account and the capital account. For payment of current account items (including
foreign exchange transactions relating to goods, trade and services and other current payments),
RMB can be converted into foreign currency without the approval of the SAFE, subject to certain
procedural requirements, including the production of relevant supporting documents for the
transactions. The conversion of RMB into foreign currencies and the remittance of foreign
currencies out of the PRC for capital account ite ms (such as direct equity investments, loans and
recovered investments) must be approved by or registered with th e SAFE or its local authorities
in advance.
A c c o r d i n gt ot h e ‘‘Circular of SAFE on Further Improving and Revising the Foreign
Exchange Control Policy on Direct Investment ’’（《國家外匯管理局關於進一步改進和調整直接投
資外匯管理政策的通知》）issued by the SAFE on November 19, 2012 and last amended on
December 30, 2019, the opening of multiple spec ial purpose foreign exc hange accounts does not
require the approval of SAFE. I n addition, the same entity may open multiple capital accounts in
different provinces. Reinves tment of legitimate income of foreign investors in the PRC is no
longer required to be approved or verified by the SAFE, and foreign exchange purchases and
remittances resulting from capital r eduction, liquidation, prior rec overy of investment or transfer
of shares of a foreign-invested enterprise are no longer required to be approved by the SAFE.
A c c o r d i n gt ot h e‘‘Circular on Further Simplifying and I mproving the Policies for Foreign
Exchange Administration for Direct Investment ’’（《關於進一步簡化和改進直接投資外匯管理政
策的通知》）issued by the SAFE on February 13, 2015 and last revised on December 30, 2019,
the foreign exchange registration of inward direct investment and outward direct investment will
be reviewed and processed by the banks directly, and the SAFE and its branches should indirectly
supervise the foreign exchange registration through the banks.
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Laws and Regulations Relating to Taxation
Enterprise Income Tax ( ‘‘EIT’’)
Pursuant to the ‘‘Enterprise Income Tax Law of the PRC ’’（《中華人民共和國企業所得稅
法》）promulgated by the NPC on March 16, 2007, which came into effect on January 1, 2008 and
was amended on February 24, 2017 and December 29, 2018 respectively, and the ‘‘Implementing
Rules of the Enterprise Income Law of the PRC (2024 Revision) ’’（《中華人民共和國企業所得稅
法實施條例》（2024 修訂））, formulated by the State Council on December 6, 2024, which came
into effect on January 20, 2025, resident enterprises shall be subject to EIT at a rate of 25% on
their income derived from sources within or outs ide the territory of the PRC. Foreign-invested
enterprises in the PRC that are classified as resident enterprises shall be subject to an EIT rate of
25% on their income derived from sources within or outside the PRC. High-tech enterprises
supported by the State shall be subject to a reduced EIT rate of 15%. A non-resident enterprise
which has not set up any organisation or establishment in the PRC, or which has set up any
organisation or establishment but the income d erived from it has no actual connection with the
organisation or establishment, shall pay ente rprise income tax at a rate of 10% on its income
derived from within the PRC.
Value-Added Tax ( ‘‘VAT’’)
According to the ‘‘Provisional Regulations on Value-added Tax of the PRC ’’（《中華人民共
和國增值稅暫行條例》）promulgated by the State Council on December 13, 1993 and amended on
November 10, 2008, February 6, 2016 and November 19, 2017, and the
‘‘Detailed Rules for the
Implementation of the Provisional Regulations of the PRC on Value-added Tax ’’（《中華人民共和
國增值稅暫行條例實施細則》）promulgated by the Ministry of Finance on December 25, 1993
and amended on December 15, 2008 and October 28, 2011, unless otherwise specified, all
enterprises and individuals selling products, prov iding processing, repair and assembly labour,
selling services, intangible assets, immovable a ssets and importing goods within the territory of
the People ’s Republic of China are subject to a value-added tax at a rate of 17%.
Pursuant to the ‘‘Notice on Implementing the Pilot Pro gram of Replacing Business Tax with
Value-Added Tax in an All-round Manner ’’（《關於全面推開營業稅改徵增值稅試點的通知》）,
which was issued on March 23, 2016 and came into effect on May 1, 2016, with the approval of
the State Council, the trial point for the conversion of business tax into VAT has been
comprehensively launched on a nationwide basis with effect from May 1, 2016 onwards.
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The ‘‘Circular of on Adjusting Value-added Tax Rates ’’（《關於調整增值稅稅率的通知》）
issued by the Ministry of Finance and the State A dministration of Taxation on April 4, 2018 and
effective from May 1, 2018 adjusted the appli cable tax rate for VAT, with the original 17% and
11% tax rates being adjusted to 16% and 10% respectively for taxpayers engaging in VAT-taxable
sales activities or importing goods.
A c c o r d i n gt ot h e‘‘Announcement on Relevant Policies for Deepening Value-Added Tax
Reform ’’（《關於深化增值稅改革有關政策的公告》）, which was issued on March 20, 2019 and
became effective on April 1, 2019, when a general VAT taxpayer engages in VAT taxable sales
or imports goods, the VAT rate previously applicable to 16% is adjusted to 13%; and the VAT
rate previously applicable to 10% is adjusted to 9%.
Laws and Regulations Relating to Overs eas Issuance/Listing of Securities
A c c o r d i n gt ot h e‘‘Trial Measures for Administration of Overseas Issuance of Securities and
Listing of Domestic Enterprises ’’（《境內企業境外發行證券和上市管理試行辦法》）(hereinafter
referred to as the ‘‘Trial Measures ’’) promulgated by the CSRC on February 17, 2023, which
came into effect on March 31, 2023, and the guidelines for the application of the five regulatory
rules, direct overseas issuance and listing of a dome stic enterprise refers to the overseas issuance
and listing of a company limited by shares and re g i s t e r e da n de s t a b l i s h e di nt h eP R C .D o m e s t i c
enterprises conducting overseas issuance and listings should file with the CSRC in accordance
with the Trial Measures, and submit filing reports, legal opinions and other relevant materials, as
well as truthful, accurate and complete informatio n of shareholders. Overseas issuance and listing
activities of domestic enterprises shall comply w ith the laws, administrative regulations and
relevant state regulations on foreign investment, state-owned assets management, industry
supervision and outbound investment, and shall not disrupt the order of the domestic market, nor
jeopardise the interests of the state, the public in terest of the society and the legitimate rights and
interests of the domestic investors. In the case o f an overseas initial public issuance or listing of a
domestic enterprise, a record shall be filed w ith the CSRC within three working days after the
submission of the overseas application for listing. The Trial Measures stipulate the circumstances
under which overseas issuance and listing shall not be permitted, including (1) where the listing
and financing are expressly prohibited by laws, administrative regulations or relevant state
regulations; (2) where the relevant competent department of the State Council has determined, in
accordance with the law, that the overseas issuance and listing may jeopardise national security;
(3) where a domestic enterprise, or its controllin g shareholders, or the de facto controller of an
enterprise, has been involved in corruption, bribery, embezzlement of property or
misappropriation of property, or criminal offences against the socialist market economic order;
(4) the domestic enterprise is being investig ated by the law for suspected crimes or major
violations of laws and regulations, and there is no clear conclusion yet; (5) there are major
ownership disputes in the shareholdings held b y controlling sharehold ers or shareholders
dominated by controlling shareholders or de facto controllers.
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OVERVIEW
Our Company was founded in December 2 011 by Mr. Yang, one of our Controlling
Shareholders, as a joint stock company with limited liability under the laws of the PRC. We focus
on the design, R&D, manufacturing, and sales of energy storage battery products and systems.
BUSINESS DEVELOPMENT MILESTONES
The following table summarizes the key m ilestones in our business development:
Year Milestone
2011 . . Our Company was established, and we began establishing partnerships with leading
telecom operators and equipment manufacturers in China
2016 . . We commenced our business on electrical energy storage settings and began
developing energy storage batteries in commercial and residential settings
2018 . . We began establishing partnerships with large tech companies and data center
operators
2018 . . We have successively collaborated with Alibaba, JD.com, Baidu, GDS, and ChinData
2020 . . We were awarded as ‘‘China Light Industry Lead-acid Battery Industry Top Ten
Enterprises ’’ by China National Light Industry Council, China Battery Industry
Association
2021 . . We were awarded as ‘‘Thirteenth Five-Year Plan ’’ Battery Industry Science and
Technology Innovation Advanced Collective ’’by China Battery Industry Association
2022 . . We introduced Zaoyang Fund, Hengsheng Zizhu and Xiangyang Investment as our
Pre-IPO Investors
2023 . . We ranked first in terms of shipment volume in the global telecom base station energy
storage market
We ranked first among Chinese companies in terms of shipment volume in the global
data center energy storage market
We were awarded as ‘‘Jiangsu Province First Batch of Innovative Management
Intellectual Property International Sta ndard Implementation Pilot Enterprises ’’ by
Jiangsu Provincial Intellectual Propert y Office, Jiangsu Provincial Department of
Industry and Information Technology
We were awarded as ‘‘2023 China Energy Storage Industry Best Battery Supplier ’’ by
China Chemical and Physical Power Supply Industry Association
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Year Milestone
2024 . . We were awarded as ‘‘BNEF Energy Storage Tier 1 Manufacturer ’’by BloombergNEF
We were awarded as ‘‘GGII Energy Storage Industry TOP 50 Company ’’ by Gaogong
Industry Institute
We were awarded as ‘‘GGII Golden Globe Awards ’’by Gaogong Industry Institute
We were awarded as ‘‘China IDC Industry Innovation Technology Product Award ’’ by
China IDC Industry Annual Ceremony
OUR GROUP
As of the Latest Practicable Date, our Group comprised our Company and 9 subsidiaries.
For details, see Note 1 to the Accountants ’ Report in Appendix I to this prospectus.
We primarily operate our business through our Company and three principal operating
subsidiaries, Shuangdeng Front, Shuangdeng Runyoung and Shuangdeng Energy Storage, the
details of which are set forth below:
Subsidiaries
Date of
incorporation
Place of
incorporation
Registered
capital
Equity
interest
attributable
to our
Group
Principal business
activities
Shuangdeng Front . . . November 13, 2006 PRC RMB75,466,200 100% Production, research
and development
and sales of
lithium-ion energy
storage batteries
Shuangdeng
R u n y o u n g .......
July 20, 2007 PRC RMB56,000,000 100% Production, research
and development
and sales of lead-
acid energy storage
batteries
Shuangdeng Energy
S t o r a g e ........
December 23, 2022 PRC RMB100,000,000 100% Production, research
and development
and sales of
lithium-ion energy
storage batteries
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ESTABLISHMENT AND DEVELOPMENT OF OUR GROUP
Our Company
(1) Establishment of Our Comp a n ya n dE a r l yD e v e l o p m e n t
Pursuant to the promoters ’ agreement dated December 8, 2011 entered into by and among
Mr. Yang, Mr. Qian Shan ’gao（錢善高）, Mr. Zhu Shiping （祝士平）, Mr. Zhou Yuezhang （周躍
章）, Mr. Zhou Ping （周平）,M r .Z h o uW e i g a n g（周偉鋼）and Mr. Zhai Lifeng （翟立鋒）, our
Company was established as a joint stock co mpany under the laws of the PRC with an initial
share capital of RMB300 million comprising 300 million Shares of RMB1.0 par value each. Other
than our Controlling Shareholder M r. Yang and Director Mr Qian Shan ’gao, the other five
promoters are Independent Third Parties.
Upon the completion of the establishment on December 28, 2011, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 2 5 0 , 5 0 0 , 0 0 0 8 3 . 5 0
Mr. Qian Shan ’g a o ........................... 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 5 0
Total ..................................... 300,000,000 100.00
Following its establishment and during the period from 2012 to 2014, the Company acquired
certain business related assets, mainly manufact uring equipment, from several entities controlled
by Mr. Yang and/or Dr. Yang, at an aggregate co nsideration of approximately RMB138.1 million
which were determined with reference to the book value of such assets as valued by independent
valuer. Two of our principal subsidiaries, i.e. Shuangdeng Front and Shuangdeng Runyoung, were
also acquired by the Company from the entities w hich were under control of Mr. Yang and Dr.
Yang, respectively. The considerations relatin g to such acquisitions were all determined with
reference to the valuation reports prepared by independent third party valuers. For details,
see ‘‘ — Establishment and Development of Our Group — Our Principal Subsidiaries ’’ in this
section.
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(2) Share Transfer in February 2013
On February 18, 2013, Mr. Qian Shan ’gao entered into a share transfer agreement with Mr.
Qian Bingqing （錢冰清）,s o no fM r .Q i a nS h a n ’gao. On the same date, Mr. Yang entered into a
share transfer agreement with his son Dr. Yang. Pursuant to the relevant share transfer
agreements, Mr. Qian Shan ’gao agreed to transfer 12,000,000 Shares, representing 4.00% equity
interest of our Company, to Mr. Qian Bingqing at nominal consideration and Mr. Yang agreed to
transfer 147,000,000 Shares, representing 49.00% equity interest of our Company, to Dr. Yang at
nominal consideration.
Upon the completion of such share transfer on March 29, 2013, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
D r .Y a n g.................................. 1 4 7 , 0 0 0 , 0 0 0 4 9 . 0 0
M r .Y a n g .................................. 1 0 3 , 5 0 0 , 0 0 0 3 4 . 5 0
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 5 0
Total ..................................... 300,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 169 ---
(3) Share Transfer in February 2014
On February 17, 2014, Mr. Yang entered into a share transfer agreement with Dr. Yang,
pursuant to which, Dr. Yang agreed to transfer 147,000,000 Shares, representing 49.00% equity
interest of our Company, to Mr. Yang at the consideration of RMB1.00.
The transfer of 49% equity interests in t he Company from Mr. Yang to Dr. Yang in
February 2013 and, subsequently, the transfer of the same equity interest in the Company from
Dr. Yang to Mr. Yang were due to the Dr. Yang ’s family wealth succession arrangement. As
confirmed with the PRC Legal Adviser, the consid erations determined for both transfers were in
compliance with applicable laws and regulations in the PRC.
Upon the completion of such share transfer on March 5, 2014, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 2 5 0 , 5 0 0 , 0 0 0 8 3 . 5 0
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 4 . 0 0
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 2 . 0 0
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 5 0
Total ..................................... 300,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 170 ---
(4) Capital Increase in December 2015
On December 24, 2015, the then shareholders of our Company resolved to increase the
number of Shares in our Company from 300,000,000 Shares to 330,000,000 Shares with
registered capital of our Company increased from RMB300,000,000 to RMB330,000,000. The
increased share capital was subscribed by Taiz hou Hechuang, a limited partnership ultimately
controlled by Mr. Yang, at the total consideration of RMB66,000,000. The consideration was
determined with reference to the Company ’s net asset value as of October 31, 2015.
Upon the completion of such capital increase on December 29, 2015, the shareholding of
our Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 2 5 0 , 5 0 0 , 0 0 0 7 5 . 9 0
T a i z h o uH e c h u a n g ............................ 3 0 , 0 0 0 , 0 0 0 9 . 0 9
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 330,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 171 ---
(5) Share Transfer in December 2015 and January 2016
On December 29, 2015, Mr. Yang entered into a share transfer agreement with Shuangdeng
Investment, his controlled entity. Pursuant to w hich, Mr. Yang agreed to transfer 62,620,000
Shares, representing approximately 18.97% equity interest of our Company, to Shuangdeng
Investment at the consideration of RMB137,764,000. The consideration was determined with
reference to the Company ’s then net asset value.
On January 6, 2016, Mr. Yang further entered into a share transfer agreement with
Shuangdeng Investment. Pursuant to which, Mr. Yang agreed to further transfer 46,970,000
Shares, representing approximately 14.23% equity interest of our Company, to Shuangdeng
Investment at the consideration of RMB103,334,000. The consideration was determined with
reference to the Company ’s then net asset value.
Upon the completion of such share transfers on January 6, 2016, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 4 2 . 7 0
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 3 . 2 0
T a i z h o uH e c h u a n g ............................ 3 0 , 0 0 0 , 0 0 0 9 . 0 9
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 330,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 172 ---
(6) Capital Increase in January 2016
On January 13, 2016, the then shareholders of our Company resolved to increase the number
of Shares in our Company from 330,000,000 Shares to 336,600,000 Shares with registered capital
of our Company increased from RMB330,000,000 to RMB336,600,000. The increased share
capital of 6,600,000 Shares was subscribed by Taizhou Zhongdian Hongtai Investment Center
(Limited Partnership) （泰州中電弘泰投資中心（有限合夥））(‘‘Zhongdian Hongtai ’’), an investor
and Independent Third Party, at the total consideration of RMB69,300,000. The consideration was
determined based on the arm ’s length negation among our Company, the then Shareholders and
Zhongdian Hongtai.
Upon the completion of such capital increase on January 14, 2016, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 4 1 . 8 6
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 2 . 5 5
T a i z h o uH e c h u a n g ............................ 3 0 , 0 0 0 , 0 0 0 8 . 9 1
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 5 7
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 5 7
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 5 7
Z h o n g d i a nH o n g t a i ........................... 6 , 6 0 0 , 0 0 0 1 . 9 6
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 7 8
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 7 8
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 336,600,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 173 ---
(7) Capital Decrease in May 2018
On February 28, 2018, the then shareholders of our Company resolved to decrease the
number of Shares in our Company from 336,600,000 Shares to 330,000,000 with registered
capital of our Company decreased from RMB336,600,000 to RMB330,000,000. The reduced
share capital of 6,600,000 Shares was repurchased by our Company from Zhongdian Hongtai at
the consideration of RMB75,900 ,000 and subsequently been cancelled. The consideration was
determined based on the arm ’s length negotiation among our Company and the then Shareholders.
Upon the completion of such capital decrease on May 15, 2018, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 4 2 . 7 0
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 3 . 2 0
T a i z h o uH e c h u a n g ............................ 3 0 , 0 0 0 , 0 0 0 9 . 0 9
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 330,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 174 ---
(8) Share Transfer in July 2019
On July 15, 2019, for the purpose of impleme nting share incentiv e scheme, Taizhou
Hechuang entered into a share transfer agreement with Taizhou Heying. Pursuant to which,
Taizhou Hechuang agreed to transfer 11,400,000 Shares, representing approximately 3.45% equity
interest of our Company, to Taizhou Heying, one of our Employee Incentive Platforms, at the
consideration of RMB1.0034 for each Share.
Upon the completion of such share transfer, the shareholding of our Company was as
follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 4 2 . 7 0
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 3 . 2 0
T a i z h o uH e c h u a n g ............................ 1 8 , 6 0 0 , 0 0 0 5 . 6 4
T a i z h o uH e y i n g .............................. 1 1 , 4 0 0 , 0 0 0 3 . 4 5
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 330,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 175 ---
(9) Share Transfer in April 2020
On April 1, 2020, for the purpose of implementing share incentive scheme, Taizhou
Hechuang entered into a share transfer agreement with Taizhou Heying and Taizhou Hexin.
Pursuant to which, Taizhou Hechuang agreed to transfer 5,000,000 Shares and 13,600,000 Shares,
representing approximately 1.52% and 4.12% equity interest of our Company, to Taizhou Heying
and Taizhou Hexin, our Employee Incentive Platforms, at the consideration of RMB1.0034 for
each Share.
Upon the completion of such share transfer on June 13, 2020, the shareholding of our
Company was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 4 2 . 7 0
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 3 . 2 0
T a i z h o uH e y i n g .............................. 1 6 , 4 0 0 , 0 0 0 4 . 9 7
T a i z h o uH e x i n .............................. 1 3 , 6 0 0 , 0 0 0 4 . 1 2
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 6 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 8 2
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 5
Total ..................................... 330,000,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 176 ---
(10) Capital Increase in December 2022
On December 19, 2022, the then shareholders of our Company resolved to increase the
number of Shares in our Company from 330,000,000 Shares to 358,269,000 Shares with
registered capital of our Company increased from RMB330,000,000 to RMB358,269,000. The
increased 28,269,000 Shares were subscribed by Zaoyang Changjiang Venture Capital Fund
Partnership (Limited Partnership) （ 棗陽長江創業投資基金合夥企業（ 有限合夥））(‘‘Zaoyang
Fund ’’), Xiamen Hengsheng Zizhu Equity Investment Partnership (Limited Partnership) （廈門恒
盛紫竹股權投資合夥企業（ 有限合夥 ））(‘‘Hengsheng Zizhu ’’) and Xiangyang Gaoqian
Entrepreneurship Investment Center (Limited Partnership) （襄陽高謙創業投資中心（有限合
夥））(‘‘Xiangyang Investment ’’) as to 22,000,000 Shares, 6,233,300 Shares and 35,700 Shares,
respectively, at the consideration of approximate ly RMB13.6363 per Share, which was determined
through arm ’s length negotiation.
Upon the completion of such share transfer, the shareholding of our Company as of
December 31, 2022 was as follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 4 0 , 9 1 0 , 0 0 0 3 9 . 3 3
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 0 . 5 9
Z a o y a n gF u n d ............................... 2 2 , 0 0 0 , 0 0 0 6 . 1 4
T a i z h o uH e y i n g .............................. 1 6 , 4 0 0 , 0 0 0 4 . 5 8
T a i z h o uH e x i n .............................. 1 3 , 6 0 0 , 0 0 0 3 . 8 0
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 3 5
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 3 5
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 3 5
H e n g s h e n gZ i z h u ............................ 6 , 2 3 3 , 3 0 0 1 . 7 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 6 7
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 6 7
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 2
X i a n g y a n gI n v e s t m e n t......................... 3 5 , 7 0 0 0 . 0 1
Total ..................................... 358,269,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 177 ---
(11) Equity Transfer in July 2024
On July 30, 2024, Mr. Yang entered into a sha re transfer agreement with Taizhou Heying.
Pursuant to which, Mr. Yang agreed to transfer 2,600,000 Shares, representing approximately
0.73% equity interest of our Company, to Taizhou Heying for the purpose of granting awards to
Dr. Yang under the Employee Incentive Scheme s, our Employee Incentive Platform, at the
consideration of RMB6.24 for each Share. The co nsideration was determined based on the net
asset of the Group as of June 30, 2024.
Upon the completion of such share transfer, the shareholding of our Company was as
follows:
Shareholders
Number of
Shares Equity interest
(%)
M r .Y a n g .................................. 1 3 8 , 3 1 0 , 0 0 0 3 8 . 6 1
S h u a n g d e n gI n v e s t m e n t........................ 1 0 9 , 5 9 0 , 0 0 0 3 0 . 5 9
Z a o y a n gF u n d ............................... 2 2 , 0 0 0 , 0 0 0 6 . 1 4
T a i z h o uH e y i n g .............................. 1 9 , 0 0 0 , 0 0 0 5 . 3 0
T a i z h o uH e x i n .............................. 1 3 , 6 0 0 , 0 0 0 3 . 8 0
Mr. Qian Bingqing . . . . . . . . . . . . . . . . . . . ........ 1 2 , 0 0 0 , 0 0 0 3 . 3 5
M r .Z h uS h i p i n g............................. 1 2 , 0 0 0 , 0 0 0 3 . 3 5
M r .Z h o uY u e z h a n g ........................... 1 2 , 0 0 0 , 0 0 0 3 . 3 5
H e n g s h e n gZ i z h u ............................ 6 , 2 3 3 , 3 0 0 1 . 7 4
M r .Z h o uP i n g .............................. 6 , 0 0 0 , 0 0 0 1 . 6 7
M r .Z h o uW e i g a n g ........................... 6 , 0 0 0 , 0 0 0 1 . 6 7
M r .Z h a iL i f e n g ............................. 1 , 5 0 0 , 0 0 0 0 . 4 2
X i a n g y a n gI n v e s t m e n t......................... 3 5 , 7 0 0 0 . 0 1
Total ..................................... 358,269,000 100.00
Our Principal Subsidiaries
(1) Shuangdeng Front
Shuangdeng Front was established in the PRC as a limited company on November 13, 2006
with a registered capital of USD10,000,000. At the time of establishment, Shuangdeng Front was
primarily engaged in R&D, production and ma nufacturing of lithium battery and owned by
Jiangsu Haifu Investment Co., Ltd. （江蘇海富投資有限公司）(formerly known as Jiangyan
Chuangxin Electronics Co., Ltd. （姜堰市創新電子有限公司）(‘‘Haifu Investment ’’)a n dN e w
Energy Technology Limited （新能源技術有限公司）(‘‘New Energy Technology ’’)a st o7 5 %a n d
25%, respectively. Haifu Investment was controlled by Dr. Yang ’ss p o u s ea tt h et i m eo f
establishment of Shuangdeng Front.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 178 ---
On November 20, 2007, Haifu Investment transferred its entire equity interest in
Shuangdeng Front to Shuangdeng Cable at the consideration of USD7,500,000. On October 22,
2009, Shuangdeng Cable transferred its entire equity interest in Shuangdeng Front to Haifu
Investment at the consideration of USD7,500,000. On July 2, 2010, New Energy Technology
transferred its entire equity interest in Shua ngdeng Front to Heng Feng (China) Technology
Limited ( ‘‘Heng Feng Technology ’’), at the consideration of USD2,800,000. In December 2014,
Shuangdeng Front was owned by Haifu Investment and Heng Feng Technology as to 75% and
25%, respectively, and Haifu Investment was c ontrolled by Mr. Yang at that time. The Company
and its then wholly-owned subsidia ry Fu Shuang Investment Limited （富雙投資有限公司）(‘‘Fu
Shuang Investment ’’) together acquired entire equity inte rests in Shuangdeng Front from Haifu
Investment and the other shareholder at the con siderations of approximately RMB96.0 million and
RMB32.0 million, respectively. The considerations were determined with reference to the
valuation report prepared by an independent va luer. Upon the completion of such acquisition,
Shuangdeng Front has been a wholly subsidiary of the Group.
On March 16, 2020, Fu Shuang Investment transferred 25% equity interest of Shuangdeng
Front to our Company at the consideration of RMB36,500,000. The registered capital of
Shuangdeng Front was converted to RMB75,466,200 at the exchange rate on the date of
remittance and there is no changes in the shar eholding of Shuangde ng Front since then.
(2) Shuangdeng Runyoung
Shuangdeng Runyoung is one of our principal operating subsidiaries engaging in the
production, research and development and sales of lead-acid energy storage batteries. Shuangdeng
Runyoung was established in the PRC as a limited company on July 20, 2007 with a registered
capital of RMB12,000,000. At the time of establishment, Shuangdeng Runyoung was primarily
engaged in lead-acid battery manufacturing and owned by Shuangdeng Front and Mr. Chen
Hailong（‘‘陳海龍’’）, an Independent Third Party, as to 97% and 3%, respectively.
As a result of several subsequent capital increase from February 2008 to May 2008, the
registered capital of Shuangdeng Runyoung was increased from RMB12,000,000 to
RMB36,000,000. On April 27, 2010, Mr. Chen Hailong transferred his entire equity interest in
Shuangdeng Runyou ng to Shuangdeng Front at the conside ration of RMB0.36 million which was
determined with reference to the then paid registered capital of Shuangdeng Runyang. Upon the
completion of such equity transfer, Shuangdeng Runyang became a wholly owned subsidiary of
Shuangdeng Front. On October 15, 2013, our Company entered into an equity transfer agreement
with Shuangdeng Front, pursuant to which, Shuangdeng Front transferred entire equity interest of
Shuangdeng Runyoung to our Company at the consideration of RMB50,129,239.50 which was
determined with reference to the audited net asset value of Shuangdeng Runyoung. Upon the
completion of such equity transfer, Shuangdeng Runyoung became a wholly-owned subsidiary of
our Company. The registered capital of Shuangdeng Runyoung was further increased to
RMB56,000,000 on March 27, 2015 and there is no changes in the shareholding of Shuangdeng
Runyoung since then.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(3) Shuangdeng Energy Storage
Shuang Energy Storage is one of our principal operating subsidiaries engaging in the
production, research and development and sales of lithium-ion energy storage batteries.
Shuangdeng Energy Storage was established in the PRC as a limited company on December 23,
2022 by our Company with registered capital of R MB100 million. Since its establishment, there is
no changes in the shareholding of Shuangdeng Energy Storage.
Deregistration and Deconsolidation
In order to streamline our corporate and business structure, during the Track Record Period,
we have deregistered certain subsidiaries which have no operations, including, Chinashoto France
SAS, Fu Shuang Investment, Anhui Shuangdeng New Energy Co., Ltd. （安徽雙登新能源有限公
司） and Shoto Energy Pakistan (SMCPRIVATE) Lim ited which were all solvent prior to their
respective deregistration.
In December 2021, due to the capital injected by other shareholders of Shuangdeng
Tianpeng Metallurgical Jiangsu Co., Ltd. （ 雙 登天 鵬冶金 江蘇有 限公司 ）(‘‘Tianpeng
Metallurgical ’’), our Company ’s equity interest in Tianpeng Meta llurgical decreased from 51% to
18%. As a result, Tianpeng Meta llurgical ceased to be a subsidiary of our Company since then.
Huifeng Juneng Technology (Huai ’an) Co., Ltd. （慧峰聚能科技（淮安）有限公司）(‘‘Huai ’an
Huifeng Juneng ’’), a former subsidiary of the Group, is primarily engaged in photovoltaic
industry which is not part of our principal busin ess. To further streamline our business line, in
July 2024, Huifeng Juneng, the immediate sole shareholder of Huai ’an Huifeng Juneng and a
wholly owned subsidiary of our Company, entered into an equity and asset transfer agreement
(the ‘‘Huifeng Juneng Agreement ’’) with Huai ’an Liangzhixu Technology Co., Ltd. （淮安亮之旭
科技有限
公司）(‘‘Liangzhixu ’’), an Independent Third Party. Pursuant to the Huifeng Juneng
Agreement and subject to the closing condition o f completion of payment of the consideration of
RMB6 million by Liangzhixu, Huifeng Juneng shal l transfer its entire equity interest in Huai ’an
Huifeng Juneng to Liangzhixu. The consideratio n was determined with re ference to a valuation
report issued by an independent valuer. On August 30, 2024, Liangzhixu fully paid the
consideration to the Group. Accordingly, th e transfer of entire equity interests in Huai ’an Huifeng
Juneng was completed on September 25, 2024. We recorded an impairment loss of RMB15.7
million from the disposal of Huai ’an Huifeng Juneng. For detail, please refer to Note 25 of
Appendix I to this prospectus. This disposal would have no material adverse impact on our
business operation and financial performance.
Our Directors confirmed that each subsidiary that deregistered or deconsolidated during the
Track Record Period and up to the date of Latest Practicable Date did not involve in any material
non-compliance or subject to any potential liabilities prior to their r espective deregistration or
deconsolidation.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 180 ---
EMPLOYEE INCENTIVE SCHEMES
In recognition of the contributions of our employees and to incentivize them to further
promote our development, Taizhou Heying and Taizhou Hexin were established as our Employee
Incentive Platforms.
Taizhou Heying was established in the PR C as a limited partnership on July 15, 2019.
Taizhou Hechuang, ultimately controlled by Mr. Yang, is the sole general partner of Taizhou
Heying and is responsible for the management of Taizhou Heying. Thus, all management power
and voting rights of Taizhou Heying reside with Taizhou Hechuang. As of the Latest Practicable
Date, Taizhou Heying had 39 limited partners including Dr. Yang Rui （楊銳）(chairman of the
Board, executive Director and chief executive officer) with 14.16% partnership interest, Dr. Yang
Baofeng（楊寶峰）(executive Director and deputy general manager) with 16.84% partnership
interest, Ms. He Rong （賀蓉）(executive Director, chief financial officer and secretary of the
Board) with 8.95% partnership interest, Mr. Lou Zhiqiang （樓志強）(chairman of supervisory
committee and technical director of the technica l center) with 7.89% partnership interest, Mr.
Qian Youwang （錢友網）(deputy general manager) with 7.89% partnership interest, Mr. Wang
Zhaobin (former supervisor) with 7.89% p artnership interest, Mr. Zhong Yihua （鐘義華） with
7.89% partnership interest and Mr. Dai Jun （戴駿） with 7.89% partnership interest and 31
existing employees of our Company with an aggreg ate of 20.53% partnership interest and non of
whom has more than 5% partnership interest in Taizhou Heying.
Taizhou Hexin was established in the PRC a s a limited partnership on March 17, 2020.
Taizhou Hechuang, ultimately controlled by Mr. Yang and is the general partner of Taizhou
Hexin. Thus, all management power and voting rights of Taizhou Hexin reside with Taizhou
Hechuang. As of the Latest Practicable Date, Tai zhou Hexin had 47 limited partners including Dr.
Yang Rui （楊銳）(chairman of the Board, executive Dir ector and chief executive officer) with
10.37% partnership interest, Ms. Sun Caiyun （孫彩雲）(supervisor and deputy general manager of
manufacturing and delivery center) with 1. 47% partnership interest, Mr. Mu Lianzhou （穆連洲）
with 11.03% partnership interest, Mr. Li Meng （李猛）with 11.03% partnership interest and Mr.
Hu Longwen （胡龍文）
with 7.35% partnership interest and 42 existing employees of our
Company with an aggregate of 52.06% partnership interest and non of whom has more than 5%
partnership interest in Taizhou Hexin.
As of the Latest Practicable Date, the awards under the Employee Incentive Platforms have
been fully granted and all grantees have paid respective amount of exercise price.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 181 ---
PRE-IPO INVESTMENT
Overview
Our Company has obtained investments from Zaoyang Fund, Hengsheng Zizhu and
Xiangyang Investment through the capital increase in December 2022. For details, see ‘‘ —
Establishment and Development of Our Group — (10) Capital Increase in December 2022 ’’in this
section.
Principal Terms of the Pre-IPO Investment and Pre-IPO Investors ’ Rights
The following table summarizes the key terms of the Pre-IPO Investment to our Company
made by the Pre-IPO Investors:
Amount of consideration paid
(RMB) (approximation)
385.48 million (among which RMB300.00 million by
Zaoyang Fund, RMB85.00 million by Hengsheng
Z i z h ua n dR M B 0 . 4 8m i l l i o nb yX i a n g y a n g
Investment)
Date of payment of full
consideration
December 19, 2022
Date of agreements
(1) November 22, 2022
December 16, 2022
Post-money valuation of our
Company (RMB)
(approximation)
4,885.46 million
Cost per Share paid under the
Pre-IPO Investment (RMB)
(approximation)
13.6363
Discount to the Offer Price
(approximation) (2)
(3.35)%
Basis of determination of the
valuation and consideration
The valuation and consideration for the Pre-IPO
Investment were determined based on arm ’sl e n g t h
negotiations between our Company and the Pre-IPO
Investors after taking into consideration the timing of
the investments and the business, operations and
status of our business and operating entities.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 182 ---
Lock-up period Pursuant to the ap plicable PRC law, all existing
Shareholders (including the Pre-IPO Investors) could
not dispose of any of the Shares held by them within
12 months following the Listing Date.
Use of proceeds from the Pre-IPO
Investment
We utilized the proceeds from the Pre-IPO
Investments for the principal business of our
Company, including but no t limited to research and
development activities, the growth and expansion of
our Company ’s business and general working capital
purposes. As of the Latest Practicable Date, 100% of
the net proceeds from the Pre-IPO Investment paid to
our Company had been utilized.
Strategic benefits to our Company
brought by the Pre-IPO Investors
At the time of the Pre-IPO Investment, our Directors
were of the view that our Company could benefit
from the additional funds provided by the Pre-IPO
Investors ’ investments in our Company and the
knowledge and experience of the Pre-IPO Investors.
Notes:
(1) On November 22, 2022, our Company entered into an investment agreement with Zaoyang Fund. On
December 16, 2022, our Company entered into investment agreements with Xiangyang Investment and
Hengsheng Zizhu, respectively.
(2) The discount is based on the indicative price of HK$14.51 and the indicative exchange rate of RMB1 =
HK$1.0997.
Pre-IPO Investors ’ Rights
Pursuant to relevant subscription agreements during the Pre-IPO Investment, the Pre-IPO
Investors had been granted certain special rights, i ncluding, among others, pre-emptive right, right
of first refusal, divestment right and anti-dilu tion right. Pursuant to the relevant supplemental
agreements entered into and among relevant Shareholders in December 2022 and as confirmed by
our Directors, all special rights entitled to th e Pre-IPO Investors cease d to be effective since
December 30, 2022. As such, th e Company did not record any redemption liabilities on its
balance sheet as of December 31, 2022. The Pre-IPO Investors ’ special rights had no material
financial impact on the Company ’s financial statements throughout the Track Record Period.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 183 ---
Information About the Pre-IPO Investors
The background information of our Pre-IPO Investors is set out below.
Zaoyang Fund Zaoyang Fund is a limited partn ership established under the laws of
the PRC, the general partner of which is Hubei Gaotou Huimeng
Entrepreneurship Investment Management Co., Ltd. （湖北高投匯盟
創業投資管理有限公司） (‘‘Hubei Gaotou ’’), a wholly-owned
subsidiary of Hubei Provincial HIGH Technology Industry
Investment Co., Ltd. （ 湖 北 省 高 新 產 業 投 資 集 團 有 限 公 司 ）
(‘‘Hubei HIGH Technology ’’) which in turn is controlled by
State-owned Assets Supervision an d Administration Commission of
Hubei Provincial People ’s Government （湖北省人民政府國有資產
監督管理委員會）. As of the Latest Practicable Date, Zaoyang Fund
had two limited partners, namely, C hangjiang Venture Capital Fund
Co., Ltd （長江創業投資基金有限公司）(‘‘Changjiang Venture ’’)
and Zaoyang Hanjiang Guangwu New Kinetic Energy Industry
Fund Partnership (Limited Partnership) （棗陽漢江光武新動能產業
基金合夥（有限合夥））(‘‘Zaoyang Hanjiang ’’). Changjiang Venture
is wholly owned by State-owned Assets Supervision and
Administration Commission of Hubei Provincial People ’s
Government. Zaoyang Hanjiang is owned by Hanjiang Investment
Holdings Co., Ltd. ( 漢江控股發展集團有限公司)( ‘‘Hanjiang
Investment ’’), Xiangyang Hanjiang Capital Investment
Management Co., Ltd （ 襄 陽 漢 江 資 本 投 資 管 理 有 限 公 司 ）
(‘‘Hanjiang Capital ’’) and Zaoyang Guangwu Industrial
Investment Co., Ltd （ 棗 陽 市 光 武 產 業 投 資 股 份 有 限 公 司 ）
(‘‘Guangwu Industrial ’’). Hanjiang Investment and Hanjiang
Capital are ultimately controlled by State-owned Assets
Supervision and Administra tion Commission of Xiangyang
Municipal People ’s Government （襄陽市人民政府國有資產監督管
理委員會）. Guangwu Industrial is wholly owned by State-owned
Assets Supervision and Administration Bureau of Zaoyang
Municipal（棗陽市國有資產監督管理局）. To the best knowledge
of our Directors, each of Zaoyang Fund, Hubei Gaotou, Hubei
HIGH Technology, Changjiang Venture, Zaoyang Hanjiang,
Hanjiang Investment, Hanjiang Capital and Guangwu Industrial is
an Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 184 ---
Hengsheng Zizhu Hengsheng Zizhu is a limited partnership established under the
laws of the PRC, the executive partners of which are Guangzhou
Kailong New Energy Technology Co., Ltd. （廣州凱龍新能源科技
有限公司）(‘‘Guangzhou Kailong ’’) and Jianxin Guomao (Xiamen)
Private Equity Fund Management Co., Ltd. （建信國貿（廈門）私募
基金管理有限公司 ）(‘‘Jianxin Guomao ’’). As of the Latest
Practicable Date, Guangzhou Kail ong is ultimately controlled by
Mr. Liu Kunhao （劉坤浩）. Jianxin Guomao is owned by Hangzhou
Hanshi Investment Management Services Co., Ltd. （杭州漢石投資
管理服務有限公司） (‘‘Hangzhou Hanshi ’’), Hunan Yunzhou
Investment Co., Ltd. （ 湖 南 耘 州 投 資 有 限 公 司 ） ( ‘‘Hunan
Yunzhou ’’) and Zhonghui Tongxin (Xiamen) Enterprise
Management Co., Ltd. （ 眾 匯 同 鑫（ 廈 門 ）企 業 管 理 有 限 公
司）(‘‘Zhonghui Tongxin ’’) as to 40%, 35% and 25%, respectively.
Xiamen Kehua Weiye Co., Ltd （廈門科華偉業股份有限公司）
(‘‘Xiamen Kehua ’’) as the largest limited partner with
approximately 35.29% interest in Hengsheng Zizhu. Xiamen Kehua
is ultimately controlled by Mr. Chen Chenghui （陳成輝）.T ot h e
best knowledge of our Directors, each of Hengsheng Zizhu,
Guangzhou Kailong, Jianxin Guomao, Mr. Liu Kunhao, Hangzhou
Hanshi, Hunan Yunzhou, Zhonghui Tongxin, Xiamen Kehua and
Mr. Chen Chenghui is an Independent Third Party.
Xiangyang
Investment
Xiangyang Investment is a limited p artnership established under the
laws of the PRC, the executive partner of which is Mr. Liao Long
（廖龍）. As of the Latest Practicable Date, Xiangyang Investment
has 10 limited partners and the interest held by the limited partners
in Xiangyang Investment ranged from approximately 1.82% to
18.18% with Mr. Xia Jinqiang （夏進強）being the largest limited
partner of Xiangyang Investment. To the best knowledge of our
Directors, each of Xiangyang Investment, Mr. Liao Long and
Mr. Xia Jinqiang is an Independent Third Party.
Compliance with the Guide
Based on the documents provided by the Company relating to the Pre-IPO Investment and
on the basis that (i) the considerations for the Pr e-IPO Investment are irrevocably settled more
than 120 clear days before Listin g; and (ii) the termination or cessation of special rights granted
to the Pre-IPO Investors as disclosed in ‘‘Pre-IPO Investors ’ Rights ’’ above, the Joint Sponsors
confirm that the Pre-IPO Investment is in compliance with the guidance set out in Chapter 4.2 of
the Guide.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 185 ---
PUBLIC FLOAT
The 274,773,300 Shares held by Mr. Yang, Shuangdeng Investment, Taizhou Heying,
Taizhou Hexin and Hengsheng Zizhu, representing approximately 76.69% of our total issued
Shares as of the Latest Practicable Date, or approximately 65.92% of our total issued Shares upon
the completion of the Global Offering (assuming the Over-allotment Option is not exercised), or
approximately 64.56% of our total issued Shares upon exercise of the Over-allotment Option in
full, will not be considered as part of the public float for the purpose of Rule 8.08 of the Listing
Rules as these Shares are Unlisted Shares which will not be converted into H Shares and listed
upon completion of the Global Offering.
The 22,960,000 Unlisted Shares held by Shuangdeng Investment and Mr. Qian Bingqing,
representing approximately 6.41% of our total issued Shares as of the Latest Practicable Date, or
approximately 5.51% of our total issued Shares upon the completion of the Global Offering
(assuming the Over-allotment Option is not exercised), or approximately 5.39% of our total issued
Shares upon exercise of the Over-allotment Optio n in full, will be converted into H Shares and
listed upon completion of the Global Offering. The Shares are held by our Controlling
Shareholder who is a core connected person of our Company, the H Shares held by Shuangdeng
Investment will not be counted towards the public float for the purpose of Rule 8.08 of the
Listing Rules after the Listing. As the Shares owned by Mr. Qian Bingqing were obtained from
his father Mr. Qian Shan ’gao, who is a Director and a core connected person of the Company, at
nominal consideration. Mr. Qian Bingqing ’s acquisition of such Shares are considered as financed
by a core connected person pursuant to Rule 8.24 of the Listing Rules. As such, the Shares held
by Mr. Qian Bingqing will not be counted towards the public float for the purpose of Rule 8.08
of the Listing Rules after the Listing.
The 60,535,700 Unlisted Shares held by Zaoyang Fund, Mr. Zhu Shiping, Mr. Zhou
Yuezhang, Hengsheng Zizhu, Mr. Zhou Ping, Mr. Zhou Weigang, Mr. Zhai Lifeng and Xiangyang
Investment, representing approximately 16.90% of our total issued Shares as of the Latest
Practicable Date, or approximately 14.52% of our total issued Shares upon the completion of the
Global Offering (assuming the Over-allotment Option is not exercised), or approximately 14.22%
of our total issued Shares upon exercise of the Ove r-allotment Option in full, are Unlisted Shares
which will be converted into H Shares and listed u pon completion of the completion of the Global
Offering. As these entities will not be core c onnected persons of our Company upon the
completion of the Global Offering, are not accustomed to take instructions from core connected
persons of our Company in relation to the acquis ition, disposal, voting or other disposition of
their Shares, and their acquisition of Shares were not financed directly or indirectly by core
connected persons of our Company, the H Shares held by them will be counted towards the public
float for the purpose of Rule 8.08 of the Listing Rules after the Global Offering.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 186 ---
Immediately upon Listing, assuming that (i) 58,557,000 H Shares are allotted and issued in
the Global Offering; (ii) the Over-allotment Op tion is not exercised; ( iii) 83,495,700 Unlisted
Shares will be converted to H Shares, and (iv) 416,826,000 Shares are issued and outstanding in
the share capital of our Company upon completion of the Global Offering, 119,092,700 Shares,
representing approximately 28.57% of the total number of issued Shares of our Company will be
counted towards the public float, which is higher than the prescribed percentage of H Shares
required to be held in public hands of 15% w ith the expected market value of HK$150 million
under Rule 8.08(1) (based on an Offer Price of HK$14.51 per H Share). Therefore, our Company
will be able to meet the minimum public float r equirements under Rules 8.08 (as amended and
replaced by Rule 19A.13A) of the Listing Rules.
FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC issuer
with no other listed shares at the time of listing, this will normally mean that the portion of H
shares for which listing is sought that are held by the public and not subject to any disposal
restrictions (whether under contract, the Listing Rules, applicable laws or otherwise), at the time
of listing, must: (a) represent at least 10% of the total number of issued shares in the class to
which H shares belong at the time of listing (excl uding 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.
The Cornerstone Investor has agreed to a lock-up period of 12 months following the Listing
Date. As such, H Shares held by the Cornerstone Investor upon the Listing shall not be counted
towards the free float of the H Shares of the Com pany at the time of Listing. Based on an Offer
Price of HK$14.51 per H Share, the Company will satisfy the free float requirement under Rule
19A.13C of the Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 187 ---
CAPITALIZATION OF OUR COMPANY
The table below is a summary of the capitalization of our Company as of the date of this
prospectus and the Listing Date (assuming the Over-allotment Option is not exercised):
As of the date of
this prospectus As of the Listing Date (assuming the Over-allotment Option is not exercised)
Shareholders
Number of
Unlisted
Shares
Approximate
percentage in
total issued
share capital
Number of
HS h a r e s
Approximate
ownership
percentage in
HS h a r e s
Number of
Unlisted
Shares
Approximate
ownership
percentage in
Unlisted
Shares
Total number
of Shares
Approximate
ownership
percentage in
total issued
share capital
(%) (%) (%) (%)
M r .Y a n g ........ 1 3 8 , 3 1 0 , 0 0 0 3 8 . 6 1 –– 138,310,000 50.34 138,310,000 33.18
Shuangdeng Investment . 109,590,000 30.59 10,960,000 7.72 98,630,000 35.90 109,590,000 26.29
Z a o y a n gF u n d ..... 2 2 , 0 0 0 , 0 0 0 6 . 1 4 2 2 , 0 0 0 , 0 0 0 1 5 . 4 9 –– 22,000,000 5.28
T a i z h o uH e y i n g ..... 1 9 , 0 0 0 , 0 0 0 5 . 3 0 –– 19,000,000 6.91 19,000,000 4.56
T a i z h o uH e x i n..... 1 3 , 6 0 0 , 0 0 0 3 . 8 0 –– 13,600,000 4.95 13,600,000 3.26
Mr. Qian Bingqing . . . 12,000,000 3.35 12,000,000 8.45 –– 12,000,000 2.88
M r .Z h uS h i p i n g .... 1 2 , 0 0 0 , 0 0 0 3 . 3 5 1 2 , 0 0 0 , 0 0 0 8 . 4 5 –– 12,000,000 2.88
Mr. Zhou Yuezhang . . 12,000,000 3.35 12,000,000 8.45 –– 12,000,000 2.88
H e n g s h e n gZ i z h u .... 6 , 2 3 3 , 3 0 0 1 . 7 4 1 , 0 0 0 , 0 0 0 0 . 7 0 5 , 2 3 3 , 3 0 0 1 . 9 0 6 , 2 3 3 , 3 0 0 1 . 5 0
M r .Z h o uP i n g ..... 6 , 0 0 0 , 0 0 0 1 . 6 7 6 , 0 0 0 , 0 0 0 4 . 2 2 –– 6,000,000 1.44
Mr. Zhou Weigang . . . 6,000,000 1.67 6,000,000 4.22 –– 6,000,000 1.44
M r .Z h a iL i f e n g.... 1 , 5 0 0 , 0 0 0 0 . 4 2 1 , 5 0 0 , 0 0 0 1 . 0 6 –– 1,500,000 0.36
Xiangyang Investment . 35,700 0.01 35,700 0.03 –– 35,700 0.01
Investors taking part in
the Global Offering . –– 58,557,000 41.22 –– 58,557,000 14.05
358,269,000 100.00 142,052,700 100.00 274,773,300 100.00 416,826,000 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 188 ---
PREVIOUS APPLICATION FOR LISTING
Our Company submitted an application for listin g on Shenzhen Stock Exchange on June 28,
2023 and withdrawn the application on April 9, 2024 (the ‘‘A-Share Listing Application ’’). The
Shenzhen Stock Exchange issued two rounds of vetting comments in respect of the A-Share
Listing Application, requestin g further details on the Company ’s history, financial information,
business model description and legal compliance, and our Company provided responses to such
comments in November 2023 and January 2024, respectively, which are publicly disclosed. No
major comments or issues were ra ised or identified in the enquir ies from the the Shenzhen Stock
Exchange that would affect the Company ’s suitability for Listing on the Stock Exchange. As of
the Latest Practicable Date, there was no outstanding comment or enquiry from the Shenzhen
S t o c kE x c h a n g ei nc o n n e c t i o nw i t ht h eA - S h a r eListing Application, nor disagreement between
our Company and any professional parties engaged for the A-Share Listing Application. As
advised by our PRC Legal Advisor and based on relevant applicable rules and regulations, we,
may at our sole and absolute discretion, withdr aw our listing application at any time during the
A-Share Listing Application and the withdraw al of the A-Share Listing Application did not
constitute contravention of regulatory requireme nts applicable to the A-Share Listing Application.
As confirmed by the Directors, (a) there was no disputes or disagreements between the Company
and any professional parties engaged for the previous A-Share Listing Application; (b) there was
no material matters in relation to the previous A- Share Listing Application which would affect the
Company ’s suitability for listing; and (c) there was no other matters in relation to the previous A-
Share Listing Application that nee d to be brought to the Exchange ’s attention.
Due to the general market sentiment and the change in the overall strategic development of
our Company and our observation of the successful listing of a number of peer companies on the
Stock Exchange, which opened doors to the international capital markets for those market players,
our Company decided to withdraw the A-Share Listing Application and pursue the Listing on the
Stock Exchange.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 189 ---
CORPORATE STRUCTURE IMMEDIATELY BEFOR E COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the shareholding structure of our Company immediately before completion of the Global Offering:
Taizhou Hexin(1) Taizhou Heying(1) Shuangdeng
Investment(1)
Xiangyang
Investment Hengsheng Zizhu Zaoyang Fund
Our Company(3)
(PRC)
5.30%  30.59% 38.61%  3.8% 0.01%1.74% 6.14% 3.35%


Shuangdeng
Front
(PRC)
100%
Shuangdeng
Holdings Inc
(U.S.)
Shoto Energy
LLC
(U.S.)
100%
100%
Shuangdeng
Runyoung
(PRC)
100%

Mr. Qian
Bingqing(2)

Mr. Zhu Shiping

3.35%
Mr. Zhou Y uezhang

3.35%
Mr. Zhou Ping


1.67%
Mr. Zhou Weigang

1.67%
Mr. Zhai Lifeng
0.42%
100%

Shuangdeng
Energy Storage
(PRC)


100%
SHOTO
SINGAPORE
PTE.LTD.
(Singapore)
SHOTO
TECHNOLOGY
(MALAYSIA)
SDN.BHD.
(Malaysia)
SHOTO ENERGY
PTE.LTD.
(Singapore)
100%
100%
Mr. Yang(1)
Taizhou Hechuang(1)(4)
Taizhou Hanfu(1)
100%
82.5%
80%

1%
6.69% 0.05%

100%
 Huifeng Juneng
(PRC)



HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 190 ---
Notes:
(1) As of the Latest Practicable Date, each of Taizhou H echuang, Taizhou Hexin and Taizhou Heying is a limited
partnership established in the PRC. Taizhou Hechuang is the general partner of Taizhou Hexin and Taizhou Heying.
Taizhou Hanfu, a company wholly owned by Mr. Yang, is the general partner of Taizhou Hechuang. Shuangdeng
Investment is owned as to 80% and 20% by Mr. Yang and his spouse, Ms. Qian Wuzhen （錢五珍）. Thus, Mr. Yang
is able to exercise voting rights in our Company through (i) 138,310,000 Shares directly held by him; (ii)
109,590,000 Shares held by Shuangdeng Investment; (iii) 19,000,000 Shares held by Taizhou Heying; and (iv)
13,600,000 Shares held by Taizhou Hexin.
(2) Mr. Qian Bingqing is the son of Mr. Qian Shan ’gao（錢善高）, our non-executive Director.
(3) As of the Latest Prac ticable Date, we have three branch companies located in Nanjing, Shanghai and Shenzhen
respectively.
(4) As of the Latest Practicable Date, Taizhou Hechuang ha d seven limited partners inc luding Mr. Yang with 82.50%
partnership interest, Mr. Qian Bingqing （錢冰清）with 4.00% partnership interest, Mr. Zhu Shiping （祝士平）with
4.00% partnership interest, Mr. Zhou Yuezhang （周躍章）with 4.00% partnership interest, Mr. Zhou Ping （周平）
with with 2.00% partnership interest, Zhou Weigang （周偉鋼）with 2.00% partnership interest and Mr. Zhai Lifeng
（翟立鋒）with 0.50% partnership interest.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE IMMEDIATELY FOLLOWING COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the shareholding structure of our Company immediately after completion of the Global Offering (assuming the
Over-allotment Option is not exercised):
Xiangyang
Investment

Public Shareholders
14.05%0.01%1.44% 0.36%1.44%
Taizhou Hexin(1) Taizhou Heying(1) Shuangdeng
Investment(1)  Hengsheng Zizhu Zaoyang Fund
4.56% 26.29% 33.18%  3.26%

 5.28% 2.88% 2.88% 2.88% 1.50%

Mr. Qian
Bingqing(2)

Mr. Zhu Shiping


Mr. Zhou Y uezhang


Mr. Zhou Ping



Mr. Zhou Weigang


Mr. Zhai Lifeng
Our Company(3)
(PRC)
Shuangdeng
Holdings Inc
(U.S.)
SHOTO
SINGAPORE
PTE.LTD.
(Singapore)
SHOTO
TECHNOLOGY
(MALAYSIA)
SDN.BHD.
(Malaysia)
Shoto Energy
LLC
(U.S.) SHOTO ENERGY
PTE.LTD.
(Singapore)
100%  100%
100%
Shuangdeng
Runyoung
(PRC)
100%
100%
Shuangdeng
Front
(PRC)
100%
100%
100%

Shuangdeng
Energy Storage
(PRC)
Mr. Yang(1)
Taizhou Hechuang(1)(4)
Taizhou Hanfu(1)
100%
82.5%
80%

1%
6.69% 0.05%
Huifeng Juneng
 (PRC)
100%


Note: Please refer to notes (1) to (4) in the paragraph headed
“Corporate Structure Immediately Before Completion of the Global Offering
”in this section.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
Who We Are
We are a leading company in energy storage business for big-data and telecommunication
industries. We focus on the design, R&D, manufacturing, and sales of energy storage batteries
and systems. Capitalizing on the rich experience we have accumulated over a decade through
serving diverse customers operating telecom base stations, data centers, power stations, power
grids, and in other energy storage settings, we are well-positioned to capture the vast market
opportunities brought up by the big data era, and continue leading the development of the
industry. According to Frost & Sullivan, in 2024, we ranked the first among global telecom base
station and data center energy storage battery providers in terms of shipment volume, achieving a
market share of 11.1%.
Based on our in-depth understanding of indus tries and customers, we are dedicated to
providing customers with energy storage batteri es that may properly address their individualized
and diversified energy storage needs. In particular, our major customers engage in big data and
telecommunication industries, which offer key in frastructure for both d igital and real economy,
and place a high priority on safety and reliability . We are committed to continuous investment in
the development of technology and products with co mpound technical routes and multi-scenario
coverage to fulfill our customers ’ need. In addition, capitalizing o n our insights into evolving
customer demands, especially during an era marked by significant growth in the application of big
data and artificial intelligence technology , we have managed to facilitate our customers in
securing a high-quality, safe and cost efficient energy supply.
Leveraging our distinguished technology and product strength, robust manufacturing and
service capability, as well as our strong brand reputation, we have established long-term business
relationship with world-leading telecommunica tion enterprises, and te chnology companies,
creating a synergy that featu re mutual trusts and solid co operation. This allows us to
continuously maintain our mark et leading position among the global telecom and data center
energy storage battery providers for consecutive three years. As of December 31, 2024, we have
served five of the world ’s top ten telecom operators and equipment manufacturers, nearly 30% of
the world ’s top 100 telecom operators and equipment manufacturers, and all of China ’s top five
telecom operators and equipment manufacturers. We served 80% of top 10 Chinese self-owned
data center companies and 90% of top 10 Chinese third-party data center companies. We have
served our top five customers in 2022, 2023 and 2024 for an average of over ten years.
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The following image showcases some of our scale and achievements:
~30%(1)
Global Top100 telecom operators
and equipment vendors covered as of
December 31, 2024
80%(2) /9 0 %(3)
Top10 Chinese self-owned data center
companies/Top10 Chinese third-party
data center companies covered as of
December 31, 2024
#1
In global telecom and data center
energy storage battery suppliers
in terms of shipment volume in 2024
according to Frost & Sullivan
31
Participated in drafting national
standards and industry standards
as of December 31, 2024
353
Patents obtained as of
the Latest Practicable Date
10+ years
Of average service experience for
top five customers in 2022, 2023
and 2024
Notes:
(1) Top 100 telecom operators and equipment manufacturers are ranked based on the top telecom equipment
manufacturers ranking integ rated by Frost & Sullivan fro m multiple open sources, a nnual report, and research
database of Frost & Sullivan, and the top 100 telecom operators ranking provided by Dgtl Infra, a platform for
digital infrastructure intelligence providing data on telecom, data centers, fiber, etc. The top 100 telecom operators
and equipment manufacturers are selected based on several quantifiable factors including sales revenue, market
capitalization, number of subscribers, number of employees, etc.
(2) By the definition provided by China Academy of Information and Communications Technology (CAICT), self-
owned data center companies are companies build, own and operate their own data centers, mainly telecom
operators and cloud services providers. Top 10 Chinese self-owned data center companies are ranked based on
CAICT, International Data Corporation (IDC) and research database of Frost & Sullivan. Top 10 Chinese self-
owned data center companies are selected based on several quantifiable factors including sales revenue, service
range, investment in research and development, etc.
(3) Top 10 Chinese third party data center companies are ranked based on ‘‘Top 10 Data Center Service Providers in
China in 2024 ’’ launched by CAICT. Top 10 Chinese third party data center companies are selected based on
factors including overall scale, capacity building, financial status, international layout, etc.
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Our Market Opportunity
The global energy market is undergoing a profound transformation from fossil fuels to
renewable energy. The evolving global trend toward electrification further drives significant
collaboration among new energy, energy stor age, and smart grids, promoting sustainable
development of green economy. In particular, energy storage allow new energy achieve improved
power supply stability, thus eff ectively solving long-lasting challenges in the development of
renewable energy industry. From 2023 to 2030, global added installed capacity of solar PV is
expected to increase from 345.5 GW to 927.8 GW. During the same period, global added installed
capacity of wind power is expected to increa se from 116.0 GW to 356.4 GW. Besides the rapid
growth of global renewable energy installations, t he increase in energy storage duration and ratios
of renewable projects equipping energy storage is further accelerating the demand for energy
storage batteries. In Europe, for instance, the energy storage ratio in solar PV industry has
reached over 65% in 2023, with average storage durations of over 1.5 hours. In China, major
provinces and cities have mandated high ene rgy storage ratios of 1 0%-30% for renewable
projects, with extended storage durations of ove r two hours. Till 2030, there is still significant
room for global improvement in energy storage r atio and storage duration, as regions with a high
proportion of renewable energy installations are approaching a storage duration of nearly 4 hours.
Thus, the global transition to renewable energy w ill dramatically increase the need for energy
storage systems, especially lithium-ion and lead -acid batteries. According to Frost & Sullivan,
global energy storage cumulative installed c apacity is expected to increase from 746.8 GWh in
2024 to 6,810.1 GWh in 2030.
We are now immersed in an era defined by the tra nsformative power of artificial intelligence
and big data, where the transmission, storage an d computation of vast amounts of data all require
significant supply of power, imp osing a key bottleneck on green energy and energy storage
sector. In addition, the continuously enhanc ed interaction and collaboration among data
infrastructure, telecom base stations and end us ers, keep driving power de mand to increase in the
artificial intelligence and big data era.
 Telecom base stations: Telecom base stations, the essential infrastructure to ensure
reliable data transmission, constitute an e fficient transmission network to facilitate
robust computing power. In recent years, along with the rapid global expansion of 5G
telecom base stations, the upgrading and development of telecommunication
technology are expected to continue to drive robust demand for infrastructure
development. According to Frost & Sullivan , the cumulative number of global telecom
base stations is expected to increase from 21.0 million units in 2024 to 43.9 million
units in 2030, which will drive the global ad ded installed capacity of telecom energy
s t o r a g et or i s ef r o m4 3 . 9G W hi n2 0 2 4t o1 0 0 . 2G W hi n2 0 3 0 .
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 Data centers: As the key carriers of latest-genera tion digital technologies, such as
artificial intelligence and cloud computing, data centers experienced a rapid growth in
recent years around the world. The advent of the AI era is also accelerating the
industry trend towards large-scale and high-computing power data centers. According
to Frost & Sullivan, the proportion of global e lectricity consumption by data centers is
expected to increase from 4.0% in 2024 to 10.1% in 2030. In line with this rapid
expansion and upgrade, a sufficient power supply at low costs has become one of the
core demands. During this process, driven by global pursuit of clean and secure energy
source, there has been a rapid growth in market demands for energy storage products.
According to Frost & Sullivan, the global added installed cap acity of data center
energy storage is expected to increase from 16.5 GWh in 2024 to 209.4 GWh in 2030.
Our Journey and Strategic Evolution
Founded in 2011 in Taizhou, Jiangsu Provinc e in China, we have demonstrated reliability
and high quality of our batteries and services over t he past decade. We have c ontinually expanded
our business, established a strong global reputation, and built brand influence, laying a solid
foundation for our long-term sustainable development.
 Energy storage for telecom base stations: At the outset, we entered the energy
storage sector for telecom base stations, estab lishing long-term cooperative relationship
with leading telecom operators and equipment manufacturers in China, including China
Mobile, China Unicom, China Telecom, and China Tower. Since 2017, we have
continuously expanded our overseas presence, and have successfully entered into
supply chains of many world-renowned enterprises to provide energy storage batteries
for telecom base stations, including Ericsson, Vodafone, and Telenor.
Based on our highly automated manufacturin g capabilities, stringent quality control
system, and rapid service response, our energy storage batteries for telecom base
stations have garnered an excellent reputation among customers, with successful track
record of serving global leading telecom operators around the world. As of December
31, 2024, we had established long-term, in-depth cooperative relationship with world-
renowned customers, covering nearly 30 of the top 100 telecom operators and
equipment manufacturers in the world.
According to Frost & Sullivan, in 2024, we ra nked first in terms of shipment volume
in the global telecom base station energy storage market, achieving a market share of
9.2%.
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 Energy Storage for Data Centers: With the penetration and promotion of big data
technologies, energy storage batteries for data centers have become essential products
f o re n s u r i n gd a t as e c u r i t ya n de n e r g ys e curity. In 2018, we keenly identified the
market demands of the internet era and began establishing cooperative relationship
with large tech companies and data center operators. Since 2018, we have successively
collaborated with Alibaba, JD.com, Baidu, GDS, and ChinData. In 2022, we
innovatively developed the first large-scale dual-function energy storage plan
incorporating ‘‘backup power + power storage and management ’’ for data centers in
China, and supplied our products to the Xiong ’an Urban Supercomputing Center,
contributing its successful achievement of being recognized as national green data
center. Up to the Latest Practicable Date, our energy storage products have been used
in hundreds of data centers.
According to Frost & Sullivan, in 2024, we r anked first among Chinese companies in
terms of shipment volume in the global data center energy storage market. In 2024,
our market share in the global data center energy storage market reached 16.1%.
 Electrical Energy Storage Settings: We are committed to expanding our presence in
the electrical energy storage settings, whe re we have successfully captured market
opportunities brought up by sectors in large- scale power grid energy storage, and
commercial and residential storage settings . In particular, we have participated in, as a
key supplier of energy storage products and systems, the development of the State
Grid Zhangbei Energy Storage System Project, which started operation since 2011 as
the world ’s largest new energy power station in ter ms of installed capacity integrating
wind power, solar PV, energy storage systems , and intelligent power transmission as of
the Latest Practicable Date. We have subsequently launched energy storage projects
across China, as well as in Cambodia, Mongolia, Guinea and Central Africa.
In 2016, we began developing energy storage batteries in commercial and residential
settings. As a well-recognized brand, our products are sold in Europe, Africa, Asia,
and other regions. According to Frost & S ullivan, in 2024, we are one of the leading
Chinese companies in terms of shipment volume of energy storage batteries in
commercial and residential settings.
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Building on our extensive battery technology expertise and broad coverage of customers
across different industries, we have developed a product matrix that spans the aforementioned
three major settings. Through a customer-cen tric approach, we are committed to continually
enhancing the value of our lithium-ion and lead-a cid batteries provided to our customers. Our
strategic focus on big data and telecom sectors with dual technical routes, combined with our
strong R&D capabilities in producing safe, high performance and cos t-effective products, as well
as our high-quality customer base and strong bran d reputation, has enabled us to achieve market
leadership. More specifically:
 Strategic focus on big data and telecom sectors with dual technical routes: We have a
strategic focus on the energy storage batteri es applied in data centers and telecom base
stations. With the strong growth in demand for AI computing, 5G network and
expansion of IoT related applications, energ y storage batteries applied in big data and
telecom sectors have great growth potential. Our customers in big data and
telecommunication industries place a hig h priority on safety and reliability. In
response to these market demands, we have adopted a dual-tech route, offering both
lead-acid and lithium-ion batteries to a ddress diverse needs of customers across
different application scenarios: lead-acid batteries for scenarios with high safety
requirements, and lithium-ion batteries for growth areas that demand high performance
and need integration with new energy solutions. With our dual technical routes to
address the evolving needs of customers in our strategic markets, we believe that we
are well-positioned to seize the tremendou s market opportunities in the downstream
markets.
 Safe, high performance and cost-effective products: Through our R&D in advance
technology, we are able to produce energy storage batteries that excel in safety, cost-
effectiveness and performance. For example, over the past decade, we have never
experienced any material dispute or accident caused by our products ’ quality,
maintaining an excellent record on product safety for our batteries sold and used
around the world. Additionally, we are le ading the development of the industry
standard for ‘‘Lithiumiron Phosphate Battery Packs for AC UPS in Data Centers ’’ in
China, setting the benchmark for energy stor age battery technology in the era of big
data.
 Strong brand reputation and high-quality customer base: With over a decade of
dedicated industry expertise, we have established a globally leading customer base and
a stronger brand reputation. We served nearly 30 of the world ’s top 100 telecom
operators and equipment manufacturers and have consistently received positive
feedback and numerous award from our customers. For example, for four consecutive
years of 2021-2024, we have been the only energy storage battery company to receive
China Mobile ’s Tier-1 Excellent Supplier (A-Leve l) award. Through our relentless
efforts, the ‘‘Shoto ’’ brand now stands for exceptio nal reliability and continuous
innovation, enabling us to maintain a l eading customer base and market share.
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Our Financial Performance
After years of dedicated efforts, we have ac hieved strong financial performance. We
recorded revenue of RMB4,072.5 million, RMB4 ,259.8 million, and RMB4,498.5 million, in
2022, 2023 and 2024, respectively. We reco rded revenue of RMB1,394.2 million and
RMB1,866.6 million in the five months ende d May 31, 2024 and 2025, respectively. We
recorded gross profit of RMB689.6 million, RM B866.8 million and RMB750.9 million in 2022,
2023 and 2024, respectively. We recorded gr oss profit of RMB275.1 million and RMB278.6
million in the five months ended May 31, 2024 and 2 025, respectively. We recorded net profit of
RMB281.0 million, RMB385.2 million, and R MB353.3 million in 2 022, 2023 and 2024,
respectively. We recorded net profit of RMB 139.7 million and RMB126.7 million in the five
months ended May 31, 2024 and 2025, respectively.
OUR STRENGTHS
Global leading storage battery company i n data center and telecom industries
In the global trend of AI revolution and the era of big data, the demand for energy storage
batteries in data centers and telecommunication sec tors is poised for explosive growth. According
to Frost & Sullivan, global shipments of the ene rgy storage batteries used for telecom base
stations and data centers increased from 29. 1 GWh in 2020 to 60.4 GWh in 2024, reflecting a
CAGR of 20.1%. It is projected to further rise to 309.7 GWh by 2030, with an anticipated CAGR
of 31.3% from 2024 to 2030.
With a deep understanding of the industry and customer demand, we have developed
industry-leading technologies and multi-pathway products with optimal balance among safety,
cost efficiency and performance, which enables us to capture huge growth potential in our
industry. Since our inception, we have focused on energy storage technology applied in the
telecommunications sectors. We proudly hold prominent positions in various influential industry
organizations, such as Vice Chairman of the Battery Branch of the China Electrical Equipment
Industrial Association, Council Member of the Data Center Branch of the China Computer Users
Association, Vice Chairman of the Zhongguancun Energy Storage Industry Technology Alliance,
and Vice Chairman of the first council of the Jiangsu Energy Storage Industry Association. These
roles enable us to closely monitor and effectivel y participant in forming industry standards or
driving industrial progress. Our quality management practices under the ‘‘Industrial Internet +
Intelligent Manufacturing ’’ model have earned us the 2023 National Quality Benchmark
recognition from the China Association for Qua lity. Our energy storage batteries applied for
telecom base stations have been awarded the seventh batch of National ‘‘Single Champion
Products ’’, in recognition of our leading manufacture technology, prominent market share and
excellent product quality.
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At the same time, we are committed to advanci ng green and low-carbon initiatives, adhering
to the principles of ‘‘new energy, circular economy, and high technology. ’’ We are dedicated to
manage our manufacture in a safe, efficient, an d environmental-friendly method, earning the
distinction of one of the first ‘‘National Green Factories ’’ by the Ministry of Industry and
Information Technology in 2017. Additionally, we work closely with our suppliers to minimize
environmental impact, and in 2021, we were honored as a ‘‘National Green Supply Chain
Management Enterprise ’’by the Ministry of Industry and Information Technology.
Through years of deep involvement in the industry, we have gained a profound insight of
the energy storage needs for telecom base stati ons and data centers, and established strong
customer loyalty and extensive brand influence. With our advanced technology, premium
customer base, and global brand presence, we hold a competitive edge in the global market.
According to Frost & Sullivan, in 2024, we ranked the first among global telecom and data center
energy storage battery providers in terms of shipment volume. Our revenues generated from data
center segments have also show n rapid growth, increasing f rom RMB764.8 million in 2022 to
RMB1,391.9 million in 2024. In the era of artif icial intelligence and big data, we are well-
positioned to capture the vast mar ket opportunities of the future.
R&D capabilities in high safety, cost ef ficiency and superior performance
Our products span diverse application scenarios, including energy storage for telecom base
stations, data centers, and the electrical energ y storage settings. We continuously expand our
technology portfolio to encompass lithium-ion batte ries, lead-acid batteries, sodium-ion batteries,
and solid-state batteries, ensuring we can pr ovide the most suitable products for various
application scenarios and diverse customer use. Our R&D efforts are focused on addressing the
needs and pain points of our customers operating telecom base stations and data centers, with a
steadfast commitment to ongoing improvements in safety, cost, and performance of our products.
 Product Safety: We uphold a safety-first philosophy for our energy storage
technologies, which is particularly crucial in fields such as telecommunications and
data centers. We conduct comprehensive safet y testing across all stages, from cells and
modules to pack and systems, ensuring our products meet UL, IEC, and other
certification standards. For the past decade, we have never experienced any material
dispute or accident caused by our products ’ quality, maintaining an excellent record on
product safety for our batteries sold and used around the world over ten years. To
further enhance the energy safety, we have been actively developing the solid-state
battery technology, thereby strengthenin g our position to capture potential future
market opportunities therein.
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 Product Cost: Starting from the product design, we adopt dual-component material
system to reduce raw material costs and op timize cost efficiency of our batteries. We
also pursue supreme efficiency in our production and operational management. During
the Track Record Period, through utilizing s tandardized production procedures in large
scale, highly automated production lines and advanced production technique, we keep
the comprehensive BOM loss rate at approximately 6.6%, achieve a material pass-
through rate of over 98.0%, and maintain a final product qualification rate of 99.8%
compared to the industry average BOM loss rate of 6% to 10%, average material pass-
through rate of 90% to 99%, average product pass-through rate of 90% to 95%, and
average final product qualification rate of 95% to 99%. Furthermore, leveraging our
leading market position and long-term busine ss relationship with enterprises along the
supply chain, we managed to achieve a stable, high-quality supply with highly
competitive price arrangement. We offer a d iverse range of products across multiple
technology pathways to provide the most co st-effective options that meet customer
performance requirements. Since 2020, we have been taking proactive measures in
studying development of the sodium-ion ene rgy storage technologies, capitalizing on
which, we have successfully launched our f irst 48V sodium-ion battery system for
telecom base stations in 2023. Our sodium-io n batteries have been widely adopted in
telecom base stations by telecommunica tion companies in multiple provinces and
regions, including Anhui, Qinghai, Tibet and Gansu. In addition, we have participated
in, as one of the leading organizations, p reparation of the industry standard for
‘‘Sodium-Ion Battery Packs for Communication ’’ in China, which may facilitate
continuous cost reduction across the industry.
 Product Performance: Our energy storage batteries for telecom base stations can
operate within a temperature range of -45 ℃ to 75 ℃ and are able to meet charging and
discharging requirements under extreme conditions, including normal operation at
altitudes of up to 5,000 meters. Our batteri es applied in data centers, utilizing
advanced technologies such as continuous grid plate preparation technology, deliver
superior high-rate performance. These products achieve discharge rates exceeding 6C,
with instantaneous discharge capabilities r eaching 10C, making them ideal products to
serve customer-specific performance needs across various application scenarios.
Additionally, we are leading the development of the industry standard for ‘‘Lithium-
iron Phosphate Battery Packs for AC UPS in Data Centers ’’ in China, setting the
benchmark for energy storage battery technology in the era of big data.
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We have established a tec hnical expert committee led by multiple academicians and
comprised of over 30 renowned industry experts. This committee collaborates with distinguished
experts from leading instituti ons such as China Electric Power Research Institute, Tsinghua
University, Nanjing University, and Huazhong Uni versity of Science and Technology. Together,
we have developed a long-term, stable research and communication mechanism, regularly
engaging in academic exchanges to stay abreast of cutting-edge technological advancements.
Through active collaboration between industry, ac ademia, and research, we c ontinuously optimize
our product manufacturing process and technologies, driving ongoing innovation.
During the Track Record Period, our R&D expenses accounted for 2.5%, 2.6%, 2.5%, 3.2%
and 3.0% of our total revenues. We protect the scientific achievements and core technologies
resulting from our R&D investments through p atents and other means. As of the Latest
Practicable Date, we held a total of 353 pa tents, including 111 invention patents.
Outstanding manufacturing and operational capabilities
We are an energy storage battery manufacturer distinguished by optimal production and
operational efficiency. Adhering to the principles of lean manufacturing and efficient resource
allocation, we achieve cost reduction and effici ency gains while keeping agile in getting adapted
to the envolving market conditions.
We boast advanced manufacturing facilities an d highly automated production systems,
including vacuum paste mixers for high-speed dispersion vacuum mixing processes, coating
machines that enable wide-width coating preci sion automatic extrusion, high-speed automated
assembly lines, and a comprehensive digital mon itoring and manufacturing execution system for
the entire product manufacture lifecycle. These innovations, combined with our highly automated
and precise production methods, enable us to achieve a product pass-through rate of 92.5%.
Furthermore, we utilize the Manufacturing Exec ution System (MES) for intelligent and digital
management throughout the entire production process. This enhances efficiency and ensures
seamless coordination across all departments and stages. By embracing lean production principles,
we optimize resource allocation and sharing. Our lithium-ion battery production cycle is only 11
days, and our lead-acid battery production cycle is just 15 days, both of which are industry-
leading benchmarks. The average industry produ ction cycle of lithium-ion batteries is 15 to 25
days, and the average industry production cycle of lead-acid batteries is 20 to 40 days. Our
factory has also been honored with national recognition for excellence in intelligent
manufacturing.
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We are committed to achieving operational ex cellence. Through meticulous management, we
maximize resource utilization efficiency and enhan ce output effectivene ss, enabling us to provide
high-quality, cost-effective batteries to our cu stomers. Our agile production planning ensures
seamless coordination between manufacturing an d sales, allowing us to swiftly adapt to market
changes and customer demands, thereby captu ring the emerging market opportunities. Our
superior supply chain management, characterized by optimized inventory levels, improved
logistics efficiency, and advanced supply chain management technologies, enables us to respond
quickly and accurately to market needs. Our outstanding management efficiency is reflected in
our strong financial performance. Our gross profit margin was 16.9%, 20.3%, 16.7%, 19.7% and
14.9% in 2022, 2023 and 2024, and the five months ended May 31, 2024 and 2025, respectively,
and our inventory turnover rates was 6.9, 6.8, 7.8 and 5.9, in 2022, 2023 and 2024, and the five
months ended May 31, 2025, respectively, which were above industry average, according to Frost
& Sullivan.
High-quality customer base with trust and loyalty to our brand
We leverage our technological and market advantages to drive innovation and meet market
demands. With over a decade of dedicated indust ry expertise, we have established a globally
leading customer base and brand strength. Upholding the ‘‘customer first ’’ philosophy, our
extensive industry expertise and customer servic e efforts have given us a deep insight of customer
needs and pain points, which enables us to provide the most suitable products and consistently
improve customer experience and satisfactio n, fostering trust and loyalty to our brand.
With our unwavering commitment to enhance the market recognition of our brand, we boast
a high-quality global customer base. We proudly served nearly 30 of the world ’s top 100 telecom
operators and equipment manufacturers. In the realm of telecommunication industry, we have
forged strong relationship with leading telecom operators and telecommunication equipment
manufacturers in China, such as China Mobile, China Telecom, China Unicom, and China Tower,
as well as prominent international telecommunication giants like Ericsson, Vodafone, Orange, and
Telenor.
With our long-term vision and commitment, we have dedicated ourselves to the energy
storage battery industry for over a decade. Through our relentless effort to enhance our brand, the
‘‘Shoto ’’ brand now stands for exceptional reliability and continuous innova tion, enabling us to
maintain a leading customer base and market share. We believe our customers view us as the
definitive leader among global tele com and data center energy storage battery providers, placing
complete trust in our products and our customer services. Our brand has also been recognized as a
key international brand for cultivation and deve lopment in Jiangsu Province. For four consecutive
years of 2021 to 2024, we have been the only energy storage battery company to receive China
Mobile ’s Tier-1 Excellent Supplier (A-Level) award. We are awarded the Class I Collaborative
Supplier accolade by China Tower in 2023. We are awarded by China Telecom as the Group-
Level Excellent Supplier in 2022. We are awarded by Kehua Data as the Excellent Partner in
2023.
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An experienced and visionary management team
We are led by a visionary, stable, and highly experienced management team. Our Chairman,
Dr. Yang Rui, brings extensive experience in the energy storage battery industry and a global
perspective. He has been honored with multiple acco lades, including the 2024 Person of the Year
in Energy Storage Battery Industry, and Jiangsu Province Excellent Entrepreneur. His forward-
thinking strategic decisions have driven our company ’s continuous innovation and growth. Our
executive Director and deputy general manager, Dr. Yang Baofeng, is a senior engineer who has
received distinguished honors, such as ‘‘Jiangsu Province Technology Entrepreneur ’’ and
‘‘Innovation and Entrepreneurship Star. ’’ He also serves as Vice Chairman of the China Battery
Industry Association and the China Chemical and Physical Power Industry Association. Our
senior management team possesses deep expertise in energy storage battery technology and
business management. All senior team members have been with us for many years, ensuring
effective management collaboration and a unified long-term business strategy.
Our management team implements a flat organiza tional structure, attracting enterprise teams
that share our beliefs and qualities. For over a d ecade, our management team has maintained
unwavering passion and clear objectives, focusing on our key products and core strengths. For
i n s t a n c e ,d u r i n gt h er a p i dg r o w t hp h a s eo ft h eEV battery industry, we decide not to rush into this
field. Instead, we concentrated on deepening our expertise in our existing core products and
application scenarios. Under the strategic di rection of our core management team, we have
expanded our focus from battery for telecom base stations to three major application scenarios
and multiple technological pat hways, extending our reach from t he domestic market to a global
presence. Our strategic focus has positioned us opt imally to capitalize on the growth opportunities
within the the era of big data and artificial intelligence.
OUR STRATEGIES
Further enhance and expand our energy storage business with customer-centric approach
Adhering to our customer-centric approach, w e will continue devoting ourselves to deliver
the most suitable and premium batteries to our customers across various industries, including
telecom operators and tech companies. We have been the absolute leader in energy storage
batteries for the telecom and data center industries. We plan to deepen our cooperative
relationships with our existing recognized customers and increase our penetration rate. In
addition, we plan to expand the application of our products to more scenarios and intend to
expand our customer base in China and overseas, thereby increasing our market share in the era
of big data and artificial intelligence.
Meanwhile, we seek to further enhance our ca pability in serving our customers. We have
established multi-tiered market a nd customer service teams across various regions in China and
around the globe to meet the diverse needs of our customers, further strengthening their trust and
solidifying our market-leading position.
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Further develop our data center business
As artificial intelligence technology ushers in a new era of widespread adoption, the surging
demand for computing power will drive unprecedented growth in energy needs. In this landscape,
energy storage becomes a pivotal technology w ithin new power systems dominated by renewable
energy. As a pioneer in energy storage battery provider for data centers, we leverage our deep
industry insights and technological advantag es to maintain our leadership in the sector.
In response to the expanding demand for computing power and the increasing energy
consumption of data centers, we will maintain our innovative drive to provide comprehensive
energy storage functions
, including backup power, peak shavin g and valley filling, and intelligent
management, among others. We aim to seize gro wth opportunities in the data center sector and
cultivate our second growth pillar.
We will continuously update and refine our ene rgy storage battery technologies, to help our
data center customers address critical challe nges such as power reliability and cost control,
thereby consistently supporting the growth of th e digital economy and artificial intelligence.
Continue to invest in R&D
Through our R&D in advance technology, we strive to deliver batteries with superior
performance, enhanced safety, and greater cost-effectiveness. This commitment enables us to meet
the demands of our downstream customers and drive the development of our industry.
We are actively promoting the safe, stable, and efficient operation of energy storage
systems. Guided by our iterative approach of ‘‘researching one generatio n ahead, pilot testing the
next, and mass-producing the current ’’, we continue to invest in strategic R&D areas such as the
performance of fundamental raw material, sys tem safety monitoring, intelligent management,
sodium-ion battery technology, and solid-state ba ttery technology. Leveraging our deep industry
understanding, we are committed to providing our c ustomers with the most optimal technologies
and products across various application scenarios.
We will keep strengthening our R&D team by a llocating more resources to R&D activities
and establishing more efficient R&D platforms. By enhancing talent acquisition and development,
we aim to recruit high-caliber professionals an d elevate the overall quality of our R&D team,
providing robust talent support for our technological innovations.
Expand our global presence
By leveraging our products competitiveness and strong brand reputation, we will actively
serve and expand our global presence through business cooperation with domestic and overseas
customers.
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We will continue to deepen our presence and pe netration in existing markets while actively
investing in strategic markets such as Europe, Southeast Asia, and Africa. We plan to further
expand our domestic and international sales networks to promote our global business.
In addition, we intend to establish more subsid iaries, production fac ilities, and warehousing
centers abroad, seeking to extend our reach to serve more customers worldwide and enhance our
brand recognition.
OUR PRODUCTS
During the Track Record Period, we derived revenues mainly from sales of energy storage
batteries, including both lithium-ion batter ies and lead-acid batte ries. Our batteries are
standardized standalo ne products. Our lithium-ion batteri es are mainly lithium iron phosphate
batteries, the products line of which includes both flexible packaging and square aluminum shell
configurations. Our lead-acid batteries include a bsorbent glass mat batteries, gel batteries, and
lead-carbon batteries. Each type of our batteries offers a comprehensive range of features and
distinctive advantages, catering to our customers ’ diverse requirements in relation to their specific
application scenarios under telecom base stations, data centers and electrical energy storage
settings.
Leveraging our key technological advantage s and robust manufacturing capabilities, our
lithium-ion batteries and lead-acid batteries offe r stable performance, long cycle lives, enhanced
safety and high cost-effectiv eness to meet diverse customer ’s needs for different application
scenarios. We focus particularly on serving our customers ’ energy storage needs in telecom base
station, data center, and electrical energy storage settings. According to Frost & Sullivan, in 2024,
we ranked first in terms of shipment volume in global telecom and data center energy storage
markets.
The table below sets forth the revenues breakdown by application scenario for the years and
periods indicated:
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base Station . . . . . . . . . . 2,640,989 64.8 2,464,004 57.8 2,299,367 51.1 746,772 53.6 792,785 42.5
Data center . . . . . . . . . . . . . . . . 764,815 18.8 899,942 21.1 1,391,898 31.0 397,000 28.4 872,947 46.7
Electrical energy storage settings . . . 302,443 7.4 487,977 11.5 450,840 10.0 132,366 9.5 68,696 3.7
Other settings
(1) . . . . . . . . . . . . . 281,906 7.0 339,863 8.0 261,105 5.8 86,570 6.2 80,555 4.3
Others (2) . . . . . . . . . . . . . . . . . . 82,327 2.0 67,991 1.6 95,312 2.1 31,477 2.3 51,625 2.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
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Notes:
(1) Primarily include uninterruptible power supply ( ‘‘UPS’’) batteries and start -stop batteries.
(2) Primarily include sales of waste including le ad slag, used batteries, and electricity sales.
Energy Storage Batteries for Telecom Base Station
We provide both lithium-ion batteries and lead -acid batteries in the application scenario of
telecom base station. Our energy storage batteri es for telecom base stations serve as a vital
safeguard against power outages and shortages that could lead to network paralysis and
communication disruptions, and therefore ensure the reliable operation of telecom base stations.
Additionally, our energy storage batteries ca n be utilized to capitalize on the cost differences
between peak and off-peak electricity rates. By st oring energy during low-cost off-peak periods
and using it during high-cost peak times, our energy storage batteries effectively reduce the
overall electricity costs for the operation of telecom base stations.
Along with our insights accumulated from the d ecade-long history of serving customers in
telecom base stations since our inception, we devote ourself to improve the technological
performance of batteries to meet the evolving m arketing demand and better serve the energy
storage needs of our customers. During the Track Record Period, we have established stable
relationship with major domestic telecom operato rs and equipment manufacturers, including China
Mobile, China Unicom, China Te lecom, and China Tower. Acco rding to Frost & Sullivan, in
2024, we ranked first among Chinese companies in terms of shipment volume in the global
telecom base station energy storage market.
Lithium-ion Batteries
Our lithium-ion batteries de signed for telecom base station not only boast high energy
density, long cycle life, and high reliability, but also have features that can meet our customers ’
various needs in the setting of telecom base sta tion, such as high adaptability for all kinds of
geographical conditions, compact and lightweig ht design, and other specific requirements from
our customers.
In particular, as telecom base stations are often deployed in diverse and challenging
geographic conditions, our lithium-ion batteri es for telecom base stations are designed with
exceptional adaptability for telecom base stations operating in all geographic conditions, including
extreme altitudes, high humidity levels, and a wid e range of temperatures. Whether used in the
heat of deserts, the cold of plateau, or the high humidity of tropical climates, our batteries ensure
reliable performance and battery longevity.
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The table below shows the technological specif ications of our lithium-ion batteries and some
of our key lithium-ion batteries designed for telecom base stations:
Lithium-ion Batteries
Technological Specifications Product Key Features
5G-4850 Series
Specific technological specifications:
 Cycle Life: 800 – 3500 cycles at 80% Depth of
Discharge (DOD) @ 35 ℃
 Charge/Discharge Efficiency: 97%
 Operating Temperature Range: -40 ℃ to 60 ℃
Launched in 2019, our 5G-4850 series
features a universal adaptability for all
kinds of geographical conditions. With
its broad operating temperature from
-40°C~60°C, the 5G-4850 series is
capable to meet the diverse needs of
customers operating 5G telecom base
stations in extreme weather and
geological conditions, such as deserts,
high altitude or extremely cold regions.
In addition, it supports various types of
installation methods, including wall-
mounted, pole-mounted, and flat-
mounted options, providing flexible and
convenient deployment method to suit
different telecom base station sites.
SDA10 Series
Specific technological specifications:
 Cycle Life: 3500 cycles at 80% Depth of
Discharge (DOD) @ 35 ℃
 Charge/Discharge Efficiency: 97%
 Operating Temperature Range: -40 ℃ to 70 ℃
Launched in 2020, our SDA10 series is
designed for customers who prioritize
both performance and weight efficiency.
With its high mass energy density up to
125Wh/kg, the SDA10 series can store
the same amount of energy with
significantly less weight and a more
compact form. This advanced feature
makes the SDA10 series ideal for
applications for the telecom base
stations where space and weight are
critical constraints.
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Smart-Li Series
Specific technological specifications:
 Cycle Life: 4000 cycles at 80% Depth of
Discharge (DOD) @ 25 ℃
 Charge/Discharge Efficiency: 99%
 Operating Temperature Range: -20 ℃ to 60 ℃
Launched in 2021, our Smart-Li series
is characterized by high compatibility.
It is not only compatible with lithium-
iron batteries from multiple brands and
various voltages/technological specifications,
but can also seamlessly operate in
mixed power storage scenarios and
power sources, regardless of lithium-
iron batteries and lead-acid batteries.
The Smart-Li Series provides a perfect
and flexible solution to our customers ’
need to scale up their existing energy
storage power systems.
Lead-acid Batteries
Our lead-acid batteries designed for telecom base station are sealed, safe, and reliable,
offering stable operation with high energy density. Even in high-temperature environment, our
lead-acid batteries can maintain their efficient f unctionality over an extended lifespans. Our lead-
acid batteries also feature low internal resistan ce, a minimal self-discharge rate, and superior
charge acceptance capabilities. In addition, the com pact structure of our lead-acid batteries make
these batteries an ideal choice for the telecom base stations.
The table below shows the technological specifi cation of our lead-acid batteries and some of
our key lead-acid batteries designed for telecom base stations:
Lead-acid Batteries
Technological Specifications Product Key Features
GFM Series
Specific technological specifications:
 Capacity Range: 200Ah – 3000Ah
 Discharge Rate: 0-3C
Launched in 2014, our GFM series is
our primary products designed for use
in telecom base stations. The GFM
series have reliable sealing and
uniquely designed monomer structure to
guarantee safe and stable operation.
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6-FMX Series
Specific technological specifications:
 Capacity Range: 50Ah – 200Ah
 Discharge Rate: 0 – 3C
Launched in 2017, our 6-FMX series is
characterized by its compact design and
ease of installation. With a length-to-
width ratio of 3.75 to 5.00, it is ideal
for telecom base stations where space is
a critical constraint.
Energy Storage Batteries for Data Center
Data centers, which provide mass data storage, processing and interaction services, require
continuous power to manage and safeguard vast amounts of data. Our energy storage batteries
applied in data centers provide robust defense against the risks of power outages and shortages
that can lead to network failures and service interruptions. We provide both lead-acid batteries
and lithium-ion batteries for the ap plication scenario of data center.
According to Frost & Sullivan, safety and co sts are the key considerations for energy
storage batteries applied in data centers. Leveraging our strong technological advantages and
decade-long experience in producing energy storage batteries, we keenly identified the market
demands for energy storage in data centers in 2017 and established cooperative relationships with
tech companies and data center operators. With tr iple terminal sealing t echnology and continuous
plate preparation technology, our lead-acid batteries applied for data center not only featured high
safety, but also provide high power density. Our lithium-ion batteries boast high power density up
to 333kW/m
3, and are capable to meet the same energy s torage requirements for operating data
center with less number of batteries. Therefore, our customers can purchase and install fewer
cabinets, reducing the weight on support structures and saving space, lowering the overall
construction and operational costs of data centers.
In addition to providing emergency power during outages, our storage batteries also enable
our customers to optimize the energy usage and reduce utility cost of the data centers by taking
advantage of differences in electricity rates during peak and off-peak times. According to Frost &
Sullivan, in 2024, we ranked first among Chines e companies in terms of shipment volume in the
global data center energy storage market.
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Lithium-ion Batteries
Our lithium-ion batteries designed fo r data centers can meet our customers ’ demand of high
energy density, efficiency and reliability. With the highest C-rate performance up to 6C, our
lithium-ion batteries offer faster charging and di scharging speeds, while also supporting long-term
float charging for standby power. Integrat ed with a multi-level BMS for interactive
communication, our lithium-ion batteries enable in telligent battery manage ment with real-time
monitoring of voltage, current, and temperature parameters to enhance the safety of the batteries.
In addition, our lithium-ion batteries have exce llent thermal stability, produce less heat during
operation, and provide reliable backup power assurance for data centers.
The table below shows the technological speci fication of our lithium-ion batteries and some
of our key lithium-ion batteries designed for data center:
Lithium-ion Batteries
Technological Specifications Product Key Features
SHVP Series
Specific technological specifications:
 Capacity Range: 80Ah – 280Ah
 Charge/Discharge Efficiency: 93%
 Operating Temperature Range: 0 ℃ to 45 ℃
Launched in 2022, our SHVP series is
featured by its discharge rate
performance up to 6C high power range
with compact design. With its
maximum power range of 400 kW, this
series can greatly save the space and
costs of our customer operated data
centers.
Lead-acid Batteries
Our lead-acid batteries, designed for data ce nters, are characterized by high reliability,
safety, and cost-efficiency. Meticulously enginee red for the high-current, high-power application
scenarios typical of data centers, our lead-acid batteries excel in resistance to high currents and
over-discharge. The design life of our lead-acid batteries is up to 15 years, reducing the need for
frequent replacements and maintenance.
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The table below shows the technological specifi cation of our lead-acid batteries and our key
lead-acid batteries designed for data center:
Lead-acid Batteries
Technological Specifications Product Key Features
GFMHR Series
Specific technological specifications:
 Power Range: 320W – 3000W
 Discharge Rate: 0 – 3C
Launched in 2018, our GFMHR series
is featured by its high power range and
high energy density. With its power
range of 320 W ~ 3000W and energy
density up to 40Wh/kg, this series is
specifically designed for high-current,
high-power applications in the data
centers.
Energy Storage Batteries for Electrical Energy Storage Settings
Our energy storage batteries fo r electrical energy storage se ttings cover both the power side
and the user side. For power side, we provide both lithium-ion batteries and lead-acid batteries for
generation-side and grid-side storage settings. On the generation side, our energy storage batteries
can store excess energy produced during low-demand periods and release it during peak times,
effectively matching electricity production w ith consumption. In addition, our energy storage
batteries can also integrate and store the power generated by renewable energy sources, such as
energy generated by wind or solar power, into the g rid. On the grid side, these batteries alleviate
congestion by providing additional power during high demand, preventing overload and potential
outages. By adjusting the balance of supply against demand and offering backup capacity, our
energy storage batteries help our customers regulate the system frequency and maintain grid
functionality during emergencies.
For user side, we provide lithium-ion energy sto rage batteries for the user side, including
commercial and residential setting. Featured by a stackable design, our batteries embody
simplicity and modular flexibility to accommodat e a variety of usage scenarios in commercial and
residential settings. Our lithium-ion batteries in clude multiple protection layers, ensuring safety
and reliability. In addition, our lithium-ion batteri es support smart operations and maintenance,
feature Bluetooth functionality, and offer rea l-time battery status monitoring through our
application.
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The table below shows the technological specifi cation of our key lithium-ion batteries and
lead-acid batteries designed for electrical energy storage settings:
Lithium-ion Batteries
Technological Specifications Product Key Features
SDC10-Box5/Box5 Pro Series
Specific technological specifications:
 Cycle Life: 6000 cycles at 80% Depth of
Discharge (DOD) @ 25 ℃
 Charge/Discharge Efficiency: 97%
 Operating Temperature Range: -20 ℃ to 50 ℃
 Discharge Rate: 0.5C
Launched in 2022, our SDC10-Box5/
Box5 Pro series features high charge/
discharge efficiency, high cycle life,
and high reliability. Along with its
industrial aesthetic design, it also offers
excellent compatibility and scalability.
This series supports integration with
major inverter brands, and its system
capacity can be expanded up to 81kWh
through parallel connections, providing
extra flexibility for the energy storage
needs in commercial and residential
settings.
HP-S Series
Specific technological specifications:
 Capacity Range: 50Ah
 Cycle Life: 6000 cycles at 80% Depth of
Discharge (DOD) @ 25 ℃
 Design Life: 15 years
 Charge/Discharge Efficiency: 98%
 Operating Temperature Range: -20 ℃ to 50 ℃
 Voltage Range: 307.2V – 619V
 Discharge Rate: 1C
Launched in 2023, our HP-S series
features high power range, high
efficiency, high reliability, and high
expandability. With a high energy
conversion efficiency of 98%, this
series is suitable for various
applications such as electricity supply
in household, and small scale
commercial and industrial energy
storage settings.
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Lithium-ion Batteries
Technological Specifications Product Key Features
Liquid-cooled Containeri zed Energy Storage System
Specific technological specifications:
 Charge/Discharge Efficiency: ≥94%
 Operating Temperature Range: -30 ℃ to 55 ℃
Launched in 2023, our liquid-cooled
containerized energy storage system is
characterized by its high adaptability to
power grids in various geographical
conditions. With it s broad operating
temperature range, it can operate stably
in high-temperature and high-humidity
environments. Additionally, it can meet
our customers ’ usage requirements at
altitudes of approximately 5,000 meters.
This system employs our dual protection
BMS technology, which detects cell
anomalies early and provides early
warnings to enhance safety.
Energy Storage Batteries for Other Settings
Our energy storage batteries for other settings p rimarily include UPS batteries and start-stop
batteries. Our UPS batteries were first launched in 2012, and are designed to provide reliable
backup power during electrical outages for critical devices like computers and servers. Our start-
stop batteries were first launched in 2018, and are specifically designed for vehicles with start-
stop functionality. With the featured lead-carbon a bsorbent glass mat technology, our start-stop
batteries offer high performance and long i dle start-stop life up to 180,000 cycles.
The average lifespan, which is also the desi gned life, is 15 years for our lithium-ion
batteries and lead-acid batteries. The average useful life, the period after which our customers
usually will seek replacement, is eight years for l ithium-ion batteries and six years for lead-acid
batteries. The long lifespan and useful life do not reduce demand for our batteries, as long cycle
life is one of our products ’ strengths and a key considerations of our customers for choosing our
batteries. In addition, we continue to invest in R& D to improve the product longevity to save cost
for our customers.
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RESEARCH & DEVELOPMENT
Our Research and Development
The energy storage battery industry is characterized by rapid technological advances,
innovation and evolving custom er demands. Our competitiveness t herefore significantly depends
on our ability to develop innovative and advan ced technologies that meet evolving customer ’s
demands and preferences. As a global leading energy storage battery manufacturer, we rely on our
in-house R&D to establish and strengthen our mark et position, and achieve continuous growth.
Throughout the Track Record Period, we pivot our R&D focus and resources along with the
industrial trend and advancements in energy storage batteries. Adhering to the principle of
‘‘researching one generation ahead, pilot testing the next, and mass-producing the current ’’,w e
aim to enhance the market competitiveness of both lithium-ion batteries and lead-acid batteries
through our R&D efforts.
We have R&D centers located in Taizhou, S henzhen, Beijing and Xiangyang. Our R&D
centers focus on the research and development of energy storage battery technologies to improve
the safety, cost-efficiency and performance of our energy storage batteries.
Certain details of our Taizhou R&D center, Shenzhen R&D center, Beijing R&D center and
Xiangyang R&D center are set out as follows:
R&D Center Major responsibilities and R&D focus
Taizhou R&D Center Mainly focuses on:
 the R&D on energy storage technology, manufacture process
improvement, basic research, and production technical support for
lithium-ion battery cells and lead-acid batteries;
 the R&D on electrochemical energy storage batteries;
 responsible for conducting pilot testing of our batteries, drafting
R&D guidelines, and managing R&D projects.
Shenzhen R&D
Center
Mainly focuses on the R&D of the critical components in the energy
storage control systems, including BMS and EMS system.
Beijing R&D Center Mainly focuses on the R&D of t he products applied for electrical energy
storage settings.
Xiangyang R&D
Center
Mainly focuses on the R&D of the hi gh-rate lithium-ion batteries and
lead-acid batteries.
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We place a high emphasis on R&D investment and the reserve of R&D talent. In 2022, 2023
and 2024, and the five months ended May 31, 2024 and 2025, our research and development
expenses amounted to RMB100.7 million, RMB 112.8 million, RMB110.5 million, RMB44.1
million and RMB55.2 million, respectively. As of th e Latest Practicable Date, we held a total of
353 patents, including 111 invention patents and has develo ped multiple core technologies and
established a comprehensive technology research and development management policy.
As of May 31, 2025, our R&D team consisted of 245 employees involved in R&D
functions, accounted for 10.7% of our total employees. Among our R&D personnel,
approximately 23.4% of them hold a master ’s degree or above. In addition, our R&D team
members have extensive experience in energy storage industry. During the Track Record Period,
we have achieved continuous break-through in relation to energy storage battery manufacturing,
successfully enhancing the safety, power density , performance stability, life cycle and adaptability
of our products.
Besides invention and patents, we have also accumulated rich know-how in serving various
and specific demands from customers holding leadi ng industry position in their respective sector,
which impose stringent standard on energy storage batteries supplied.
Research and Development Resources
Our technical team has actively participated in the formulation of national and industry-
related standards on multiple occasions, demonstra ting our strong technological credibility and
influence in the industry. As of May 31, 2025, we have participated in the formulation of one
international standard issued by International Electrotechni cal Commission (IEC), 10 national
standards and 21 industry standards issued by the Ministry of Industry and Information
Technology of the People ’s Republic of China and the Standardization Administration of China.
In addition, we actively pursue collaborative R &D partnerships with external entities to co-
develop innovative technologies and products that align with dynamic market needs. We are
convinced that these strategic collaborations en rich our understanding of industry trends and
cutting-edge technologies, enabling us to strea mline our ongoing R&D initiatives effectively.
We work closely with leading experts in the e nergy storage industry and have formed an
external technical expert committee, which was led by academician from the Chinese Academy of
Engineering and Chinese Academy of Sciences, and jointed by more than 30 industrial expert to
support and advise on our technical innovation. Through regular meetings, our technical expert
committee provides us with insights into the latest scientific research and technological
advancements, as well as strategic advice on our R&D focus and future market trends, enhancing
our competitive advant age in innovation.
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During the Track Record Period, we have estab lished profound partnerships with leading
universities, research institutions and industry expert. These collabora tions have facilitated a
series of projects focused on pioneering new technologies, offering crucial technical insights that
underpin our future product development strategies. This integrated approach not only enhances
our technological base but also strengthens our competitive edge in the market. As of the Latest
Practicable Date, we have not utilized intellect ual property rights co-developed with other
partners in our batteries and these intellectual property rights are primarily reserved as technical
assets for our further R&D and products.
For example, during the Track Record Period, we have entered into a joint development
agreement with Tianmu Lake Institute of Advanced Energy Storage Technologies （天目湖先進儲
能技術研究院有限公司） on the development of high-conductivity solid-state electrolytes. As of
the Latest Practicable Date, the joint R&D pr oject has completed development of the key
materials, and achieved the fabr ication of 100Ah solid-state lithium-ion batteries, which laid a
solid foundation for our future R&D on the technology and manufacture of solid-state battery.
The major terms and content of our joint technology development agreement typically
include the following:
Major terms Content
Ownership of intellectual
property rights
The new intellectual pr operty rights and related rights and interests
jointly developed by both parties shall be shared by both parties.
For new intellectual property rights created by the researchers
based on the joint development project at their own expenses, we
would have the right of first refusal.
Confidentiality Any information obtained during joint development shall not be
disclosed to any other third party. The confidentiality obligation
under the agreement shall not be affected by termination or lapse of
the agreement.
Term and termination The term of the agreements varies from 1 to 4 years.
Development progress Each party shall inform the other one the progress in development
of the relevant products.
Allocation of costs We bear the cost of the joint development projects.
Although every joint technology agreement varies, for joint technology development
agreements with external entities such as institute s and universities with industry expertise, we
generally specify in the agreement as to the specific types and the specifications of the products.
Such agreements are legally binding and have not been subject to material breaches during the
Track Record Period.
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Our Key Technology
Devoting ourselves to the continuous R&D of the latest and advanced technologies that can
improve safety, cost-efficiency and performance of our batteries, we have developed a broad
portfolio of key technologies that are used in our batteries to address the needs and pain points of
our customers.
Battery Cell Technology
 Activated carbon micropore protection technology. This technology effectively
improves the utilization rate of micropore s in activated carbon in the manufacturing
process of lithium-ion batteries, and subsequently enhances the capacitance
characteristics, and improve the pe rformance of lithium-ion batteries.
 Triple terminal sealing technology. This technology employs a combination of
welding and adhesive sealing to ensure the reliability of terminal sealing. First, the
lead sleeve of lead-acid battery is welded to the terminal post. A sealing adhesive is
then applied, followed by a marking adhesiv e after curing. This technology ensures
terminal seal is safe and improves the reliability of our lead-acid batteries.
 Corrosion-resistant grid and alloy technology. This technology enhances the
uniformity of current distribution and improves the corrosion resistance lifespan of the
grid plate. By reducing the corrosion rate of the grid plate and constructing a uniform
current transmission network, it greatly improves the cycle life of our batteries and
reduced cost for our customers.
 Electrode group winding technology. This technology improv es the shock-resistant,
fast-charging capabilities, and p erformance of our batteries.
 Continuous grid plate preparation technology. This technology uses highly
corrosion-resistant alloys. The cathode grid plate is manufactured through continuous
rolling and punching, resulting in a denser crystal structure and superior corrosion
resistance compared to traditional gravity casting. The anode grid plate uses
continuous casting, increasing productio n efficiency by three times over gravity
casting. Additionally, a continuous coatin g process with film coating technology
effectively addresses the issue of coating dust.
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Integration/Application-related
 5G telecom power supply technology. This technology enables wireless connection
from our lithium-ion battery to the telecom ba se station management platform, and it
also facilitates the nearfield Bluetooth c onnections with handheld devices, allows for
real-time monitoring of the power supply and operation status of the battery.
 Liquid-cooling energy storage technology. This technology employs efficient thermal
management capabilities and intelligent c ontrol, to more evenly dissipate the heat
generated by the batteries, ensuring that t he lithium-ion battery operates within the
optimal temperature range. Together with the digital and intelligent management
system that can monitor key parameters of ba ttery status and ambient temperature in
real-time, this technology greatly improves the safety and maintainability of our
batteries.
 Dual Protection BMS technology. This technology employs dual-channel and dual
protection mechanisms to monitor the battery ’s status and connects the BMS with a
circuit breaker to prevent potential hazards such as overcharging, over-discharging,
and overheating. It prevents thermal runaway risks in the event of a protection function
failure, reducing the overcharge safety risk and improving the safety of the battery
system.
New Batteries
 High-performance sod ium-ion battery. For sodium-ion battery, we employ surface
coating, doping, and passivation treatme nts for active materials to develop high-
capacity, highly stable battery active mate rials. With pre-fabrication technology for
artificial SEI (Solid Electrolyte Interphase ) films on electrode surfaces, this materials
greatly enhance the compatibility of active mat erials with electrolytes and the stability
of electrode interfaces, and improve the safety and performance of the sodium-ion
battery.
 High-safety long-lifespan solid-state Battery . For solid-state battery, we develop
composite solid electrolyte materials featuring high ionic conductivity, a wide
electrochemical window, and high ion transference numbers. We also develop an in-
situ preparation technology for solid electrolytes induced by thermal and chemical
methods, which achieves perfect compa tibility with the existing lithium battery
industrial systems, and surface modification technologies for active materials and
electrodes, which enhances the stability of el ectrode interfaces and r educing interface
impedance.
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Our Key R&D Projects
In addition to dedicating our R&D resources t o improving the performance and production
of our existing products, we have also been investing in R&D projects of the next generation of
products and materials, which we consider crucia l for us to maintain our leading industry position
and achieve sustainable development.
The table below illustrates our ke y R&D programs, and key features:
No. Product Key Features
1 Lithium-ion battery cell
R&D project
The project focuses on introducing suitable materials and
optimizing the production process to enhance the energy
density and cost efficiency of individual battery cells,
improve product performance, and increase overall cost-
effectiveness.
2 Lithium-ion battery
communication system
This system adopts flat cell design, high-energy-density cell
configuration, long-lifespan cell design, and a standardized
BMS interface, and supports optional features such as
antitheft modules, protocol mat ching, and fire protection
modules, enhancing and optim izing its functionality.
3 BMS The new generation of BMS is capable to intelligently
manage and maintain each battery cell, monitor the operation
status, and prevent overcharging and over-discharging to
extend the battery ’s lifespan.
4 Data center standardized
lithium-ion batteries
The standardized lithium-ion batteries aim to address the
demand of our customers from domestic and overseas markets
by developing a series of batteries with standardized
specifications, such as 10-minute and 15-minute backup
power scenarios.
5 Liquid-cooled container
energy storage system
The liquid-cooled container energy storage system uses
various high-capacity, safe lith ium-ion batteries. It features an
intelligent liquid cooling desig n, enhanced level of system
integration and high energy density. It improves space use
efficiency and the economic viability of the energy storage
system.
6 High-Rate sodium-ion
cells
The high-rate sodium-ion batteries can support a 10C
discharge rate and exhibit excellent low-temperature
performance, capable of discharging at -30°C.
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No. Product Key Features
7 100Ah Aluminum-cased
solid state battery
The solid state battery has the advantage of superior safety,
higher energy efficiency and longer product life.
8 High energy density
lead-acid battery
This product is featured by longer cycle life, higher energy
density and enhance cost-efficiency.
MANUFACTURING AND PRODUCTION
Production Site
Capitalizing on our rich industry experience and advanced production techniques, we have
established three operating production plants featuring premium manufacture equipment, highly
automated procedures, stringent quality control and ESG compliance standards.
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The table below sets out production volume, production capacity and u tilization rate of our products of our production sites for the years/
periods indicated:
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2025
Production
Volume
Production
Capacity (1)
Utilization
Rate (2)
Production
Volume
Production
Capacity (1)
Utilization
Rate (2)
Production
Volume
Production
Capacity (1)
Utilization
Rate (2)
Production
Volume
Production
Capacity (1)
Utilization
Rate (2)
GWh GWh % GWh GWh % GWh GWh % GWh GWh %
Lithium-ion batteries .............
Plants
location
F r o n tP l a n t ................... T a i z h o u 1 . 1 3 1 . 5 8 7 1 . 5 1 . 4 1 2 . 1 7 6 5 . 0 1 . 4 3 2 . 1 3 6 7 . 1 0 . 7 1 0 . 8 9 7 9 . 8
Lead-acid batteries
T a i z h o uP l a n t .................. T a i z h o u 3 . 7 3 5 . 0 0 7 4 . 6 3 . 3 2 5 . 0 0 6 6 . 4 4 . 2 5 5 . 0 0 8 5 . 0 2 . 1 3 2 . 0 8 1 0 2 . 4 (4)
Runyoung Plant . . . . ............. X i a ngyang 1.34 1.25 107.2 (3) 1.30 1.62 80.2 1.62 1. 62 99.9 0.67 0.68 98.5
Subtotal of lead-acid batteries ........ ..... 5.07 6.25 81.1 4.62 6.62 69.8 5.87 6.62 88.7 2.80 2.76 101.4
Notes:(1) Production capacity is based on the optimal hourly production rate of various machines operating 16 hours a day for operating 360 days for a year (no
t including time spent on
production line upgrade or adjustment).
(2) Utilization rate is calculated as d
ividing production volum
e by the production capa
city for the same year.
(3) Our Runyoung Plant recorded a utilization rate more than 100% in 2022 because we operated our plant for more than 16 hours a day to meet the increased m
arket demand for
our lead-acid batteries.
(4) Our Taizhou Plant recorded a utilization rate more than 100% in the five months ended May 31, 2025 because we operated our plant for more than 16 hours
a day to meet the
increased market demand for our lead-acid batteries.
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Front Plant
Our Front Plant in Jiangsu is situated on a s ite that spans approximately 126.8 thousand
sq.m. The plant is primarily focused on manufacturing lithium-ion batteries. In 2023, our Front
Plant was rewarded as the Provincial Industrial Internet Demonstratio n Project (Benchmark
Factory Category) by Jiangsu Provincial Department of Industry and Information Technology.
Taizhou Plant
Our Taizhou Plant in Jiangsu spans an area of approximately 338.7 thousand sq.m.. It broke
ground and started commercial production in 2012. It focuses on producing the lead-acid batteries
applied for telecom base stations and data cente rs. With the continuous introduction of premium
manufacturing equipment and facilities, and fully automated assembly lines, our Taizhou plant is
at the forefront of the industry with advanced process technology and high production efficiency.
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Runyoung Plant
Our Runyoung Plant in Xiangyang, Hubei, is situated on a site that spans approximately
222.3 thousand sq.m. The plant is our main pro duction facility for manufacturing lead-acid
batteries and has been awarded the National Green Factory honor by the Ministry of Industry and
Information Technology of the People ’s Republic of China in 2022.
Xiangyang Plant
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Our Xiangyang Plant in Hubei covers an area of approximately 73.6 thousand sq.m.. It
broke ground in May 2023, commenced production in late 2024 and is currently in the ramp-up
phase. Its designed production capacity is 2.5GWh . The plant is expected to primarily focus on
manufacturing lithium-ion batteri es for commercial and residentia l settings. It is characterized by
a high degree of automation, advanced produc tion equipment, an intelligent monitoring system
and high green energy efficiency.
Production Equipment
We procure our production equipment from reputable suppliers from China and overseas.
The equipment used in our productions were either (i) standard machineries and equipment which
are readily available on the market, or (ii) tailor-made equipment produced based on the designs
or specific requirement we provided to the equipment suppliers.
During the Track Record Period, we have not encountered any delay in equipment delivery,
or suspension or malfunction of our equipment, that caused material and adverse impact to our
business operations.
The following table describes our main produc tion equipment for lithium-ion batteries.
Equipment Function/Usage
Country of
Origin
Mixing machine It uses a high-speed dispersion vacuum stirring process to mix
the raw materials into a slurry.
China
Coating machine It coats the positive a nd negative electrode slurry onto the
current collector evenly.
China
Roller machine It presses the coated coil to a set thickness, ensuring the
coating on the current collector surface makes closer contact.
China
Laser die-cutting
machine
It uses laser to cut the edges of the coil into pole lugs. China
Automatic winder It interleaves the po sitive and negative coil and diaphragm
into a roll core.
China
High-speed
automatic
assembling line
It assembles the roll core with the tabs, cover plates,
aluminum casing, and other structural components to form the
battery cell.
China
Liquid injection
machine
It injects the electrolyte i nto the battery cell. China
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The following table describes our main production equipment for lead-acid batteries.
Equipment Function/Usage
Country of
Origin
Lead-carbon lead
strip machine
It casts lead alloy into formed lead strips according to
process requirements.
Italy
Punching machine It punches the formed lead strips into grid plates. U.S.A/China
Continuous casting
and coating
production line
It melt the lead alloy and transport to the continuous
casting mold via a specialized lead pump, enabling
continuous production of grid plates.
U.S.A/China
Lead powder
machine
Formed lead ingots are processed through cold cutting and
grinding to produce lead powder.
China
Vacuum paste mixer It mixes raw materi als in a specific ratio and then blended
into a slurry using a high-speed dispersion vacuum
mixing process.
China
Vacuum acid filling
machine
Uses a vacuum method to inject the electrolyte into the
battery.
Germany/China
Our major production equipment and machinery have an estimated average useful lives of
10 years and are depreciated at an average annual rate of 9.5%. Depreciation is calculated on a
straight-line basis over its estimated useful life. As of May 31, 2025, the remaining useful life of
our major equipment and machin ery for manufacturing lithium- ion batteries and lead-acid
batteries is 33 to 120 months. We regularly inspect and maintain our production equipment and
machinery, as well as replace consumable parts and components subject to their wear and tear
conditions.
Manufacturing Procedures
Adhering to the lean production philosophy, we implement a comprehensive control process
and make efforts to ensure that our manufacturin g procedures for lithium-ion batteries and lead-
acid batteries meet high standards of quality, and ach ieve cost reduction and high efficiency at the
same time, catering to the demanding needs of our customers. The production cycle for our
lithium-ion battery is 11 days, and 15 days for our lead-acid battery.
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Lithium-ion Batteries
Mixing
Sorting
Coating
Formation
Calendaring
Electrolyte
injection
Slitting
Assembling
No. Process Name Process Description
1 Mixing Mix the positive and negative ac tive materials, conductive agent,
binder, and solvent uniformly to form a slurry.
2 Coating Coat the slurry uniformly onto the current collector according to
process requirements, and evaporate the solvent from the slurry to
form the positive electrode roll.
3 Calendaring Compact the positive and ne gative electrode sheets to ensure closer
bonding between the components of the electrodes.
4 Slitting Cut the wide electrode rolls, aft er coating and roll pressing, into the
required width according to process specifications.
5 Assembling Assemble the positive electr ode, negative electrode, separator, and
c a s i n gi n t oad r yc e l l .
6 Electrolyte
injection
Inject the electrolyte into the dry cell.
7 Formation Charge the cell to activate it.
8 Sorting Sort the cells based on their performance data to ensure uniformity in
usage.
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Lead-acid Batteries
Power
preparation Paste mixing
Plate casting
Coating Curing and
drying
Cluster
welding
Acid
injection and
formation
No. Process Name Process Description
1P o w e r
preparation
Processing lead ingots into powdered lead.
2 Paste mixing Mix lead powder, water, sulfuric acid, and additives, stirring them to
form a uniform mixture of lead paste.
3 Plate casting Cast lead alloy into a grid structure with specific strength and shape,
make it capable of supporting active material and conducting
electricity.
4 Coating Evenly apply the prepared lead p aste (active material) onto the grid.
5C u r i n g a n d
drying
Cure and dry the plates under specific temperature and humidity
conditions.
6 Cluster welding Melt lead to fuse the positive and negative plates together at the lugs.
7 Acid injection
and formation
Inject sulfuric acid electrolyte into the semi-finished battery, then
perform formation charging and discharging to activate and charge the
battery.
QUALITY CONTROL
Our Quality Control Department
We perform quality control, inspection, tes ting, identifying defects and irregularities
throughout all stages in our pr oduction process. Our emplo yees follow our quality control
protocols to control and monitor each stage of our operating process, including procurement of
components and raw materials, production, and inspection of finished products, to ensure product
quality. During the Track Record Period and up to the Latest Practicable Date, there were no
material safety issues in relation to our product quality. As of May 31, 2025, we had 64
employees responsible for quality management. Our quality control department is responsible for:
 oversight of the operation management of our company and subsidiaries;
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 quality feedback evaluation and the tracing and handling of quality issues;
 the management of the test center and metrology system and process;
 the entire quality control process on the products;
 quality control of our suppliers;
 management and acquisition of product qualifications and certificates; and
 management and implementatio no fc o n s t r u c t i n gp r o j e c t s .
Wei Wang, the director of our quality control department, has over 17 years of work
experience in the field of quality control field w ithin energy storage battery industry. He is a Six
Sigma Black Belt and also a member of the 10t h Council of the Jiangsu Applied Statistics
Association, and the ‘‘Chief Quality Officer ’’of Jiangyan District enterprises.
During the Track Record Period and up to the Latest Practicable Date, (i) we had not
received any material complaints or product lia bility claims relating to product quality; (ii) we
had not received any material product returns from our customers, or (iii) we had not experienced
any product recalls or fatal accidents due to product defects.
Our Quality Control System
We are dedicated to delivering products of exc eptional quality and reliability, continuously
striving to enhance customer satisfaction. Our commitment to continuous improvement
strengthens our company ’s core competitiveness. We have es tablished a comprehensive quality
control system that complies with relevant national and international standards, covering supplier
quality management, incoming material quality management, manufac ture process quality
management, shipping quality management, and post-sale quality management to ensure the
consistency of our high product quality.
We have managed our suppliers and the procurement process on the basis of a series of
supplier management internal control systems a nd criteria formulated by us. For details, see ‘‘ —
Suppliers — Procurement Arrangement ’’in this section.
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We have established our product safety and quality management system to implement the
safety review, precise monitoring and early warning in all aspects of our new product projects
commencing from design to mass production and us er consumption. The flow chart of our quality
control system is as follows:
*OWPMWFNFOUJOBEWBODFEQSPEVDU
RVBMJUZQMBOOJOHBOESJTLNJUJHBUJPOBU
UIFQSPEVDUEFTJHOBOEEFWFMPQNFOUTUBHF
4USJDUDPOUSPMPGJOQVU
RVBMJUZWFSJDBUJPOPGOFX
NBUFSJBMTBOEFWBMVBUJOHPG
OFXTVQQMJFST
4USJDUDPOUSPMPGPVUQVU
FOTVSFFWFSZQSPEVDUMFBWJOH
PVSGBDUPSZNFFUTQFSGPSNBODF
TUBOEBSETBOEDVTUPNFS
SFRVJSFNFOUT
2VBMJUZ
DPOUSPMBUOFX
QSPEVDUEFTJHO
BOE3%
1SPEVDU
QFSGPSNBODF
BOERVBMJUZ
DPOUSPM
.BTT
QSPEVDUJPO
QSPDFTTRVBMJUZ
DPOUSPM
2VBMJUZ
DPOUSPMPGSBX
NBUFSJBMTBOE
TVQQMJFST
*5.BOBHFNFOU
1SPEVDUJPOBVUPNBUJPO
4UBTQFDJBMJTBUJPO
4UBCJMJTBUJPOPGLFZQPTJUJPOT
Leveraging IT tools such as ERP (Enterprise Resource Planning), MES (Manufacturing
Execution System) and OA syste m, we have developed a data-driven quality control platform. By
intelligently processing data and utilizing analysis and mining technologies across sales,
production, procurement, and q uality control, the MES system enables more efficient decision-
making and effective management. During the p roduction process, the ERP system exchanges
data with equipment, records manufacturing process data in the database, traces data from
production planning to shipment, and contr ols production quality. The OA system helps to
standardize the quality control procedure and ma nage non-conforming pr oducts, new product
development, quality reviews, and testing throu gh streamlined workflows. By integrating our
quality control protocols and inf ormation technology, we enable real -time monitoring, scientific
analysis, and enhanced decision-m aking in plant quality management.
Committed to building digital and intelligent p lants, we utilize various technologies to
automate management and production processes. We believe this would standardize and
streamline the production management, reduce errors, plug loopholes, increase efficiency, and
provide decision-making support.
Complementing our meticulously designe d quality control system, we have also been
installed and are operating advanced productio n and testing equipment to ensure the highest
standards of product quality. We operates a CNAS-accredited testing center with various
specialized labs, including chemical analysis, p recision testing, environmental adaptation,
reliability, system integration for energy storage. The testing center is capable of comprehensive
testing from raw material analysis to performance testing of semi-finished and finished products.
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We have a dedicated team responsible for ov erseeing our quality cont rol processes. They
work collaboratively with our customer service teams to provide timely support and after-sale
services. Through their combined efforts, we are able to confirm and evaluate customer
requirements before sales, monitor and safe guard the fulfillment process during sales, and
gathering customer feedback after sales.
This integrated approach allows us to maintain high standards of customer satisfaction and
product quality.
Our Quality Accreditations
Our relentless efforts in quality control earne d us various authoritative international and
domestic certifications, including:
System Certifications
 ISO 9001 Quality Management System certification
 QC 080000 Hazardous Substance Process Management System certification
 ISO 14001 Environmental Management System certification
 ISO 45001 Occupational Health and Safet y Management System certification
 ISO 50001 Energy Managemen t System certification
 ISO 10012 Measurement Management System certification
Lithium Batteries
 International certification: UN38.3 cer tification, CE-EMC certification, UL1973
certification, IEC62619 certification, IEC6 2620 certification, RoHS certification,
UKCA certification, the VDE certification, TÜV Certification, UL 9540A certification
 China ’s mandatory inspection certification (GB /T36276), China Classification Society
(CCS) Certification
Lead-acid Batteries
 International certification: TLC Product Ce rtification, CE-EMC certification, UL1989
certification, IEC60896 certification
 China Classification Society (CCS) Cer tification, China Railway Inspection and
Certification (CRCC), NM-450 CRCC Product Certification
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SALES, MARKETING AND CUSTOMERS
Our Sales and Service Network
We have an extensive global sales and service network and dedicated sales teams to serve
our customers globally. As of May 31, 2025, our sales and service network consisted of our
headquarters, and 29 service outlets across va rious provinces and regions in China, and five
oversea subsidiaries in U .S., Singapore and Malaysia . In addition, upon customer ’s request, we
dispatch sales and technical exp erts to cover countries such as Uz bekistan, the Philippines, South
Africa, Mexico, Italy, Indonesia, Thailand, the United Arab Emirates and Ethiopia.
As of May 31, 2025, we had 267 employees in sales and marketing, focusing on business
development, customer service, brand promotion, and industry coverage.
Through our sales and service network, we have dedicated personnel responsible for each of
our lithium batteries and lead- acid batteries sold in domestic and overseas market. Our sales and
market teams regularly contact our existing and potential customers about our current products
and development plans, and gather feedbacks from customers on our products to gain more
insight about needs of our customers and future market trends.
The following table sets forth a breakdown of our revenues by region for the year and
periods indicated:
For the year ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Mainland China . . . . . . . . . . . . . 3,394,555 83.4 3,330,829 78.2 3,608,974 80.2 1,031,966 74.0 1,546,929 82.9
Overseas . . . . . . . . . . . . . . . . . 677,925 16.6 928,948 21.8 889,548 19.8 362,219 26.0 319,679 17.1
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Compared to the local suppliers, we boast strong technological advantages in producing
energy storage batteries that excel in safety, cost and performance. In terms of performance, our
energy storage batteries for telecom base stations can operate within a temperature range of -45°C
to 75°C, compared to an average industry tem perature range of -30°C to 60°C. In addition,
leveraging our strong technology capability to control costs and reduce waste during the
production, as well as our advanced logistic management capacity, we also keep a cost advantage
compared to the local and global suppliers. With our stronger manufacturing capacity and precise
production methods, we achieved a product pass-through rate of 92.5%, higher than the industry
average. The production cycle of our lithium-io n battery production cycle is only 11 days, and
our lead-acid battery production cycle is just 15 days, both of which are industry leading
benchmarks. Capitalizing on such competitive edg e, we are able to offer energy storage batteries
with superior performance and cost-effectiveness, and at the same time to adopt a dynamic pricing
strategy allowing us to set favorable prices for customers or regions that we deem have strategic
value while maintaining reasonable profit margi n. At the same time, our oversea sales and service
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network enables us to capture the oversea market demand for energy storage batteries and provide
timely and comprehensive services to our oversea customers. During the Track Record Period, we
have expanded our oversea markets and our overseas sales accounted for 16.6%, 21.8%, 19.8%,
26.0% and 17.1% of our total revenues in 2022, 2023, and 2024 and for the five months ended
May 31, 2024 and 2025, respectively. Our market share in telecom and data center energy storage
is higher than the that of the lo cal suppliers. According to Frost & Sullivan, in 2024, we ranked
the first among global telecom base station and data center energy storage battery providers in
terms of shipment volume, achieving a market share of 11.1%.
Among our oversea sales, we primarily sold our batteries to Europe, Southeast Asia, and
Africa, including countries such as Sweden, Norway, Indonesia, Vietnam, India and South Africa.
Our major oversea customers are primarily international telecom operators and equipment
manufacturers, such as Ericsson, Telenor and Nokia. We primarily procured our oversea
customers through direct negotiation.
The following table sets forth a breakdown of revenues by regions and major country for the
year and period indicated:
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Mainland China . . . . . . . . . . . . . 3,394,555 83.4 3,330,829 78.2 3,608,974 80.2 1,031,967 74.1 1,546,929 82.9
Asia Pacific excluding mainland
China
Malaysia. . . . . . . . . . . . . . . . . . 8,284 0.2 10,217 0.2 98,553 2.2 38,979 2.8 36,713 2.0
Indonesia . . . . . . . . . . . . . . . . . 55,310 1.4 37,668 0.9 91,481 2.0 39,161 2.8 25,864 1.4
I n d i a .................... 7 9 2 – 135,746 3.2 80,603 1.8 16,498 1.2 32,497 1.7
Vietnam . . . . . . . . . . . . . . . . . . 65,894 1.6 88,106 2.1 70,199 1.6 19,972 1.4 33,169 1.8
Others
(1) . . . . . . . . . . . . . . . . . . 55,547 1.4 74,896 1.8 70,712 1.5 33,987 2.4 38,816 2.0
Subtotal .................. 185,827 4.6 346,633 8.2 411,548 9.1 148,597 10.6 167,059 8.9
EMEA
Sweden. . . . . . . . . . . . . . . . . . . 186,915 4.6 125,100 2.9 120,375 2.7 36,942 2.6 62,891 3.4
N o r w a y . .................. 3 2 , 4 4 4 0 . 8 8 9 , 0 0 1 2 . 1 7 5 , 7 7 0 1 . 7 4 9 , 5 7 1 3 . 6 9 , 3 3 5 0 . 5
E g y p t . ................... 7 , 6 2 8 0 . 2 2 9 , 3 0 5 0 . 7 2 6 , 5 8 5 0 . 6 1 9 , 3 9 0 1 . 4 ––
South Africa. . . . . . . . . . . . . . . . 46,364 1.1 42,814 1.0 20,291 0.5 18 – 14,016 0.8
Finland. . . . . . . . . . . . . . . . . . . 81,162 2.0 61,422 1.4 17,520 0.4 9,881 0.7 2,568 0.1
Others
(2) . . . . . . . . . . . . . . . . . . 81,093 2.0 166,149 3.9 134,867 2.9 58,938 4.2 30,594 1.6
Subtotal .................. 435,606 10.7 513,791 12.0 395,408 8.8 174,740 12.5 119,404 6.4
Other Regions
Brazil. . . . . . . . . . . . . . . . . . . . 24,406 0.6 33,167 0.8 47,610 1.1 23,664 1.7 11,497 0.6
G u a t e m a l a ................. 1 0 , 3 8 1 0 . 2 7 , 1 0 3 0 . 2 1 0 , 2 1 0 0 . 2 9 , 5 4 2 0 . 7 ––
Others
(3) .................. 2 1 , 7 0 5 0 . 5 2 8 , 2 5 4 0 . 7 2 4 , 7 7 2 0 . 6 5 , 6 7 5 0 . 4 2 1 , 7 1 9 1 . 2
Subtotal .................. 56,492 1.3 68,524 1.6 82,592 1.9 38,881 2.8 33,216 1.8
Total . . . . . . . . . . . . . . . . . . . 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
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Notes:
(1) mainly include Hong Kong SAR, Pakistan and Kazakhstan, and Singapore.
(2) mainly include UAE, Romania, and Mauritius.
(3) mainly include Peru, Mexico, Uruguay and Colombia.
The revenue generated from our oversea sal es increased from RMB677.9 million in 2022 to
RMB928.9 million in 2023, primarily due to our con tinuous effort to expand our oversea sales
and global presence. Our revenue generated from our oversea sales decreased from RMB928.9
million in 2023 to RMB889.5 million in 2024, main ly due to the decrease in revenue generated
from EMEA as our customer demand in EMEA was gradually stabilized. Our revenue generated
from Asia Pacific excluding mainland Chin a increased from RMB346.6 million in 2023 to
RMB411.5 million in 2024, mainly due to our busine ss expansion in Southeast Asia, especially
Indonesia, and Malaysia.
In 2023, the total added installed capacity for energy storage batteries in Asia Pacific
(excluding mainland China) reached 20.3 GWh. We achieved a shipment volume of 0.4 GWh in
Asia Pacific (excluding mainland Ch ina), with the market share of 1.9%.
In 2023, the total added installed capacity for energy storage batteries in EMEA (Europe,
Middle East and Africa) region reached 31.9 GWh. We achieved a shipment volume of 0.5 GWh
in EMEA region, with the market share of 1.6%.
After our oversea customers initiate and place an purchase order, we will confirm the order
within certain period of time. After confirming t he details of the purchase order, we generally will
ship our batteries by Free Carrier (FCA) or Delivery at Place (DAP) in accordance with
INCOTEMS 2010, or other shipping terms agreed by our customers in the contracts. Our
customers shall make payment within certain period after the receipt of an undisputed invoice.
During the Track Record Period, the products we sold oversea were primarily lithium-ion and
lead-acid batteries for telecom base station and electrical energy storage settings.
Sales and Distribution
During the Track Record Peri od, we primarily sold directly to end customers in China and
abroad. To expand the geographic coverage and consumer reach of our products, we complement
our direct sales with distribution network. As of December 31, 2022, 2023 and 2024, we had 124,
114 and 106 distributors, respectively, which contributed to 10.4%, 13.8%, and 7.2% of our total
revenues in 2022, 2023 and 2024, respectively. As of May 31, 2025, we had 29 distributors,
which contributed to 4.4% of our total revenues for the five months ended May 31, 2025. The
revenues from the sales of energy storage batterie s, including distributors and direct sales, is
recognized when control of the goods is transferred at an amount that reflects the consideration to
which we expect to be entitled in exchange for those goods.
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The table below sets forth our revenues by geographic region and sales channel for the
period indicated.
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Domestic
Direct Sales. . . . . . . . . . . . . . . . 3,126,517 76.8 2,983,933 70.0 3,532,599 78.5 996,689 71.5 1,520,068 81.4
Distributor . . . . . . . . . . . . . . . . 268,038 6.6 346,896 8.2 76,374 1.7 35,278 2.5 26,861 1.4
Subtotal . . . . . . . . . . . . . . . . . . 3,394,555 83.4 3,330,829 78.2 3,608,973 80.2 1,031,966 74.0 1,546,929 82.8
Overseas
Direct Sales. . . . . . . . . . . . . . . . 524,473 12.8 685,460 16.1 641,387 14.3 246,975 17.7 266,032 14.3
Distributor . . . . . . . . . . . . . . . . 153,452 3.8 243,488 5.7 248,162 5.5 115,243 8.3 53,647 3.0
Subtotal . . . . . . . . . . . . . . . . . . 677,925 16.6 928,948 21.8 889,549 19.8 362,218 26.0 319,679 17.3
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
The table below sets out the total number of distributors and their movements for the period
indicated.
Year ended December 31,
Five
Months
Ended
May 31,
2022 2023 2024 2025
N u m b e ro fd i s t r i b u t o r sa tt h eb e g i n n i n go ft h ep e r i o d..................... 1 3 4 1 2 4 1 1 4 1 0 6
Number of new distributors for the period (1) ........................... 5 9 5 1 4 8 1
Number of terminated distributors for the period (2) ....................... 6 9 6 1 5 5 7 8
N e ti n c r e a s e / ( d e c r e a s e )i nn u m b e ro fd i s t r i b u t o r sf o rt h ep e r i o d............... ( 1 0 ) ( 1 0 ) ( 7 ) ( 7 7 )
N u m b e ro fd i s t r i b u t o r sa tt h ee n do ft h ep e r i o d ......................... 1 2 4 1 1 4 1 0 6 2 9
Notes:
(1) The number of new distributors represents those distributors from whom we recognize revenues for the year
indicated but no revenues recognized for the financial year immediately preceding the year indicated.
(2) The number of terminated distributors represents those distributors from whom we did not recognize revenues for
the year indicated but have revenues recognized for the financial year immediately preceding the year indicated.
(3) Based on our definitions of new distr ibutors and terminated distributor s, the fluctuation in the number of
distributors was mainly due to the time when our distributors procured from us and the amount are recognized as
revenue. As we maintain a buyer-seller relationship, rather than a principal-agent relationship with our distributors,
our distributors place purchase orders from us based on their demand of our batteries in each year or period, which,
under our definition, may classify them into new or terminated distributors.
During the Track Record Period, to the best of our Directors ’ knowledge, all of our
distributors were Independent Third Parties, and none were controlled by our current or former
employees.
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We maintain a buyer-seller relationship with our distributors. During the Track Record
Period, we mainly engaged distributors to support our business expansion, as we strived to
enlarge our sales network coverage to provide our batteries to more consumers. According to
Frost & Sullivan, our use of distributors is in line with the industry norm. We value the
management of our distributors, and maintain a good cooperative relationship with them. We set
up policy on management of distributors, accordi ng to which, we select our distributors based on
a number of factors, including their track record, sales experience, and reputation, among others.
We also regularly evaluate our distributors on the basis of their sales performance and channel
development ability.
We believe the risk of channel stuffing is remo te in our distribution network. We generally
require full payment from distributors within 60 days of the shipment of our products. We
generally do not allow returns of products sold to distributors, except for defective products.
According to Frost & Sullivan, our good return policy with distributors is in line with the
industry practice.
We entered into distribution agreement with cer tain distributors, while other distributors
mainly place purchase orders from us from time t o time. Our distribution agreement typically
includes the following terms:
Major terms Content
Duration Typically one year
Payment and credit terms We generally require our distributor make full payment within 60
days since shipment.
Minimum purchase
amount
We may specify an indicated minimum purchase amount in the
distribution agreements.
Pricing We specify the price of each type of products provided to
customers in each purchase orders under the distribution
agreement, including unit price and total price.
Appointment of
sub-distributors
We generally do not allow our distributors to engage any sub-
distributor without our consent. The distributor shall get our
approval for the sale and the selling price to sub-distributor.
Delivery term Generally we bear the costs and ris ks associated with bringing the
goods to the named place of destina tion. This includes transport,
insurance, and any other costs up to the point of delivery at the
specified place.
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Major terms Content
Termination Each party has the right to terminate the agreement if the other
party breaches the distribution agreement.
Warranty and return
policy
We usually offer a warranty period of 36 months.
We bear the cost of product return or replacement in case of
defective products.
Marketing
Leveraging our broad product portfolio featur ing various technological specifications
designed to serve diverse application scenarios and stringent customers ’ demands, as well as our
rich industry experience and technological capability to capture and solve evolving practical
challenges that our customers may encounter in their energy storage needs, we have established
and retained long-term relationship with custom ers with leading industry positions in China and
overseas.
As our marketing strategy and effort, we provide our potential customers comprehensive and
tailored advisory and analysis for their energy st orage needs. Typically, our marketing team will
provide:
 Technical Consultation: Our sales and marketing team offers expert technical
consultation to address potential customer ’s inquires and provide insights into our
batteries, helping our potential customers understand the technological specifications
and application of our energy storage batteries.
 Energy Storage Plan Design : Based on the specific energy storage needs and actual
application scenarios of our potential customers, our sales and marketing team will
help to design tailored and comprehensive energy storage plans, including advising the
most suitable product type to use, quantity of batteries needed and the way of
installation and arrangement of batteries. O ur designs ensure each potential customer ’s
energy storage needs are addressed with the optimal efficiency and the most suitable
products.
 Product Demonstration : we also provide product demonstration tailored to our
potential customers ’ need, showcasing the specific features and technological
advancement of our batteries. These demonstrations help our potential customers gain
a comprehensive understanding of our products and how they can be integrated into
their operations to achieve their energy storage plans.
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 Prototype Testing: To facilitate the decision-making process of our potential
customers, our sales and marketing team w ill also offer prototype testing of our
products, ensuring they choose the most suitable batteries for their energy storage
needs.
In addition, to further advertise and promote our products, we frequently attend and present
at various industry conferences and exhibitions around the world to both keep abreast of recent
industry trends and showcase our product ’s competitiveness in marketing events. For example, in
2024, we were invited to the Intersolar Europe 2024 Exhibition in Germany and the Middle East
Energy Conference in Dubai, and co-hosted the ESIE 2024 Conference & Expo （儲能國際峰會暨
展覽會）, where we launched our new products and gave a lecture on current technological
focuses. In 2023, we attended the IDCC 2023 (2023 年度中國年度大會）, where we were invited
to deliver a keynote speech and were granted the 2023 China IDC Industry Innovation
Technology Product Award (2023 年度IDC產業創新技術產品獎）.
Our Customers
During the Track Record Period, we primarily sold our batteries to customers in China. In
2022, 2023 and 2024, and the five months ended May 31, 2025, our five largest customers in
each year during the Track Record Period contributed 54.2%, 46.1%, 38.4%, and 34.0%,
respectively, to our total revenues in the same y ear. In addition, our single largest customer in
each year during the Track Record Period contributed 24.3%, 21.3%, 13.1%, and 10.2%
respectively, to our total revenues in the same year. Except for Customer E, whom we procured
through direct negotiation, we became acquainte d with and secured sales from each of our major
customers through a public tender process.
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The following tables set forth the details of our five largest customers for each year during the Track Record Period.
For the Five Months ended May 31, 2025
Customers
Sales
Amount
Percentage of
total Sales Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products sold by
our Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000 %
C u s t o m e rA............ 189,496 10.2% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2015 30
days
Bank transfer Lithium-ion
batteries/Lead-
acid batteries
RMB17.6 billion Beijing
C u s t o m e rB............ 109,846 5.9% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2013 30
Days
Bank transfer/
check
Lithium-ion
batteries/Lead-
acid batteries
RMB213 billion Beijing
C u s t o m e rC............ 151,891 8.1% One of the largest
telecommunication
companies in the world
2013 30
Days
Bank transfer Lithium-ion
batteries/Lead-
acid batteries
RMB300 billion Beijing
C u s t o m e rD............ 117,441 6.3% One of the world ’sl a r g e s t
e-commerce and technology
companies
2019 30
Days
Bank transfer Lead-acid
batteries
US$155 million Hangzhou
C u s t o m e rE ............ 6 5 , 8 6 6 3 . 5 % Al e a d i n gm u l t i n a t i o n a l
networking and
telecommunication company
2020 120
days
Bank transfer Lead-acid
batteries
SEK16,720.8
million
Stockholm
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For the Year ended December 31, 2024
Customers
Sales
Amount
Percentage of
total Sales Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products sold by
our Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
C u s t o m e rA............ 589,642 13.1% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2015 30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB17.6 billion Beijing
C u s t o m e rB............ 417,539 9.3% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2013 30
days
Bank transfer/
check
Lithium-ion
batteries/lead-
acid batteries
RMB213 billion Beijing
C u s t o m e rC............ 363,914 8.1% One of the largest
telecommunication
companies in the world
2013 30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB300 billion Beijing
C u s t o m e rD............ 200,543 4.5% One of the world ’sl a r g e s t
e-commerce and technology
companies
2019 30
days
Bank transfer Lead-acid
batteries
US$155 million Hangzhou
C u s t o m e rE ............ 151,617 3.4% A leading multinational
networking and
telecommunication company
2020 120
days
Bank transfer Lithium-ion
batteries
SEK16,720.8
million
Stockholm
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For the Year ended December 31, 2023
Customers
Sales
Amount
Percentage of
total Sales Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products sold by
our Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
C u s t o m e rA............ 907,533 21.3% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2015 30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB17.6 billion Beijing
C u s t o m e rC............ 359,069 8.4% One of the largest
telecommunication
companies in the world
2013 30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB300 billion Beijing
C u s t o m e rB............ 303,711 7.1% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2013 30
days
Bank transfer/
check
Lithium-ion
batteries/lead-
acid batteries
RMB213 billion Beijing
C u s t o m e rF ............ 237,583 5.6% One of the largest
international trading
companies in China,
specializing in building
materials and construction
products
2020 60
days
Bank transfer/
Bank acceptance
Lithium-ion
batteries/lead-
acid batteries
RMB300.95 million Beijing
C u s t o m e rG............ 156,617 3.7% One of the largest
telecommunication
companies in the world
2013 15-30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB31.0 billion Beijing
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For the Year ended December 31, 2022
Customers
Sales
Amount
Percentage of
total Sales Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products sold by
our Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
C u s t o m e rA............ 990,257 24.3% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2015 30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB17.6 billion Beijing
C u s t o m e rC............ 405,576 10.0% One of the largest
telecommunication
companies in the world
2013 30-90
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB300 billion Beijing
C u s t o m e rB............ 314,113 7.7% One of the largest
telecommunication
companies in the world,
listed on the Hong Kong
Stock Exchange
2013 30
days
Bank transfer/
check
Lithium-ion
batteries/lead-
acid batteries
RMB213 billion Beijing
C u s t o m e rG............ 288,709 7.1% One of the largest
telecommunication
companies in the world
2013 15-30
days
Bank transfer Lithium-ion
batteries/lead-
acid batteries
RMB31.0 billion Beijing
C u s t o m e rE ............ 211,380 5.2% A leading multinational
networking and
telecommunication company
2020 120
days
Bank transfer Lithium-ion
batteries
SEK16,720.8
million
Stockholm
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As of the Latest Practicable Date, none of our Directors, their close associates or any of our
Shareholder which to the best knowledge of our Directors owned more than 5% of the issued
share capital of our Company, had any interest in our five largest customers in each year during
the Track Record Period. To the best knowledge of our Directors, each of our five largest
customers in each year during the Track Record Period was an Independent Third Party.
Customer Concentration
In 2022, 2023 and 2024, and the five months ended May 31, 2025, our five largest
customers accounted for approximately 54.2%, 46.1%, 38.4%, and 34.0% of our total revenues,
respectively.
Customer A accounted for RMB 990.3 million, RMB907.5 m illion, RMB589.6 million and
RMB189.5 million of our total revenues in 2022, 2023 and 2024, and the five months ended May
31, 2025, respectively, accounting for approximately 24.3%, 21.3%, 13.1% and 10.2% of our total
revenues during the same year or period, respectively, while Customer C accounted for
RMB405.6 million, RMB359.1 mill ion, RMB363.9 million and RM B151.9 million in 2022, 2023
and 2024, and the five months ended May 31, 2025, representing approximately 10.0%, 8.4%,
8.1% and 8.1% of our revenues during the same year or period, respectively.
As confirmed by Frost & Sullivan, having suc h a level of concentration is common in the
energy storage batteries market due to the high concentration of market players in the
telecommunication industry and data center indust ry. The high concentration of industries of our
end customers naturally led to situations where ene rgy storage batteries manufacturers have high
concentration in sales.
Our Directors are of the view that despite th e concentration of revenues from Customer A
and Customer C, the sustainable growth of our business will not be materially affected as our
relationship with the relevant customers is unlik ely to experience a material adverse change or
termination. With our long-term commitment to providing superior products and customer
services, we have been the only energy storage battery company to receive Excellent Supplier (A-
Level) award from Customer C for four consecutive years of 2021 to 2024, and are awarded the
Class I Collaborative Supplier by Customer A in 2023.
Our Customers ’ Selection on Suppliers
The major customers of our energy storage batteries used for telecom base stations are
leading telecom operators and equipment manufact urers, including China Mobile, China Unicom,
China Telecom, China Tower, Ericsson, Vodafone and Telenor. The major customers of our
energy storage batteries used for data centers are data center operators, such as Alibaba, JD.com,
Baidu, Chindata, and GDS. The major customers of our energy storage batteries used for
electrical energy storage settings are power st ations, power grids, commercial and household
users.
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As leading enterprises in their industrie s, our major customers have comprehensive,
stringent and relative high requirements for selecting their suppliers. In the tender process, we, as
supplier, are evaluated on various dimensions of parameters, including our business scale,
technological capacity, product quality and certif ications, sales and customers service quality,
ESG, compliance with national standards and other requirements.
The following table sets forth the revenue breakdown by projects obtained from tenders and
direct negotiations and the percentage to the total revenues during the Track Record Period.
For the year ended December 31,
Five Months
Ended May 31,
2022 2023 2024 2025
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Projects obtained from direct negotiations . . . . . . . . . . . . . . . 1,700,225 41.7 1,749,392 41.1 1,725,385 38.4 969,407 51.9
P r o j e c t so b t a i n e df r o mt e n d e r s ...................... 2 , 3 7 2 , 2 5 5 5 8 . 3 2 , 5 1 0 , 3 8 5 5 8 . 9 2 , 7 7 3 , 1 3 7 6 1 . 6 8 9 7 , 2 0 1 4 8 . 1
Total .................................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,866,608 100.0
Our tender success rates in 2022, 2023 and 2024, and the five months ended May 31, 2025
were approximately 34.8%, 38.0% and 39.5% and 42.1%, respectively.
During the term of our framework agreement with our major customers, our major customers
may conduct on-site factory inspection and ev aluate our production fa cilities, equipment and
quality control system. If any non-conformities are identified by customers, corrective actions are
mandated, and follow-up audits are conducted to ensure issues are resolved satisfactorily. When
the framework agreement expires, we will be reevaluated based on the similar parameters and the
customers will determine whether to continue cooperation with us based on the evaluation results.
With our strong technological capacity, advanced manufacturing equipment and process,
premium product quality, extensive customer serv ice network and high customer service quality,
during the Track Record Period, we have successfully reached these requirements on suppliers
and maintained relationship with our major customers.
In addition, we have received several awa rds from our customer in recognition of our
premium products and service:
 For four consecutive years of 2021 to 2024, we have been the only energy storage
battery company to receive China Mobile ’s Tier-1 Excellent Supplier (A-Level) award.
 We are awarded the Class I Collaborative S upplier accolade by China Tower in 2023.
 We are awarded by China Telecom as the Group-Level Excellent Supplier in 2022.
 We are awarded by Kehua Data as the Excellent Partner in 2023.
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During the Track Record Period, the amount of our backlog orders amounted to approximately
RMB881.1 million, RMB861.2 million and RMB 883.6 million as of December 31, 2022, 2023
and 2024.
The following table sets forth the rolling bac klog of our orders by outstanding contract
balance during the Track Record Period.
For the year ended December 31,
2022 2023 2024
RMB ’000 RMB ’000 RMB ’000
O u t s t a n d i n gb a l a n c ea tt h eb e g i n n i n go ft h ey e a r................... 551,824 881,117 861,234
A d d :C o n t r a c tv a l u eo fn e w l ya w a r d e do r d e r s..................... 4 , 838,166 4,716,835 5,149,276
Less: Revenue (VAT inclusive) recognized from sales of lead-acid and lithium-
i o nb a t t e r i e sd u r i n gt h ey e a r *............................. 4 , 508,873 4,736,718 5,126,863
O u t s t a n d i n gb a l a n c ea tt h ee n do ft h ey e a r ....................... 881,117 861,234 883,647
* As the contract value according to the agreement is inclusive of VAT, for the purpose of calculating the backlog
order, the revenue recognized during the relevant year also includes VAT.
Sales Agreement
We typically enter into framework sales agreements with our major customers, under which
our customers will enter into individual purchase orders with us. Such agreements are legally
binding and have not been subject to material breaches during the Track Record Period and up to
the Latest Practicable Date.
Our framework sales agreements typically contain the following terms:
Technological
Specification
As our business involves the development, manufacture and sales of
products and technologies for customers, our customers usually set
relevant technical parameters and technological specification of the
batteries in the sales contract. Those parameters and technological
specification sets out certain characteristics and requirements of the
products to be delivered.
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Price and price
adjustment
mechanism
We specify the price of each type of products provided to customers
in the framework sales agreement, including unit price and total price.
We have price adjustment mechanism that allow us to adjust the price
of the lead-acid battery based on the fluctuations of the main raw
materials during a specified period.
The market spot price and the proportion of each raw materials serve
as the base for calculating the cost of raw material used in the
batteries. According to Frost & S ullivan, such price adjustment
mechanism is common in the industry.
Payment term We grant credit period to our customers according to their credit
profile, historical performance and procurement amount. We typically
grant credit terms of one to six months to eligible customers.
Delivery term Generally we bear the costs and risks associated with bringing the
goods to the named place of destina tion. This includes transport,
insurance, and any other costs up to the point of delivery at the
specified place.
Inspection Product inspection may take place within a specified period after
delivery to customer. Our customers may require us to replace the
defective products.
Duration,
termination and
renewal
Generally one to two years.
Minimum
purchase
requirement
We generally do not have minimum purchase requirements for our
customers.
Warranty and
return policy
We usually offer a warranty period in accordance with applicable
regulations. The warranty period usually ranges from three to eight
years during which we bear the cost of product return and provide
maintenance service or make replacement free of charge to our
customers. For the amount of provision and our provision policy
related to product warranty, see Note 31 to the Accountants ’ Report in
Appendix I to this prospectus.
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Pricing
Our ability to properly price our products is im portant to our results of operations. We have
an effective pricing strategy. We usually use a cost-plus method to price our products based on
the fluctuation of raw materials, overhead, expe cted order volume, prevailing market price,
competitors ’ pricings, payment methods and specifica tion of products requested by customers. In
particular, as our products are primarily used in telecom base stations and data centers, our results
of operations are mainly driven and affected by the development, construction schedule or
progress of relevant projects, which in turn, were determined by our customers ’ business decision,
as well as related policies and infrastructure dev elopment strategy. As a result, we may adjust our
pricing strategy, taking into account various factors in line with our business development
strategy, including our long-term cooperation with the relevant customers.
In addition, we have set up a price adjustment mechanism in contracts with major customers
that allows us to adjust the price of our batteri es based on the price fluctuations of the main raw
materials, such as LFP, lead ingots and graphite, during a specified period. As we cannot pass all
the increased cost in raw materials to our customers, the percentage of revenue adjusted based on
our price adjustment mechanism accounted for 8.9%, 14.2%, 19.2% and 7.7% of our total revenue
in 2022, 2023 and 2024, and the five months ended May 31, 2025, respectively. During the Track
Record Period, the pricing of our batteries fluctuated due to the change in the price of raw
materials. Since later 2022, we started to adju st our pricing by introducing price adjustment
mechanism terms in our framework sales agree ments with our major customers for lithium-ion
batteries. The price adjustment mechanism terms only applied to our major customers because we
primarily entered into framework sales agreement s with major customers. For other customers, we
typically entered into purchase and sale agreemen ts in which the price of batteries is determined
based on the costs of raw material at the time, and we do not plan to extend such price
adjustment mechanism terms to other customers with whom we do not entered into framework
sales agreement. For price fluctuation of our batteries during the Track Record Period, see
‘‘Financial Information — Description of Major Components of our Results of Operations —
Revenues ’’in this prospectus.
Generally, the price adjustment mechanism stipulated in the contracts with our major
customers works as follows:
(i) The original raw material costs: When signing the framework contract and submit our
bidding price, the original material costs are determined based on (a) the average
market price of each major raw materials published on the website of Shanghai Metals
Market from the previous week and (b) the usage amount of the each major raw
material in producing our batteries.
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(ii) The new raw material costs: For certain period of time (generally each month or every
three months) in which our customers place purchase orders, we recalculate the
material costs by checking the average market price of each major raw materials
published on the website Shanghai Metals Market from the previous month.
(iii) The price adjustment: At the beginning of each period, we compare the original raw
material costs with the new raw material cos ts. If the new material costs increased/
decreased beyond certain threshold (generally 5% or more) from the original raw
material costs, the battery price in our customer ’s purchase order is allowed to be
adjusted by the difference between the new raw material costs and the original raw
material costs.
When the prices of certain raw materials experience phased increases beyond a certain
threshold, our price adjustment mechanism enables us to adjust our selling prices. As of May 31,
2025, we have entered into agreements that include price adjustment mechanism with over five
customers. Such customers contribute to approximately 24.2% of our total revenue in the five
months ended May 31, 2025. As we cannot pass all the increased cost in raw materials to our
customers, the percentage of revenue adjusted based on our price adjustment mechanism
accounted for 8.9%, 14.2%, 19.2% and 7.7%, respectively, and we recorded gross profit margins
of 16.9%, 20.3%, 16.7% and 14.9%, in 2022, 2023 and 2024 and the five months ended May 31,
2025, respectively. To certain extent, the price adjustment mechanism ameliorated our risk
exposure to the price fluctuation of raw materials.
The following table sets forth the breakdown of revenue by fixed price contracts and
contracts with the inclusion of price adjustment terms and the percentage to the total revenues
during the Track Record Period:
For the year ended December 31,
Five Months Ended
May 31,
2022 2023 2024 2025
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
F i x e dp r i c ec o n t r a c t s ........................... 2 , 2 7 1 , 0 7 5 5 5 . 8 2 , 3 4 0 , 1 1 8 5 4 . 9 2 , 7 2 0 , 9 7 3 6 0 . 5 1 , 4 1 5 , 3 7 5 7 5 . 8
Contracts with the inclusion of price adjustment terms . . . . . . . . 1,801,405 44.2 1,919,659 45.1 1,777,549 39.5 451,233 24.2
Total .................................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,866,608 100
Customer Service
We have established multi-tiered customer servi ce teams across various regions in China and
around the globe. As of December 31, 2024, our national service network consisted of 29 outlets
across various provinces and regions in China. As one of our key competitive advantage, we have
an extensive business and service network that allows us to consistently deliver high-quality
services nationwide with flexibility and conveni ence for our customers in a timely manner. Our
initial response time from receiving any customer s feedback or complaint is within two hours, and
our customers service team is required to reach the site of work designated by the customers
within 24 hours.
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The chart below sets forth our customer complaints handling procedure:
Y
Y
N
Whether
our responsibility
Can
it be handled
directly
Output internal analysis report
and propose corrective and
preventive measures
Can it be
resolved
Can it be
resolved
Whether
internal analysis
and intervention
needed
Preliminary
analysis
Implement solution
Receiving feedback/
complaint from
customer
Respond to customers
Implement solutions
Negotiate and
propose solution
Escalate to marketing/
quality control manager
Respond to
assist the customer
resolve the complaint
Escalate to higher
management level
N
N
N
Y
Y
YN
Y
N
Rectification
and validation
For our oversea customers, we generally provi de our initial response via phone call or email
within 24 hour from receiving any customers feedback or complaint, and communicate our
analysis and follow-up steps with our customers within 48 hours. If it is our responsibility, we
propose a detailed solution or replacement plan t o our customers with a corresponding timeline. If
necessary, we also handle the issue on-site per customer ’s request. Depending on the visa policies
of different countries, the on-site visit is generally completed within 7 working days.
During the Track Record Period and as of the Latest Practicable Date, we have not received
any material customer complaints.
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SUPPLIERS
We purchase almost all of our raw materials and key components from third-party suppliers
in China, mainly including lithium iron pho sphate, lead alloy and lead ingots. We have
established stable relationships with our suppliers, enabling us to secure a consistent supply of
raw materials at competitive prices. This helps e nsure our ability to produce and deliver high-
quality products on time, meeting the needs of our customers.
During the Track Record Period, purcha se from our top five suppliers amounted to
RMB1,273.1 million, RMB1,243.7 million, RMB1,541.4 million and RMB801.8 million,
accounting for 42.3%, 43.8%, 47.9% and 50.3% of our total purchase in 2022, 2023 and 2024,
and the five months ended May 31, 2025, respectively. During the Track Record Period, we have
not encountered any shortages or delay in the supply of raw materials that led to production
disruptions. We believe that our stable relati onships with suppliers will continue to ensure an
adequate and steady supply of raw materials and help control future price fluctuations. During the
Track Record Period, there have been no quality i ssues with our raw materials that significantly
impacted our operations.
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The following tables set forth the details of our five largest suppliers for each year during the Track Record Period.
For the Five Months ended May 31, 2025
Suppliers
Sales
Amount
Percentage of
total Sales Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products sold by
our Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
(RMB in millions)
Supplier A . . . ........ 4 0 4 , 2 6 6 2 4 . 2 % A non-ferrous metal producer
listed on the Shanghai
Stock Exchange
2013 45 days Bank transfer Lead alloy 1,090.2 Jiyuan
Supplier B . . . ........ 1 4 8 , 2 4 9 8 . 9 % A ne n v i r o n m e n t a lt e c hnology
company
2023 45 days Bank acceptance Lead ingots 5 Nantong
Supplier C . . . ........ 1 3 2 , 7 7 2 7 . 9 % A na l l o yt e c hnology
company
2022 45 days Bank transfer Lead ingots 30 Jiyuan
Supplier D . . . ........ 6 5 , 3 1 2 3 . 9 % Ap l a s t i cc o m ponent
manufacturing company
2018 30 days Bank transfer Lead-acid battery
shell
3.5 Taizhou
Supplier E . . . ........ 5 1 , 2 1 8 3 . 1 % Ac o m m o d i t yw h o l e s a l e
business
2016 45 days Bank transfer Lead ingots 3 Shanghai
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For the Year ended December 31, 2024
Suppliers
Purchase
Amount
Percentage of
total purchase
amount Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products
purchased by our
Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
(RMB in millions)
Supplier A . . . ........ 6 6 3 , 4 0 5 2 0 . 6 % A non-ferrous metal
producer, listed on the
Shanghai Stock Exchange
2013 45 days Bank transfer Lead alloy 1,090.2 Jiyuan
Supplier C . . . ........ 3 0 2 , 4 0 9 9 . 4 % A na l l o yt e c hnology
company
2022 45 days Bank transfer Lead ingots 30 Jiyuan
Supplier F . . . ........ 2 3 3 , 9 4 5 7 . 3 % Am e t a l l u r g i c a lc o m p a n y 2012 45 days Bank transfer Lead ingots/lead
alloy
10.2 Xiangyang
Supplier B . . . ........ 2 0 8 , 3 1 6 6 . 5 % A ne n v i r o n m e n t a lt e c hnology
company
2023 45 days Bank acceptance Lead ingots 5 Nantong
Supplier E . . . ........ 1 3 3 , 2 9 0 4 . 1 % Ac o m m o d i t yw h o l e s a l e
business
2016 45 days Bank transfer Lead ingots 3 Shanghai
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For the Year ended December 31, 2023
Suppliers
Purchase
Amount
Percentage of
total purchase
amount Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products
purchased by our
Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
(RMB in millions)
Supplier A . . . ........ 4 6 8 , 6 7 5 1 6 . 5 % A non-ferrous metal producer
listed on the Shanghai
Stock Exchange
2013 45 days Bank transfer Lead alloy 1,090.2 Jiyuan
Supplier G . . . ........ 2 9 4 , 0 4 6 1 0 . 4 % Am e t a lm a n u f a c t u r i n g
company
2023 45 days Bank transfer Lead ingots 120 Baoding
Supplier H . . . ........ 1 9 3 , 2 3 8 6 . 8 % An e we n e r g yb a t t e r y
manufacturing company
listed on the Beijing Stock
Exchange
2020 30 days Bank acceptance Lithium iron
phosphate
611.5 Guiyang
Supplier F . . . ........ 1 8 8 , 0 1 6 6 . 6 % Am e t a lm a n u f a c t u r i n g
company
2012 45 days Bank transfer Lead ingots/lead
alloy
10.2 Xiangyang
Supplier I . . . ........ 9 9 , 6 8 9 3 . 5 % A lithium-ion battery
manufacturer listed on the
Hong Kong Stock Exchange
2019 60-90 days Bank transfer and
bank acceptance
Lithium-ion
battery cells
2,160 Wenzhou
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For the Year ended December 31, 2022
Suppliers
Purchase
Amount
Percentage of
total purchase
amount Company background
Commencement
of Business
Relationship
Credit
Term Payment Method
Products
purchased by our
Group
Registered capital/
Issued share
capital
Registered
place
RMB
’000
(RMB in millions)
Supplier A . . . ........ 5 2 7 , 8 9 5 1 7 . 5 % A non-ferrous metal producer
listed on Shanghai Stock
Exchange
2013 45 days Bank transfer Lead alloy/lead
ingots
1,090.2 Jiyuan
Supplier J . . . ........ 2 3 5 , 6 0 9 7 . 8 % An e we n e r g yb a t t e r y
manufacturing company
2020 45 days Bank transfer Lithium-ion
battery cells
762.49 Shangrao
Supplier K . . . ........ 2 1 2 , 6 2 8 7 . 1 % Am e t a lm a n u f a c t u r i n g
company
2020 45 days Bank transfer Lead ingots 9 Baoding
Supplier F . . . ........ 1 5 9 , 9 7 8 5 . 3 % Am e t a lm a n u f a c t u r i n g
company
2012 45 days Bank transfer Lead ingot/lead
alloy
10.2 Xiangyang
Supplier H . . . ........ 1 3 7 , 0 0 5 4 . 6 % An e we n e r g yb a t t e r y
manufacturing company
listed on Beijing Stock
Exchange
2020 30 days Bank acceptance Lithium iron
phosphate
611.5 Guiyang
BUSINESS
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As of the Latest Practicable Date, none of our Directors, their close associates or any of our
Shareholder which to the best knowledge of our Directors owned more than 5% of the issued
share capital of our Company, had any interest in our five largest suppliers in each year during
the Track Record Period. To the best knowledge of our Directors, each of our five largest
suppliers in each year during the Track Record Period was an Independent Third Party.
Overlapping Customer and Supplier
During the Track Record Period, one of our to p five suppliers (being Supplier C), from
whom we procure lead alloy and lead ingots, was also our customer procuring lead slag waste
from us. In 2022, 2023 and 2024, and the five months ended May 31, 2025, our purchase amount
attributable to Supplier C amounted to RMB 160.0 million, RMB 188.0 million, RMB223.9
million, and RMB18.8 million, which accounted f or 5.3%, 6.6%, 7.3% and 1.2% of our total
purchases, respectively, and our sales amount attributable to Supplier C amounted to RMB6.6
million, RMB1.1 million, RMB3.9 million, an d RMB0.7 million, which accounted for 0.2%,
0.0%, 0.1% and 0.0% of our total sales amount, respectively. From the sale to Supplier C, we
recorded, gross loss of RMB0.2 million, gross l oss of RMB0.0 million, gross profit of RMB0.1
million and gross loss of RMB0.1 million in 2022, 2023 and 2024, and the five months ended
May 31, 2025, and the gross profit margin of sales to Supplier C was negative 3.0%, negative
1.5%, 22.2% and negative 10.6% in 2022, 2023 and 2024, and the five months ended May 31,
2025, respectively.
According to Frost & Sullivan, having suc h overlap is common in the industry. The
transactions that we entered into with the overlapping supplier-customer were on an arm ’s-length,
mutually independent basis under normal commercial terms resulted from public tender processes.
The sales and purchases were neit her interconnected nor inter-c onditional. The key terms of our
sales and supply agreements with the overlapping supplier-customer were substantially similar to
those with our other customers and suppliers.
Given that (i) our relationship with the suppl ier-customer is unlikely to materially
deteriorate or terminate, and (ii) the sales amount to the supplier-customer was immaterial during
the Track Record Period, we believe that the supp lier-customer overlap during the Track Record
Period would not hinder our business prospects.
Supply and Demand of Raw Material
The major raw materials for lithium-ion batteri es are LFP, graphite, separators, electrolyte
solutions and shell. The major raw materials for l ead-acid batteries are lead ingots, lead alloy,
shell, sulphuric acid and fiberglass separators.
In 2022, 2023 and 2024, and the five months ended May 31, 2025, cost of raw materials
amounted to RMB2,824.5 million, RMB2,868 .8 million, RMB3,097.2 million, and RMB1,357.0
million, respectively, accounting for 83.5%, 84.6 %, 82.7% and 85.5% of total costs of sales for
the same year or period.
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During the Track Record Period, we have experienced fluctuations in the cost of our raw
materials. In particular, the price of lithium carbonate and LFP have experienced considerable
fluctuations. According to Frost & Sullivan, in 2022, 2023 and 2024, and for the five months
ended May 31, 2025, the market price of LFP was RMB125.0 thousand per ton, RMB72.2
thousand per ton, RMB40.2 thousand per ton and RMB34.1 thousand per ton, respectively. To a
lesser extent, the price of other raw materials such as lead and graphite also experienced price
fluctuation during the Track Record Period, primarily due to changes in the market supply and
demand. During the Track Record Period, we have set up price adjustment mechanism to allow us
to adjust our battery price based on the fluctuatio ns of the main raw materials during a specified
period. In addition, we closely monitor the prices of raw materials and invest in enhancing our
manufacturing efficiency and yield rate by continuously improving our manufacturing technology
and optimizing our quality control processes, th ereby improving the utilization efficiency of raw
materials. During the same years, we did not enga ge in hedging activities against the fluctuation
in raw material prices. For the movements of price of raw materials during the Track Record
Period, see ‘‘Industry Overview — Battery and Raw Materials Price Analysis, ’’ ‘‘Financial
Information — Major Factors Affecting Our Results of Operations — Fluctuation in Prices of
Raw Materials ’’ and ‘‘Risk Factors — Risks Relating to Our Business and Industry — We are
exposed to price fluctuations of raw materials, and we may not be able to adjust our prices to
fully offset the increased costs of raw materials, which will adversely affect our profit margins,
result of operations and financial condition ’’in this prospectus.
To manage fluctuations of raw material prices and ensure a stable supply of key raw
materials, we engage in strategic collaborations with our main raw material suppliers, primarily to
secure quantities of these materials at certain pr ice in advance. The key terms of our strategic
collaborations arrangement with our main raw mate rial suppliers generally include the following:
Duration Generally one year
Pricing The pricing of raw material is locked at certain price agreed upon by
both parties.
Payment and
credit term
Within 30 days after acceptance
Minimum and
Maximum
Purchase/
Supply
Requirement
We shall purchase and the supplier shall deliver at least 80% or at
most 120% of the quantity stipulated in the contract. During the Track
Record Period, we have no dispute with our suppliers regarding the
minimum and maximum purchase/supply requirement.
Warranties Generally one year after acceptance
Inspection and
product returns
Product inspection and acceptance may take place within seven days
after delivery of the raw materials to us. We may return to suppliers
defective raw materials that do not meet the agreed quality standard,
and the suppliers shall remedy the same, including product return and
replacement. Our suppliers and us bear responsibility for potential
product defects in accordance with industry norm.
BUSINESS
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Looking ahead, we do not rule out the possib ility of entering into new agreements with our
main suppliers to lock in the prices of key raw materials. If we can prudently estimate the
fluctuations in raw material prices and lock in prices at advantageous levels, such actions could
be beneficial to us.
Procurement Arrangement
During the Track Record Period, we carefully select external suppliers and require them to
meet certain evaluation and assessment standards . We only select suppliers listed on our qualified
supplier list. To be on the list, all potential supp liers are evaluated and rated comprehensively on
key parameters such as qualification, quality, customer service, thoroughness of quality control,
production capacity and logistics. We also conduct comprehensive and daily management for our
suppliers, classifying and evaluating our supp liers based on the key parameters quarterly and
annually. This evaluation helps us establish a merit-based system, promoting the best and phasing
out the underperformer s, ensuring the quality and cost-e ffectiveness of our procurement.
Apart from annual framework agreements, we generally do not enter into long-term
purchasing agreements with suppliers and place orders as needed. Purchase orders detail the
specifications and quality standa rds of the raw materials, quantities, payment obligations, and
delivery methods. Such agreements are legally binding and have not been subject to material
breaches during the Track Record Period and up to the Latest Practicable Date. Additionally,
during the track record period, we did not enter into any exclusive supply agreements with our
suppliers.
The major terms of the framework agreemen ts we enter into with our suppliers generally
include the following:
Duration Generally one to two years
Purchase Order We typically include purchase amount, the type, specification, unit
price, quantity and date of de livery in the purchase order.
Pricing Depending on the type of raw material and supplier, prices are
determined/adjusted taking int o account the then prevailing market
price when placing orders.
We have price adjustment mechanism for procuring certain raw
materials. For LFP, the price is generally determined based on the
prevailing market price published on the website of Shanghai Metals
Market (www.smm.com) on the date of our purchase order. For lead
ingots and lead alloy, the price is determined based on average market
price published on the website of Shanghai Metals Market from the
26th of the previous month to the 25th of the month in which our
purchase order is placed.
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Payment and
credit term
45 – 90 days
Delivery term Generally our supplier bears the costs and risks associated with
bringing the goods to our named place of destination.
Minimum
purchase
requirement
None
Inspection and
product returns
Product inspection may take place within a specified period after
delivery of the raw materials to us. We may return to suppliers
defective raw materials that do not meet the agreed quality standard,
and the suppliers shall remedy the same, including product return and
replacement. Our suppliers and us bear responsibility for potential
product defects in accordance with industry norm.
Confidentiality We usually set confidentiality clau ses in the framework agreements,
and the period of confidentiality ob ligations may be extended to after
the expiration of the agreements.
Termination Terminable upon material breach of the agreement, or insolvency of
any party.
THIRD PARTY PAYMENT
Background
During the Track Record Period, certain of our customers (the ‘‘Relevant Customers ’’)
have settled payments with us through thi rd-party payers (such payer(s), the ‘‘Third-Party
Payer(s), ’’and such arrangement(s), the ‘‘Third-Party Payment Arrangement(s) ’’).
The Third-Party Payment Arrangement(s) primarily include: (a) settlement by legal
representative, actual contro ller, employees or entities within the same group of the Relevant
Customers; and (b) settlement by independent th ird parties of the Relevant Customers. In 2022,
2023 and 2024 and the five months ended May 31, 2025, there were 29, 38, 38, and 0 Relevant
Customers, respectively, and the aggregate amount of Third Party Payment Arrangement was
RMB27.4 million, RMB39.8 million, RMB25.5 million, and nil, representing approximately 0.7%,
0.9%, 0.8%, and 0.0% of our total revenues, respectively.
BUSINESS
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The following table sets forth the breakdown of approximate amount of the Third-Party
Payment Arrangement and the percentage to the total revenues during the Track Record Period:
Year Ended December 31,
Five Months
Ended May 31,
2022 2023 2024 2025
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Settlement by legal representative, actual controller, employees or
e n t i t i e sw i t h i nt h es a m eg r o u p .................... 1 0 , 3 8 0 . 1 0 . 3 1 6 , 9 4 9 . 3 0 . 4 5 , 7 7 7 . 1 0 . 2 ––
Settlement by independent third parties . . . . . . . . . . . . . . . . . 17,020.7 0.4 22,895.0 0.5 19,690.1 0.6 ––
T o t a l ..................................... 2 7 , 4 0 0 . 8 0 . 7 3 9 , 8 4 4 . 3 0 . 9 2 5 , 4 6 7 . 2 0 . 8 ––
During the Track Record Period and up to the La test Practicable Date, we had not initiated
any Third-Party Payment Arrangements, but only accepted the Third-Party Payments paid by the
Third-Party Payers at the request of the Relevant Customers. In addition, during the Track Record
Period and up to the Latest Practicable Date, we have not provided any discount, commission,
rebate, or other benefits to any of the Relevant Customers or the Third-Party Payers to facilitate
or encourage the Third-Party Payment Arrangements. As advised by our PRC Legal Advisors, our
acceptance of payments through the Third Party Payment Arrangements do not contravene any
prohibitive provisions under PRC laws and regulations.
As advised by our PRC Legal Advisor, the Third-Party Payment Arrangement would not be
deemed as constituting the crim e of money laundering specifie d in Article 191 of the Chinese
Criminal Law. According to Article 191, mone y laundering involves actions to conceal or
disguise the origins and nature of proceeds from crimes such as drug offenses, organized crime,
terrorist activities, smuggling, co rruption, financial management d isruption, and financial fraud.
Our transactions have a substantial and genuine commercial background, and the associated third-
party payment arrangements do not meet the defin ition and criteria for mone y laundering. Based
on the analysis above, our PRC Legal Advisor is of the view that the risk of money laundering
related to our business operation and the Thi rd-party Payment Arrangements is remote.
Our Internal Control Consultant has conducted follow-up review of the internal control
measures in relation to Third-Party Payments adopted by us following the cessation of the
arrangements in August 2024 and did not identify any material deficiencies.
During the Track Record Period and up to the Latest Practicable Date, as confirmed by the
Directors, (1) we had not encountered any disputes with, nor received any refund request from,
any Relevant Customer or Third-Party Payer, and (2) we had not been subject to any disputes or
administrative penalties by the re levant government authorities w ith respect to the Third-party
Payment Arrangements.
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Reasons for Third-Party Payment Arrangement
The Relevant Customers primarily include, among others, our customers overseas, many of
which located in the countries/regions where the local currency is not RMB, USD or Euros. For
the Relevant Customers other than our customers overseas, we accepted the third-party payment
mainly due to the request of our customers.
The main reasons that there exists Third-Party Payment Arrangement in our business are as
follows:
 for overseas customers located in countri es/regions where the local currency is not
RMB, USD or Euros, and since we only accept a few mainstream currencies, they
often opt for third-party payment methods;
 for group companies that control multiple su bsidiaries, they typically prefer using
Third-party Payment Arrangements with entities or individuals within the same group
or designated companies to facilitate thei r centralized management and control of
funds;
 in compliance with the relevant rules of the local governments in China, some of our
government and enterprise cooperation pro grams are settled by government payment
centers rather than by the specific cooperating governments agencies; and
 some of our customers prefer using Third-party Payment Arrangement with their
debtors or staff to facilitate settlement or debt collection.
Internal Control Measures for Third-Party Payment Arrangements
To safeguard our Group ’s interest against risks associated with Third-Party Payment
Arrangements, the following internal control measures have been adopted by our Group:
(1) Since August 23, 2024, we have ceased all Third-Party Payment Arrangements and all
new orders placed thereafter by custo mers can only be settled by customers ’ own
accounts;
(2) We circulated notice internally to alert and inform relevant staff members of
requirements on identifica tion of, and prohibition on accepting Third-Party Payment
Arrangement;
(3) Our finance department is responsible fo r maintaining a receipt settlement management
ledger, which records, among oth er information, the customer ’s name, content of
transaction, payment data, payment sum, payment method and the payer ’s name, so as
to ensure that relevant payments are m ade directly by the relevant customer;
(4) Since August 23, 2024, for all identified payments made by the Third-Party Payers, we
will only settle the payment until we recei ve direct payment from the relevant
customers.
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Considering that our revenues generated from these Third-Party Payment Arrangements as a
percentage of our total revenues was immaterial, our Directors confirm that the cessation of the
Third-Party Payment Arrangements does not have a material adverse impact on our business,
financial conditions or results of operations.
Our Directors are responsible for formulatin g and overseeing the implementation of our
internal control measures and the effectiveness o f our internal control system. In preparation for
the Global Offering, we have engaged an independent third-party consultant (the ‘‘Internal
Control Consultant ’’) to perform a review over selected areas of our internal controls over
financial reporting in May 2024 (the ‘‘Internal Control Review ’’). The scope of the Internal
Control Review performed by the Internal Control Consultant covered, among others, the Third-
Party Payment Arrangements. Pursuant to the In ternal Control Review undertaken for Global
Offering purposes, the Internal Control Consultant reviewed the above internal control measures
in relation to Third-Party Payment Arrangements adopted by us and did not identify any material
deficiencies.
BUSINESS ACTIVITIES WITH CUSTOMERS IN THE RELEVANT REGIONS
Certain countries or organizations, including the U.S., the European Union, the United
Kingdom, the United Nations and Australia, maintain economic sanctions and trade restrictions
targeting certain industries or sectors within the countries subject to International Sanctions.
During the Track Record Peri od, we had sold our Chinese-origin lithium-ion battery and
lead-acid battery products directly to our custome rs globally. Based on our review on the location
of our customers, we have identified custo mers located in certain countries subject to
International Sanctions, the Relevant Region s. Products we sold to the Relevant Regions were
mainly battery products for telecom base sta tions. We engage in the business with these
customers primarily through our existing custome rs, their affiliates or through direct negotiation.
The revenue generated from such sales to the Relevant Regions was approximately RMB59.2
million, RMB84.0 million, RMB90.0 million and RM B7.9 million, representing approximately
1.5%, 2.0%, 2.0% and 0.4% of our total revenue in 2022, 2023 and 2024, and the five months
ended May 31, 2025, respectively. These tra nsactions were carried out by our Group entities
incorporated in China directly to our custome rs located in the Relevant Regions, and some
payments received by us were denominated in USD or EUR. There was no other nexus to the
United States, the European Union, the United K ingdom or Australia, including any persons
domiciled or entities incorporated from the se regions. While some of our customers were
designated on the Entity List maintained by the B IS, none of our customers were designated on
other sanctions list maintained by the U.S. or the EU. The revenue generated from such sales to
our customers designated on the Entity List wa s approximately RMB1,220,274, RMB38,556,
RMB193,106 and RMB306,723, representing approximately 0.0%, 0.0%, 0.0% and 0.0% of our
total revenue in 2022, 2023 and 2024, and the five months ended May 31, 2025, respectively. As
advised by our International Sanctions Legal Adviser, our sales to these customers designated on
the Entity List did not represent a violation of t he applicable sanctions or export controls, as
discussed further below.
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--- page 261 ---
We have engaged Hogan Lovells, our International Sanctions Legal Adviser to perform
procedures to assess our compliance with International Sanctions laws and regulations and
evaluate our risk of exposure and potential penalties imposed under the International Sanctions
laws and regulations.
Primary sanctions
Based on our review on the location of our cust omers, we have identified customers located
in certain countries subject to the International Sanctions, the Relevant Regions. As advised by
our International Sanctions Legal Adviser, although the Relevant Regions were subject to various
sanctions during the Track Record Period, none of them was a Comprehensively Sanctioned
Country. The Comprehensively Sanctioned Count ries are subject to a general and comprehensive
territorial-based export, import, financial or investment embargo under sanctions related law or
regulation of the Relevant Jurisdiction (for ins tance, transactions in USD and EUR with entities
located in a Comprehensively Sanctioned Country i s generally prohibited), on the other hand, the
Relevant Regions are subject to a more limited s et of sanctions, targeting certain designated
entities, products, or sectors inside the Relevant Region. As advised by our International
Sanctions Legal Adviser, our sales involving the Relevant Regions during the Track Record
Period did not represent a violation of applicab le sanctions and were not Primary Sanctioned
Activities for the purpose of the guidance in Cha pter 4.4 of the Guide for New Listing Applicants
issued by the Stock Exchange, given that:
(i) none of our customers located in the Relevant Regions were identified on the Specially
Designated Nationals and Blocked Persons List maintained by OFAC or the relevant
restricted parties lists maintained by th e European Union, Australia and the United
Nations; and
(ii) for the export control restrictions applicable to our customers listed on the Entity List
maintained by the BIS, products subject t o the EAR are generally prohibited from
exporting to any entities designated on the Entity List unless licensed. All products
sold to our customers in the Relevant Reg ions and certain customers listed on the
Entity List maintained by the BIS were Chin ese-origin lithium-ion battery and lead-
acid battery products that does not subject to the EAR. Therefore, our sales to such
customers did not require a license nor otherwise violate the export control restrictions
applicable to these customers.
Secondary sanctions
The U.S. has also enacted secondary sanctions targeting non-U.S. persons who are engaged
in certain defined activities, certain sectors in the Relevant Regions or provide material support
for such activities and sectors, business activitie s engaging in these defined activities, sector or
provide material support for such activities and s ectors can be viewed as engaging in Secondary
Sanctionable Activities. Amon g the Relevant Regions, the ‘‘manufacturing ’’ sector of Russian
economy (together with other four sectors of the Russian economy, architecture, engineering,
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construction and transportation) were designated under EO 14024 on May 19, 2023, providing
authority to OFAC to impose sanctions on any person found to ‘‘operate in ’’ such designated
sectors.
Save for the transactio ns with Russia, the Group ’s transactions in the Relevant Regions did
not involve other business activities targeted by extra-territorial provisions (i.e. secondary
sanctions) of sanctions law or regulation in the Relevant Jurisdictions. U.S. sanctions do not
a u t o m a t i c a l l ya p p l yt oe v e r yc o m p a n yi ns u c hd e signated sectors in Russia, instead, OFAC has to
exercise its discretionary authority to de signate a particular person or entity for ‘‘operating in ’’
such designated sectors for U.S. sanctions to apply. When considering whether an entity is
engaged in significant transactions that expose such entity to risks of secondary designation,
OFAC would consider a basket of factors, including the size and commercial purpose of the
transactions. To our best knowledge, the batte ries we sold to Russia were used in data centers,
telecom base stations and other application scen arios such as for backup power of hospitals and
banks. The revenue generated from our sales to Russia (excluding the Crimea, Kherson,
Zaporizhzhia, and LPR/DPR regions) was ap proximately RMB3.9 m illion, RMB11.8 million,
RMB10.9 million and nil, representing approxima tely 0.1%, 0.3%, 0.2% and 0.0% of our total
revenue in 2022, 2023 and 2024, and the five months ended May 31, 2025, respectively. Products
we sold to the Relevant Regions (i ncluding Russia) were mainly ba ttery products for telecom base
stations.
Given the nature of our activities, as advised b y our International Sanctions Legal Adviser,
it appears unlikely that OFAC would view our Group itself as ‘‘operating in ’’ Russia ’s
manufacturing sector or have materially assisted, sponsored, or provide financial, material or
technological support for, or good or services to or in support of architecture, engineering,
construction, manufacturing and transportation sectors of Russian Federation economy ” under EO
14024 for its business activities with Russia by merely selling the Group ’sp r o d u c t st oR u s s i ao r
that OFAC would designate us as an SDN for merely selling the Group ’s products to Russia
(rather than manufacturing its products in Russia, locally); also, considering that our transactions
with the Relevant Regions did not involve other bus iness activities targeted by extra-territorial
provisions of sanctions law or regulation in the Relevant Jurisdictions and the fact that we do not
transact with any sanctioned entities located in Russia or otherwise designated under EO 14024, it
is unlikely that our activities would result in OFA C using its secondary san ctions authority under
EO 14024 and other secondary sanctions author ities to sanction the Relevant Persons. As of the
Latest Practicable Date, we are not designated by the secondary sanctions authority under EO
14024 or found by OFAC to ‘‘operate in ’’certain designated sectors in Russia.
Conclusion
Therefore, based on the above, our International Sanctions Legal Adviser has not identified
apparent violations of International Sanctions by us. Our International Sanctions Legal Adviser is
of the view that our Group is not subject to material sanctions risks, after evaluating the sanctions
risks of our historical business activities with cu stomers in the Relevant Regions during the Track
Record Period and up to the Latest Practicable Date. Our Directors are, thus, of the view that
given we are not in violation of the Internationa l Sanctions, it is unlikely there will exist any
potential penalty that can be imposed on our Group by applicable government agencies including
OFAC.
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Our Directors confirmed that during the Track Record Period and up to the Latest
Practicable Date, we were not subject to any sanctions that would materially affect our business
operation or results of operations. Our Directors are of the view that the revenue generated from
these business activities with the Relevant Reg ions are not material given that the revenue
contribution from these business represent less than 5% of our annual revenue. Therefore, nothing
has come to the attention of the Joint Sponsors that would cause them to cast reasonable doubt on
the views of our International Sanctions Legal Adviser and our Directors. Considering that our
existing business with the Relevant Regions are not in violation of the International Sanctions, we
intend to continue the business with the Relevan t Regions in accordance to the International
Sanctions and our internal controls and risk management measures set out in below.
Internal Controls
In addition, we have adopted enhanced internal control and risk management measures
which we believe enable us to monitor and evalua te our business to address economic sanction
risks as follows:
 we will set up and maintain a separate b ank account upon the Listing, which will be
designated for the sole purpose of the deposit and deployment of the proceeds from the
Global Offering or any other funds raised through the Stock Exchange;
 to further enhance our existing internal risk management functions, our legal specialist
is responsible for monitoring our exposure to sanctions risks and our implementation
of the related internal control procedures . Our legal specialist will hold a meeting
biannually to monitor our exposure to sanctions risks and to review our procedures
implemented over sanctions screening;
 we will evaluate the sanctions risks prior to determining whether we should embark on
any business opportunities in Countries subje ct to International Sanctions or Sanctions
Persons. According to our internal control procedures, our legal specialist needs to
review and approve all relevant business transaction documentation from customers or
potential customers from Countries subject to International Sanctions or Sanctions
Persons. In particular, screening process will be implemented to identify if the
potential transaction counterparty of the Group is a person or entity on the various lists
of restricted parties and countries maintained by the U.S., the EU, the UN, the U.K.,
the United Kingdom overseas territories or Au stralia, including, without limitation, any
government, individual or entity that is th e subject of any OFAC-administered
sanctions which lists are publicly availabl e. The transactions that fail the internal
review will not be proceed. We will monitor revenue contribution derived from
business opportunities in Countries subject to International Sanctions, and ensure that
the total annual revenue contribution der ived from these business opportunities will not
be material (5% or more) and not in violatio ns of International Sanctions. At the same
time, our legal specialist should, periodi cally review the existing customers and
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suppliers lists to ensure that the Group does not engage in transactions with countries,
regions, entities or individuals on the sanctio n lists. If any potential sanctions risk or
suspicious transaction is identified, we ma y seek advice from reputable external legal
counsel with necessary expertise and experi ence in International Sanctions matters;
 our Directors will continuously monitor the use of proceeds from the Global Offering,
as well as any other funds raised through the Stock Exchange, to ensure that such
funds will not be used to finance or facilitate, directly or indirectly, activities or
business with, or for the benefit of, Sanctioned Countries or Sanctioned Persons where
this would be in breach of International Sanctions;
 our legal specialist will review our internal control policies and procedures with
respect to sanctions matters as part of th e biannual meeting. As and when our Legal
Department considers necessary, we will retain external legal counsel with necessary
expertise and experience in sanctions matters for recommendations and advice; and
 if necessary, we will engage external legal counsel to provide compliance training
relating to the international sanctions to our Directors, our senior management and
other relevant personnel to assist them in evaluating the potential sanctions risks in our
daily operations, in particular, to perform screening procedures in respect of
counterparties to our Group ’s business to ensure none of them are Sanctioned Persons.
Our external legal counsel will provide the latest list of Sanctioned Countries to our
Directors, senior management and other relevant personnel, who will in turn
disseminate such information internally.
Our International Sanctions Legal Advisors h ave reviewed and evaluated these internal
control measures and are of the view that these measures appear adequate and effective for our
Company, based on our products and risk assessmen t, to comply with applicable international
sanction laws and our undertakings to the Stock Exchange.
Having taken into account the above advice of our International Sanctions Legal Advisors,
our Directors are of the view that our measures provide a reasonably adequate and effective
internal control framework to a ssist us in identifying and monitoring any material risk relating to
sanctions laws so as to protect the in terests of our Shareholders and us.
Undertakings
Our Directors confirm that we do not have present intention to undertake any business
involving directly or indirectly the Comprehensively Sanctioned Countries. We will not
knowingly or intentionally conduct any business with any Sanctioned Persons (including but not
limited to those located in any of the Relevant Reg ions), or any business in any Comprehensively
Sanctioned Countries that will cause us to violate International Sanctions, and we will not use the
proceeds from the Global Offering to finance or fa cilitate, directly or indirectly, activities or
business with, or for the benefit of, the Comprehensively Sanctioned Countries or Sanctioned
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Targets. Our Directors will continuously monitor the use of proceeds from the Global Offering, as
well as any other funds raised through the Stock Exchange, to ensure that such funds will not be
used to finance or facilitate, directly or indirectly , activities or business with, or for the benefit of,
Comprehensively Sanctioned Countries or Sanctioned Persons where this would be in breach of
International Sanctions.
Further, given the scope of the Global Offering and the expected use of proceeds as set out
in this prospectus, our International Sanctions Legal Adviser is of the view that the involvement
by parties in the Global Offering will not implicate a ny applicable International Sanctions on such
parties, including our Company, our potential inv estors, Shareholders, the Stock Exchange and its
listing committee and group companies, and acco rdingly the sanctions risk exposure to our
Company, potential investors and Shareholders, and persons who might, directly or indirectly, be
involved in permitting the listing, trading and clearing of our Shares (including the Stock
Exchange, its listing committee and re lated group companies) is remote.
WAREHOUSING, LOGISTICS AND INVENTORY MANAGEMENT
Our inventories primarily consist of raw materials, work-in-progress, finished goods and
goods in transit. For details, see ‘‘Financial Information — Discussion of Certain Selected Items
From the Consolidated Statements of Financial Position — Inventories ’’ in this prospectus. We
have implemented policies to optimize our inventory level, and our inventory management system
and storage and transportation capabilities are cons idered superior within the industry. For details
of policy on making provision of inventories, see ‘‘Financial Information — Discussion of Certain
Selected Items From the Consolidat ed Statements of Financial Position — Inventories ’’ in this
prospectus.
We achieve efficient inventory management through carefully considering the inventory
impact of our products, aiming to realize inventory control through designs and modularization.
Each department provides the safety stock standard value for materials (including spare parts)
based on monthly/annual demand, divided into upper and lower inventory alert levels. Warehouse
managers monitor inventory according to the safety stock standards provided by each department
and give timely warnings and feedback if the s tandards are exceeded. We are committed to
adopting a flexible approach to inventory management, adjusting our inventory levels in response
to market demand fluctuations. When market demand increases, we correspondingly raise our
inventory levels to ensure supply stability. We are therefore able to direct our manufacturing and
control the supplier ’s delivery to achieve a faster invento ry flow. Additionally, we periodically
analyze our inventory level so that we are able to deal with slow-moving inventories in a timely
manner.
As of the Latest Practicable Date, save as otherwise disclosed in ‘‘ — Properties ’’ in this
section, almost all of our warehouses are owned by ourselves, which allows for greater control
and efficiency in our logistics operations. Additionally, our suppliers bear the cost of logistics,
which enables us to maintain a c ost-effective supply chain.
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INFORMATION TECHNOLOGY
We believe that information technology is cruc ial for maintaining our competitive position.
We utilize multiple information technology systems to manage various aspects of our operations,
including but not limited to sales management, mater ial procurement, production, quality control,
inventory management, financial reporting, and human resources. Within our integrated
information systems, we have multiple system s, including but not limited to ERP system and OA
system through out our business operations. Our systems are of vital importance in coordinating
among departments and quality control. For details, see ‘‘ — Quality Control — Our Quality
Control System ’’in this section.
The functionality and stability of our informatio n technology infrastructure are critical to our
business operations. The IT department conducts system checks, data backups, system
maintenance, and other activities to ensure the co ntinuous operation of critical IT systems and
facilities. During the Track Record Period and u p to the Last Practical Date, our IT systems did
not experience any major failures or complete breakdowns that had a significant adverse impact
on our overall business operations.
EMPLOYEES
We recognize the importance of talents for s ustainable business growth and competitive
advantages. We believe that our success depends on our ability to attract, retain and motivate
qualified personnel. As part of our human resour ces strategy, we offer employees competitive
salaries, performance-based bonuses, and othe r incentives. We sign non-competition agreement
with our senior management or other key employees. Our employees are periodically reviewed on
the basis of, among other criteria, their abilities t o achieve stipulated performance targets. As a
result, we have generally been able to attract and retain qualified employees and maintain a stable
core management team.
We adopt a diversified recruitment approach to ensure a sufficient talent pool for key
positions. We primarily recruit our employees through on-campus recruitment, online job sites
and internal referrals. We provide on-board training for all of our employees as well as periodic
training or seminars to ensure their self-develop ment. We also strive to create a multiple-incentive
mechanism and a friendly working environment to fulfil our employees ’ full potential.
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As of May 31, 2025, we had 2,290 full-time employees, almost all of whom are based in
China. The following table sets forth the numbers of our employees categorized by function as of
the date indicated:
Employees Categorized by Function
Number of
Employees % of total
R & Da n dT e c h n i c a l .......................... 2 4 5 1 0 . 7
P r o d u c t i o n................................ 1 , 5 1 0 6 5 . 9
A d m i n i s t r a t i v e ............................. 2 3 1 1 0 . 1
F i n a n c i a l ................................. 3 7 1 . 6
S a l e s&M a r k e t i n g ........................... 2 6 7 1 1 . 7
Total .................................... 2,290 100.0
We currently have a labor union for our employees. We believe that we have maintained
good relationships with our employees. During the Track Record Period and up to the Latest
Practicable Date, we did not experience any mate rial labor disputes or strikes that may have a
material and adverse effect on our business, financial condition or results of operations.
Dispatched Staff
In addition to direct employment, during the Track Record Period, we entered into labor
dispatch agreements with Independent Third Party employment agents whereby the employment
agents dispatched suitable staff to fulfill our job requirements on mutually agreed terms, including
the number of staff to be dispatched, period of the dispatch and wages and benefits of the
dispatched staff. Staff dispatched to us by the employment agent are engaged only in temporary,
auxiliary or substitutable positions . Our Directors believe that th e labor dispatch arrangements
enabled us to maintain a sufficient and flexible level of labor force to meet our operation
requirements. Pursuant to the labor dispatch agreements, we pay a combined fee to the
employment agent, primarily consisting of service fees of the employment agent and wages and
benefits of the dispatched staff. The employment agent is responsible for arranging payment of
wages, insurances and other welfare conditions as required by the PRC laws and regulations upon
receipt of the combined fee. The dispatched sta ff are employed by the employment agent, and
hence we are not their employer. We apply our human resources policy and codes of our conduct
to the workers dispatched to us.
Pursuant to Labor Contract Law of the People ’s Republic of China, and the Interim
Provisions on Labor Dispatch （勞務派遣暫行規定）(the ‘‘Interim Provisions ’’) which came into
effect on March 1, 2014, an employer shall strictly control the number of dispatched staff to make
sure that it does not exceed 10% of the total number of its workers. In the event of violation of
the Interim Provisions, the relevant labor depart ment would order the violating company to rectify
such violation. If the violating company does no t rectify within a prescribe period, it will be
imposed a fine of RMB5,000 to RMB10,000 for each person over the limit. In 2022, the total
number of dispatched contract workers in our Company exceeded 10% of our Company ’st o t a l
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workforce, and the total number of dispatched contract workers in our subsidiary Shuangdeng
Front exceeded 10% of its total workforce. We have taken active measures to address this issue
by converting labor-dispatched employees into regu lar employees, thereby reducing the proportion
of labor-dispatched workers. Since December 2022 and up to the Latest Practicable Date, the
number of dispatched staff of our Company and each of our subsidiaries did not exceed the
threshold of 10% as required by the Interim Provisi ons. These dispatched staff were mainly hired
for positions with supporting nature.
Taking into consideration (i) the written confir mation from the relevant labor administration
authority, which is the competent regulatory authority to give such confirmation as advised by our
PRC Legal Advisor, that we had not been subject t o material administrative penalties as a result
of violating the applicable labor protection laws and regulations in the PRC; and (ii) as of the
Latest Practicable Date, we had not been requested by the relevant labor administration authority
to rectify such incident, and (iii) as advised by our PRC Legal Advisor, we have fully rectified
the non-compliance incident since December 2022 and therefore, the risk of us being penalized is
remote as confirmed by our PRC Legal Advisor. Our Directors are of the opinion that such
incident will not have a material adverse impact on our business or results of operations.
Social Insurance and Housing Provident Fund Contributions
We are required to contribute to social insurance and housing provident funds for our
employees based in China under applicable PRC laws and regulation. During the Track Record
Period and up to the Latest Practicable Date, we used third-party human resources agencies to
make social insurance and housing provident fund contributions on behalf of us for some of our
employees, and we did not make full social insurance and housing provident fund contribution for
certain employees in strict compliance with relevant laws and regulations. In 2022, 2023 and
2024, and the five months ended May 31, 2025, our shortfall of contribution to social insurance
and housing provident funds amounted to RMB 16.9 million, RMB27.7 million, RMB30.2 million
and RMB14.8 million and we have made full provisio n for the shortfall of contribution to social
insurance and housing provident funds.
We were unable to make full social insurance and housing provident fund contributions for
such employees primarily because (i) some employees were new hires and could not complete the
social insurance and housing provident fund payment procedures in time during the month; and
(ii) certain of our employees were not willing to bear the costs associated with social insurance
and housing provident funds.
As advised by our PRC Legal Advisor, in the e vent that (i) the relevant PRC authorities may
demand us to pay the outstanding social insurance funds, or (ii) the relevant government
authorities find our historical arrangement of eng aging the third-party human resources service
providers to pay social security funds and housing provident funds for some employees to be non-
compliant with the Social I nsurance Law of the PRC （《中華人民共和國社會保險法》）and the
Regulations on Management of Housing Fund （《住房公積金管理條例》）, the relevant PRC
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authorities may demand us to pay the outstandin g social insurance funds within a stipulated
deadline and we may be liable for a late payment fee equal to 0.05% of the outstanding amount
for each day of delay. We estimate that in the event that we are ordered to make up for the social
insurance outstanding contributions during the Track Record Period, the maximum late payment
fee would be approximately RMB51.0 million. If we fail to make such payments, we may be
liable for a fine of one to three times the amount of the outstanding contributions. In respect of
the outstanding housing provident fund contributions, we may be demanded by the relevant PRC
authorities to pay the underpaid a mount to the housing provident fund within a prescribed time
limit, failing which we may be subject to the compulsory enforcement by the People ’s Court.
Considering that (i) we were not aware of any m aterial employee complaints or claims with
respect to inadequate social insurance and/or housing provident fund contributions; (ii) we have
obtained confirmations from the relevant competent government authorities, as confirmed by our
PRC Legal Advisors, confirming that no administ rative penalty was imposed on us in relation to
our social insurance and housing provident fund contributions during the Track Record Period;
(iii) during the Track Record Period and up to t he Latest Practicable Date, we had not received
any administrative penalty in relation to social insurance and housing provident fund
contributions, and we had not received any notice from relevant competent government
authorities regarding any claim for inadequate cont ributions of our current and former employees,
nor any notifications from the relevant competen t government authorities requiring us to pay the
shortfalls, and (iv) based on the foregoing, our PRC Legal Advisors advised that (a) the risk of us
being conducted centralized collection of our historical social insurance is remote, provided that
there are no collective employee complaints and no significant changes in current laws,
regulations, or the implementation of local policies, and (b) the risk of us being penalized due to
our historical shortfall of contribution to social insurance and housing provident payment is
remote, our Directors believe that the non-comp liance during the Track Record Period in relation
to the payment of social insurance and housing provident fund will not have material adverse
effects on our production and business operatio ns. We will continue to communicate with the
relevant government authorities to ensure that the calculation and payment methods for our social
insurance and housing provident fund contributions comply with the applicable requirements.
As of the Latest Practicable Date, we had not been subject to any administrative penalties
for the aforementioned matters, nor were we aware of any material employee complaint or dispute
with respect to social insurance or housing provident fund contribution. Nevertheless, we may be
exposed to risks in relation to the aforementioned matters. For details, see ‘‘Risk Factors — Risks
Relating to Doing Business in the Places Where We Operate — Certain of our practices with
respect to social insurance and housing provide nt fund contribution may subject us to penalties ’’
in this prospectus.
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COMPETITION
According to Frost & Sullivan, the global ener gy storage battery market is competitive.
Within the global energy storage battery indust ry, we participated in the global telecom and data
center energy storage battery market, as well as the global electrical energy storage market. In
2024, the total global added installed capacity fo r energy storage batteries in telecom and data
center application reached 60.4 GWh, with the top five players holding a combined market share
of approximately 40.7%. Our group achieved a shipment volume of 6.7 GWh, ranking the first
among global telecom and data center energy storage battery providers, with the market share of
11.1%.
The global electrical energy storage market is characterized by a relatively fragmented
competitive landscape, with more than 10,000 ex isting and startup companies in the industry,
covering products including energy storage ba tteries, battery management systems, power
conversion system, etc. For details, please see ‘‘Industry Overview ’’in this prospectus.
We believe that our competitive position is under pinned by our strengths, including leading
market position, exceptional R&D capabilities and technologies, excellent manufacturing and
operational capabilities, strong brand power and e xperienced team and visionary management. For
details, see ‘‘ — Our Strengths ’’ in this section. For risks invol ving the competitive advantages of
our energy storage batteries and targeted markets, see ‘‘Risk Factors — R i s k sR e l a t i n gt oO u r
Business and Industry — We operate in a competitive industry and many of our competitors may
be more established, resourceful or adaptive, we may not be able to effectively compete with
other industry players ’’in this prospectus.
AWARDS AND RECOGNITION
The following table sets out a summary of the major awards and recognition we have
received during the Track Record Period.
No. Year Award or Recognit ion Issuing Authority
1 2024 BNEF Energy Storage Tier 1
Manufacturer
BloombergNEF
2 2024 GGII Energy Storage Industry
TOP 50 Company
Gaogong Industry Institute
3 2024 GGII Golden Globe Awards Gaogong Industry Institute
4 2024 China IDC Industry Innovation
Technology Product Award
China IDC Industry Annual Ceremony
5 2023 National Quality Benchmark China Quality Association
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No. Year Award or Recognit ion Issuing Authority
6 2023 National Intelligent
Manufacturing Pilot
Demonstration Action –
Excellent Scenario
Ministry of Industry and Information
Technology
7 2023 Jiangsu Province First Batch of
Innovative Management
Intellectual Property
International Standard
Implementation Pilot
Enterprises
Jiangsu Provincial Intellectual Property
Office, Jiangsu Provincial Department
of Industry and Information
Technology
8 2023 2023 Provincial Industrial
Internet Demonstration Project
(Benchmark Factory Category)
Jiangsu Provincial Department of
Industry and Information Technology
9 2023 2023 China Energy Storage
Industry Best Battery Supplier
Award
China International Energy Storage
Conference
10 2023 2023 Greater Bay Area Data
Center Product Technology
Excellence Award
China Communications Industry
Association Data Center Committee,
Guangdong Province Data Center
Industry Alliance, Shenzhen Digital
Economy Industry Promotion
Association
11 2022 ‘‘Seventh Batch of National
‘Single Champion ’
Demonstration Enterprises
(Communication Backup
Power Supply Products)
Ministry of Industry and Information
Technology
12 2022 First National Advanced Energy
Storage Technology
Innovation Challenge
Benchmark Product Category
Competition 2022
‘‘Benchmark Product Award ’’
– Based on Wind-cooled High
Safety Technology Data
Center Energy Storage System
Ministry of Industry and Information
Technology Industry Development
Promotion Center
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No. Year Award or Recognit ion Issuing Authority
13 2022 Jiangsu Province Innovative
Leading Enterprise
Jiangsu Provincial Science and
Technology Department
14 2022 National Intellectual Property
Demonstration Enterprise
National Intellectual Property
Administration
SEASONALITY
We were not subject to material seasonality duri ng the Track Record Period. For details, see
‘‘Financial Information — Major Factors Affecting Our Results of Operations — Fluctuation in
Prices of Raw Materials ’’in this prospectus.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ( ‘‘ESG’’)
We seek to be a responsible corporate in fulf illing environmental, social and governance
responsibilities by advancing the use of clean ener gy, supporting social causes and exploring
ways to protect the environment. Our management prioritizes ESG matters, actively develops and
enhances our operating procedures, and is focused on continual improvements in this area. We
recognize the importance of robus t ESG policies and practices in fulfilling our corporate mission
and goals, which in turn drives enduring value for our stakeholders.
ESG Policy and Governance
We acknowledge our responsibility on environmental protection and social responsibilities
and are committed to complying with the ESG re porting requirements u pon Listing. We believe
that it requires the collective effort from our Boa rd to evaluate and manage material ESG issues.
Therefore, our Board of Directors is responsible for (i) reviewing and approving our ESG
development strategy and targets, major issues, management structure, and management systems,
and (ii) reviewing our ESG report. Our Strategy Committee is responsible for (i) researching and
formulating our ESG development strategy and targets, major issues, and management systems;
(ii) identifying and controlling risks related to ESG daily management; (iii) guiding the daily
implementation of ESG work; and (iv) reviewin g and submitting our ESG report to the Board of
Directors. Our ESG team is responsible for (i) implementing our ESG development strategy and
goals, organizing and arranging the execution departments to implement ESG work, and
supervising their ESG activities; (ii) prepar ing the ESG report; (iii) drafting ESG policy
documents, related issues, phased work plans, and implementation schemes; and (iv) conducting
ESG business training and tracking E SG policy requirements and trends.
We are formulating an ESG management mechanism to ensure comprehensive coverage of
ESG work through multi-angle, multi-level specia lized inspections, cross-checks, and supervisory
inspections, effectively preve nting and managing ESG risks.
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We have also been prioritizing ESG topics in cluding environment management capability,
energy efficiency, GHG emission control, and product carbon footprint. We expect to update the
mechanism and establish an ESG policy ( ‘‘ESG Policy ’’) in accordance with the standards of
Appendix 27 to the Listing Rules to cover, among others, (i) the appropriate risk governance on
ESG matters, (ii) ESG governance structure and ES G strategy formation procedures, (iii) ESG risk
management and monitoring, and (iv) the iden tification of key performance indicators ( ‘‘KPIs ’’),
the relevant metrics and mitigating measures upon Listing.
In view of our current practice, our ESG policy will set out the respective responsibility and
authority of different parties. We will also es tablish an ESG committee to implement the ESG
Policy, formulate ESG-related goals and organize their implem entation. The members of the ESG
Committee will be appointed by our Directors a nd senior management and responsible for
managing and supervising our ESG matters and providing advice and assistance to the Board.
The ESG Committee will be mainly tasked with several key roles:

Strategy Advisement . They assess our ESG-related activities based on policies, laws,
standards, current trends, and the expectations of our stakeholders. They then advise
the Board on setting our ESG strategy;

Strategy Monitoring . They track how well we are implementing our ESG strategies
and achieving our goals by assessing how our ESG efforts are affecting stakeholders
and suggests ways to improve our ESG initiatives; and

Performance Evaluatio n. Beyond assessing our ESG performance by communicating
with stakeholders, we will hire external agencies to independently review our
accomplishments in environmental areas, such as managing waste water, noise, air
pollution, and our response to climate change.
We plan to set up metrics and targets for these ESG issues and to review our key ESG
performance on a regular basis.
Environment Matters
During our production, waste water, waste gas and solid waste are regularly discharged. Our
operations are therefore subject to numerous national and provincial environmental laws and
regulations governing the discharge of waste water, gas emission, hazardous chemicals and waste
management. For example, we are subject to, among others, the Environmental Protection Law of
the PRC （《中華人民共和國環境保護法》）, Environmental Impact Assessment Law of the PRC
（《中華人民共和國環境影響評價法》）, Law of the PRC on Prevention and Control of
Environmental Pollution by Solid Waste （《中華人民共和國固體廢物污染環境防治法》）,L a wo f
the PRC on Prevention and Control of Water Pollution （《中華人民共和國水污染防治法》）and
Law of the PRC on Prevention and Control of Atmospheric Pollution （《中華人民共和國大氣污染
防
治法》）. For details, see ‘‘Regulatory Overview — Laws and Regulations Relating to
Environmental Protection ’’in this prospectus.
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As advised by our PRC Legal Advisor, we had obtained all relevant pollutant discharged
permits during the Track Record Period and up to the Latest Practicable Date and we were in
compliance in all material respects with the relevant PRC environmental laws or regulations
during the Track Record Period and up to the Latest Practicable Date. If our Group fails to
comply with the relevant laws and regulations , we would be subject to fines, suspension of
business or cessation of operations. For details, see ‘‘Risk Factors — R i s k sR e l a t i n gt oO u r
Business and Industry — Environmental, Social and Governance ( ‘‘ESG ’’)m a t t e r s ,a n d
unsuccessful management of such matters may impose additional costs and expose us to new
risks ’’in this prospectus.
Our management focuses on ensuring that our production emissions, treatment of waste
water, waste gas and solid waste are in complianc e with the relevant regulations and policies of
national and local governments.
We also perform regular maintenance on our production facilities to ensure the equipment
and systems are in good working condition. Furt her, we have developed a manual of safety code
which specified operational procedures during production. As to our future environmental
protection plan, we will continue to adopt advanced technology to upgrade our environmental
protection standard.
During the Track Record Period and up to the Latest Practicable Date, we had produced the
following waste materials and put emphasize on enhancing resources utilization rate:
Waste Water
Waste water is generated during production i n our production facilities. We prioritize water
resource management and are committed to con serving water resources and ensuring full
compliant waste water discharge during our production and operations. From waste water
treatment and reuse to employee participation, we are dedicated to achieving sustainable water
resource utilization. We have designated waste water treatment personnel who are required to
understand the operational procedures and technical requirements of waste water treatment. They
must wear appropriate protective e quipment and receive relevant ce rtifications before starting to
work. In our waste water treatment areas, we displ ay signs outlining the duties of the staff, waste
water treatment processes, and emergency response plans for environmental safety incidents. We
also require these areas to be kept clean, without unrelated items such as hoses, fire hoses, or
submersible pumps present.
We closely monitor the waste water treatment p rocess, requiring staff to maintain accurate
daily records, including water quality testing r esults, chemical usage, discharge volumes,
treatment and reuse amounts, and sludge production. Untreated waste water is strictly prohibited
from being discharged. Before discharge, water samples must be sent to the monitoring center for
analysis, and only after approval from higher management can the waste water be released.
Monthly statistics are compiled on e xternal waste water discharges.
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Additionally, we have environmental inspector s who regularly patrol the plant to check for
issues such as damaged pipes or facilities, cross- contamination of production waste water, or
leaks entering rainwater or sewage systems. They also ensure that waste water collection tanks
and pipes operate at low water levels to prevent overflow. We believe that through these concrete
and effective measures, we will significantly improve water resource management efficiency and
make a positive contribution to prote cting precious water resources.
Waste Gas
Waste gas is generated at our production facilit ies. Our waste gas generated includes, among
others, lead and its compounds, sulfuric acid fog, particulate matter and non-methane total
hydrocarbons. We require that there are no unrelated items around the waste gas treatment
facilities, and no gas or liquid leaks from any pr oduction equipment. Our environmental
specialists are responsible for daily inspectio ns and regular maintenance of the waste gas
treatment systems, ensuring immediate repai r or replacement if any issues are detected.
Specifically, the water in waste gas treatment systems like shower and spray units must be
regularly cycled and replaced to prevent build up. Dust collection facilities, such as bag and
cartridge filters, must have no dust leaks at the discharge points. The pH value of the water used
in acid-alkali scrubbers is controlled between 10 and 12. All activities, such as water changes,
bag replacements, and chemica l additions, are documented. Additionally, our environmental
specialists conduct comprehensive self-monitoring of all active lead gas and lead dust emissions
once a month.
Solid Waste
We generate solid waste in our production. The solid waste we generated includes, among
others, lead-containing waste (waste lead residue, dust collector, lead sludge), lead-containing
waste packaging, waste lead batteries, household garbage and NMP waste liquid. We strictly
adhere to environmental protection laws, re gulations, and requirem ents applicable to its
operations. We have established effective management systems for solid waste generated during
production and operations, carrying out stringent pollutant management. We classify solid waste
into two categories based on its harmfulness: ge neral waste and hazardous waste. Each type has
its own specific labeling and disposal methods. We store general waste separately according to its
characteristics and assign dedicated personnel for each category. We strictly follow storage
requirements to prevent scattering, leakage, rain exposure, and seepage. For hazardous waste,
storage areas must have hardened, corrosion-resistant floors without cracks or damage, and
emergency drainage channels must be in place to collect runoff into waste water tanks. Further,
we have designated personnel who regularly inspect the generation, storage, and transfer of
hazardous waste, with the inspection results recorded in the hazardous waste management log. If
hazardous waste is lost or stolen, the responsible staff must promptly investigate the cause, take
appropriate measures to prevent pollution incidents, and report to the quality control department.
We set annual pollutant management targets and take proactive reduction measures.
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Risks Related to the Environment and Climate
We recognize the potential financial and rep utational risks related to the environment,
including those stemming from adherence to preva iling environmental regulations and stringent
standards. For example, China ’s carbon neutrality objective established in 2020, which aims to
have CO 2 emissions peak before 2030 and achieve carbon neutrality before 2060, may lead to
increased costs related to energy procurement, as we may be required to incur transition costs in
procuring green energy that can be more expensive than energy generated from conventional
sources, or bear the costs of purchasing or upgrading our equipment.
We also recognize a certain level of threat that climate-related issues pose to us. Actual and
potential climate-related risks identified by u s can be classified into two major categories:
physical risk and transitional risk. We define phys ical risks as risks that potentially cause physical
impact to us. We believe that climate-relate d issues may bring about the physical risk of
increasingly severe extreme weather events, such as more frequent storms, typhoons and flooding.
As a result, we may be impacted by higher operation and maintenance costs, as well as more
insurance premium payable for protection, and the health and safety of employees may also be
endangered. In addition, transitional risks may eme rge due to climate change and climate-related
issues as consumers shift their preferences while regulators require more extensive ESG-related
disclosures. Such transitiona l risks may result in additional operating expenses. With regard to
increasing responsibilities on ESG-related discl osure, we may be impacted by increased cost to
execute more stringent monitoring measures on pollutant emissions and resource consumption.
 In response to such potential risks, we pla n to take measures as follows: to integrate
solar power in our production bases and supply chain systems to reduce cost of energy
use;
 to introduce energy-saving equipment, and formulate plans to reduce process energy
consumption, in turn reducing energy consumption.
Save for the above, up to the Latest Practicable Date, we were not aware of other actual
environment or climate-related risks or damages that could adversely affect our business, strategy
and financial performance.
Opportunities Related to the Environment and Climate
As an energy storage batteries manufacturer, we believe the increasing awareness of
environmental and climate-related issues pr ovide abundant opportunities for our growth.
In addition, as our business aligns with interna tional efforts to reduce carbon emissions and
store green energy, our energy storage batteries can be deemed as a preferred solution to reduce
carbon footprints, creating substantial growth prospects for our company. Given that we have
been continually enhancing the efficiency and reducing the cost of our energy storage batteries,
we expect to make energy storage products more accessible and affordable.
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Metrics and Targets on Environmental Impacts
To better assess and manage our environmental footprint, we closely track various metrics
related thereto in our production plants. Th e main metrics concerned, are as follows:
For the year ended December 31
2022 2023 2024
Energy . . . . . . Electricity (kWh) 134,165,922 134,545,728 153,998,181
Steam (t) 99,110 115,629 107,682
A i r ........ G r e e n h o u s eG a sE m i s s i o n s
(tons CO 2 equivalent)
Scope 1 4,632 3,471 3,152
Scope 2 121,725 121,101 121,369
Scope 3 35,824 (1) 602,725 (2) 608,086
W a t e r ....... W a t e rc o n s u m p t i o n( t ) 394,302 472,263 529,578
Sewage discharge (t) 59,223 59,056 108,416
Reuse volume 335,079 413,206 421,162
Solid Wastes . . Hazardous waste (t) 3,620 4,672 6,661
Recyclable waste (t) 3,604 4,656 6,631
Notes:
(1) Calculate based on emissions generated internally by our Group (mainly GHG emissions from business travel).
(2) Calculate based on emissions generated internally by our Group and by third parties in our supply chain (including
GHG emissions from business travel, upstream and downstream logistics transportation, product manufacturing and
usage).
From 2022 to 2024, our production increased while overall energy consumption and
emissions increased, primarily due to the development and expansion of our operation. In the
future, we will uphold the principles of envir onmental friendliness and green development,
promoting green production and reducing energy consumption and emissions.
The upward trend of our GHG emissions from 2022 to 2023 was primarily due to business
growth, such as production expansion and increased engagement with suppliers and customers. As
we enhance our ESG policy and increasingly put emphasize on green production, our GHG
emissions remain stable in 2024.
In addition, the significant increase of Scope 3 GHG emissions in 2023 was primarily
because we adopted a more stringent statistics standard. In 2022, our Scope 3 GHG emissions
were calculated mainly based on emissions gene rated from internal activities such as business
travel, without including third-party emissions. However, starting from 2023, we expanded our
tracking to include GHG emissions from various stages of the supply chain by engaging with
upstream and downstream third parties, allowing for more comprehensive carbon emission
monitoring. This also reflects our growing commitment to addressing greenhouse gas emissions.
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According to Frost & Sullivan, these metrics a nd measurements are in line with the norm of
the energy storage industry, and our metrics a re in the average range. However, we strive to
further reduce such emissions and discharges. By 2030, we plan to:
 Decrease our GHG gas emission per million RMB revenues by 40%;
 Increase our electricity consumption from renewable resources by 40%; and
 Decrease our water consumption p er million RMB revenues by 30%.
In a concerted effort to advance our ‘‘green office ’’ initiative, aiming at reducing resource
consumption and enhancing ecol ogical and environmental protec tion, we initiated green and low-
carbon office practices.
Measures on Managing Environmental Risks
Our approach to environmental risk management is proactive, focusing on incorporating
green and low-carbon practices from the onset of our operations. Therefore, we adopt various
measures in planning and building facilities tha t are sustainable and eco-friendly. We have
obtained ISO50001 and I SO14064, which testify to our envi ronment management capability,
efficiency, GHG emission control, and product carbon footprint. This systematic approach enables
continuous enhancement of o ur environmental management capabilities and compliance with
recognized environmental standards.
We place significant emphasis on environmental pollution and climate change. We strictly
comply with environmental protection laws and regulations, adhere to industry standards, and
strengthen pollution control while promoting clean production and sustainable development.
Subsidiaries that emit pollutants register and re port to relevant governmental authorities pursuant
to laws and regulations, and a dedicated department within our Group monitors and inspects the
implementation of environmental policies and emi ssions. Additionally, we actively integrate green
development into our corporate governance, advancing energy conservation and emissions
reduction. We have established a zero carbon a ction office, responsible for setting long-term
carbon reduction plans and annual targets, monitoring and reporting on the execution of these
plans, addressing any issues promptly.
In addition, we have implemented a series of measures in our daily operations to mitigate
environmental risks and fulfill our targets.
 GHG emission. Since 2022, we have conducted an inventory of greenhouse gases
within the production boundaries of the organization in accordance with ISO14064
standards. We prepare greenhouse gas inventory reports and disclose the inventory
results in its social responsibility report.
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 Energy consumption. We prioritize energy managem ent by implementing energy-
saving measures across all production stages, achieving ISO50001 certification, and
adhering to its standards. This includes esta blishing energy policies, conducting energy
audits, and continuously improving through systematic energy management
frameworks. We optimize production by analyzing processes, upgrading to efficient
equipment, and utilizing energy recovery sy stems. Additionally, renewable energy
sources such as solar and wind are adopted, and green power is prioritized. Employee
involvement is encouraged through awareness campaigns, training, and incentive
mechanisms for energy-saving suggestions.
 Photovoltaic Power Generation. As a producer and integrator of energy storage
products, we have built photovoltaic panels on 50,000 square meters of factory roofs.
 Water consumption and waste water discharge. We have sewage treatment systems
and initial rainwater collection systems. B y adopting multi-stage treatment processes,
we have reduced the concentration of pollutants in the discharged water. Over 90% of
the treated water is reused, and any water that needs to be discharged is sampled and
subjected to chemical analysis. It can only be discharged after passing the analysis and
receiving approval from the responsible supervisor.
 Hazardous substances . With the rapid development of the new energy battery
industry, our company increasingly relies on chemicals in the production process. As
an industry leader, we are committed not only to providing high-performance products
but also to ensuring employee safety, protecting the environment, and promoting
sustainable industry development. Effective chemical management is the cornerstone of
achieving these goals, covering every aspect from procurement, storage, and use of
chemicals to waste disposal. We revise our environmental emergency response plan
every three years and organize drills for rel evant personnel to enhance their emergency
response capabilities and prevent environm ental pollution incidents. Regarding
environmental facilities, we ensure the class ification and treatment of pollutants. We
have invested great efforts and expenditure to integrate assembly production lines and
purchase automated assembly lines, utilizin g robots instead of manual labor, which not
only improves production efficiency but also reduces environmental pollution risks.
 Waste gas . To reduce the negative impact of waste gas, we have trained environmental
management personnel with qualificatio ns. We have installed online monitoring
devices for pH, flow meters, and automatic total lead detection, all of which are
connected to the environmental protection system for monitoring. We have formulated
enterprise environmental management systems and inspection methods. We accept
supervision and random inspections by environmental protection departments, and
disclose environmental information to the public.
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We have upgraded the lead dust collectors to f ilter + spray tertiary treatment processes.
In the acid mist-producing formation proce ss, we have installed acid mist absorption
treatment devices, which treat the emissions through acid-base neutralization, with all
emissions discharged through high chimneys.
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any fines or other penalties due to non-compliance in relation to health, work safety,
social or environmental regulations which had materially and adversely affected our financial
condition or business operations.
Sustainable Supply Chain Management Policy
We actively promote the construction of green supply chains. Taking advantage of self-
generated products, we establish green supply ch ains, and actively influence suppliers to improve
the environmental friendliness of products and reduce carbon emission. In response to the national
‘‘dual carbon ’’ policy, we set carbon reduction targets to increase the proportion of renewable
energy use.
In selecting our suppliers, we take into consi deration their carbon footprints and their
undertaking of social responsibility. When selec ting suppliers, we require new suppliers to have
operated lawfully for at least two consecutive years without any records of unethical business
practices. The suppliers must pass at least ISO 90 01 quality management system certification and
meet our standards for manufacturing process. We set in place a social responsibility assessment
system for suppliers, which is standardized, transparent, cooperative, reciprocal, long-standing and
forward-looking. Several red lines of social res ponsibilities have been speci fied for our suppliers,
which cover the prohibitive rules on child labor , forced labor, bribery and extortion, and the
occurrence of major safety, fire and environmenta l protection incidents. Violation of these red
lines will be punished according to the severity by restricting the procurement amount or
terminating the cooperation. We conduct carbon fo otprint and social responsibility assessment for
all new suppliers, so as to assess their capability to comply with laws, regulations and sustainable
development agreements. High-risk suppliers which fail the assessment will not be accepted, and
we will continue to supervise and assist our supp liers in rectifying any deficiency we identified
and continuously improving their ESG management framework.
We also educate our suppliers on various green strategies and have communications with
our suppliers regarding sustainable developm ent and social responsibility from time to time to
guide our suppliers to reduce their carbon footprints.
In terms of supply chain management, we requ ire materials supplied by all of our suppliers
to comply with requirements of Restriction of Hazardous Substances Directive, or ROHS, and
Registration, Evaluation, Authorization and Re striction of Chemicals, or REACH, satisfy the
environmental directives or certifications re quired by national and local regulations and the
government, and meet our environmental directive requirements and the above-mentioned green
design requirements. Suppliers also need to pro vide material testing reports on hazardous
substances restricted by environmental protection regulations according to our requirements and
we periodically review the testing report of our suppliers.
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Production Policy
We are dedicated to reducing waste, pollution and energy consumption in our production
process. All our subsidiaries have set up effective waste treatment for water, gas and solid waste.
Through regular monitoring and third-party evaluations, we ensure that the discharge of waste
water, waste gas and solid waste during the ma nufacturing and operation process meets the
requirements under national and local laws and regulations.
In addition, we have established internal reg ulations and measures to manage the production
process, aiming at preventing and reducing workplace accidents, protecting employee safety and
health, safeguarding our workplace assets and i mproving production efficiency and quality. We
have a dedicated safety management team responsible for overseeing and evaluating production
safety. We also require subsidiary managers to re gularly visit the site to assess safety conditions,
promptly eliminate hazards, and approve major d isaster prevention and response plans. In the
event of a major safety accident, we hold the responsible personnel, department heads and
supervising managers accountable. To promote safety, we also have a special safety award,
recognizing subsidiaries and ma nagers who effectively uphold s afety responsibilities and avoid
safety incidents with biannual commendations.
Product Safety and Products Recycling Policy
We require that products manufacturing processes comply with all applicable legal
regulations and standards, ensuri ng that our products pose no harm or risk to customers. During
product development, we identify relevant safety features and establish corresponding standards
and control measures. On-site inspectors and operators monitor and manage product safety
features throughout the production process according to planned control requirements. If any
irregularities are detected during product insp ection, the production department will promptly
report the issue, halt production, and address it accordingly.
The products we manufacture are recyclable. We have built a comprehensive after-sale
recycling network. Customers can recycle and trade in used products to us. We also recycle
defective batteries from the production line.
Improper transfer or disposal of used lithium- ion batteries can result in leakage, fire or
explosion, posing risks of personal injury and environmental pollution. Improper disposal of lead-
acid batteries can lead to acid leakage, causing environmental harm. We have always placed great
emphasis on the storage, disposal and recyclin g of used batteries, with dedicated personnel
handling related matters. Our battery products a re packaged and stored in a well-ventilated, dry
area, and we ensure that the storage area is kept away from flammable materials and heat sources.
New battery products and used batteries are typically stored in separate zones to avoid confusion.
After collecting used lithium-ion batteries, w e first discharge them to ensure their energy is
depleted, reducing the risk of accidents during storage and transportation. The used batteries are
temporarily stored in a dry, low-temperature warehouse before being transferred to a specialized
third-party battery recycling company for prope r handling. Third-party recycling companies
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handling used lead-acid batteries utilize autom atic disassembly equipment to dismantle and
categorize the batteries. The disman tled lead plates, lead slag, and l ead-contaminated materials are
then smelted in high-temperature furnaces usin g additives such as anthracite to produce crude
lead. This crude lead is further refined by adding trace elements in alloy or electrolysis pots to
create lead ingots. We regularly select third-party recycling companies through a bidding process,
prioritizing those that are fully certified and whose recycling processes are environmentally
friendly. In 2023, we recycled approximately 2,972 tons of lead-acid batteries and 88 tons of
lithium-ion batteries and cooperated with batte ry recycling companies to dismantle disposed
batteries for resource reuse, energy conservation and emission reduction.
Social Matters
Regarding social matters, we prioritize crea ting a fair and supportive work environment for
our employees. Our policies on compensation, dismissal, equal opportunities, and anti-
discrimination are transparent and in complianc e with applicable laws and regulations, and we
conduct induction training for every employee and keep them informed of our systems and
policies to keep them abreast with their relevant rights and duties in our Group. We hire
employees based on their merits and maintain a corporate policy that promotes equal
opportunities and fair compensation for all. I f employees experience discrimination, we
encourage them to seek immediate assistance, allowing us to promptly investigate and address
the situation. Additionally, we offer training programs to keep our employees updated on industry
and regulatory developments. During the COVID-19 pandemic, we took measures to ensure a safe
work environment by implementing company-wide s elf-protection policie s for our employees. We
also made work-from-home accommodations to applicable employees. We also organize
community outreach events, where our employees could promote health and wellbeing through
taking part in voluntary blood donation, and provide support and aid to other employees facing
hardships.
Anti-corruption and Anti-bribery
We strictly abide by the laws and regulations related to anti-corruption, including but not
limited to the Anti-Unfair Competition Law of the PRC （《中華人民共和國反不正當競爭法》）and
the Criminal Law of the PRC （《中華人民共和國刑法》）. We uphold a high standard of integrity
and have zero tolerance for corruption or bribery. We promote clear work ethics to employees,
and strictly prohibit bribery, extortion, fraud, money laundering and other unethical behaviours,
such as gambling, misappropriation of our Group ’s assets, provision or acceptance of gifts or
other improper benefits. We distribute our code of conduct, which includes anti-corruption and
anti-bribery provisions, to all employees on the i nitial orientation and require them to comply
with our code of conduct. We have established v arious working committees with members from
different departments responsible for receiving reports and complaints on unethical work
behaviours and to prepare written records accordingly to report to the management or the Board
in a timely manner. We make our internal reporting channel open and available for our staff to
report any suspected bribery and corruption conduct. Further, we developed a whistle-blower
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program on a group level to ensure that such prohibited conduct would be reported without fear
of retaliation, investigated by an independent t hird party, and that the identity of the whistle-
blower along with other sensitive information w ill be kept confidential. We also provide regular
anti-corruption and anti-briber y compliance trainings for employees so as to cultivate a good
compliance culture.
Employment
Our Group has established rules and procedures of, among others, recruitment, job
promotion, compensation, benefits, rest periods, and dismissal, etc., to protect our employees ’
rights. During recruitment and job promo tion, our Group follows the principle of ‘‘selection on
merit ’’, taking into account the performance, work e xperience and capability of the applicant or
employee. Our Group advocates a diverse and equal workforce culture by ensuring that applicants
and employees are not discriminated against on the basis of gender, age, race, family status or
physical disability. Our Group determines employees ’ compensation packages on the basis of
work performance and the market standard of remu neration. All of these measures aim to provide
our employees with a fair work environment.
Our Directors confirm that our Group does not employ children and prohibits any form of
forced labor within our operations. Our Directors confirm that our Group has complied in all
material aspects with the laws and regulations re lating to child and forced labor. As an additional
measure to avoid violating labor laws and regulations, our Group inspects all applicants ’ identity
documents during the recruitment process. Our Directors confirm that if any child labor or forced
labor business is discovered, our Group will seek legal advice and take corrective measures
immediately.
Occupational Health and Safety
We prioritize occupational health and safety and adhere to PRC laws and regulations to
safeguard employee well-being and prevent workplace hazards. We have obtained the ISO45001
certification, signifying our ab ility to meet international standard for health and safety at work. In
addition, we implement comprehensive preventive measures to ensure the safety and health of our
employees. We conduct regular monitoring of workplace safety, and promptly address any
identified safety hazards. To prevent workplace accidents, we monitor emissions of harmful
substances such as waste gases, solid waste, and noise within our facilities to ensure they do not
adversely impact employee health. We also provide employees with protective equipment, such as
specialized work uniforms and insulated gloves, to ensure safety during their work activities.
During the Track Record Period, all of our empl oyees working in positions with occupational
disease risks participated in medical examina tion, and we had zero fatality due to work-related
injuries. Our health and safety management system, certified by third-party institutions, includes
comprehensive policies regarding precenting, recording and handling accidents and meets
GB/T45001 standards. We consistently perform sa fety reviews, maintaining a level II safety
production standardization certificate, with incident rates below the industry average, as
confirmed by Frost & Sullivan. To ensure observance of our occupational health and safety
guidelines, we conduct pre-job training, environmental safety training and assessment for all new
employees.
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DATA PRIVACY AND INFORMATION SECURITY RISK MANAGEMENT
Data privacy and information security is one of our top priorities. In the course of
conducting our business, the personal data we c ollect mainly pertains to the collection of
employee information, customer and supplier contact information, and other data necessary for
operation and management. Except for collecting contact information from our client through our
official website, we do not engage in collecting personal information through any other public
channels such as operational websites, apps , or mini-programs on internet platforms.
We have implemented robust protective meas ures for the personal data we collect. These
measures include, among others:
 establishing internal control systems such as ‘‘Data Security Management Measures ’’
and ‘‘Data Classification and Grading Management Measures ’’ to stipulate our
management of data confidentiality, data a pproval authority, data usage rights, data
classification and grading, data security responsibilities, and we have effectively
implemented and executed these systems;
 minimizing the access and circulation rights of private information;
 adopting technical measures such as encryption and anti-leakage to protect
information; and
 establishing an network isolation sys tem to ensure information security.
We believe data security requires the comb ined capabilities of both top-notch systems and
vigilant users of such systems. Therefore, w e provide information securities trainings to
employees to increase their compliance awareness. We have an emergency response mechanism
for information security and we carry out emerg ency drills on a regular basis and improve our
information management system accordingly.
With the assistance of our PRC Data Compliance Counsel, we completed the following
rectification in data privacy and information security:
 enhanced the notifications related to the processing of personal information, including
employee information, customer contact information, and supplier contact information;
 improved the management documents related to cybersecurity, data security, and
personal information protection; and
 strengthened the internal management structure and designated responsible personnel
in terms of cybersecurity, data security, and pe rsonal information pro tection. Including
assisting to set up a data security management office, assisting appointing data security
officer, and personal information protection officer.
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Before completing the above rectifications, we were not subject to any administrative
penalties or legal disputes arising from data privacy and data security issues.
During the Track Record Period and up t o the Latest Practicable Date, we did not
experience any material information leakage or loss of personal, operating or transaction data. As
confirmed by our PRC Data Compliance Counsel, for the period from January 1, 2022 to the
Latest Practicable Date, after the completion o f rectification, we are in compliance with the
applicable PRC laws and regulations relating to the cybersecurity and data security, including the
collection or use or of personal information.
INTELLECTUAL PROPERTY
Owing to the efforts of our R&D team, we have been able to develop and own a series of
important intellectual properties and several key technologies. For details, see ‘‘ — Research &
Development — Our Key Technology ’’in this section.
As of the Latest Practicable Date, we possesse d 353 patents (111 of which are inventions),
six domain names, 63 trademarks and 40 computer software copyrights in China, as well as 38
overseas registered trademarks as of the same date.
We recognize the utmost importance of intellectual property rights for our success in the
energy storage market. Therefore, we rely primar ily on a combination of trade secrets, patents,
copyrights, trademarks, unfair competition laws a nd contractual rights, such as confidentiality
agreement, to protect our intellectual property rights. Certain employees are required to sign an
integrity agreement when they join us, and our key management personnel and certain employees
holding key positions are also required to enter into a non-compete agreement with us. We also
strictly control access to our facilities via a secu re entry system, and we adopt comprehensive
policies to prevent unauthorized communication o f sensitive information to external parties. In
some commercial agreements we enter into, we gener ally state all rights and obligations regarding
the ownership and protection of intellectual pro perties. In addition, we have taken the following
key measures to protect our intellectual property rights: (i) implementing internal policy to
establish robust management over our intellectual property rights, (ii) timely registration, filing
and application for ownership of our intellectual pro perties, (iii) actively tracking the registration
and authorization status of int ellectual properties and take action in a timely manner if any
potential conflicts with our intellectual proper ties are identified, and (iv) engaging professional
intellectual property service providers.
As of the Latest Practicable Date, we had not been subject to any material disputes or claims
for infringement upon third parties ’ intellectual property rights in the PRC.
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INSURANCE
As of the Latest Practicable Date, we maintai ned applicable social insurance in the PRC,
and we also maintained insurance on properties, equipment, environmental liability and product
liability insurance. Our Directors are of the view t hat our insurance coverage is sufficient and
adequate and is in line with customary industry practices. Nevertheless, we may be exposed to
claims and liabilities which exceed our insurance coverage. See ‘‘Risk Factors — Risks Relating
to Our Business and Industry — Our insurance coverage may not cover all losses, and we may
incur significant losses resul ting from operating hazards, pro duct liability claims, project
construction or business interruptions ’’in this prospectus.
PROPERTIES
We own and lease certain properties in China primarily to be used as production facilities
and offices. These properties are used for non-pr operty activities as defined under Rule 5.01(2) of
the Listing Rules.
According to section 6(2) of the Companies (Exemption of Companies and Prospectuses
from Compliance with Provisions) Notice, this do cument is exempted from compliance with the
requirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance which r equire a valuation report with respect to all our
interests in land or buildings, for the reason tha t, as of the Latest Practicable Date, none of our
properties has a carrying amount of 15% or more of our consolidated total assets.
Land Use Right and Owned Properties
As of the Latest Practicable Date, we had the right to use 15 parcels of land in Jiangsu,
Inner Mongolia and Hubei, with a total site area of 894,560.84 sq.m., which were primarily used
for industrial purposes. As of the Latest Practicab le Date, we have obtained real estate ownership
certificates for all the afo rementioned parcels of land.
As of the Latest Practicable Date, we owned te n properties in Jiangsu, Inner Mongolia and
Hubei, with an aggregated GFA of approximately 380,658.26 sq.m., which were primarily used
for daily operation and production. Among them, we have obtained property ownership
certificates for all buildings.
Leased Properties
As of the Latest Practicable Date, we leased 40 properties in mainland China with a gross
floor area of approximately 14,629.36 sq.m.. The leased properties are used as offices,
dormitories for our employees and warehouses. We do not foresee any impediments in renewing
our existing lease.
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Pursuant to the applicable PRC laws and regu lations, property lease contracts must be
registered with the local branch of the Ministr y of Housing and Urban-Rural Development of the
PRC. As of the Latest Practicable Date we had not obtained proper lease registration for 19 leased
properties. As advised by our PRC Legal Advisor, the non-registration of the property lease will
not affect the validity of the lease contract and the legal use of the leased property, but relevant
local housing authorities may require us to complete the registration within the prescribed period
and we may be subject to penalties of RMB1,000 to RMB10,000 as a result of the non-
registration for each of the property. The maximum penalty we may receive due to such non-
compliance is RMB200,000 and as advised by our PRC Legal Advisor, the likelihood that we will
receive such penalty is remote. Considering the above and based on our PRC Legal Advisor ’s
opinion, our Directors are of the view that the failure to register the lease contract does not have a
material adverse impact on our business and operation results.
We have not received title certificates of 16 properties we leased as of the Latest Practicable
Date. Despite the lack of certain title certificates of our leased properties, those leased properties
are easily replaceable and do not serve as the primary production and operation sites for us.
Therefore, as confirmed by our Directors and advised by our PRC Legal Advisor, this will not
have a material adverse impact on our production and business operations. As the lessee, we face
the risk of being unable to continue using the relevant leased properties, but there is no risk of
being penalized, as advised by our PRC Legal Advisor.
Furthermore, one of our leased properties is being used for a purpose different from that
stated in the title certificate, primarily because o ffice space in the area is limited and the property
met our operational needs. The leased property, with a GFA of 88.68 sq.m., is currently used as
offices while the usage registered for such property is residence. These leased property is not our
primary site for business operation or production, and we have not received any notice prohibiting
us from continuing to use this property under the lease agreement. Therefore, as confirmed by our
Directors and advised by our PRC Legal Advisor, this discrepancy will not have a material
adverse impact on our production and business operations. As the lessee, we face the risk of
being unable to continue using the relevant leased properties, but there is no risk of being
penalized as the monetary penalty (if any) should be undertaken by the lessor instead of the
lessee, as advised by our PRC Legal Advisor.
For details, see ‘‘Risk Factors — Risks Relating to Doing Business in the Places Where We
Operate — Our legal right to use certain leased prop erties could be challenged or restricted ’’,
‘‘Risk Factors — Risks Relating to Doing Business in the Places Where We Operate — We may
be subject to fines for failure to register some of our leases ’’and ‘‘Risk Factors — Risks Relating
to Doing Business in the Places Where We Operate — We may be subject to fines for using
leased properties in a manner that differs from the purpose of title certificate ’’in this prospectus.
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CERTIFICATES, LICENSES AND PERMITS
As advised by our PRC Legal Advisor, our Directors confirm that, during the Track Record
Period and up to the Latest Practicable Date, we had obtained all material certificates, licenses,
approvals and permits from relevant authorities f or our operations in material respects. We renew
all such material permits and licenses from time t o time to comply in all material aspects with the
relevant laws and regulations. The successful renewal of our existing licenses, permits and
approvals will be subject to our fulfillment of rel evant requirements. We had not experienced any
material difficulty in renewing such certificat es, permits and licenses during the Track Record
Period and up to the Latest Practicable Date an d we do not expect any material difficulties in
such renewals so long as we comply with the app licable requirements and conditions set by the
relevant laws and regulations. As of the Latest Practicable Date, we were not aware of any reason
that would cause or lead to the non-renewal of our existing licenses, permits and approvals.
The following table sets forth a list of our ma terial certificates, licenses, and permits:
Holder License/Permit/A pproval Issue Authority
Expiration
Date
Shuangdeng . . . . . . . Pollutant Emission Permit Taizhou City Ecology and
Environment Bureau
March 9,
2030
Safety Production
Standardization
Certificate (Level II)
Jiangsu Provincial
Emergency Management
Department
March 20,
2026
Shuangdeng Front . . . Pollutant Emission Permit Taizhou City Ecology and
Environment Bureau
April 21,
2030
Safety Production
Standardization
Certificate
Taizhou City Emergency
Management Bureau
July 3, 2025
Radiation Safety License Taizhou City Ecology and
Environment Bureau
May 30,
2026
Shuangdeng
Runyoung . . . . . . .
Pollutant Emission Permit Xiangyang City Ecology and
Environment Bureau
May 29,
2028
Safety Production
Standardization
Certificate (Level III)
Xiangyang City Emergency
Management Bureau
December,
2027
Shuangdeng Energy
S t o r a g e .........
Pollutant Emission Permit Xiangyang City Ecology and
Environment Bureau
Zaoyang Branch
May 15,
2029
Radiation Safety License Xiangyang City Emergency
Management Bureau
December 3,
2028
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LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any actual or pending legal, arbitra tion or administrative proceedings (including any
bankruptcy or receivership proceedings) that we believe would have a material adverse effect on
our business, financial condition, results of operations, reputation or compliance. During the same
period, we were not involved in any non-compliance incidents which would, individually or in
aggregate, have a material adverse effect on our business as a whole. As confirmed by our PRC
Legal Advisor, our business operations had been carried out in compliance with applicable PRC
laws and regulations in all material respects during the Track Record Period and up to the Latest
Practicable Date.
F r o mt i m et ot i m e ,w em a yb ei n v o l v e di nl e g a lp roceedings, investigati ons, administrative
penalties or other claims or disputes arising in the ordinary course of our business. For details,
see ‘‘Risk Factors — R i s k sR e l a t i n gt oO u rB u s i n e s sa n dI n d u s t r y— W em a yb ei n v o l v e di n
legal or other proceedings arising out of our operations from time to time and may face
reputational risks and significant liabilities as a result ’’in this prospectus.
RISK MANAGEMENT AND INTERNAL CONTROL
We have established a comprehensive risk manag ement and internal control process through
which we address risks associated with business. We have put in place a set of operational risk
analysis and response measures so as to achieve risk aversion, risk reduction and risk response by
properly identifying, categorizing and analyzing various risks. In particular, we have adopted the
following measures to mitigate the risks on bribery and corruption:
 a policy relating to anti-bribery and an ti-corruption was issued by us. Our audit
department is responsible for monitoring, accepting escalation, processing investigation
and reporting of incompliance behavior including bribery and corruption;
 a whistle-blower mechanism was set up by us, including report channels (email),
investigation procedures and responding to detected problems;
 a policy relating to control the risks of economic sanctions was issued by us. Our legal
and business managers are responsible to review and control such risks and the policy
also includes relevant implementation procedures; and
 compliance training is provided to all employees including new employees.
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We have adopted, or expected to adopt, a series of changes in our internal control policies,
programs and procedures to strengthen our risk ma nagement and internal control capability and
prevent non-compliance event from happening. These measures include:
 the engagement of the Internal Control Consultant who performed a review on our
internal controls over financial reporting in May 2024 and provided recommendation
accordingly. We have adopted the corresponding remediation actions to improve our
internal control system. The Internal Control Consultant performed a follow-up review
with regard to those actions taken by us, an d there was no further material finding
identified in the design of internal control process of the follow up review;
 the regular training to be provided by external legal advisor to our Directors and senior
management after Listing on the subject of compliance of relevant Listing Rules
requirements and applicable PRC laws and regulations; and
 the establishment of our Audit Committee which comprised of three independent non-
executive Directors to oversee our risk management and internal control systems, and
review the financial statements of our Company from the perspective of compliance
with applicable rules and regulations.
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BOARD OF DIRECTORS
Our Board of Directors consists of seven Direct ors, with three executive Directors, one non-
executive Director and three independent non-executive Directors. Our Board of Directors serves
a term of three years and is responsible for, and has general powers for the management and
conduct of our business.
The table below sets out certain information of our Directors.
Name Age Position(s)
Date of
appointment
as Director
Date of joining
our Group
Roles and
responsibilities
Relationship with
other Directors,
Supervisors and
senior
management
Dr. Yang Rui
（楊銳）
45 Chairman of the
Board, executive
Director and
chief executive
officer
December 22,
2020
March 16, 2013 Responsible for the
overall management,
operation and
strategies of our
Group
Cousin of Mr.
Qian Youwang
（錢友網）
Dr. Yang Baofeng
（楊寶峰）
47 Executive Director
and deputy
general manager
April 30, 2018 August 1, 2012 Responsible for
overseeing the
overall operation of
our Group
None
Ms. He Rong
（賀蓉）
49 Executive
Director, chief
financial officer,
secretary of the
Board and joint
company
secretary
June 12, 2024 December 28,
2011
Responsible for the
secretary of the
Board related works,
a n di nc h a r g eo f
finance, human
resources and
investment of our
Group
None
Mr. Qian
Shan ’gao
（錢善高）
69 Non-executive
Director and
deputy general
manager
December 28,
2011
December 28,
2011
Responsible for
providing strategic
advice on the
development of our
Group
None
Dr. Yin Junming
（殷俊明）
52 Independent
non-executive
Director
June 15, 2020 June 15, 2020 Responsible for
providing
independent advice
and judgment to our
Board
None
Dr. Wang Jin
（王進）
58 Independent
non-executive
Director
June 12, 2024 June 12, 2024 Responsible for
providing
independent advice
and judgment to our
Board
None
Dr. Wang Xi
（王熹）
34 Independent
non-executive
Director
June 12, 2024 June 12, 2024 Responsible for
providing
independent advice
and judgment to our
Board
None
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Executive Directors
Dr. Yang Rui （ 楊銳）, aged 45, is the chairman of the Board, executive Director and chief
executive officer of our Company. He was redesignated as an executive Director on July 19,
2024. He served as a director of our Company from March 2013 to February 2014 and December
2014 to February 2017; as an assistant to the chairman of the Board from August 2018 to
December 2020; and he has been serving as the Director and chief executive officer of our
Company since December 2020 and the chairma n of the Board since May 2021. He is primarily
responsible for the overall management, operation and strategies of our Group.
Dr. Yang has over 12 years of experience in management. Dr. Yang served as a chairman of
the board of Shuangdeng Front from July 2012 to March 2014. Prior to joining our Group, Dr.
Yang served as a lecturer of Nanjing Forestry University （南京林業大學）from September 2007
to September 2016, and he was responsible for lecturing. In addition, he was one of the founders
and served as a director of Open-ended Strategies International Design Inc. from September 2014
to September 2019, a commercial design firm, and he was responsible for the overall
management.
Dr. Yang obtained his bachelor of landscape architecture degree and master of urban
planning degree from Nanjing Forestry University in the PRC in July 2001 and June 2004,
respectively. In addition, he obtained another m aster of landscape architecture degree from
University of Toronto in Canada in June 2007. Dr. Yang obtained his doctoral of management
degree from Nanjing University （南京大學）in June 2012.
Dr. Yang Baofeng （ 楊寶峰）, aged 47, is an executive Director and a deputy general
manager of our Company. He was appointed as a Director on April 30, 2018 and was re-
designated as an executive Director on July 19, 2024. He is primarily responsible for overseeing
the overall operations of our Group.
Dr. Yang joined our Company in August 2012 and as a deputy chief engineer from August
2012 to February 2016. Since March 2016, Dr. Yang Baofeng has accumulated extensive
experience in management by serving as the director and senior management at our Group,
including as: (i) a vice president of our Company since March 2016; (ii) a chairman of the board
of Shuangdeng Runyoung since May 2018; (iii) a responsible person of Nanjing branch of our
Company since January 2021; (iv) an executive director of Shuangdeng Front since January 2021;
(v) a chairman of the board of Anhui Shuangdeng New Energy Co., Ltd. （安徽雙登新能源有限公
司）from March 2021 to May 2023; (vi) a chairman of the board of Huifeng Juneng since April
2021; and (vii) a responsible person of Shanghai branch of our Company since March 2023.
Prior to joining our Group, he served as an assistant to chief of Nanjing Shuangdeng
Technology Development Research Institute Co., Ltd. （南京雙登科技發展研究院有限公司）(the
‘‘Shuangdeng Technology ’’), a company engaged in batteries research, from July 2001 to
December 2003, as a chief of Shuangdeng Technology from January 2004 to December 2005, as a
head of Shuangdeng Technology from January 2008 to July 2012.
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Dr. Yang Baofeng obtained his bachelor of electrochemical engineering degree, master of
chemical engineering degree and doctoral of chemical engineering and technology degree from
Harbin Institute of Technology （哈爾濱工業大學）in the PRC in July 1999, April 2007 and July
2020, respectively.
Ms. He Rong （ 賀蓉）, aged 49, is an executive Director, chief financial officer, secretary of
the Board and joint company secretary of our Company. She joined our Company in December
2011 and worked as a manager of financial department and an assistant to general manager from
December 2011 to June 2017. She has been promoted to the chief financial officer since August
2018 and secretary of the Board since December 2020. She was appointed as a Director on June
12, 2024 and re-designated as an executive Director on July 19, 2024. She is responsible for
secretary of the Board related works, and in charge of finance, human resources and investment of
our Group.
Ms. He obtained her associate diploma in acco unting for foreign-related enterprises from
Jiangsu Finance and Economics College （江蘇財經高等專科學校）in the PRC in July 1996. She
further obtained her master of business administration degree from Shanghai University of
Finance and Economics （上海財經大學）in the PRC in January 2013.
Non-executive Director
Mr. Qian Shan ’gao（ 錢善高）, aged 69, is a non-executive Director and deputy general
manager of our Company. He was appointed as a Director on December 28, 2011 and was re-
designated as a non-executive Director on July 19, 2024. He is primarily responsible for
providing strategic advice on the development of our Group. He joined our Company in
December 2011 and served as a director of our Company from December 2011 to April 2018, and
as a senior manager of investment securitie s department of our Company from May 2018 to
January 2022.
During the period from May 2003 to May 2018, he consecutively served as director,
supervisor and deputy general manager of Jiangsu Shuangdeng, a company engaged in house
rental, and he was responsible for the overall management.
Prior to 2011, Mr. Qian served as a director of Jiangsu Shuangdeng Power Supply Co.,
Ltd.（江蘇雙登電源有限公司）, a company engaged in power supply, and he was responsible for
overall management.
Mr. Qian obtained his vocational diploma in industrial enterprise management from
Yangzhou University of Technology （揚州工學院）(now known as Yangzhou University （揚州
大
學））in the PRC in October 1992. He further completed his postgraduate course in Modern
Enterprise Management and Decis ion Making from Nanjing University （南京大學）in the PRC in
July 2001.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Independent Non-executive Directors
Dr. Yin Junming （ 殷俊明）, aged 52, is an independent non-executive Director of our
Company. He was appointed as an independent non-executive Director on June 15, 2020. He is
primarily responsible for providing independent advice and judgment to our Board.
Prior to joining our Group, Dr. Yin worked as an associate professor of Zhengzhou Sias
University （鄭州西亞斯學院）(formerly known as Zhengzhou U niversity Sias International
College（鄭州大學西亞斯國際學院）) from 2003 to 2006, and he was responsible for research on
accounting teaching. In addition, he served as a p rofessor of School of Acco unting, Nanjing Audit
University（南京審計大學會計學院）from 2009 to 2022, and he was responsible for research on
accounting teaching. He has been serving as a professor of Business School of Nanjing University
of Information Technology （南京信息工程大學商學院）since 2023, and he is responsible for
research on accounting teaching.
Dr. Yin also has experience of serving as independent directors for various companies,
including: (i)Jiangsu Canlon Building Materials Co., Ltd. （江蘇凱倫建材股份有限公司）,a
company engaged in waterproofing materials and listed on the Shenzhen Stock Exchange (stock
code: 300715.SZ), from December 2017 to December 2023; (ii) Anhui Shenjian New Materials
Co., Ltd （安徽神劍新材料股份有
限公司）, a company listed on the Shenzhen Stock Exchange
(stock code: 002361 .SZ), since January 2020; (iii) Suning Universal Co., Ltd. （蘇寧環球集團有
限公司）, a company engaged in commercial service and listed on the Shanghai Stock Exchange
(stock code: 000718.SH), from O ctober 2020 to October 2023; (iv) Everbright Securities
Company Limited （光大證券股份有限公司）, a company engaged in corporate finance and listed
on the Hong Kong Stock Exchange and Shanghai Stock Exchange (stock code: 6178.HK and
601788.SH), since December 2020; and (v) Jiangsu Rugao Rural Commercial Bank Co., Ltd （江
蘇如皋農村商業銀行股份有限公司）, a commercial bank in the PRC, since December 2023.
Dr. Yin obtained his associate degree in pressure processing from Chongqing Iron and Steel
Vocational School （重慶鋼鐵專科學校）in the PRC in July 1993. He further obtained his master
of accounting degree from East China Jiaotong University （華東交通大學）in the PRC in June
2000. He obtained his doctoral of accounting from Xi ’an Jiaotong University （西安交通大學）in
the PRC in December 2006.
Dr. Wang Jin （ 王進）, aged 58, is an independent non-executive Director of our Company.
He was appointed as a Director on June 12, 2024 and re-designated as an independent non-
executive Director on July 19, 2024. He is primarily responsible for providing independent advice
and judgment to our Board.
Dr. Wang Jin has been serving as a legal represe ntative of Beijing Guohe Intelligent Energy
Technology Research Institute Co., Ltd. （北京國合智慧能源技術研究院有限公司）since 2015, a
president of Guohe Intercontin ental Energy Consulting Institute （國合洲際能源諮詢（北京）院）
since October 2016, an executive vice chairman of the New Energy International Investment
Alliance（新能源國際投資聯盟）since June 2018.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Dr. Wang Jin also has experience of serving as independent directors for various listed
companies, including: (i) CECEP Solar Energy Co., Ltd （中節能太陽能股份有限公司）,a
company engaged in solar energy and listed on the Shenzhen Stock Exchange (stock code:
000591.SZ), from March 2016 to May 2021; (ii) Tongwei Co., Ltd. （通威股份有限公司）,a
company engaged in new energy and listed on the Shanghai Stock Exchange (stock code:
600438.SH), from May 2016 to May 2022; (iii) Elion Clean Energy Company Limited （億利潔能
股份有限公司）, a company engaged in new energy and listed on the Shanghai Stock Exchange
(stock code: 600277.SH), since March 2021; and (iv) Chengdu Guibao Science & Technology
Co., Ltd. （成都矽寶科技股份有限公司）, a company engaged in rubber production and listed on
the Shenzhen Stock Exchange (stock code: 300019.SZ), since April 2022.
Dr. Wang Jin obtained his master degree in economics from Renmin University of China
（中國人民大學）in the PRC in October 1989. He further obtained his doctor of philosophy degree
from Emory University in the USA in August 2001.
Dr. Wang Xi （ 王熹）, aged 34, is an independent non-executive Director of our Company.
She was appointed as a Director on June 12, 2024 and re-designated as an independent non-
executive Director on July 19, 2024. She is responsible for providing independent advice and
judgment to our Board.
Dr. Wang Xi has extensive experience in accounting and financing. She served as an
assistant professor of school of accountancy at the Chinese University of Hong Kong from July
2017 to June 2024 and she was responsible for researching related works. She has been serving as
an assistant professor of of school of accounting and finance at the Hong Kong Polytechnic
University since July 2024 and she is responsible for researching related works.
Dr. Wang Xi received school of accountancy teaching awards from 2017 to 2018 and from
2020 to 2021 from the Chinese University of Hong Kong. She also received the faculty teaching
merit award in the year of 2017, 2018, 2019, 2021 and 2022.
Dr. Wang Xi obtained her bachelor degree of business administration in accounting and
finance and completed all requirements for a second major in applied mathematics from Emory
University in the USA in May 2012. She further obtained her doctor of philosophy degree from
University of Florida in the USA in August 2017.
Directors ’ Interest in Other Businesses
None of our Directors has any interest in any business, apart from the business operated by
members of our Group, that competes or is likely to compete, directly or indirectly, with the
business of our Group and would require disclosure pursuant to Rule 8.10 of the Listing Rules.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Disclosure Pursuant to Rule 13.51(2) of the Listing Rules
Each of our Directors has confirmed that:
(1) save as disclosed in the paragraph headed ‘‘Appendix VI — Statutory and General
Information — Further Information about Our Directors, Supervisors and Substantial
Shareholders — 1. Disclosure of Interests ’’in this prospectus, he/she has no interest in
the Shares within the meaning of Part XV of the SFO as of the Latest Practicable Date;
(2) save as disclosed above, he/she does not hold and has not held any other directorships
in public companies the securities of which ar e listed on any securities market in Hong
Kong or overseas in the three years prior to and as of the Latest Practicable Date;
(3) save as disclosed in ‘‘ — Board of Directors ’’in this section, none of our Directors has
any relationship with any other Directors, Supervisors, senior management or
substantial Shareholders of our Company; and
(4) he/she did not complete his/her education programs as disclosed in this section by way
of attendance of long distance learning or online courses.
Except as disclosed in this prospectus, to the best of the knowledge, information and belief
of our Directors having made all reasonable enquiries:
(1) there is no other matter with respect to the appointment of our Directors that needs to
be brought to the attention to the Shareholders as of the Latest Practicable Date; and
(2) there is no other information relating to our Directors that is required to be disclosed
pursuant to Rule 13.51(2) of the Listing Rules as of the Latest Practicable Date.
Disclosure Pursuant to Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to
under Rule 3.09D of the Listing Rules in July 2024, and (ii) understands his or her obligations as
a director of a listed issuer under the Listing Rules.
Disclosure Pursuant to Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his/her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules; (ii) he/she has
no past or present financial or other interest in the business of our Company or its subsidiaries or
any connection with any core connected person (a s defined in the Listing Rules) of our Company;
and (iii) that there are no other factors that may a ffect his/her independence at the time of his/her
appointment.
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SUPERVISORY COMMITTEE
Supervisors
Our Supervisory Committee consists of thre e Supervisors. Pursuant to our Articles of
Association, at least one-third of our Supervisors must be employee representative selected by our
employees. Except for the employee representative Supervisor, the other Supervisors are elected
and appointed by our Shareholders at a Shareholders ’ meeting for a term of three years, which is
renewable upon re-election and re-appointment.
The table below sets out certain information of our Supervisors.
Name Age Position(s)
Date of
appointment
as
Supervisor
Date of
joining our
Group
Roles and
responsibilities
Relationship
with
Directors,
other
Supervisors
or senior
management
Mr. Lou Zhiqiang
（樓志強 ）
41 Chairman of
supervisory
committee and
technical director
of the technical
center
April 27,
2023
August 1,
2012
Responsible for
supervising the
performance of
our Directors and
the senior
management and
overseeing the
affairs of our
Supervisory
Committee
None
Ms. Sun Caiyun
（孫彩雲）
41 Supervisor and
deputy general
manager of
manufacturing
and delivery
center
May 28,
2021
March 11,
2013
Responsible for
supervising the
performance of
our Directors and
the senior
management and
overseeing the
affairs of our
Supervisory
Committee and
operational
planning,
warehousing,
shipping, AEO
customs
compliance, and
other related
works
None
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Name Age Position(s)
Date of
appointment
as
Supervisor
Date of
joining our
Group
Roles and
responsibilities
Relationship
with
Directors,
other
Supervisors
or senior
management
Mr. Huang
Xuegong
（黃學工）
45 Employee
representative
Supervisor and
deputy general
manager of
quality
department
April 30,
2018
December
28, 2011
Responsible for
supervising the
performance of
our Directors and
the senior
management and
overseeing the
affairs of our
Supervisory
Committee
and the
implementation
a n do p e r a t i o no f
environmental
laws and
regulations,
outsourcing of
environmental
management, and
environmental
supervision of
various
production lines
None
Mr. Lou Zhiqiang （ 樓志強 ）, aged 41, is a chairman of Supervisory Committee and
technical director of the technical center. He joined our Company in August 2012 and served as a
technical assistant and then as a technical manager from August 2012 to December 2017, and was
appointed as a chairman of Supervisory Committe e in April 27, 2023. He has also been working
as a technical director of the technical center of our Company since January 2018. He is primarily
responsible for supervising the performance of our Directors and the senior management and
overseeing the affairs of our Supervis ory Committee and product development.
Prior to joining our Group, he worked as a technical manager of Jiangsu Shuangdeng, and
he was responsible for technical research and development related works from January 2010 to
July 2012.
Mr. Lou has received multiple masterpieces awards from government departments,
including: (i) the first prize for scientific and technological progress （科學技術進步一等獎）
awarded by the People ’s Government of Jiangyan City （姜堰市人民政府）in December 2011; (ii)
the second prize for scientific and technological progress （科學技術進步二等獎）by the Taizhou
City Municipal People ’s Government （泰州市人民政府）in February 2013; (iii) third prize in
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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science and technology （科學技術獎三等獎）by the People ’s Government of Jiangsu Province （江
蘇省人民政府）in January 2014; (iv) the first prize for scientific and technological progress （科學
技術進步一等獎）awarded by the China Light Industry Federation （中國輕工業聯合會）three
times in March 2014, February 2017, and January 2020; (v) a 311 high-level talent (311 高層次人
才）in Taizhou City in July 2014; and (vi) the title of Outstanding Contribution Young Expert （In
2020 (2020 年突出貢獻中青年專家稱號）by the Taizhou City Municipal People ’s Government （泰
州市人民政府）in March 2021.
Mr. Lou obtained his bachelor of chemical engineering and process degree from Harbin
Engineering University （哈爾濱工程大學）in the PRC in July 2005. He further obtained his
master of business administration degree from Nanjing University of Science and Technology （南
京理工大學）in the PRC in January 2015. In addition, Mr. Lou is currently pursuing a doctoral
degree in materials science an d engineering at Beijing Unive rsity of Chemical Technology （北京
化工大學）in the PRC since September 2021.
Ms. Sun Caiyun （ 孫彩雲）, aged 41, is a supervisor and deputy general manager of
manufacturing and delivery center. She joined our Company as a director of president office in
March 2013 and was appointed as a supervisor in May 28, 2021. She is primarily responsible for
supervising the performance of our Directors and the senior management and overseeing the
affairs of our Supervisory Committee and opera tional planning, warehousing, shipping, AEO
customs compliance, and other related works.
Ms. Sun has consecutively held several pos itions in our Group. She worked as a director of
the president ’s office of our Company from March 2013 to November 2015, as a director of
Shuangdeng Front from December 2015 to May 2018, a director of Shuangdeng Cable from
December 2015 to May 2018. Since December 2015, Ms. Sun has consecutively served as a
director of the president ’s office, deputy general manager of the international marketing
department, deputy general manager of the planning and operations department, and deputy
general manager of the manufacturing and delivery center of our Company.
Prior to joining our Group, She worked as an officer of Jiangsu Shuangdeng from January
2007 to December 2007, promoted as a manager of securities department from December 2007 to
November 2010 and as a director of president office from December 2010 to February 2013, and
she was responsible for securities overall management.
Ms. Sun obtained her bachelor of English degree from Huaiyin Normal University （淮陰師
範學院）in the PRC in June 2006.
Mr. Huang Xuegong （ 黃學工）, aged 45, is an employee representative supervisor and
deputy general manager of quality department. H e joined our Group as an deputy general manager
of manufacturing department in December 2011 and was appointed as an employee representative
supervisor in April 30, 2018. He is primarily responsible for supervising the performance of our
Directors and the senior management and overse eing the affairs of our Supervisory Committee
and the implementation and operation of environmental laws and regulations, outsourcing of
environmental management, and environment al supervision of various production lines.
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Mr. Huang has consecutively held several positions in our Group. He worked as a deputy
manager of manufacturing department from December 2011 to December 2020, as a deputy
general manager of the inte lligence department from Janua ry 2021 to December 2021, and as a
deputy general manager of quality department since January 2021.
Prior to joining our Group, he worked as an assembly workshop worker of Jiangsu
Shuangdeng and promoted to an inspector from June 2004 to June 2008 and then promoted to a
safety and environmental supervisor from July 2008 to November 2011.
Mr. Huang obtained his associate diploma in ma rketing from Yangzhou University through
remote learning in the PRC in July 2002. He furthe r obtained his bachelor of mechanical design
and manufacturing and automation degree from Jiangsu University （江蘇大學）through remote
learning in the PRC in July 2017.
Other Disclosure Pursuant to Rule 13.51(2) of the Listing Rules
Except as disclosed in this prospectus, each of our Supervisors has confirmed that:
(1) he/she does not hold and has not held any other directorships in public companies the
securities of which are listed on any secur ities market in Hong Kong or overseas in the
three years prior to and as of the Latest Practicable Date;
(2) none of our Supervisors has any relationship with any other Directors, Supervisors,
senior management or substantial Shareholders of our Company; and
(3) he/she did not complete his education programs as disclosed in this section by way of
attendance of long distance learning or online courses.
Except as disclosed in this prospectus, to the best of the knowledge, information and belief
of our Directors having made all reasonable enquiries:
(1) there is no other matter with respect to th e appointment of our Supervisors that needs
to be brought to the attention to the Sharehol ders as of the Latest Practicable Date; and
(2) there is no other information relating to our Supervisors that is required to be disclosed
pursuant to Rule 13.51(2) of the Listing Rules as of the Latest Practicable Date.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management and operation of our
business.
The table below sets out certain information in respect of the senior management of our
Group.
Name Age Position(s)
Date of
appointment as
senior
management
Date of joining
our Group
Roles and
responsibilities
Relationship with
Directors,
Supervisors or
other senior
management
Dr. Yang Rui
（楊銳）
45 chairman of the
Board, executive
Director and
chief executive
officer
December 22,
2020
March 16, 2013 Responsible for the
overall management,
operation and
strategies of our
Group
Cousin of Mr.
Qian Youwang
（錢友網）
Dr. Yang Baofeng
（楊寶峰）
47 Executive Director
and deputy
general manager
March 15, 2016 August 1, 2012 Responsible for
overseeing the
overall operation of
our Group
None
Ms. He Rong
（賀蓉）
49 Executive
Director, chief
financial officer,
secretary of the
Board and joint
company
secretary
August 11, 2018 December 28,
2011
Responsible for the
secretary of the
Board related works,
a n di nc h a r g eo f
finance, human
resources, securities
investment, and
overseas factory
construction of our
Group
None
Mr. Qian
Youwang
（錢友網）
59 Deputy general
manager
December 28,
2011
December 28,
2011
Responsible for the
management of
lead-acid and
lithium battery
production bases,
a n di nc h a r g eo ft h e
Group ’s quality
control
Cousin of Dr.
Yang Rui
（楊銳）
Dr. Yang Rui （ 楊銳） is an executive Director, the chairman of our Board and the chief
executive officer of our Company. For details, see ‘‘ — Board of Directors — Executive
Directors ’’in this section.
Dr. Yang Baofeng （ 楊寶峰）is an executive Director and deputy general manager of our
Company. For details, see ‘‘ — Board of Directors — Executive Directors ’’in this section.
Ms. He Rong （ 賀蓉）is an executive Director, chief financial officer, secretary of the Board
and joint company secretary of our Company. For details, see ‘‘ — Board of Directors —
Executive Directors ’’in this section.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Qian Youwang （ 錢友網）, aged 59, is deputy general manager of our Company. He
joined our Group in December 2011 and he has been working as a deputy general manager since
then. He is responsible for the management of lead-acid and lithium battery production bases, and
in charge of the Group ’s quality control.
Mr. Qian has consecutively held several positions in our Group. He worked as a director
and general manager to Shuangdeng Front since May 2018, and as a director of Shuangdeng
Energy Storage since December 2022.
Prior to joining our Group, he worked as an assistant to the general manager of Jiangsu
Shuangdeng from January 2008 to December 2008, and promoted as a deputy general manager
from January 2009 to December 201 1, and he was responsible for overall quality management.
Mr. Qian obtained his diploma in military jour nalism and public opinion communication
from Nanjing University of Political Science （南京政治學院）(now known as Political Science
College of National Defense University of the People ’s Liberation Army of China （中國人民解放
軍國防大學政治學院））in the PRC in June 2013. He further obtained his master of business
administration degree from Xiamen University （廈門大學）in the PRC in September 2015.
JOINT COMPANY SECRETARIES
Ms. He Rong ( 賀蓉) was appointed as one of our joint company secretaries on July 19,
2024. Ms. He is an executive Director, chief financial officer and secretary of the Board of our
Company. For details, see ‘‘ — Board of Directors — Executive Directors ’’in this section.
Mr. Tam Ka Lung （ 譚家龍）, he graduated from the Hong Kong University of Science and
Technology with a Bachelor of Business Administration in Accounting (Second Class Honors,
Division I) degree in November 2001. Mr. Tam is a fellow member of the Association of
Chartered Certified Accountants and a member of the Hong Kong Institute of Certified Public
Accountants. Mr. Tam has over 20 years ’ experience in auditing, financial management, company
secretary and corporate governance, merger an d acquisitions and IPO. Mr. Tam has worked in
KPMG with last position as a senior manager. He is currently the director of Danok Corporate
Services Limited.
COMPLIANCE ADVISOR
We have appointed Orient Capital (Hong Kong) Limited as our compliance advisor pursuant
to Rule 3A.19 of the Listing Rules. Pursuant to R ule 3A.23 of the Listing Rules, the compliance
advisor will advise us on the following circumstances:
 before the publication of any announcements, c irculars or financial reports required by
regulatory authorities or applicable laws;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 303 ---
 where a transaction, which might be a no tifiable or connected transaction under
Chapters 14 and 14A of the Listing Rules, is contemplated, including share issues and
share repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or whe re our business activities, developments or
results deviate from any forecast, estimate o r other information in this prospectus; and
 where the Stock Exchange makes an inquiry of us regarding unusual price movement
and trading volume or other issues under Rule 13.10 of the Listing Rules.
The compliance advisor will, on a timely basis, inform our Company of any amendment or
supplement to the Listing Rules that are ann ounced by the Stock Exch ange. The compliance
advisor will also inform our Company of any new or amended law, regulation or code in Hong
Kong applicable to us, and advise us on the continuing requirements under the Listing Rules and
applicable laws and regulations.
The terms of the appointment shall commence on the Listing Date and end on the date
which we comply with Rule 13.24 of the Listing Rul es in respect of our financial results for first
full the financial year comme ncing after the Listing Date.
BOARD COMMITTEES
We have established the following committees on our Board: the Audit Committee, the
Remuneration Committee, the Nomination committee and the Strategy Committee. The
committees operate in accordance with the terms of reference established by our Board.
Audit Committee
Our Company has established an audit co mmittee with written terms of reference in
compliance with Rule 3.21 of the Listing Rules and paragraph D.3 of part 2 of the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules (the ‘‘Corporate Governance
Code ’’). The Audit Committee consists of Dr. Yin Junming （殷俊明）, Dr. Wang Jin （王進）and
Mr. Qian Shan ’gao （錢善高）, with Dr. Yin Junming serving as the chairman.
The primary duties of the audit committee inclu de, but not limited to, to assist our Board by
providing an independent view of the effectiven ess of the financial reporting process, internal
control and risk management systems of our Group, overseeing the audit process, and performing
other duties and responsibilities as assigned by our Board.
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Remuneration Committee
Our Company has established a remuneration c ommittee with written terms of reference in
compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of part 2 of the Corporate
Governance Code. The Re muneration Committee consists of Dr. Wang Jin, Dr. Yin Junming and
Dr. Yang, with Dr. Wang Jin serving as the chairman.
The primary duties of the Remuneration Commi ttee include, but are not limited to, (i)
making recommendations to our Board on our policy and structure for all remuneration of
Directors and senior management and on the establishment of a formal and transparent procedure
for developing policy on such remuneration; (ii) determining the specific remuneration packages
of all Directors and senior management; and (iii) reviewing performance-based remuneration by
reference to corporate goals and objectives resolved by our Board from time to time.
Nomination Committee
Our Company has established a nomination committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and paragraph E.1 of part 2 of the Corporate
Governance Code. The Nomination Committee c onsists of Dr. Wang Jin, Dr. Yang and Dr. Yin
Junming, with Dr. Wang Jin serving as the chairman.
The primary duties of the Nomination Committe e include, but are not limited to, reviewing
the structure, size and composition of our Board, assessing the independ ence of independent non-
executive Directors and making recommenda tions to our Board on matters relating to the
appointment of Directors.
Strategy Committee
Our Company has established a strategy comm ittee. The Strategy Committee consists of
Dr. Yang, Dr. Yang Baofeng and Dr. Wang Xi, with Dr. Yang serving as the chairman.
The primary duties of the strategy committee inc lude, but are not limited to, researching on
the Company ’s long-term development strategies and major investment decisions, and providing
recommendations to the Board.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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CORPORATE GOVERNANCE
Code Provision C.2.1 of the Corporate Governance Code
Under paragraph C.2.1 of the Corporate Governance Code, the roles of chairman and chief
executive should be separate and should not be performed by the same individual. Dr. Yang Rui
is the chairman of our Board and the chief executive officer of our Company. With profound
experience in management, Dr. Yang Rui is in charge of the overall management, operation and
strategies of our Group. Despite the fact that the roles of the chairman of our Board and the chief
executive officer of our Company are both performed by Dr. Yang Rui which constitutes a
deviation from paragraph C.2.1 of the Corporate Governance Code, our Board considers that
vesting the roles of both the chairman of our Board and the chief executive officer all in Dr. Yang
Rui has the benefit of ensuring consistent lead ership and more effective and efficient overall
strategic planning of our Group. The balance of power and authority is ensured by the operation
of our Board, our Supervisors and our senior management, each of which comprises experienced
and diverse individuals. Our Board currently co mprises three executive Directors, one non-
executive Director and three independent non-executive Directors. Therefore, our Board possesses
a strong independence element in its composition.
Save as disclosed above, our Company intends to comply with all code provisions under the
Corporate Governance Code.
Board Diversity
We have adopted a board diversity policy (the ‘‘Board Diversity Policy ’’) to enhance the
effectiveness of our Board and to maintain a hig h standard of corporate governance. Pursuant to
the Board Diversity Policy, in reviewing and asse ssing suitable candidates to serve as a Director,
the Nomination Committee will consider a range of diversity perspectives with reference to our
Company ’s business model and specific needs, including but not limited to gender, age, language,
cultural and educational b ackground, professional qualifica tions, skills, knowledge, industry and
regional experience and/or length of service.
Our Directors have a balanced mixed of knowle dge and skills, including but not limited to
business management, research and development and audits. They obtained degrees in various
majors including management, engineering, accounting and finance, etc. Furthermore, our Board
has a relatively wide range of ages, ranging from 34 years old to 69 years old, and consists of
five male members and two female members. O ur Board of Directors is of the view that our
Board satisfies the Board Diversity Policy. Th e Nomination Committee is responsible for
reviewing the diversity of our Board, reviewi ng the Board Diversity Policy from time to time,
developing and reviewing measurable objectives for implementing the Board Diversity Policy,
and monitoring the progress on achieving these measurable objectives in order to ensure that the
policy remains effective.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 306 ---
Our Company will (i) disclose the biographical details of each Director and (ii) report on the
implementation of the Board Diversity Polic y (including whether we have achieved board
diversity) in its annual corporate governance report. In particular, our Group will take
opportunities to increase the proportion of fem ale members of our Board when selecting and
recommending suitable candidates for Board appointments to help enhance gender diversity in
accordance with stakeholder expectations and recommended best practices. Our Group also
intends to promote gender diver sity when recruiting staff at th e mid to senior level so that our
Company will have a pipeline of female senior m anagement and potential successors to our
Board.
We believe that such merit-based selection pro cess with reference to our Board Diversity
Policy and the nature of our business will be in the best interests of our Group and our
Shareholders as a whole.
COMPENSATION OF DIRECTORS, SUPERVISORS AND MANAGEMENT
Our Company offers executive Directors, Supervisors and members of our senior
management, who are also employees of our Company, emolument in the form of salaries,
allowances, discretionary bonus and benefits in kind (if applicable). Our independent non-
executive Directors receive em olument based on their responsibilities (including being members
or the chairman of the Board committees). We adopt a market and incentive-based employee
emolument structure and implement a multi-layered evaluation system which focuses on
performance and management goals.
The aggregate amounts of remuneration which were paid to our Directors and Supervisors
(including fees, salaries, allowances and benefits in kind, performance related bonuses and share
incentive expense) for the financial years ended December 31, 2022, 2023 and 2024 and five
months ended May 31, 2025 were approximate ly RMB19.3 million, RMB20.4 million, RMB21.5
million and RMB7.8 million, respectively.
It is estimated that the aggregate amount of remuneration payable to our Directors and
Supervisors (including fees, salaries, allowances and benefits in kind, discretionary bonuses,
pension scheme contributions, and equity-settled share award expenses) for the financial year
ending December 31, 2025 will be approximatel y RMB16.1 million under arrangements in force
a so ft h ed a t eo ft h i sp r o s p e c t u s .
For the financial years ended December 31, 2022, 2023 and 2024 and five months ended
May 31, 2025, there were two, two, three and three Directors, one, one, one and one supervisor
among the five highest paid individuals, respectively. The aggregate amounts of remuneration
which were paid by our Group to the five highest paid individuals (excluding Directors and
Supervisor) for the financial years ended December 31, 2022, 2023 and 2024 and five months
ended May 31, 2025 were RMB7.5 million, RM B10.6 million, RMB3.1 million and RMB0.8
million, respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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During the Track Record Period, (i) no remuneration was paid to our Directors, Supervisors
or the five highest paid individuals as an inducement to join, or upon joining our Group, (ii) no
compensation was paid to, or receivable by, our Directors or past Directors, Supervisors or the
five highest paid individuals for the loss of office as a director of any member of our Group or
any other office in connection with the management of the affairs of any member of our Group,
and (iii) none of our Directors or Supervisors waived or agreed to waive any emoluments.
Except as disclosed above, no other payment has been paid, or is payable, by our Group to
our Directors, Supervisors or the five highest paid individuals of our Group during the Track
Record Period.
For details, see Note 8 to the Accountants ’ Report as set out in Appendix I to this
prospectus.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Yang, father of Dr. Yang (chairman of the Board,
executive Director and chief executive officer), is able to exercise approximately 78.29% voting
rights in our Company through (i) 138,310,000 Shares directly held by him; (ii) 109,590,000
Shares held by Shuangdeng Investment; (iii) his c ontrol of 19,000,000 Sh ares of Taizhou Heying
through controlling Taizhou Hanfu; and (iv) his co ntrol of 13,600,000 Shares of Taizhou Hexin
through controlling Taizhou Hanfu. Taizhou Hec huang is the general partner of each of Taizhou
Heying and Taizhou Hexin and the general partner of Taizhou Hechuang is Taizhou Hanfu.
Immediately upon completion of the Global Offer ing (assuming the Over-allotment Option is not
exercised), Mr. Yang will be directly and indire ctly entitled to exercise a pproximately 64.66%
voting rights in our Company. In addition, Shuangdeng Investment is owned by Mr. Yang and his
spouse, Ms. Qian Wuzhen （錢五珍）as to 80% and 20%, respectively, thus Ms. Qian Wuzhen is
deemed to be interested in all Shares held by Shuangdeng Investment by virtue of the SFO.
Therefore, Mr. Yang, Ms. Qian Wuzhen, Shuangdeng Investment, Taizhou Hanfu, Taizhou
Hechuang, Taizhou Heying an d Taizhou Hexin will be regard ed as a group of Controlling
Shareholders under the Listing Rules upon the Listing.
Other than the controlling interests in the Group, Mr. Yang and his son Dr. Yang also
control or own other entities (the ‘‘Excluded Entities ’’) during the Track Record Period and up to
the Latest Practicable Date. These Excluded En tities either principally engaged in businesses
different from our Group, such as property development and leasing, production and sales of
cables and inter cell connectors, or did not has actual business operation. None of such Excluded
Entities were subject of any material non-compliance or were involved in any pending or
threatened litigation, arbitration or administra tive proceedings during the Track Record Period and
up to the Latest Practicable Date.
Our Controlling Shareholders have confirmed that, as of the Latest Practicable Date, they
did not have any interest in other business, apart from the business of our Company, which
competes or is likely to compete, directly or indi rectly, with our business, which would require
disclosure under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Our Directors consider that we are capable of carrying on our business independently of our
Controlling Shareholders and their close associates after the Listing, taking into consideration of
the factors below.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Management Independence
Our Board consists of seven Directors, including three executive Directors, one non-
executive Director and three independent non-executive Directors. We believe that our Board as a
whole, together with our senior management, is able to perform the managerial role in our Group
independently from our Controlling Sharehol ders for the following considerations:
(a) each of our Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she acts for the benefit of and in the best interests of our
Company and not allow any conflict between his/her duties as a Director and his/her
personal interests;
(b) our daily management and operation decisions are made by all our executive Directors
and senior management, all of whom have substantial experience in the industry in
which we are engaged and will be able to make business decisions that are in the best
interest of our Group. For details, see ‘‘Directors, Supervisors and Senior
Management ’’in this prospectus;
(c) we have appointed three independent non-executive Directors, comprising more than
one-third of the total members of our Board, who have sufficient knowledge,
experience and competence with a view to bringing independent judgment to the
decision-making process of our Board;
(d) in the event that there is a potential conflict of interest arising out of any transaction to
be entered into between our Group and a Director and/or his/her associate, he/she shall
abstain from voting and shall not be counted towards the quorum for the voting; and
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders which would
support our independent management. For details, see ‘‘ — Corporate Governance ’’ in
this section.
In light of the above, our Directors believe that our Company has sufficient and effective
control mechanisms to ensure that our Directors perform their respective duties properly and
safeguard the interests of our Company and our Shareholders as a whole.
Operational Independence
We have full rights to make all decisions on, and to carry out, our own business operations
independently. We have our own departments spec ializing in these respective areas which have
been in operation and are expected to continue to operate independen tly from our Controlling
Shareholders and their close associates. We hold a ll the requisite licenses, intellectual property
rights and qualifications that are material t o carry on our principal business. We also have
independent access to suppliers and customers and have sufficient capital, facilities and
employees to operate our business independently from our Controlling Shareholders and their
close associates.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 310 ---
Mr. Yang ’s associates have been providing raw materials and leases to our Group during the
Track Record Period. Such transactions are expected to continue after the Listing. For details, see
‘‘Connected Transactions ’’ in this prospectus. Save for the con nected transactions set out in this
section and as disclosed in ‘‘Connected Transactions ’’ in this prospectus, our Directors do not
expect there to be any other transactions betwee n our Group and our Controlling Shareholders or
their respective close associ ates upon or shortly after the L isting. In addition, none of our
Controlling Shareholders and Di rectors or their respective close associates has been our major
supplier or customer which provides any critical se rvices or materials for our operation. Thus, the
existence of the above continuing connected tr ansactions will not affect our operational
independence from our Controlling S hareholders after the Listing.
While some of such Excluded Entities also use the same brand name ‘‘Shuangdeng（雙登）’’
with our Group, there is no disagreements or disputes in relation to the intellectual property rights
among the Group and such Excluded Entities. Save as the connected transactions as disclosed in
the ‘‘Connected Transactions ’’ in this prospectus, Mr. Wang Jin (our independent non-executive
Director) serves as an independent director of Shuangdeng Cable Co., Ltd. （雙登電纜股份有限公
司）and the use of same brand name, there is no sharing and/or transfer of personnels/resources
between the Group and the Excluded Entities. Ba sed on the above, our Directors believe that we
will be able to operate independently from our Controlling Shareholders and their close
associates.
Financial Independence
We have an independent financial system. We make financial decisions according to our
own business needs and neither our Controlling Sha reholders nor their close associates intervene
with our use of funds. We have established an independent finance department with a team of
financial staff and an independent audit, accounting and financial management system.
In addition, we have been and are capable of ob taining financing from third parties without
relying on any guarantee or sec urity provided by our Controlling Shareholders or their close
associates. As of the Latest Practicable Date, there was no loan, advance or guarantee provided by
our Controlling Shareholders or their close associates.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of and do not place undue reliance o n our Controlling Shareholders and their close
associates after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 299 –


--- page 311 ---
CORPORATE GOVERNANCE
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders ’ interests. We have adopted the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Group and our
Controlling Shareholders:
(a) where a Shareholders ’ meeting is to be held for considering proposed transactions in
which our Controlling Shareholders or any of their associates has a material interest,
our Controlling Shareholders or their associate will not vote on the relevant resolutions
and shall not be counted in the quorum for the voting;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon the Listing, if our Compa ny enters into connect ed transactions with
our Controlling Shareholders or any of thei r associates, our Company will comply with
the applicable Listing Rules;
(c) our Board consists of a ba lanced composition of executiv e Directors, non-executive
Director and independent non-executive Directors, with independent non-executive
Directors representing not less than one-third of our Board to ensure that our Board is
able to effectively exercise independent ju dgment in its decision-making process and
provide independent advice to our Shareholders. Our independent non-executive
Directors individually and collectively po ssess the requisite knowledge and experience
to perform their duties. They will review whether there is any conflict of interests
between our Group and our Controlling Shareholders and provide impartial and
professional advice to protect the interests of our minority Shareholders;
(d) 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
(e) we have appointed Orient Capital (Hong Kong) Limited as our compliance advisor to
provide advice and guidance to us in resp ect of compliance with the applicable laws
and the Listing Rules, including various requirements relating to corporate governance.
Based on the above, our Directors believe that sufficient corporate governance measures
have been put in place to manage conflicts of interest that may arise between our Group and our
Controlling Shareholders and to protect our Shareholders ’ interests as a whole after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 300 –


--- page 312 ---
ONE-OFF CONNECTED TRANSACTION
Jiangsu Shuangdeng Lease
Background
As of the Latest Practicable Date, Jiangsu Shuangdeng was controlled by Mr. Yang, one of
our Controlling Shareholders. As such, Jiangsu Shuangdeng i s an associate of Mr. Yang and
therefore a connected person of our Company under the Listing Rules.
We have entered into a series of lease agreements dated October 1, 2021, August 1, 2023
and December 20, 2023 (the ‘‘Jiangsu Shuangdeng Lease(s) ’’) with Jiangsu Shuangdeng,
respectively, which constituted one-off conn ected transactions of our Company (the leased
premises set out below are referred to as the ‘‘Premises ’’).
Principal terms
(a) Lease dated October 1, 2024
Pursuant to the Jiangsu Shuangdeng Lease dated October 1, 2024, our Company has agreed
to lease from Jiangsu Shuangdeng certain p remises for our office uses for a fixed term
commencing from October 1, 2024 to September 30, 2027 at a rental of RMB1,518,254 per year.
Such rentals are determined by the Company and Jiangsu Shuangdeng through arm ’sl e n g t h
negotiation with reference to preva iling market rates for properties of similar size situated in the
locality that are used for similar purposes in t he PRC. The leased premises are located at Room
2001-2008, No. 19, Zhongyang Road, Gulou District, Nanjing, Jiangsu Province, the PRC, with
an gross floor area of 1,039.90 square meters.
(b) Lease dated August 1, 2023
Pursuant to the Jiangsu Shuangdeng Lease, our Company has agreed to lease from Jiangsu
Shuangdeng certain premises for our office uses for a fixed term commencing from August 1,
2023 to July 31, 2025 at a rental of RMB3,440,423.57 per year. Such rentals are determined by
the Company and Jiangsu Shuangdeng through arm ’s length negotiation with reference to
prevailing market rates for properties of simila r size situated in the locality that are used for
similar purposes in the PRC. The leased premises a re located at 1st Floor (partial), 4th Floor, 6th
Floor, 10th-11th Floor, Building 4, District 16, ABP, No. 188 West Fourth Ring Road, Fengtai
District, Beijing, the PRC, with an gross floor area of 2,298.98 square meters.
CONNECTED TRANSACTIONS
– 301 –


--- page 313 ---
(c) Lease dated December 20, 2023
Pursuant to the Jiangsu Shuangdeng Lease, our Company has agreed to lease from Jiangsu
Shuangdeng certain premises for our office uses for a fixed term commencing from December 20,
2023 to December 19, 2026 at a rental of RMB108,968 per year. Such rentals are determined by
the Company and Jiangsu Shuangdeng through arm ’s length negotiation with reference to
prevailing market rates for properties of simila r size situated in the locality that are used for
similar purposes in the PRC. The leased premises are located at Room 801, No. 1518 Zhangyang
Road, Pudong New Area, Shanghai, the PRC, with an gross floor area of 68.47 square meters.
Reasons and benefits of the transaction
Our Company leased the Premises throughout the Track Record Period and up to the Latest
Practicable Date, and any relocation may cause unnecessary disruption to our business operations
and incur unnecessary costs. The Jiangsu Shuangdeng Leases have been entered into in the
ordinary and usual course of business of our Company and on normal commercial terms.
Accounting treatment and Listing Rules implications
In accordance with IFRS 16 applicable to our Group and pursuant to the guidance issued by
the Stock Exchange, when an issuer enters into a lease transaction as a lessee and where the lease
is subject to an agreement with fixed terms, it is treated as a one-off transaction (i.e., an
acquisition of capital assets). As such, each transaction under the Jiangsu Shuangdeng Leases will
be recognized as acquisition of right-of-use asse ts and constitutes a one-off transaction of our
Company before the Listing and will not be classified as continuing connected transactions under
Chapter 14A of the Listing Rules. Accordingly, the reporting, annual review, announcement,
circular and independent shareholders ’ approval requirements with regard to continuing connected
transactions in Chapter 14A of the Listing Rules will not be applicable to the Jiangsu Shuangdeng
Leases.
The value of right-of-use assets we recognized on our balance sheet arising from leasing the
Premises were RMB2.4 million, RMB6.6 million, RMB2.1 million, RMB4.0 million as of
December 31, 2022, 2023 and 2024 and May 31, 2025, respectively.
PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
Provision of raw materials by connected persons
During the Track Record Period, we purchased certain raw materials from our connected
persons in the ordinary course of our business (the connected persons set out below are referred
to as the ‘‘Connected Suppliers ’’).
CONNECTED TRANSACTIONS
– 302 –


--- page 314 ---
A. Provision of products by Jiangsu Fushanda New Energy Technology Co., Ltd. （江蘇福
善達新能源科技有限公司）(‘‘Jiangsu Fushanda ’’)
Background
As of the Latest Practicable Date, Jiangsu Fushanda was wholly owned by Shuangdeng
Cable Co., Ltd. （雙登電纜股份有限公司）(‘‘Shuangdeng Cable ’’) which was owned as to
90% by Jiangsu Haifu Investment Co., Ltd. （江蘇海富投資有限公司）, a company owned as
to 51% by Dr. Yang, our executive Director and chairman of the Board. As such, Jiangsu
Fushanda is an associate of Dr. Yang and therefore a connected person of our Company
under the Listing Rules.
We have been purchasing raw materials from Jiangsu Fushanda including inter cell
connectors during the Track Record Period as part of our ordinary and usual course of
business.
Historical Transaction Amounts
For the years ended December 31, 2022, 2023 and 2024 and five months ended May
31, 2025, the total expenses incurred by us in relation to the provision of raw materials by
Jiangsu Fushanda was appr oximately RMB15.5 million, RMB16.5 million, RMB20.2
million, RMB12.7 million, respectively.
Framework Purchase Agreement
On August 15, 2025, we entered into a framework purchase agreement with Jiangsu
Fushanda to govern the terms and conditions of the transactions between the Group on one
hand and Jiangsu Fushanda on the other hand in connection with the provision of raw
materials (the ‘‘Jiangsu Fushanda Framework Purchase Agreement ’’). Pursuant to the
Jiangsu Fushanda Framework Purchase Agreement, Jiangsu Fushanda has agreed to provide
raw materials, including inter cell connectors to the Group according to the purchase
agreements or orders to be entered into by the Group with Jiangsu Fushanda from time to
time. The Jiangsu Fushanda Framework Purchase Agreement will take effect upon Listing
and will be valid until December 31, 2027, renewable by mutual agreement of the parties,
subject to compliance with the requirement under Chapter 14A of the Listing Rules and all
other applicable laws and regulations.
CONNECTED TRANSACTIONS
– 303 –


--- page 315 ---
Pricing Policies
Fees charged for our purchase of inter cell connectors shall be primarily determined
based on the general guide on the sales price of the goods as provided by the seller from
time to time to the purchasers of such goods (including independent purchasers), with
certain adjustment determined from time to time by the parties on an arm ’s length basis with
reference to the market prices of such goods. We and Jiangsu Fushanda determine, the sales
price provided to us based on arm ’s length negotiation taking i nto account of primarily (i)
the guide sales price for the types of connectors it provided to its purchasers (including
independent purchasers) and market price of copper for the corresponding year; (ii) the total
sales volume we agreed to purchase; and (iii) our sales capacity and industry-leading
position. Jiangsu Fushanda agrees to provide product quality insurance in certain period
after delivery of the products to us. Specific price, payment and insurance policy will be
made according to the respective purchase agreements or orders as further entered into
between Jiangsu Fushanda and us pursuant to the Jiangsu Fushanda Framework Purchase
Agreement.
Annual Caps
The estimated maximum amount payable by us to Jiangsu Fushanda for each of the
three years ending December 31, 2025, 2026 and 2027 in relation to their provision of raw
materials to the Group shall not exceed RMB 25.2 million, RMB26.5 million and RMB27.8
million, respectively.
The proposed annual caps for the three years ending December 31, 2027, being the
estimated total amounts payable by our Group as set out above, are determined with
reference to:
(a) our estimation on the demand for the relevant raw materials with reference to our
estimated sales development and sales volume;
(b) the historical purchase amounts paid to Jiangsu Fushanda by our Group for
purchasing raw materials during the Track Record Period; and
(c) a reasonable increment of the purchase price payable to Jiangsu Fushanda taking
into account the expected inflation rate and increases in costs for the three years
ending December 31, 2027, in particular, the annual cap for the years of 2025,
2026 and 2027 were determined with reference to the transaction amount with
Jiangsu Fushanda already incurred in 2024 with 5% increase in each year.
CONNECTED TRANSACTIONS
– 304 –


--- page 316 ---
B. Provision of products by Shuangdeng Cable
Background
As of the Latest Practicable Date, Shuangdeng Cable was owned as to 90% by Jiangsu
Haifu Investment Co., Ltd. （江蘇海富投資有限公司）, a company owned as to 51% by Dr.
Yang, our executive Director and chairman of the Board. As such, Shuangdeng Cable is an
associate of Dr. Yang and therefore a connected person of our Company under the Listing
Rules.
We have been purchasing cables from Shuangdeng Cable primarily for our
construction and capacity expansion projects as part of our ordinary and usual course of
business during the Track Record Period.
Historical Transaction Amounts
For the years ended December 31, 2022, 2023 and 2024 and five months ended May
31, 2025, the total expenses incurred by us in relation to the provision of cables by
Shuangdeng Cable was approximately RMB 0.3 million, RMB0.4 million, RMB0.6 million,
RMB0.9 million, respectively.
Framework Purchase Agreement
On August 15, 2025, we entered into a framework purcha se agreement with
Shuangdeng Cable to govern the terms and c onditions of the transactions between the
Group on one hand and Shuangdeng Cable on the other hand in connection with the
provision of cables (the ‘‘Shuangdeng Cable Framework Purchase Agreement ’’).
Pursuant to the Shuangdeng Cable Framework Purchase Agreement, Shuangdeng Cable has
agreed to provide cables to the Group according to the purchase agreements to be signed by
the Group with Shuangdeng Cable from time to time. The Shuangdeng Cable Framework
Purchase Agreement will take effect upon the Listing and will be valid until December 31,
2027, renewable by mutual agreement of the parties, subject to compliance with the
requirement under Chapter 14A of the Listing Rules and all other applicable laws and
regulations.
Pricing Policies
Fees charged for our purchase of cables shall be primarily determined based on the
general guide on the sales price of the goods as provided by the seller from time to time to
the purchasers of such goods (including independent purchasers), with certain adjustment
determined from time to time by the parties on an arm ’s length basis with reference to the
market prices of such goods. We and Shuangdeng Cable determine, the sales price provided
t ou sb a s e do na r m ’s length negotiation taking into account of primarily (i) the guide sales
price for the types of cables it provided to its purchasers (including independent purchasers)
for the corresponding year; (ii) the total sales volume we agreed to purchase; and (iii) our
sales capacity and industry-leading position. Shuangdeng Cable agrees to provide product
quality insurance in certain period after delivery of the products to us. Specific price,
payment and insurance policy will be made according to the respective purchase agreements
or orders as further entered into between Shuangdeng Cable and us pursuant to the
Shuangdeng Cable Framework Purchase Agreement.
CONNECTED TRANSACTIONS
– 305 –


--- page 317 ---
Annual Caps
The estimated maximum amount payable by us to Shuangdeng Cable for each of the
three years ending December 31, 2025, 2026 and 2027 in relation to their provision of
cables to the Group will be RMB950,000, RMB998,000 and RMB1,048,000, respectively.
The proposed annual caps for the three years ending December 31, 2027, being the
estimated total amounts payable by our Group as set out above, are determined with
reference to:
(a) our estimation on the demand for the relevant cables with reference to our
estimated expansion on our production capacity;
(b) the historical purchase amounts paid to Shuangdeng Cable by our Group for
purchasing raw materials during the Track Record Period; and
(c) a reasonable increment of the purchase price payable to Shuangdeng Cable taking
into account the expected inflation rate and increases in costs for the three years
ending December 31, 2027, in particular, the annual cap for the years of 2025,
2026 and 2027 were determined with reference to the transaction amount with
Shuangdeng Cable already incurred in 2024 with 5% increase in each year.
Implications under the Listing Rules
Since the Jiangsu Fushanda and Shuangdeng Cable are all associates of Dr. Yang, the
transactions under the Jiangsu Fushanda Framework Purchase Agreement and Shuangdeng Cable
Framework Purchase Agreement (together, the ‘‘Connected Supplier ’s Agreements ’’)h a v eb e e n
aggregated pursuant to Rule 14A.81 of the Listing Rules. The aggregated annual caps under the
Connected Suppliers ’ Agreements for each of the three years ended December 31, 2025, 2026 and
2027 will be RMB26.15 million, RMB27.50 m illion and RMB28.85 million, respectively.
As one or more of the applicable percentage ratios (other than the profits ratio) of the
proposed aggregated annual caps in respect of the purchase of raw materials pursuant to the
Connected Suppliers ’ Agreements exceed 0.1% but are all less than 5% on an annual basis, the
transactions under the Connected Suppliers ’ Agreements will be subject to the reporting, annual
review and announcement requirements but are exempt from the independent Shareholders ’
approval requirement under Chapter 14A of the Listing Rules.
CONNECTED TRANSACTIONS
– 306 –


--- page 318 ---
Reasons for and Benefits of the Transactions with the Connected Suppliers
We have continued procurement relations hips with the Connected Suppliers primarily
because the Connected Suppliers are all located i n Taizhou, with lower transportation costs and
faster response to the Company ’s needs. Projects relating to the above mentioned transactions
were obtained through ind ependent tendering proce sses. In addition, Dr. Yang ’s relationships as
well as the relatively long history of busine ss relationships lead to greater mutual trust ’’.W e
believe that it is in the interest of the Company and our Shareholders as a whole to continue to
carry out connected transactions with the Connected Suppliers upon Listing having considered the
following factors: (a) each Connected Supplier has a well-established quality control system and
research and development capability to meet ou r requirements; (b) the supply channel of each
Connected Supplier allows it to meet our increase in demand in the case that we plan to expand
our production lines; (c) each Connected Supplier provides h igh quality after-sales and
maintenance services to ensure quality of produc ts provided to us; (d) we have established a
stable relationship with each Connected Supp lier during the course of which the relevant
Connected Supplier has provided us with a stead y and reliable supply of high quality products in
accordance with our specifications; and (e) the prices and terms of services offered by the
Connected Suppliers have been no less favorable than those offered by Independent Third Parties.
In addition to the Connected Suppliers, we h ave also engaged alternative third parties
suppliers for the provision of the similar raw mate rials/services during the Track Record Period.
We purchased no more than 1.0% of raw materials from Connected Suppliers during the Track
Record Period, and the purchase of these raw materials was not and will not be significantly
affected by the availability of Connected Suppliers as inter cell connectors and cables are
common raw materials with other comparable supp liers readily available in the market. Based on
our experiences in identifying alternative supplie rs and also the existing relationships with the
suppliers other than the Connected Suppliers, we are and will be able to source these raw
materials from alternative suppliers at simila r prices, quality and quantity within similar
timeframe.
INTERNAL CONTROL MEASURES FOR PARTIALLY-EXEMPT CONTINUING
CONNECTED TRANSACTIONS
We have established the following internal re view procedures to ensure that the terms for
the partially-exempt continuing connected trans actions we have or may have in the future are on
normal commercial terms and no more favorable to the counterparties than terms available to
Independent Third Parties:
 If a comparable market price is available, we shall compare the proposed product price
or service fee with the market price and take into account the market price of copper
and steel to ensure that the proposed product price or service fee will not be higher
than the selling price of product or service of a similar type or nature provided by
independent third-party suppliers or providers;
CONNECTED TRANSACTIONS
– 307 –


--- page 319 ---
 Before selecting a product supplier or services provider, our procurement department
shall obtain price quotations from certain independent third-party suppliers or
providers. The factors to be considered by us in conducting internal assessments
include price, quality, exclusivity of pr oduct or service, and value added to us;
 If no comparable market price is available, our procurement department shall conduct
arm’s length negotiation with the relevant connected persons to determine the terms in
line with the relevant pricing policies based on trade cost of the product involved or
value of the relevant service and the actual costs and expenses incurred;
 After arm ’s length negotiation with the connected person, our procurement department
will report to our senior management who will approve individual transactions as
appropriate;
 Our internal audit department will regularl y collect and monitor the transaction amount
of continuing connected transactions to ensure timely assessment on whether the
annual caps are exceeded; and
 Our independent non-executive Directors will also conduct annual review on the non-
exempt continuing connected transactions to ensure that such transactions have been
entered into on normal commercial terms, are fair and reasonable and conducted
according to the terms of the relevant framework agreement. The auditor of our
Company will also conduct annual review on the pricing and annual cap of the non-
exempt continuing connected transactions.
CONFIRMATION OF DIRECTORS
Our Directors (including our independent non-e xecutive Directors) consider that all the
continuing connected transactions de scribed under the sub-section entitled ‘‘ — Partially-exempt
Continuing Connected Transactions ’’ in this section have been and will be carried out (i) in the
ordinary and usual course of our business, (ii) on normal commercial terms or better and (iii) in
accordance with the respective terms that are fair and reasonable and in the interests of our
Company and our Shareholders as a whole.
Our Directors (including our independent non-e xecutive Directors) are also of the view that
the proposed annual caps of the continuing connected transactions described under the sub-section
entitled ‘‘ — Partially-exempt Continuing Connected Transactions ’’ in this section are fair and
reasonable and are in the interests of our Company and our Shareholders as a whole.
CONNECTED TRANSACTIONS
– 308 –


--- page 320 ---
CONFIRMATION OF THE JOINT SPONSORS
The Joint Sponsors are of the view (i) that the continuing connected transactions described
under the sub-section entitled ‘‘ — Partially-exempt Continuing Connected Transactions ’’ in this
section have been and will be entered into in the ordinary and usual course of our business, on
normal commercial terms or better, and in accordance with the respective terms that are fair and
reasonable and in the interests of our Company and our Shareholders as a whole; and that the
proposed annual caps of such continuing connected transactions are fair and reasonable, and in
the interests of our Company and our Shareholders as a whole.
WAIVER APPLICATION FOR PARTIALLY-EXEMPT CONTINUING CONNECTED
TRANSACTIONS
The transactions described under the sub-section entitled ‘‘ — Partially-exempt Continuing
Connected Transactions ’’ in this section constitute our conti nuing connected transactions under
the Listing Rules, which are exempt from the independent Shareholders ’ approval requirements
but subject to the reporting, annual review, announcement requirements of the Listing Rules.
In respect of these continuing connected transactions, pursuant to Rule 14A.105 of the
Listing Rules, we have applied for, and the Stock Exchange has granted, waivers exempting us
from strict compliance with the announcement requirement under Chapter 14A of the Listing
Rules in respect of the continuing connected transactions as disclosed in ‘‘－ Partially-exempt
Continuing Connected Transactions ’’ in this section, subject to the conditions that the aggregate
amounts of the continuing connected transactions for each financial year shall not exceed the
relevant amounts set forth in the respective annual caps (as stated above).
CONNECTED TRANSACTIONS
– 309 –


--- page 321 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and without taking into account any H Shares which may be issued pursuant to the
exercise of the Over-allotment Option, the fo llowing persons will have an interest or short
position in the Shares or the underlying Shares w hich would fall to be disclosed to our Company
and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the
SFO or, will be, directly or indirectly, interested in 10% or more of the nominal value of any
class of share capital carrying rights to vote in all circumstances at general meetings of our
Company:
Name of Shareholder Nature of interest
Description of
Shares
Number of
Shares to be
held after the
Global
Offering
Approximate
percentage of
shareholding
in the relevant
type of Shares
immediately
after the
Global
Offering (1)
Approximate
percentage of
shareholding
in the total
share capital
of our
Company
immediately
after the
Global
Offering (1)
(%) (%)
Shuangdeng Investment (2) . . . . Beneficial owner Unlisted Shares 98,630,000 35.90 26.29
H Shares 10,960,000 7.72
Ms. Qian Wuzhen （錢五珍）(2) . . Beneficial owner Unlisted Shares 98,630,000 35.90 26.29
H Shares 10,960,000 7.72
Taizhou Heying (2) . . . . . . . . . Beneficial owner Unlisted Shares 19,000,000 6.91 4.56
Taizhou Hechuang (2) ........ I n t e r e s ti nc o n t r o l l e d
corporations
Unlisted Shares 32,600,000 11.86 7.82
Taizhou Hanfu . . . . . . . . . . . Interest in controlled
corporations
Unlisted Shares 32,600,000 11.86 7.82
Mr. Yang (2) . . . . . . . . . . . . . Beneficial owner Unlisted Shares 138,310,000 50.34 64.66
Interest in controlled
corporations
Unlisted Shares 131,230,000 47.76
H Shares 10,960,000 7.72
Zaoyang Fund (3) .......... B e n e f i c i a lo w n e r HS h a r e s 2 2 , 0 0 0 , 0 0 0 1 5 . 4 9 5 . 2 8
Hubei Gaotou Huimeng
Entrepreneurship Investment
Management Co., Ltd. （湖北
高投匯盟創業投資管理有限
公司）(‘‘Hubei Gaotou ’’)(3) ..
Interest in controlled
corporations
H Shares 22,000,000 15.49 5.28
Hubei Provincial HIGH
Technology Industry
Investment Co., Ltd. （湖北省
高新產業投資集團有限公司）
(‘‘Hubei Technology ’’)
(3) ...
Interest in controlled
corporations
H Shares 22,000,000 15.49 5.28
Mr. Qian Bingqing （錢冰清） . . Beneficial owner H Shares 12,000,000 8.45 2.88
Mr. Zhu Shiping （祝士平）. . . . Beneficial owner H Shares 12,000,000 8.45 2.88
Mr. Zhou Yuezhang （周躍章）. . Beneficial owner H Shares 12,000,000 8.45 2.88
SUBSTANTIAL SHAREHOLDERS
– 310 –


--- page 322 ---
Notes:
(1) The calculation is based on the total number of 274,773,300 Unlisted Shares and 142,052,700 H Shares in issue
upon completion of the Global Offering (assuming the Over-allotment Option is not exercised) comprising (i) an
aggregate of 83,495,700 H Shares to be converted from the Unlisted Shares and (ii) 58,557,000 H Shares to be
issued pursuant to the Global Offering (assuming the Over-allotment Option is not exercised).
(2) As of the Latest Practicable Date, (i) Shuangdeng Investment is owned as to 80% and 20% by Mr. Yang and Ms.
Qian Wuzhen (spouse of Mr. Yang), respectively; (ii) Taizhou Hanfu, wholly owned by Mr. Yang, is the general
partner of Taizhou Hechuang and is responsible for the management of Taizhou Hechuang; (iii) Taizhou Hechuang
is the general partner of each of Taizhou Heying and Taizhou Hexin and is responsible for the management of
Taizhou Heying and Taizhou Hexin. As such, (i) each of Taizhou Hanfu and Taizhou Hechuang is deemed to be
interested in the Shares held by Taizhou Heying and Taizhou Hexin; (ii) Mr. Yang is deemed to be interested in the
Shares held by Shuangdeng Investment, Taizhou Heying and Hexin; (iii) Ms. Qian Wuzhen is deemed to be
interested in the Shares held by Shuangdeng Investment.
(3) As of the Latest Practicable Date, Hubei Gaotou, wholly owned by Hubei Technology, is the general partner of
Zaoyang Fund and is responsible for the management of Zaoyang Fund. As such, each of Hubei Gaotou and Hubei
Technology is deemed to be interested in the Shares held by Zaoyang Fund.
For details of the substantial Shareholders who w ill be, directly and/or indirectly, interested
in 10% or more of the nominal value of any class of share capital carrying rights to vote in all
circumstances at general meeting of any other member of our Group, see ‘‘Appendix VI —
Statutory and General Information — Further Information about our Directors, Supervisors and
Substantial Shareholders — 2. Substantial Shareholders ’’in this prospectus.
Save as disclosed herein, our Directors are not aware of any persons who will, immediately
following completion of the Global Offering (assuming the Over-allotment Option is not
exercised), without taking into account the Offer Shares that may be taken up under the Global
Offering, have interests or short positions in Sh ares or underlying Shares which would fall to be
disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO or, will be, directly or
indirectly, interested in 10% or more of the nomin al value of any class of share capital carrying
rights to vote in all circumstances at general meetings of our Company.
SUBSTANTIAL SHAREHOLDERS
– 311 –


--- page 323 ---
This section presents certain information regarding our share capital prior to and upon the
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered share capital of our Company was
RMB358,269,000 comprising 358,269,000 Unlisted Shares with a nominal value of RMB1.00
each.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately upon completion of the Global Offe ring, 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
percentage of
the total issued
share capital
(%)
U n l i s t e dS h a r e si ni s s u e........................ 2 7 4 , 7 7 3 , 3 0 0 6 5 . 9 2
H Shares to be converted from Unlisted Shares * . . . . . . . 83,495,700 20.03
H Shares to be issued pursuant to the Global Offering . . . 58,557,000 14.05
Total ..................................... 416,826,000 100.00
Immediately upon completion of the Global Offe ring, assuming the Over-allotment Option is
fully exercised, the share capital of our Company will be as follows:
Description of Shares
Number of
Shares
Approximate
percentage of
the total issued
share capital
(%)
U n l i s t e dS h a r e si ni s s u e........................ 2 7 4 , 7 7 3 , 3 0 0 6 4 . 5 6
H Shares to be converted from Unlisted Shares
* . . . . . . . 83,495,700 19.62
H Shares to be issued pursuant to the Global Offering . . . 67,340,500 15.82
Total ..................................... 425,609,500 100.00
Note:
* For details of the identities of the Shareholders whose Shares will be converted into H Shares upon Listing, see
‘‘History, Development and Corporate Structure – Public Float ’’in this prospectus.
SHARE CAPITAL
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SHARE CLASSES
Upon completion of the Global Offering and conversion of 83,495,700 Unlisted Shares into
H Shares, our Company would have Unlisted Sha res and H Shares. Both Unlisted Shares and H
Shares are ordinary shares in the share capital of our Company are regarded as the same class of
Shares. Apart from certain qualified domestic in stitutional investors in the PRC, certain qualified
PRC investors under the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong
Stock Connect, and other persons who are entitled t o hold our H Shares pursuant to relevant PRC
laws and regulations or upon approvals of any competent authorities, H S hares generally cannot
be subscribed by or traded among legal and natural persons of the PRC.
Unlisted Shares and H Shares will rank pari passu with each other in all other respects and,
in particular, will rank equally for all dividends o r distributions declared, paid or made after the
date of this prospectus. All dividends in respect of the H Shares are to be paid by us in Hong
Kong dollars or in the form of H Shares.
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
Upon completion of the Global Offering, all our Unlisted Shares (other than those
converting to H Shares) are not listed or traded on any stock exchange. The holders of our
Unlisted Shares may convert their Shares into H Shares provided such conversion shall have gone
through any requisite internal approval proces s and complied with the regulations prescribed by
the securities regulatory authorities of the Stat e Council and the regula tions, requirements and
procedures prescribed by the overseas stock exchange(s) a nd complete the filing process
procedure with CSRC. The listing of such converted Shares on the Hong Kong Stock Exchange
will also require the approval of the Hong Kong Stock Exchange.
In accordance with the Guidelines on Application for ‘‘Full Circulation ’’ of Domestic
Unlisted Shares of H-share Companies （《H股公司境內未上市股份申請‘‘全流通’’業務指
引》）(‘‘Full Circulation Guidelines ’’) published and implemented by the CSRC on November 14,
2019 and the Overseas Listing Trial Measures, d omestic unlisted shares of H-share companies
(including domestic unlisted shares held by domestic shareholders prior to the overseas listing,
domestic unlisted shares further issued in the P RC after the overseas listing and unlisted shares
held by foreign shareholders) could be listed a nd traded on the Hong Kong Stock Exchange after
application to file with the CSRC. The Full Circu lation Guidelines are applicable to domestic
companies listed on the Hong Kong Stock Excha nge only and not applicable to companies dual
listed in the PRC and on the Hong Kong Stock Exchange.
The Company has filed for application for a ‘‘full circulation ’’ of the unlisted shares on
August 29, 2024 and submitted the applicatio n reports, authorization documents of the
shareholders of unlisted shares for which an H-share ‘‘full circulation ’’ are applied, explanation
about the compliance of share acquisition and others documents in accordance with the
requirements of the CSRC.
SHARE CAPITAL
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Upon completion of the Global Offering, 83,495,700 Unlisted Shares held by Shuangdeng
Investment, Zaoyang Fund, Xiangyang Investment, Mr. Qian Bingqing, Mr. Zhu Shiping, Mr.
Zhou Yuezhang, Hengsheng Zizhu, Mr. Zhou Ping, Mr. Zhou Weigang and Mr. Zhai Lifeng will
be converted into H Shares on a one-for-one basis. The conversion of these Unlisted Shares into
H Shares have been approved by the CSRC on June 12, 2025 and an application has been made
to the Listing Committee for such H Shares to be listed on the Hong Kong Stock Exchange.
Based on the procedures for the conversion of our Unlisted Shares into H Shares as
disclosed in this section, we can apply for the lis ting of all or any portion of our Unlisted Shares
on the Hong Kong Stock Exchange as H Shares in advance of any proposed conversion to ensure
that the conversion process can be completed promptly upon notice to the Hong Kong Stock
Exchange and delivery of Shares for entry on the H Share register. As any listing of additional
Shares after our initial listing o n the Hong Kong Stock Exchange is ordinarily considered by the
Hong Kong Stock Exchange to be a purely administrative matter, it will not require such prior
application for listing at the time of our initial listing in Hong Kong. Any application for listing
of the converted Shares on the Hong Kong Stock Exchange after our initial listing is subject to
prior notification by way of announcement to inform Shareholders and the public of such
proposed conversion.
After all the requisite approvals have been obt ained, the following procedure will need to be
completed in order to effect the conversion: the relevant Unlisted Shares will be withdrawn from
the Unlisted Share register and we will re-register such Shares on our H Share register maintained
in Hong Kong and instruct the H Share Registrar to issue H Share certificates. Registration on our
H Share register will be conditional on (a) ou r H Share Registrar lodging with the Hong Kong
Stock Exchange a letter confirming the proper entry of the relevant H Shares on the H Share
register of members and the due dispatch of H Share certificates; and (b) the admission of the H
Shares to trade on the Hong Kong Stock Excha nge in compliance with the Listing Rules, the
General Rules of HKSCC and the HKSCC Opera tional Procedures in force from time to time.
Until the converted shares are re-registered on our H Share register, such Shares would not be
listed as H Shares.
So far as we are aware, upon completion of the Global Offering, other than the Shareholders
who will convert their Unlisted Shares into H Shares as mentioned above, none of our
Shareholders currently proposes to convert any of their Unlisted Shares into H Shares.
TRANSFER OF SHARES ISSUED PR IOR TO THE GLOBAL OFFERING
In accordance with the PRC Company Law, the shares issued prior to any public offering of
shares by a company cannot be transferred within one year from the date on which such publicly
offered shares are listed and traded on the relevant stock exchange. As such, the Shares issued by
our Company prior to the issue of H Shares will be subject to such statutory restriction on
transfer within a period of one year from the Listing Date.
SHARE CAPITAL
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--- page 326 ---
Our Directors, Supervisors and members of the senior management of our Company shall
declare their shareholdings in our Company and any changes in their shareholdings. Shares
transferred by our Directors, Supervisors and members of the senior management each year during
their term of office shall not exceed 25% of their total respective shareholdings in our Company.
The Shares that the aforementioned persons held in our Company cannot be transferred within
one year from the date on which the shares are listed and traded, nor within half a year after they
leave their positions in our Company. The Article s of Association may contain other restrictions
on the transfer of the Shares held by our Directors, Supervisors and members of senior
management of our Company.
For details, see ‘‘Underwriting — Underwriting Arrangements and Expenses —
Undertakings pursuant to the H ong Kong Underwriting Agreement — (A) Undertakings by our
Company and the Controlling Shareho lders in respect of our Company ’’in this prospectus.
REGISTRATION OF SHARES NOT LISTED ON THE OVERSEAS STOCK EXCHANGE
According to the Notice of Centralized Registration and Deposit of Non-overseas Listed
Shares of Companies Listed o n an Overseas Stock Exchange （《關於境外上市公司非境外上市股
份集中登記存管有關事宜的通知》）issued by the CSRC, our Company is required to register and
deposit our Shares that are not listed on the overseas stock exchange with the CSDC within 15
business days upon the Listing and provide a writte n report to the CSRC regarding the centralized
registration and deposit of our Shares that are not listed on the overseas stock exchange as well as
the offering and listing of our H Shares.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING IS REQUIRED
For details, see ‘‘Appendix IV — Summary of Principal Legal and Regulatory Provisions
and ‘‘Appendix V — Summary of Article of Association ’’in this prospectus.
SHARE CAPITAL
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--- page 327 ---
THE CORNERSTONE PLACING
We have entered into one cornerstone investment agreement ( ‘‘Cornerstone Investment
Agreement ’’) with the cornerstone investor set out below ( ‘‘Cornerstone Investor ’’), pursuant to
which the Cornerstone Investors has agreed to, subject to certain conditions, subscribe, or cause
its designated entity to subscribe, at the Offer P rice for such number of Offer Shares (rounded
down to the nearest whole board lot of 500 Shares) as may be purchased for an aggregate amount
of RMB220 million (equivalent to approxi mately HK$241.93 million in aggregate) (the
‘‘Cornerstone Placing ’’). The calculations in this section, which are based on the exchange rate
as disclosed in the section headed ‘‘Information about this Prospectus and the Global Offering ’’,
are for illustration purpose. The final number of H Shares to be subscribed by the Cornerstone
Investor will be set out in the allotment results announcement in respect of the Global Offering to
be issued by the Company.
Based on the Offer Price of HK$14.51 per Share, the number of Offer Shares to be
subscribed for by the Cornerstone Investor would be 16,673,000 Offer Shares, representing (i)
approximately 28.47% of the Offer Shares to be issued pursuant to the Global Offering and
approximately 4.00% of our total issued share capital immediately upon completion of the Global
Offering (assuming the Over-allotment Option is n ot exercised), and (ii) approximately 24.76% of
the Offer Shares to be issued pursuant to the Global Offering and approximately 3.92% of our
total issued share capital immediately upon completion of the Global Offering (assuming the
Over-allotment Option is fully exercised).
Our Company is of the view that the Cornerstone Placing will help to raise the profile of
our Company and to signify that such investor have confidence in our business and prospects.
CORNERSTONE INVESTOR
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The Cornerstone Placing will form part of the International Offering and the Cornerstone
Investor will not subscribe for any Offer Shares u nder the Global Offering (other than pursuant to
the Cornerstone Investment Agreement).
The Offer Shares to be subscribed by the Cornerstone Investor will rank pari passu in all
respects with the other fully paid Shares in issue fo llowing the completion of the Global Offering.
Immediately following the completion of the Global Offering, the Cornerstone Investor and its
close associates will not become a substantial Shareholder of our Company and will not have any
Board representation in our Company. The Offer Shares to be subscribed by the Cornerstone
Investor will be counted towards the public float of our Company under Rule 8.08 of the Listing
Rules. The three largest public Shareholders will hold no more than 50% of the Shares held in
public hands for the purpose of Rule 8.08(3) of the Listing Rules.
Other than a guaranteed allocation of the relevant Offer Shares at the Offer Price, the
Cornerstone Investor do not have any preferential rights in the Cornerstone Investment
Agreements compared with other public Shareholders.
To the best knowledge of our Company, (i) the Cornerstone Investor is an Independent
Third Party and is not a connected person as defined under the Listing Rules; (ii) the Cornerstone
Investor is independent of the Group, the Group ’s connected persons and their associates, and is
not an existing Shareholder or a close associate o f the Group; (iii) the Cornerstone Investor is not
accustomed to take and has not taken instructions in relation to the acquisition, disposal, voting or
other disposition of Shares registered in its name or otherwise held by it from our Company or
any of our directors, supervisor s, chief executive, our Contro lling Shareholders, substantial
Shareholders, or existing Shareholders, or any of their subsidiaries or their respective close
associates; (iv) the subscription of the relevant Offer Shares by the Cornerstone Investor is not
financed, funded or backed directly or indirectly by our Company, or any of our directors,
supervisors, chief executive, our C ontrolling Shareholders, substa ntial Shareholders, or existing
Shareholders, or any of their subsidiaries or their respective close associates; and (v) the
Cornerstone Investor makes independent inv estment decision. To the best knowledge of the
Company, none of the Cornerstone Investor or its shareholders are listed on any stock exchange,
and the Cornerstone Investor has confirmed that all necessary approvals have been obtained with
respect to the Cornerstone Placing and that no spec ific approval from its shareholders or relevant
stock exchange is required for the cornerstone investment.
As confirmed by the Cornerstone Investor, its subscription under the Cornerstone Placing
would be financed by its own internal resources. There is no side arrangement or agreement
between our Company and the Cornerstone Investor, nor benefit, direct or indirect, conferred on
the Cornerstone Investor by virtue of or in relation to the Global Offering and the Listing, other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price. The Cornerstone
Investor has confirmed that it has sufficient f unds to settle the investment amount under the
Cornerstone Placing and will pay and settle in fu ll for the relevant Offer Shares that it has
subscripted before dealings in the Offer Shares commences on the Stock Exchange.
CORNERSTONE INVESTOR
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The number of Offer Shares to be subscribed by the Cornerstone Investor may be affected
by reallocation of the Offer Shares between the International Offering and the Hong Kong Public
Offering in the event of over-subscription under the Hong Kong Public Offering as described in
the paragraph headed ‘‘Structure of the Global Offering — The Hong Kong Public Offering —
Reallocation ’’ in this prospectus, the number of Offer Shares to be subscribed by each
Cornerstone Investor shall be reduced on a pro rata basis to satisfy the shortfall, after taking into
account the requirements under Appendix F1 to the Listing Rules. Details of the actual number of
Offer Shares to be allocated to the relevant Cornerstone Investor will be disclosed in the allotment
results announcement of our Company to be published on or around August 25, 2025.
If there is over-allocation in the Internatio nal Offering, the settlement of such over-
allocation may be effected through delayed de livery of the Offer Shares to be subscribed by
Cornerstone Investor under the Cornerstone Placing. Where delayed delivery takes place, (i) the
delayed delivery date shall be no later than thr ee Business Days following the last day on which
the Over-Allotment Option may be exercise; a nd (ii) no extra payment will be made to the
Cornerstone Investor for the purpose of the delayed delivery arrangement, each Cornerstone
Investor that may be affected by such delayed delivery has agreed that it shall nevertheless pay
f o rt h er e l e v a n tO f f e rS h a r e so no rb e f o r e8 : 0 0a . m .o nt h eL i s t i n gD a t e .I ft h e r ei sn oo v e r -
allocation in the International Offering, delayed delivery will not take place. The maximum
number of Offer Shares that could be subject to the delayed delivery arrangement is the maximum
number of Shares to be allotted under the Over-allotment Option, i.e. 8,783,500 H Shares. As
such, there will be no deferred settlement of the investment amount for the Offer Shares to be
subscribed by the Cornerstone Investor pursuant to the Cornerstone Investment Agreements. For
details of the Over-allotment Option, please refer to the paragraph headed ‘‘Structure of the
Global Offering — Over-allotment Option ’’in this Prospectus.
CORNERSTONE INVESTOR
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--- page 330 ---
The following table sets forth details of the Cornerstone Placing:
Based on the Offer Price of HK$14.51 per Offer Share
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Cornerstone Investor
Total
Investment
Amount
Number of
Offer
Shares (1)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
(in million)
Sanshui Venture Capital Co.,
Limited （三水創業投資
有限公司）(‘‘Sanshui VC ’’) RMB220 16,673,000 28.47 4.00 24.76 3.92
Notes:
(1) Calculated based on the currency translation of RMB1.00 to HK$1.0997. Rounded down to the nearest whole
board lot of 500 Shares. Calculated based on the exchange rate set out in the paragraph headed ‘‘Information
about this Prospectus a nd the Global Offering — Exchange Rate Conversion ’’ in this prospectus with
brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Hong Kong
Stock Exchange trading fee of 0.00565% exclusive.
THE CORNERSTONE INVESTOR
The information about our Cornerstone Investor set forth below has been provided by the
Cornerstone Investor in connection with the Cornerstone Placing.
Sanshui VC is a limited liability company inc orporated under the laws of Hong Kong on
June 5, 2025 and is a wholly-own subsidiary of Taizhou Sanshui Investment Development Co.,
Ltd.（泰州三水投資開發有限公司）, a company ultimately controlled by Taizhou State-owned
Assets Supervision and Administration Commission （泰州市政府國有資產監督管理委員會）.
CLOSING CONDITIONS
The obligation of the Cornerstone Investor to subscribe for the Offer Shares under the
Cornerstone Investment Agreement is subject to, among other things, the following closing
conditions:
(i) the underwriting agreements for the Hong Kong Public Offering and the International
Offering being entered into and having become effective and unconditional (in
accordance with the respective original terms or as subsequently waived or varied by
agreement of the parties thereto) by no lat er than the time and date as specified in
these underwriting agreements, and neither o f the aforesaid underwriting agreements
having been terminated;
CORNERSTONE INVESTOR
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(ii) the Offer Price having been agreed acco rding to the Underwriting Agreements and
price determination agreement to be signed among the parties thereto in connection
with the Global Offering;
(iii) the Listing Committee of the Stock Exchange having granted the listing of, and
permission to deal in, the Shares (including the Shares to be subscribed for by the
Cornerstone Investor) as well as other applicable approvals and waivers, and such
approvals, permissions or waivers having not been revoked prior to the commencement
of dealings in the Shares on the Stock Exchange;
(iv) that no law shall have been enacted or promulgated by any governmental authority
prohibiting the consummation of the transac tions contemplated in the Global Offering
or in the Cornerstone Investment Agreements, and there shall be no order or injunction
from a court of competent jurisdiction i n effect precluding or prohibiting the
consummation of such transactions; and
(v) that the respective representations, warra nties, undertakings, acknowledgements and
confirmations of the Cornerstone Investor under the Cornerstone Investment
Agreement are accurate and true in all respects and not misleading, and there is no
material breach of the Cornerstone Investment Agreement on the part of relevant
Cornerstone Investor.
RESTRICTIONS ON DISPOSALS BY THE CORNERSTONE INVESTOR
The Cornerstone Investor has agreed that it will not, whether directly or indirectly, at any
time during the period of 12 months following the Listing Date (the ‘‘Lock-up Period ’’), dispose
of any of the Offer Shares it has subscribed for pursuant to the Cornerstone Investment
Agreement, save for certain limited circumstanc es, such as transfers to any of its wholly-owned
subsidiaries which will be bound by the same obliga tions of such Cornerstone Investor, including
the Lock-up Period restrictions.
CORNERSTONE INVESTOR
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The following discussion and analysis should be read in conjunction with our
consolidated financial statements included in the Accountants ’ Report in Appendix I to
this prospectus, together with the accompanying notes. Our consolidated financial
statements have been prepar ed in accordance with IFRSs.
The following discussion and analysis conta in forward-looking statements that reflect
our current views with respect to future ev ents and financial performance. These
statements are based on our assumptions and analysis in light of our experience and
perception of historical trends, current cond itions and expected future developments, as
well as other factors we believe are appropriate under the circumstances. However,
whether actual outcomes and developments will meet our expectations and predictions
depends on a number of risks and uncertainties. In evaluating our business, you should
carefully consider the information provided in this prospectus, including but not limited
to the sections headed ‘‘Risk Factors ’’ and ‘‘Business. ’’
For the purposes of this section, unless th e context otherwise requires, references to
the years of 2022, 2023 and 2024 refer to our fiscal years ended December 31 of such
years, respectively.
OVERVIEW
We are a leading company in energy storage business for big-data and telecommunication
industries. We focus on the design, R&D, manufacturing, and sales of energy storage batteries
and systems. Capitalizing on rich experience we have accumulated over a decade through serving
diverse customers operating telecom base stations, data centers, power stations, power grids, and
in other energy storage settings, we are well-posit ioned to capture the vas t market opportunities
brought up by the big data era, and continue leading the development of the industry.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our historical financial condition and results of operations have been affected by a number
of important factors which we believe will contin ue to affect our financial condition and results of
operations in the future. Our results are pri marily affected by the following factors:
End Markets that We Serve and Fl u c t u a t i o ni nC u s t o m e rD e m a n d
During the Track Record Period, we derived revenues primarily from sales of lithium-ion
and lead-acid batteries, with particular focus on ser ving clients operating in telecom base stations,
data centers, electrical energy storage and o ther energy storage settings. For details, see ‘‘ —
Description of Major Components of Our Results of Operations — Revenues ’’ in this section. As
a result, changes, as well as evolving trends in market demands from relevant industries set
significant impact on our business results, a nd is anticipated to continue influencing our
performance in the future.
FINANCIAL INFORMATION
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The demand for lithium-ion and lead-acid batte ries is fueled by the global transition to low-
carbon energy, the growth of 5G telecom base stations, and the expansion of data centers. The
number of 5G telecom base stations is project ed to grow from 5.0 million in 2023 to 25.0 million
by 2030. Similarly, the proliferation of AI and big data analytics is boosting the demand for data
center energy storage, with the global number of data center racks expected to rise from 25.5
million in 2023 to 184.6 million by 2030. Such demands are affected by a broad range of factors,
including general economic conditions in China and worldwide, the regulatory environment, and
the promotion of renewable energy utilization. En ergy storage enhances power supply stability,
solving long-standing challenges in downstream applications. The continuous development and
upgrade of telecom networks in China and worldwide, including the commercial rollout and
expansion of 5G networks, have significantly increased the power storage requirements of
communication bases. Additionally, with the developm ent of artificial intelligence (AI) and high-
performance computing, there is a strong increase in market demand for energy storage products
in data centers with efficient, secure, and c ontinuous power supply capabilities. We expect this
growth trend in relevant sectors to continue in the future, potentially driving sales of our
products. For details, see ‘‘Industry Overview ’’ and ‘‘Business — Overview — Our Market
Opportunities ’’in this prospectus.
In addition, capitalizing on the nature of raw m aterials and technology specifications,
lithium-ion and lead-acid batteries each have unique advantages in addressing particular
requirements under different settings. Lithium-ion batteries are favored for their high energy
density, efficiency, and longer lifespans, while lead-acid batteries offer advantages in terms of
safety, cost-effectiveness, re liability, and established recyc ling processes. As a result, while
lithium-ion batteries, being a new generation of e nergy storage technolog y, have experienced
quick expansion in various settings, lead-acid batte ries remain indispensable in several industrial
applications, including data centers and electrical energy storage settings where massive energy
throughput is required at a low cost level. Furthermore, leveraging our strong technology
capacity, while optimizing our production efficiency, we have invested in continuously enhancing
our products ’ competitiveness in terms of power density , operating temperature range, voltage
range, and life-cycle, allowing us to successf ully distinguish ourselves from competitors. For
instance, our lead-acid batteries can properly se rve high-current, high-po wer applications, with a
cycle life of up to 15 years. Our GFMHR series lead-acid batteries, launched in 2017, are ideal
for application scenarios requiring high power dens ity, providing a reliable, compact solution that
helps save space and reduce costs. Market preferences and technological evolution in these two
types of batteries, as well as our ability to quickl y adapt to such changes, may continue to affect
our business results. Additionally, economic and regulatory factors may also impact the energy
storage market. According to Frost & Sullivan, e conomic influences suc h as fluctuating raw
material costs and changes in demand can affect pricing and production strategies. On the
regulatory side, government policies and incen tives for renewable energy adoption play a crucial
role in market growth. Regulations that mandate energy efficiency and carbon reduction targets
can drive the expansion of energy storage solutions . Financial incentives and subsidies for energy
storage projects can also accelerate the development and adoption. For details, see ‘‘Risk Factors
— Risks Relating to Our Business and Industry — Our business is affected by conditions in the
FINANCIAL INFORMATION
– 322 –


--- page 334 ---
energy storage industry; in particular, potential adverse development of the supply-demand
dynamics of energy storage industry may significantly affect the price and market demand of our
product ’’ and ‘‘Risk Factors — Risks Relating to Our Business and Industry — We may not be
able to derive the desired benefits from our re search and development efforts, and keep up with
the latest technological development and industry trends, which may negatively affect our
competitiveness and profitability ’’in this prospectus.
Fluctuation in Prices of Raw Materials
The fluctuation in prices of raw material is a critical factor that significantly impacts the
energy storage industry, affecting all application scenarios in which our batteries are used. In
2022, 2023, 2024 and the five months ended May 31, 2025, our cost of raw material amounted to
RMB2,824.5 million, RMB2,868.8 million, RMB3,097.2 million and RMB1,357.0 million
representing 83.5%, 84.6%, 82.7% and 85.5% of our total cost of sales for the corresponding
years, respectively. The prices of key raw mater ial such as lead ingots, lead alloys, lithium iron
phosphate, graphite, separators, electrolytes, a nd other auxiliary materials are subject to global
market dynamics, including geopolitical events, c hanges in supply chains, and shifts in demand
from various industries. Managing these fluctuations is essential for maintaining cost-
effectiveness and ensuring stable production outputs.
For lithium-ion batteries, materials such as lith ium iron phosphate are particularly expensive
and prone to price volatility due to their lim ited supply and the growing demand from power
battery of electric vehicles. For details, see ‘‘Industry Overview — Battery and Raw Materials
Price Analysis ’’ in this prospectus. The cost of raw materia ls represented a substantial portion of
the total production cost of sales during the Track Record Period.
According to Frost & Sullivan, average selling pri ce of lithium-ion batteries are significantly
impacted by the price of key raw material, inclu ding lithium iron phosphate and other ancillary
materials. Lead-acid batteries are also volatile in the prices of lead ingots, lead alloys, and other
auxiliary materials. The price of such raw mater ials of lead-acid batteries fluctuated due to
changes in the global metals market, which was relatively stable during the Track Record Period,
and can subsequently impact the cost structure of lead-acid batteries, affecting the pricing
competitiveness and profit margins.
FINANCIAL INFORMATION
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The following sensitivity analysis illustrates t he effects of hypotheti cal fluctuations in our
average cost of raw material on our profit before income tax for the years indicated, assuming all
other factors affecting our prof itability had remained unchanged.
Year Ended December 31,
Five Months Ended
May 31,
2022 2023 2024 2024 2025
(in RMB thousands)
Change in average price of raw
material
+/– 5 % ..................... – /+ 141,223 – /+ 143,442 – /+ 154,860 – /+ 45,276 – /+ 67,852
+/– 1 0 % .................... – /+ 282,446 – /+ 286,885 – /+ 309,719 – /+ 90,551 – /+ 135,703
+/– 1 5 % .................... – /+ 423,669 – /+ 430,327 – /+ 464,579 – /+ 135,827 – /+ 203,555
+/– 2 0 % .................... – /+ 564,891 – /+ 573,769 – /+ 619,438 – /+ 181,102 – /+ 271,406
The following table sets forth a sensitivity test of our profit before income tax on fluctuation
of average selling prices of our batteries for the years indicated, assuming all other factors
affecting our profitability had remained unchanged.
For the year ended December 31,
Five Months Ended
May 31,
2022 2023 2024 2024 2025
(in RMB thousands)
Change in average selling prices of
batteries
+/– 5 % ..................... + / – 199,508 +/ – 209,589 +/ – 220,161 +/ – 68,135 +/ – 90,749
+/– 1 0 % .................... + / – 399,015 +/ – 419,179 +/ – 440,321 +/ – 136,271 +/ – 181,498
+/– 1 5 % .................... + / – 598,523 +/ – 628,768 +/ – 660,482 +/ – 204,406 +/ – 272,247
+/– 2 0 % .................... + / – 798,031 +/ – 838,357 +/ – 880,642 +/ – 272,542 +/ – 362,997
Our response to these fluctuations involves str ategic initiatives such as enhancing supplier
relationships, adjusting pricing strategies in a timely manner, and optimizing our production
processes. These efforts are aimed at mitigating the financial risks associated with raw material
price volatility and maintaining our competitive edge in the industry.
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Expansion of Production Capacity and Op timization of Production Efficiency
Our ability to continuously optimize operati onal efficiency directly influences the
competitiveness of our batteries and our sustaina ble development. This ability is particularly
pivotal for both our lithium-ion and lead-acid b atteries, where market expectations and
technological advancements require agile and efficient production processes to meet evolving
market competition in terms of pricing and qua lity. During the Track Record Period, to capture
market opportunities driven by increased demand for our products due to customers recognition of
their premium quality, technological performance and expansion in relevant industry sectors, we
steadily ramped up our production capacity, allowing us to effectively benefit from economies of
scale. For details, see ‘‘Business — Manufacturing and Production ’’in this prospectus.
Improving operational efficiency is a cornerstone of our strategy, impacting both cost
management and environmental sustainability . We are implementing initiatives to enhance
production line efficiency and reduce our environmental footprint. For instance, during the Track
Record Period, we invested in advanced coating and drying technologies to reduce energy
consumption during electrode manu facturing for lithium-ion batteries. For lead-acid batteries, we
focused on improving charging and formation processes to decrease energy use. Both product
lines benefit from ongoing process optimization. During the Track Record Period, we
continuously invested in measures to enhance production efficiency and cost control, including
improving training programs to ensure our staff are proficient in the latest manufacturing
techniques and best practices, thereby directly contributing to produc tivity and product quality.
This proactive approach improves production uptime, extends equipment lifespan, and reduces the
likelihood of costly unplanne d downtime. For details, see ‘‘Risk Factors — R i s k sR e l a t i n gt oO u r
Business and Industry — We may not be able to increase our production capacity as planned, and
even if our production expansion projects proceed as planned, we may not be able to increase our
production output in a timely manner or at all as initially envisioned ’’, ‘‘Risk Factors — Risks
Relating to Our Business and Industry — We may not continue to be successful in developing
and maintaining a cost-effective battery manufacturing capability ’’ in this prospectus. For details
of our R&D progress and key technologies adopted during the Track Record Period to improve
the efficiency of our production lines, lower defective rates of batteries, and reduce our
environmental footprint, see ‘‘Business — Research & Development ’’in this prospectus.
By expanding and managing our production capacity, strategically and continuously
improving our operational efficiency, we not only meet the current demands of our markets but
also position ourselves to adapt swiftly to futu re changes. This balanced approach between
capacity management and efficiency optimizatio ne n s u r e ss u s t a i n e dg r o w t ha n dl e a d e r s h i pi nt h e
competitive battery industry. However, our opera ting history may not be a reliable predictor of
our prospects and future results of operations. For details, see ‘‘Risk Factors — Risks Relating to
Our Business and Industry — Our operating history may not be a reliable predictor of our
prospects and future results of operations ’’in this prospectus.
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Investment in Research and Developme nt to Maintain Tech nology Leadership
The energy storage battery industry is characterized by technological advances, innovation
and evolving customer demands. Our competitiv eness therefore significantly depends on our
ability to develop innovative, advanced technologies that meet evolving customer ’s demands and
preferences. We rely on our in-house R&D to establish and strengthen our market position, and
achieve continuous growth. Throughout the Track Record Period, we pivot our R&D focus and
resources along with the industrial trend and advancements in energy storage batteries. Adhering
to the principle of ‘‘researching one generation ahead, pilot testing the next, and mass-producing
the current ’’, we aim to enhance the market competitiveness of both lithium-ion batteries and
lead-acid batteries through our R&D efforts. We have R&D centers located in Taizhou, Jiangsu,
Shenzhen, Guangdong, Beijing and Xiangyang, Hubei. Our R&D centers focus on the research
and development of energy storage battery technologies, such as electrochemical technology and
structural innovation, which could improve the safety, cost and performance of our energy storage
batteries.
Our investment in R&D is a cornerstone of our strategy to stay at the forefront of
technological advancements and maintain a competitive edge positio n. In 2022, 2023, 2024 and
the five months ended May 31, 2025, our research and development expenses amounted to
RMB100.7 million, RMB112.8 million, RMB110 .5 million and RMB55.2 million, respectively.
Our R&D efforts have directly led to significant enhancements in the functionality, efficiency,
adaptability to various application scenario s, and reliability of our products. Innovations
developed through our research have allowed us to introduce products with advanced features
that meet the evolving needs of our customers. For i nstance, improvements in specific technology
including battery life, software integration, and e nergy efficiency have directly resulted from our
focused R&D activities. These enhance ments help maintain our products ’ relevance in competitive
markets and directly contribute to increased customer satisfaction and loyalty.
Our R&D initiatives have not only enhanced our existing products but also led to the
development of new technologies that have broadened our market reach and opened up new
revenues streams. The impact of these innovations is evident in our financial performance,
contributing to an overall revenues increase and improving our market position. The development
of new technologies through our R&D initiativ es has enabled us to penetrate new market
segments and expand our geographic reach.
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Another impacts of our R&D investment is the improvement in manufacturing processes and
operational efficiency. Our research has led to the discovery and implementation of cost-saving
techniques and materials, which reduce produc tion costs and enhance the overall sustainability of
our operations. These operational efficiencies translate into lower product prices for customers
and improved margins for our bu siness, thereby enhancing our c ompetitive position in the market.
Additionally, enhanced product offerings and oper ational efficiencies h ave resulted in better
customer satisfaction rates and higher new cust omer acquisition, further boosting our revenues
and profitability. We may not be able to derive the desired benefits from our research and
development efforts, and keep up with the latest technological development and industry trends,
which may negatively affect our competitiv eness and profitability. For details, see ‘‘Risk Factors
— Risks Relating to Our Business and Industry — We may not be able to derive the desired
benefits from our research and development efforts, and keep up with the latest technological
development and industry trends, which may negatively affect our competitiveness and
profitability ’’in this prospectus.
The synergy between increased R&D spending and enhanced financial performance has
significantly propelled our business. The strateg ic alignment of our innovation efforts with market
demands has led to an increase in both revenues and market share. Such a synergy resulted in an
increase in our revenues from RMB4,072.5 m illion in 2022 to RMB4,498.5 million in 2024.
IMPACT OF THE COVID-19 PANDEMIC
In 2022, there was a resurgence of the CO VID-19 pandemic including the highly
transmissible Delta and Omicron variants in China and across the world, which had adversely
affected the economy. Due to the more stringent requirement and limited supply in freight, and
relevant policies affecting the movement of products between regions, we recorded relatively
higher transportation costs in 2022. However, our business and results of operations had not been
materially affected by the COVID-19 pandemic, during the Track Record Period.
For further information on the risk of the C OVID-19 pandemic, see the section headed
‘‘Risk Factors – Risks Relating to Our Business and Our Industry – We face risks related to
health epidemics, natural disasters and other catastrophic events, which could have a material
adverse effect on our business and results of operations. ’’in this prospectus.
BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting
Standards, which comprise all standards and in terpretations approved by the International
Accounting Standards Board. All IFRS Accounting Standards effective for the accounting period
commencing from January 1, 2025, together with the relevant transitional provisions, have been
consistently applied by the Group in the preparation of the Historical Financial Information
throughout the Track Record Period.
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The Historical Financial Information has been prepared under the historical cost convention,
except for wealth management prod ucts, bills receivables classified as financial assets at fair
value through other comprehensive income and derivative financial instruments which have been
measured at fair value. Disposal groups held for sale are stated at the lower of their carrying
amounts and fair values less costs to sell as further explained in Note 2.3 to the Accountants ’
Report included in Appendix I to this Prospectus. The Historical Financial Information is
presented in RMB and all values are rounded to the nearest thousand except when otherwise
indicated.
Our Group has not applied the following new and amended IFRS Accounting Standards, that
have been issued but are not yet effective, in Historical Financial Information. Our Group intends
to apply these new and amended IFRS Accounting Standards, if applicable, when they become
effective.
We are in the process of making a detailed assessment of the impact of these new and
amended IFRS Accounting Standards upon initial application. So far, we consider that these new
and amended IFRS Accounting Standards, except for IFRS 18, may result in changes in certain
accounting policies and no signif icant impact on our financial perfo rmance and financial position
is expected in the period of initial application. The application of IFRS 18 is not expected to have
material impact on our financial position but is expected to affect the presentation of the
statement of profit or loss and statement of cas h flows (additional disclosure will be included in
the financial statements). We will continue to assess the impact of IFRS 18 on our financial
information.
IFRS 18 Presentation and Disclo sure in Financial Statements
(1)
IFRS 19 Subsidiaries without P ublic Accountability: Disclosures (4)
Amendments to IFRS 9 and
IFRS 7
Amendments to the Classification and Measurement of
Financial Instruments (2)
Amendments to IFRS 9 and
IFRS 7
Contracts Referencing Nature-dependent Electricity (2)
Amendments to IFRS 10 and
IAS 28
Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (3)
Notes:
(1) Effective for annual periods beginning on or after January 1, 2027
(2) Effective for annual periods beginning on or after January 1, 2026
(3) No mandatory effective date yet de termined but available for adoption
(4) Effective for reporting periods beginning on or after 1 January 2027
Our Group is in the process of making an assessment of the impact of these new and
amended IFRS Accounting Standar ds upon initial application. So far, our Group considers that
these new and amended IFRS Accounting Standards may result in changes in accounting policies
but are unlikely to have a significant impact on our Group ’s financial performance and financial
position.
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MATERIAL ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGMENTS
AND ESTIMATES
We have identified certain accounting policies t hat are significant to the preparation of our
historical financial information. Some of our accounting policies involve subjective assumptions
and estimates, as well as complex judgments rel ating to accounting items. We set out below some
of the accounting policies and estimates that we be lieve are of critical importance to us or involve
the most significant estimates and judgments used in the preparation of our financial statements.
Our material accounting policy information, which are important for understanding our financial
condition and results of operations, are set o ut in further details in Notes 2.3 and 3 to the
Accountants ’ Report in Appendix I to this prospectus.
Revenues recognition
Revenues from contracts with customers
Revenues from contracts with customers, inc luding distributors and direct sales is
recognized when control of goods or services is transferred to the customers at an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or
services.
When the consideration in a contract includes a variable amount, the amount of
consideration is estimated to which we will be entitled in exchange for transferring the goods or
services to the customer. The variable consider ation is estimated at contract inception and
constrained until it is highly probable that a significant revenues reversal in the amount of
cumulative revenues recognized w ill not occur when the associated uncertainty with the variable
consideration is subsequently resolved.
Sales of products
Revenues from the sales of goods primarily arises from sales of the lead-acid battery,
lithium-ion battery and others, which is recog nized at the point in time when control of the
products is transferred to the customer, generally on the acceptance of the products.
Investments in associates
An associate is an entity in which we have a lon g-term interest of generally not less than
20% of the equity voting rights and over which it has significant influence. Significant influence
is the power to participate in the financial and ope rating policy decisions of the investee, but is
not control or joint control over those policies.
Our investments in an associate are stated in th e consolidated statement of financial position
at our share of net assets under the equity method of accounting, less any impairment losses.
Adjustments are made to bring into line any di ssimilar accounting policies that may exist.
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Our share of the post-acquisition results and o ther comprehensive income of associates is
included in the consolidated statement of profit or loss and consolidated other comprehensive
income, respectively. In addition, when there h as been a change recognized directly in the equity
of the associate, we recognize its share of any changes, when applicable, in the consolidated
statement of changes in equity. Unrealized gains a nd losses resulting from transactions between
our Group and our associates are eliminated to the extent of our investments in the associates,
except where unrealized losses provide evidence of an impairment of the assets transferred.
Goodwill arising from the acquisition of associat es is included as part of our investments in an
associate.
If an investment in an associate becomes an investment in a joint venture or vice versa, the
retained interest is not remeasured. Instead, the investment continues to be accounted for under
the equity method. In all other case, upon loss of significant influence over the associate, we
measure and recognize any retained investment at its fair value. Any difference between the
carrying amount of the associate upon loss of significant influence or joint control and the fair
value of the retained investment and proceeds from disposal is recognized in profit or loss.
When an investment in an associate is classified as held for sale, it is accounted for in
accordance with IFRS 5 Non-current Assets He ld for Sale and Discontinued Operations.
Fair value measurement
We measure our derivative financial instruments at fair value at the end of each reporting
period. Fair value is the price that would be rece ived to sell an asset or paid to transfer a liability
in an orderly transaction between market partic ipants at the measureme nt date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal mark et for the asset or liability, or in the absence of a
principal market, in the most advantageous marke t for the asset or liability. The principal or the
most advantageous market must be accessible by our Group. The fair value of an asset or a
liability is measured using the assumptions that ma rket participants would use when pricing the
asset or liability, assuming that market partic ipants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant ’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.
We use valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
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All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant t o the fair value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is observable, either directly or
indirectly
Level 3 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in th e financial statements on a recurring basis,
we determine whether transfers have occurred b etween levels in the hierarchy by reassessing
categorization (based on the lowest level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or wh en annual impairment testing for an asset is
required (other than inventories, contract assets, deferred tax assets, financial assets, investment
properties and non-current assets/a disposal group classified as held for sale), the asset ’s
recoverable amount is estimated. An asset ’s recoverable amount is the higher of the asset ’so r
cash-generating unit ’s value in use and its fair value less costs of disposal, and is determined for
an individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets, in which case the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impa irment, a portion of the carrying amount of a
corporate asset (e.g., a headquarters building) is allocated to an individual cash-generating unit if
it can be allocated on a reasonable and consistent basis or, otherwise, to the smallest group of
cash-generating units.
An impairment loss is recognized only if the carrying amount of an asset exceeds its
recoverable amount. In assessing value in use, t he estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. An impairment loss is charged to the
statement of profit or loss in the period in which it arises in those expense categories consistent
with the function of the impaired asset.
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An assessment is made at the end of each re porting period as to whether there is an
indication that previously recognized impairment losses may no longer exist or may have
decreased. If such an indication exists, the recoverable amount is estimated. A previously
recognized impairment loss of an asset other th an goodwill is reversed only if there has been a
change in the estimates used to determine the recoverable amount of that asset, but not to an
amount higher than the carrying amount that would have been determined (net of any
depreciation/amortization) had no impairment loss been recognized for the asset in prior years. A
reversal of such an impairment loss is credited to the statement of profit or loss in the period in
which it arises, (Only if there are revalued assets in the financial statements) unless the asset is
carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in
accordance with the relevant accounting policy for that revalued asset.
We did not have goodwill/intangible assets with in definite useful life/intangible assets not
yet available for use during the Track Record Period.
Property, plant and equipment and depreciation
Property, plant and equipment, other than c onstruction in progress, are stated at cost (or
valuation) less accumulated depreciation and any impairment losses. When an item of property,
plant and equipment is classified as held for sale or when it is part of a disposal group classified
as held for sale, it is not depreciated and is accounted for in accordance with IFRS 5, as further
explained in the accounting policy for ‘‘Non-current assets and disposal groups held for sale. ’’
The cost of an item of property, plant and equipment comprises its purchase price and any
directly attributable costs of bringing the a sset to its working condition and location for its
intended use.
Expenditure incurred after items of property, plant and equipment have been put into
operation, such as repairs and maintenance, is normally charged to the statement of profit or loss
in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
expenditure for a major inspection is capita lized in the carrying amount of the asset as a
replacement. Where significant parts of property, plant and equipment are required to be replaced
at intervals we recognize such parts as individual assets with specific useful lives and depreciates
them accordingly.
Depreciation is calculated on the straight-l ine basis to write off the cost of each item of
property, plant and equipment to its residual va lue over its estimated useful life. The principal
annual rates used for this purpose are as follows:
B u i l d i n g s ............................................... 4 . 7 5 %
L e a s e h o l di m p r o v e m e n t s.................................1 5 . 7 0 - 2 3 . 7 7 %
P l a n ta n dm a c h i n e r y ..................................... 4 . 7 5 - 9 . 5 0 %
M o t o rv e h i c l e s...........................................1 9 . 0 0 %
F u r n i t u r ea n do t h e r ........................................1 9 . 0 0 %
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Where parts of an item of property, plant and equipment have different useful lives, the cost
of that item is allocated on a reasonable basis among the parts and each part is depreciated
separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if
appropriate, at least at each financial year end.
An item of property, plant and equipment inclu ding any significant part initially recognized
is derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss on disposal or retirement recognized in the statement of profit or loss
in the year the asset is derecognized is the difference between the net sales proceeds and the
carrying amount of the relevant asset.
Construction in progress is stated at cost less a ny impairment losses, and is not depreciated.
It is reclassified to the appropriate category of property, plant and equipment when completed and
ready for use.
Intangible assets
Intangible assets acquired separately are me asured on initial recognition at cost. The cost of
intangible assets acquired in a business combin ation is the fair value at the date of acquisition.
The useful lives of intangible assets are assessed t o be either finite or indefinite. Intangible assets
with finite lives are subsequently amortized over the useful economic life and assessed for
impairment whenever there is an indication tha t the intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite useful life
are reviewed at least at each financial year end.
Intangible assets with indefinite useful liv es are tested for impairment annually either
individually or at the cash-generating unit level. Such intangible assets are not amortized. The
useful life of an intangible asset with an indefini te life is reviewed annually to determine whether
the indefinite life assessment continues to be supp ortable. If not, the change in the useful life
assessment from indefinite to finite is accounted for on a prospective basis.
Software
Software is stated at cost less any impairmen t losses and is amortized on the straight-line
basis over its estimated useful life of five years.
Research and development expenses
All research costs are charged to the profit or loss as incurred.
Leases
We assess at contract inception whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
FINANCIAL INFORMATION
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Group as a lessee
We apply a single recognition a nd measurement approach for a ll leases, except for short-
term leases and leases of low-value assets. We r ecognize lease liabilities to make lease payments
and right-of-use assets representing t he right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognized at the co mmencement date of the lease (that is the date
the underlying asset is available for use). R ight-of-use assets are measured at cost, less
accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets inc ludes the amount of lease liabilities recognized,
initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the
shorter of the lease terms and the estimat ed useful lives of the a s s e t sa sf o l l o w s :
L e a s e h o l dl a n d.......................................... 5 0y e a r s
B u i l d i n g s .............................................2 - 6y e a r s
If ownership of the leased asset transfers to our Group by the end of the lease term or the
cost reflects the exercise of a purchase option, depreciation is calculated using the estimated
useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognized at the commen cement date of the lease at the present value
of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by our Group and payments o f penalties for termination of a lease, if the
lease term reflects our Group exercising the op tion to terminate the lea se. The variable lease
payments that do not depend on an index or a rate are recognized as an expense in the period in
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, we use our incremental borrowing rate at
the lease commencement date because the int erest rate implicit in the lease is not readily
determinable. After the commencement date, th e amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the le ase payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in lease payments (e.g., a change to futu re lease payments resulting from a change in an
index or rate) or a change in assessment of an option to purchase the underlying asset.
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(c) Short-term leases and leases of low-value assets
We apply the short-term lease recognition exemp tion to its short-term leases of machinery
and equipment (that is those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purch ase option). It also applies the recognition
exemption for leases of low-value assets to leases of office equipment and laptop computers that
are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognized as an
expense on a straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial reco gnition, as subsequently measured at amortised
cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initia l recognition depends on the financial asset ’s
contractual cash flow characteristics and ou r business model for managing them. With the
exception of trade receivables that do not contain a significant financing component or for which
we have applied the practical expedient of not adjusting the effect of a significant financing
component, we initially measure a financial asset a t its fair value plus in the case of a financial
asset not at fair value through profit or loss, t ransaction costs. Trade receivables that do not
contain a significant financing component or for which we have applied the practical expedient
are measured at the transaction price determin ed under IFRS 15 in accorda nce with the policies
set out for ‘‘ — Revenues recognition. ’’
In order for a financial asset to be classified and measured at amortized cost or fair value
through other comprehensive income, it needs to give rise to cash flows that are solely payments
of principal and interest ( ‘‘SPPI ’’) on the principal amount outstanding. Financial assets with cash
flows that are not SPPI are classified and measured at fair value through profit or loss,
irrespective of the business model.
Our business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, se lling the financial assets, or both. Financial assets
classified and measured at amortized cost are h eld within a business model with the objective to
hold financial assets in order to collect contract ual cash flows, while financial assets classified
and measured at fair value through other comprehensive income are held within a business model
with the objective of both holding to collect cont ractual cash flows and selling. Financial assets
which are not held within the aforementioned bus iness models are classified and measured at fair
value through profit or loss.
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Purchases or sales of financial assets that r equire delivery of assets within the period
generally established by regulation or conventio n in the marketplace are recognized on the trade
date, that is, the date that we commit to purchase or sell the asset.
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.
OUR CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
The following table sets forth our consolidated statements of profit or loss and other
comprehensive income for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Revenues . . . . . . . . . . . . . . . . . 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Cost of sales . . . . . . . . . . . . . . . (3,382,884) (83.1) (3,393,009) (79.7) (3,747,639) (83.3) (1,119,099) (80.3) (1,588,050) (85.1)
Gross profit ............... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9
Other income and gains. . . . . . . . . 50,614 1.2 77,718 1.8 115,584 2.6 37,727 2.7 40,533 2.2
Selling and marketing expenses . . . . (100,255) (2.5) (151,785 ) (3.6) (138,043) (3.1) (50,102) (3.6) (53,254) (2.9)
Administrative expenses . . . . . . . . . (126,516) (3.1) (162,748) (3.8) (156,470) (3.5) (50,506) (3.6) (45,672) (2.4)
Research and development expenses. . (100,676) (2.5) (112,803) (2.6) (110,478) (2.5) (44,089) (3.2) (55,249) (3.0)
Impairment losses of impairment
losses on financial and contract
a s s e t s ,n e t ............... ( 2 2 , 6 0 7 ) ( 0 . 6 ) ( 6 , 3 4 7 ) ( 0 . 1 ) ( 1 9 , 1 8 1 ) ( 0 . 4 ) 3 , 9 0 8 0 . 3 ( 1 0 ) 0 . 0
Other expenses . . . . . . . . . . . . . . (21,467) (0.5) (34,145) (0.8) (20,169) (0.4) (5,663) (0.4) (11,556) (0.6)
Finance costs . . . . . . . . . . . . . . . (49,372) (1.2) (30,005) (0.7) (19,842) (0.4) (5,626) (0.4) (12,002) (0.6)
Share of profits and losses of an
a s s o c i a t e................ ( 6 4 7 ) ( 0 . 0 ) ( 4 7 5 ) ( 0 . 0 ) 4 2 8 0 . 0 2 9 6 0 . 0 3 2 0 . 0
Profit before tax ............ 318,670 7.8 446,178 10.5 402,712 9.0 161,031 11.5 141,380 7.6
Income tax expense . . . . . . . . . . . (37,645) (0.9) (60,975) (1.5) (49,381) (1.1) (21,339) (1.5) (14,677) (0.8)
Profit for the year ........... 281,025 6.9 385,203 9.0 353,331 7.9 139,692 10.0 126,703 6.8
Attributable to:
Owners of the parent . . . . . . . . 281,019 6.9 385,203 9.0 353,331 7.9 139,692 10.0 126,703 6.8
Non-controlling interests . . . . . . 6 0.0 ––––––––
DESCRIPTION OF MAJOR COMPONEN TS OF OUR RESULTS OF OPERATIONS
Revenues
During the Track Record Period, we derived revenues from sales of our products, which
include lithium-ion batteries and l ead-acid batteries to our custome rs. We also generated revenues
from others, which primarily represented sale of waste including lead slags and electricity sales.
Our total revenues amounted to RMB4,072.5 m illion, RMB4,259.8 milli on, RMB4,498.5 million,
and RMB1,866.6 million in 2022, 2023, 2024, and the five mo nths ended May 31, 2025,
respectively.
FINANCIAL INFORMATION
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Revenues by Application Scenario
Our batteries offer stable performance, long c ycle lives and enhanced safety to meet diverse
customers ’ needs. We focus particularly on serving clients ’ energy storage needs in various
application scenarios, including telecom base stations, data centers, and electrical energy storage
settings and other settings. In particular, as our products are primarily used in telecom base
stations and data centers, our results of oper ations were mainly driven and affected by the
development, construction schedule or progress of relevant projects, which in turn, were
determined by our customers ’ business decision, as well as related policies and infrastructure
development strategy.
During the Track Record Period, we primarily sold our battery products for telecom base
stations, data centers, electrical energy storage settings, and other settings . Our revenues increased
from RMB4,072.5 million in 2022 t o RMB4,498.5 million in 2024, and our revenue increased
from RMB1,394.2 million for the five months e nded May 31, 2024 to RMB1,866.6 million for
the five months ended May 31, 2025, driven primarily by higher revenues from sales to data
centers. This growth was largely attributed to th e expansion of data centers and cloud computing
facilities, driven by the rising market demand f or data storage and processing capabilities in
recent years. By leveraging our high produ ct quality and strong market recognition, we
successfully capitalized on this opportunity.
The following table sets forth a breakdown of our revenues by application scenario for the
years/periods indicated.
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base Station . . . . . . . . . . 2,640,989 64.8 2,464,004 57.8 2,299,367 51.1 746,772 53.6 792,785 42.5
Data center . . . . . . . . . . . . . . . . 764,815 18.8 899,942 21.1 1,391,898 31.0 397,000 28.4 872,947 46.7
Electrical energy storage settings . . . 302,443 7.4 487,977 11.5 450,840 10.0 132,366 9.5 68,696 3.7
Other settings
(1) . . . . . . . . . . . . . 281,906 7.0 339,863 8.0 261,105 5.8 86,570 6.2 80,555 4.3
Others (2) . . . . . . . . . . . . . . . . . . 82,327 2.0 67,991 1.6 95,312 2.1 31,477 2.3 51,625 2.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Notes:
(1) Primarily include uninterruptible power supply ( ‘‘UPS’’) batteries and start -stop batteries.
(2) Primarily include sales waste including lead slag, and electricity sales.
FINANCIAL INFORMATION
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Sales Volume
During the Track Record Peri od, changes in sales volume of batteries were primarily
influenced by the demand dynamics within the industries where our batteries are applied, as well
as by the performance and competitiv e positioning of our batteries. Specifically, fluctuations in
sales volume were driven by the following key factors:

downstream demand , which is closely linked to the broader industry trends. See also
‘‘Industry Overview — Overview of the Global and China Energy Storage Market —
Supply-demand Dynamics of Ene rgy Storage Battery Products ’’in this prospectus;
 our expansion strategy , particularly in the data center and electrical energy storage
markets, which contributed to an increase in battery sales as we targeted these growing
sectors. See also ‘‘Business — Our Strategies — Further Develop Our Data Center
Business ’’in this prospectus; and
 our global efforts to enhance market penetration , including expanding partnerships and
establishing a stronger intern ational presence. See also ‘‘Business — Our Strategies —
Expand Our Global Presence ’’in this prospectus.
Average Selling price
Changes in the average selling price of batteries were mainly affected by fluctuations in the
price of key raw materials, such as lithium carbona te and lead ingots. In add ition to raw material
costs, the quality of our battery products and our competitive positioning also played a role in
pricing adjustments. The following table sets fo rth the average selling price and sales volume of
our products by application scenario for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
Sales
volume
Average
selling
price
Sales
volume
Average
selling
price
Sales
volume
Average
selling
price
Sales
volume
Average
selling
price
Sales
volume
Average
selling
price
(kWh)
(RMB/
kWh) (kWh)
(RMB/
kWh) (kWh)
(RMB/
kWh) (kWh)
(RMB/
kWh) (kWh)
(RMB/
kWh)
Telecom base station. 4,252,809 621.0 3,648,862 675.3 4 ,046,291 568.3 1,272,619 586.8 1,484,726 534.0
Data center . . . . . . 1,397,252 547.4 1,636,033 550.1 2,656,366 524.0 757,797 523.8 1,655,325 527.4
Electrical energy
storage settings . . . 329,448 918.0 482,182 1,012.0 597,686 754.3 157,956 838.0 86,450 794.6
Other settings* . . . . 613,421 459.6 739,265 459.7 546,812 477.5 198,543 436.0 150,357 535.8
Note:
* Primarily include UPS batteri es and start-stop batteries.
FINANCIAL INFORMATION
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Revenues by Product
Revenues were primarily derived from sale of lithium-ion batteries and lead-acid batteries
during the Track Record Period. While maintaining our leadin g market positions in offering lead-
acid batteries for customers leveraging our outst anding quality, strong technological strength, and
industry expertise, we invested in the expansi on of lithium-ion batteries in response to growing
market demand for more efficient and energy storage products. The following table sets forth a
breakdown of our revenues by product for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Lithium-ion battery . . . . . . . . . . . 1,568,531 38.5 1,854,556 43.5 1,495,978 33.3 435,600 31.2 457,479 24.5
Lead-acid battery. . . . . . . . . . . . . 2,421,622 59.5 2,337,230 54.9 2,907,232 64.6 927,108 66.5 1,357,504 72.7
Others* . . . . . . . . . . . . . . . . . . 82,327 2.0 67,991 1.6 95,312 2.1 31,477 2.3 51,625 2.8
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0Note:
* Primarily include sales of waste including lead slag, used batteries, and electricity sales.
During the Track Record Period, changes in the sales volume of our batteries were primarily
driven by the supply-demand dynamics within the industries where our batteries are applied, the
quality of our battery products , and our competitive positioning in the market. Specifically,
fluctuations in sales volume were influenced by th e increasing downstream demand for batteries,
particularly driven by the growth in energy storage systems; our strategic focus on expanding our
presence in high-growth sectors such as data cen ters; and our ability to effectively compete in the
market through product innovation and quality improvements, which bolstered our sales
performance. For an analysis of the supply-demand dynamics of our products, see also ‘‘Industry
Overview — Overview of the Global and China Energy Storage Market — Supply-demand
Dynamics of Energy Storage Battery Products ’’in this prospectus.
FINANCIAL INFORMATION
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--- page 351 ---
Changes in the average selling price of batteries were mainly affected by fluctuations in the
price of key raw materials, such as lithium carbona te and lead ingots. In add ition to raw material
costs, the quality of our battery products and our competitive positioning also played a role in
pricing adjustments. During t he Track Record Period, prices of raw materials, such as lithium
carbonate and lead ingots, have experienced fluctuations, which were influenced by their supply
and demand dynamics. For an analysis of the market price of raw materials and energy storage
batteries, see ‘‘Industry Overview — Battery and Raw Materials Price Analysis ’’ in this
prospectus. According to Frost & Sullivan, our av erage selling price generally aligns with market
trends, considering raw material and production costs, as well as product specifications. The
following table sets forth the average selling p rice and sales volume by p roduct for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
Sales
volume
Average
selling price
(kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh) (kWh) (RMB/kWh)
Lithium-ion battery . . . . . . . . . . . 1,654,073 948.3 1,894,000 979.2 2,141,497 698.6 517,875 841.1 768,679 595.1
Lead-acid battery. . . . . . . . . . . . . 4,938,858 490.3 4,612,342 506.7 5,705,658 509.5 1,869,222 496.0 2,608,179 520.5
Revenues by Region
During the Track Record Period, we primarily derived revenues from sales to customers in
mainland China, which amoun ted to RMB3,394.6 million, RMB3,330.8 million, RMB3,609.0
million and RMB1,546.9 million, and accounted for 83.4%, 78.2%, 80.2% and 82.9% of our total
revenues in 2022, 2023, 2024 and the five months ended May 31, 2025, respectively. We record
customer revenue by region based on the customer ’s registered address or place of incorporation.
Overseas revenues amounted to RMB677.9 m illion, RMB928.9 million, RMB889.5 million, and
RMB319.7 million in 2022, 2023, 2 024, and the five months ended M ay 31, 2025, respectively.
These amounts accounted for 16.6%, 21.8%, 19.8% and 17.1% of our total revenues for the
corresponding periods. This growth represents sales of our products to customers in other
geographical regions, primarily Asia Pacific excluding mainland China and EMEA. We have
continuously expanded our overseas presence, and have successfully entered into supply chains of
many world-renowned enterprises to provide energy storage batteries for telecom base stations.
We also have subsequently launched electrical energy storage projects in overseas countries/
regions.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of revenue by region and major country for the
years/periods indicated, in absolute amount and as percentage of total revenues.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Mainland China . . . . . . . . . . . . . 3,394,555 83.4 3,330,829 78.2 3,608,974 80.2 1,031,967 74.1 1,546,929 82.9
Asia Pacific excluding mainland
China
Malaysia. . . . . . . . . . . . . . . . . . 8,284 0.2 10,217 0.2 98,553 2.2 38,979 2.8 36,713 2.0
Indonesia . . . . . . . . . . . . . . . . . 55,310 1.4 37,668 0.9 91,481 2.0 39,161 2.8 25,864 1.4
I n d i a .................... 7 9 2 – 135,746 3.2 80,603 1.8 16,498 1.2 32,497 1.7
Vietnam . . . . . . . . . . . . . . . . . . 65,894 1.6 88,106 2.1 70,199 1.6 19,972 1.4 33,169 1.8
Others (1) . . . . . . . . . . . . . . . . . . 55,547 1.4 74,896 1.8 70,712 1.5 33,987 2.4 38,816 2.0
Subtotal .................. 185,827 4.6 346,633 8.2 411,548 9.1 148,597 10.6 167,059 8.9
EMEA
Sweden. . . . . . . . . . . . . . . . . . . 186,915 4.6 125,100 2.9 120,375 2.7 36,942 2.6 62,891 3.4
N o r w a y . .................. 3 2 , 4 4 4 0 . 8 8 9 , 0 0 1 2 . 1 7 5 , 7 7 0 1 . 7 4 9 , 5 7 1 3 . 6 9 , 3 3 5 0 . 5
E g y p t . ................... 7 , 6 2 8 0 . 2 2 9 , 3 0 5 0 . 7 2 6 , 5 8 5 0 . 6 1 9 , 3 9 0 1 . 4 ––
South Africa. . . . . . . . . . . . . . . . 46,364 1.1 42,814 1.0 20,291 0.5 18 – 14,016 0.8
Finland. . . . . . . . . . . . . . . . . . . 81,162 2.0 61,422 1.4 17,520 0.4 9,881 0.7 2,568 0.1
Others (2) . . . . . . . . . . . . . . . . . . 81,093 2.0 166,149 3.9 134,867 2.9 58,938 4.2 30,594 1.6
Subtotal .................. 435,606 10.7 513,791 12.0 395,408 8.8 174,740 12.5 119,404 6.4
Other Regions
Brazil. . . . . . . . . . . . . . . . . . . . 24,406 0.6 33,167 0.8 47,610 1.1 23,664 1.7 11,497 0.6
G u a t e m a l a ................. 1 0 , 3 8 1 0 . 2 7 , 1 0 3 0 . 2 1 0 , 2 1 0 0 . 2 9 , 5 4 2 0 . 7 ––
Others (3) .................. 2 1 , 7 0 5 0 . 5 2 8 , 2 5 4 0 . 7 2 4 , 7 7 2 0 . 6 5 , 6 7 5 0 . 4 2 1 , 7 1 9 1 . 2
Subtotal .................. 56,492 1.3 68,524 1.6 82,592 1.9 38,881 2.8 33,216 1.8
Total . . . . . . . . . . . . . . . . . . . 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Notes:
(1) mainly include Hong Kong SAR, Pakistan and Kazakhstan, and Singapore.
(2) mainly include UAE, Romania, and Mauritius.
(3) mainly include Peru, Mexico, Uruguay and Colombia.
FINANCIAL INFORMATION
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--- page 353 ---
Cost of Sales
Cost of Sales by Nature
Cost of sales consists of cost of raw material, overheads, and direct labor costs. During the
Track Record Period, movement of cost of sales was consistent with the fluctuations in revenues
during the respective years. Movement of cost of sales was primarily influenced by the movement
of the prices of raw material. See also ‘‘Industry Overview — Overview of the Global and China
Energy Storage Market — Supply-demand Dynamics of Ene rgy Storage Battery Products ’’ and
‘‘Industry Overview — Battery and Raw Materials Price Analysis ’’ in this prospectus. The
following table sets forth a breakdown of cost of sales by nature for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Cost of raw material . . . . . . . . . . 2,824,457 83.5 2,868,845 84.6 3,097,192 82.7 905,512 81.0 1,357,030 85.5
Overheads . . . . . . . . . . . . . . . . . 413,617 12.2 371,003 10.9 480,193 12.8 161,519 14.4 163,387 10.3
Direct labor costs . . . . . . . . . . . . 114,091 3.4 116,899 3.4 131,817 3.5 39,571 3.5 50,959 3.2
Others* . . . . . . . . . . . . . . . . . . 30,719 0.9 36,262 1.1 38,437 1.0 12,497 1.1 16,674 1.0
Total ................... 3,382,884 100.0 3,393,009 100.0 3,747,639 100.0 1,119,099 100.0 1,588,050 100.0
Note:
* Primarily included costs of warranties we issued in connection with our batteries.
Cost of Raw Material
Cost of raw material primarily consisted of t he cost of raw material for the production of
batteries, including lead ingots, lead alloys, l ithium iron phosphate, graphite, separators,
electrolytes, and other auxiliary materials. Cost of raw material was the largest component of cost
of sales, the percentage of which remained stable throughout the Track Record Period.
The prices of raw materials such as lithium c arbonate, lead ingots, and graphite are
primarily influenced by supply and demand dynam ics. Lithium carbonate has seen fluctuating
prices due to shifts in production capacity and varying demand from sectors like electric vehicles
and energy storage systems. Similarly, duri ng the Track Record Period, lead ingots have
experienced price increases driven by a slightly decrease in supply steady demand and gradual
production growth. Graphite and other materials a lso represent a substantial portion of the total
cost of raw material, with their prices imp acted by market conditions and technological
advancements. For the price fluctuation of raw material during the Track Record Period, see
‘‘Industry Overview — Battery and Raw Materials Price Analysis ’’in this prospectus.
FINANCIAL INFORMATION
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--- page 354 ---
Overheads
Overheads primarily consisted of costs of utilitie s, transportation costs, the depreciation of
our plants and manufacturing machinery, and maintenance costs of manufacturing machinery.
Our total transportation costs decreased from RMB83.4 million in 2022 to RMB78.5 million
in 2023. This decrease was primarily due to the r elatively high transportation costs in 2022,
driven by the impact of the COVID-19 pandemic. Our total transportation costs increased to
RMB90.1 million in 2024, mainly due to the corre sponding increase in our sales volume. Our
total transportation costs increased from RMB 22.1 million in the five months ended May 31, 2024
to RMB30.0 million in the five months ended May 31, 2025. This increase was primarily due to
the growth in our sales volume and the corresponding rise in outbound logistics needs during the
period.
Our transportation costs for overseas sales remained relatively stable at RMB18.3 million
a n dR M B 1 8 . 3m i l l i o ni n2 0 2 2a n d2 0 2 3 ,r e s p e c t i v e l y ,d e s p i t et h eg r o w t hi no v e r s e a ss a l e s .T h i s
was primarily due to the reduced costs of international shipping following the end of the acute
phase of the COVID-19 pandemic in 2022. Additionally, in 2023, more overseas customers opted
for shipping terms such as FOB and FCA, which resulted in lower costs for us. Our transportation
costs for overseas sales increased to RMB28.8 m illion in 2024, mainly due to our offering of the
more favorable shipping terms, such as DAP and CPT based on our customers ’ needs, resulting in
higher transportation costs for overseas sales. Our transportation costs for overseas sales increased
from RMB6.5 million in the five months ende d May 31, 2024 to RMB8.3 million in the five
months ended May 31, 2025. This increase was primarily due to a higher proportion of overseas
orders being fulfilled under shipping terms such as DAP and CPT in response to customer
preferences, which led to higher logistics costs borne by us.
Direct Labor Costs
Direct labor costs represented salaries, bonuses, and welfare benefits for our manufacturing
staff.
Cost of Sales by Application Scenario
The following table sets forth a breakdown of cost of sales by application scenario for the
years indicated. The movement in the cost of sales for each application scenario, including in
absolute amount and as a percentage of total cost of sales during the Track Record Period
generally aligned with the movem ent of revenues for each respective application scenario. For
details of the movement of cost of sales by application scenario during the Track Record Period,
see ‘‘ — Year to Year Comparison of Results of Operations ’’ ‘‘ — Period to Period Comparison of
Results of Operations ’’in this section.
FINANCIAL INFORMATION
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--- page 355 ---
Year Ended December 31, Five Months Ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base station . . . . . . . . . . 2,216,419 65.5 1,885,583 55.6 1,829,018 48.8 582,006 52.0 659,334 41.5
Data center . . . . . . . . . . . . . . . . 634,003 18.7 729,996 21.5 1,200,788 32.0 335,400 30.0 753,090 47.4
Electrical energy storage settings . . . 233,841 6.9 406,524 12.0 410,393 11.0 102,356 9.1 63,726 4.0
Other settings
(1) . . . . . . . . . . . . . 223,030 6.7 308,424 9.1 214,924 5.7 71,094 6.4 64,680 4.1
Others (2) . . . . . . . . . . . . . . . . . . 75,591 2.2 62,482 1.8 92,516 2.5 28,243 2.5 47,220 3.0
Total ................... 3,382,884 100.0 3,393,009 100.0 3,747,639 100.0 1,119,099 100.0 1,588,050 100.0
Notes:
(1) Primarily include UPS batteri es and start-stop batteries.
(2) Primarily include sales of waste including le ad slag, used batteries, and electricity sales.
Cost of Sales by Product
The following table sets forth a breakdown of cost of sales by product for the years
indicated. The movement in the cost of sales for each product, including in absolute amount and
as a percentage of total cost of sales during the Track Record Period generally aligned with the
movement of sales volume for each product, respectively. For details of the movement of cost of
sales by product during the Track Record Period, see ‘‘ — Year to Year Comparison of Results of
Operations ’’and ‘‘ — Period to Period Comparison of Results of Operations ’’in this section.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Lithium-ion battery . . . . . . . . . . . 1,279,122 37.8 1,430,156 42.2 1,188,285 31.7 317,320 28.4 373,539 23.5
Lead-acid battery. . . . . . . . . . . . . 2,028,171 60.0 1,900,371 56.0 2,466,838 65.8 773,536 69.1 1,167,291 73.5
Others* . . . . . . . . . . . . . . . . . . 75,591 2.2 62,482 1.8 92,516 2.5 28,243 2.5 47,220 3.0
Total ................... 3,382,884 100.0 3,393,009 100.0 3,747,639 100.0 1,119,099 100.0 1,588,050 100.0
Note:
* Primarily include sales of waste including lead slag, used batteries, and electricity sales.
FINANCIAL INFORMATION
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--- page 356 ---
Gross Profit and Gross Profit Margin
During the Track Record Period, we primarily derived gross profits from batteries used in
telecom base stations, data centers, electrical en ergy storage settings and other settings. Gross
profit margin improved from 16.9% in 2022 to 20.3% in 2023, driven by strong industry demand
and our enhanced market position. This growth was further supported by our ability to adjust
selling prices in response to raw material cost flu ctuations, as well as in creased economies of
scale and production efficiency. Our gross profit margin decreased to 16.7% in 2024, mainly due
to the increased raw material costs, particul arly lead ingots, and the adoption of the more
competitive pricing terms to maintain and prom ote our position as a leader in the market. Our
gross profit margin decreased to 14.9% in the five months ended May 31, 2025, mainly due to (i)
a decrease of revenue contribution form lithium-io n batteries, the product category with a higher
gross profit margin and (ii) we strategically lower our price to maintain our leading position in
the market.
The following table sets forth a breakdown of gross profits and gross profit margins by
application scenario for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
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
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Telecom base station . . . . . . . . . . 424,570 16.1 578,421 23.5 470,349 20.5 164,766 22.1 133,451 16.8
Data center . . . . . . . . . . . . . . . . 130,812 17.1 169,946 18.9 191,110 13.7 61,600 15.5 119,857 13.7
Electrical energy storage settings . . . 68,602 22.7 81,453 16.7 40,447 9.0 30,010 22.7 4,970 7.2
Other settings (1) . . . . . . . . . . . . . 58,876 20.9 31,439 9.3 46,181 17.7 15,476 17.9 15,875 19.7
Others (2) .................. 6 , 7 3 6 8 . 2 5 , 5 0 9 8 . 1 2 , 7 9 6 2 . 9 3 , 2 3 4 1 0 . 3 4 , 4 0 5 8 . 5
Total ................... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9
Notes:
(1) Primarily include UPS batteri es and start-stop batteries.
(2) Primarily include sales of waste including le ad slag, used batteries, and electricity sales.
FINANCIAL INFORMATION
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--- page 357 ---
The following table sets forth gross profit and gross profit margin by region for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Mainland China . . . . . . . . . . . . . 507,083 14.9 603,297 18.1 504,281 14.0 163,782 15.9 212,155 13.7
Asia Pacific excluding mainland
China . . . . . . . . . . . . . . . . . 40,403 21.7 74,581 21.5 84,104 20.4 30,303 20.4 26,557 15.9
EMEA . . . . . . . . . . . . . . . . . . . 124,727 28.6 159,340 31.0 132,430 33.5 64,709 37.0 34,539 28.9
Others* . . . . . . . . . . . . . . . . . . 17,383 30.8 29,550 43.1 30,068 36.4 16,292 41.9 5,307 16.0
Subtotal excluding Mainland China . . 182,513 26.9 263,471 28.4 246,602 27.7 111,304 30.7 66,403 20.8
Total ................... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9
Note:
* Primarily includes Uruguay, Brazil, Me xico, Australia and United States.
The following table sets forth gross profit and gross profit margin by product for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
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
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Lithium-ion battery . . . . . . . . . . . 289,409 18.5 424,400 22.9 307,693 20.6 118,280 27.2 83,940 18.3
Lead-acid battery. . . . . . . . . . . . . 393,451 16.2 436,859 18.7 440,394 15.1 153,572 16.6 190,213 14.0
O t h e r s *.................. 6 , 7 3 6 8 . 2 5 , 5 0 9 8 . 1 2 , 7 9 6 2 . 9 3 , 2 3 4 1 0 . 3 4 , 4 0 5 8 . 5
Total ................... 689,596 16.9 866,768 20.3 750,883 16.7 275,086 19.7 278,558 14.9Note:
* Primarily include sales of waste including lead slag, used batteries, and electricity sales.
FINANCIAL INFORMATION
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O t h e rI n c o m ea n dG a i n s
Other income and gains primarily consists of government grants, additional VAT deduction,
interest income, foreign exchange gains, comp ensation income and rental income. The following
table sets forth a breakdown of other income and gains in absolute amount and percentage of total
other incomes and gains for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Government grants . . . . . . . . . . . . 25,103 49.6 35,596 45.8 39,371 34.1 8,154 21.6 14,202 35.0
Additional VAT deduction . . . . . . . –– 764 1.0 40,556 35.1 17,934 47.6 12,792 31.6
Interest income . . . . . . . . . . . . . . 3,402 6.7 19,260 24.8 14,814 12.8 5,990 15.9 4,012 9.9
Foreign exchange gains . . . . . . . . . 17,476 34.5 12,289 15.8 10,626 9.2 3,969 10.5 3,746 9.2
Compensation income
(1) . . . . . . . . . 603 1.2 4,497 5.8 359 0.3 189 0.5 872 2.2
Rental income . . . . . . . . . . . . . . 1,338 2.6 2,245 2.9 2,794 2.4 1,029 2.7 1,207 3.0
Others (2) .................. 2 , 6 9 2 5 . 4 3 , 0 6 7 3 . 9 7 , 0 6 4 6 . 1 4 6 2 1 . 2 3 , 7 0 2 9 . 1
Total ................... 50,614 100.0 77,718 100.0 115,584 100.0 37,727 100.0 40,533 100.0
Notes:
(1) Compensation income primarily represented the compensation we received from suppliers due to their failure to
deliver qualified raw materials to us on a timely basis and amounted to RMB0.6 million, RMB4.5 million, RMB0.4
million, RMB0.2 million and RMB0.9 million in 2022, 2023, 2024, the five month s ended May 31, 2024 and the
five months ended May 31, 2025, respectively. The compensation income varied throughout the Track Record
Period, as it was generated on a case-by-case basis and was inherently non-recurring.
(2) Primarily include gain on disposal of items of property, plant and equipment, net and gain on disposal of right-of-
use assets.
Government grants are financial incentives provided by the government to support our
business operations. These grants recognize our contribution to the development of the local
economy and align with favorable policies that sup port the growth of environmentally-friendly
industries and advanced technologies. Additional VAT deduction represents an additional 5%
deduction calculated based on the input value-added tax ( ‘‘VAT’’) from the VAT payable. Interest
income represents the earnings f rom financial assets held either for investment purposes or as part
of our liquidity management strategy. This income is primarily generated through interest-bearing
bank deposits. Foreign exchange gains are the results of fluctuations in foreign currency exchange
rates that affect our international transactions and currency holdings. These gains are recorded
based on the revaluation of balances denominated in foreign currencies. Compensation income
represents the compensation received from supp liers due to quality issues with the raw materials
they provided. Rental income represents the rev enues generated from leasing storage facilities.
FINANCIAL INFORMATION
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The following table sets forth the material government grants we received during the Track
Record Period.
Government Grant Time of Grant Amount of Grant
RMB ’000
High-Performance Energy Storage Lithium-Ion Battery
Project — 2022 Provincial Strategic Emerging Industry
Development Special Grant
July 2022 18,000
Special Support Grant for the construction of a plant in
Xiangyang, Hubei
January 2024 16,120
Special Support Grant for the construction of a plant in
Xiangyang, Hubei
December 2023 15,000
2022 Provincial Carbon Peak an d Carbon Neutrality Science
and Innovation Special Grant
January 2023 14,500
Infrastructure Development Grant May 2023 13,766
Selling and Marketing Expenses
Selling and marketing expens es primarily consist of employee compensation, business
development expenses, travel expenses, advertising and promotion expenses, lease expenses,
office expenses and others. Employee compensation represented salaries, bonus, share-based
compensations and employee benefits paid to our employees involved in the selling and
marketing activities. Business de velopment expenses re presented costs related to activities aimed
at growing and expanding the business, including market research and client meetings. Travel
expenses represented expenses associated with employee travel for business purposes, including
transportation, accommodation, and meals. Advertising and promotion expenses represented
expenses we incurred in relation to the advertisement and promotion of our products.
The following table sets forth a breakdown of selling and marketing expenses in absolute
amount and percentage of total s elling and marketing expenses f or the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Employee compensation . . . . . . . . . 70,258 70.1 102,765 67.7 74,559 53.9 34,121 68.0 28,559 53.6
Business development expenses . . . . 8,161 8.1 11,939 7.9 16,740 12.1 2,718 5.4 8,777 16.5
Travel expenses . . . . . . . . . . . . . 8,563 8.5 14,726 9.7 16,282 11.8 4,158 8.3 6,806 12.8
Advertising and promotion expenses . 1,336 1.3 7,220 4.8 14,200 10.3 4,119 8.2 3,496 6.6
Lease expenses . . . . . . . . . . . . . . 3,678 3.7 3,946 2.6 4,219 3.1 1,867 3.7 1,726 3.2
Office expenses . . . . . . . . . . . . . 2,216 2.2 2,704 1.8 2,622 1.9 782 1.6 937 1.8
O t h e r s *.................. 6 , 0 4 3 6 . 1 8 , 4 8 5 5 . 5 9 , 4 2 1 6 . 9 2 , 3 3 7 4 . 8 2 , 9 5 3 5 . 5
Total ................... 100,255 100.0 151,785 100.0 138,043 100.0 50,102 100.0 53,254 100.0
Note:
* Primarily includes tender service fees and product insurance fees of our products.
FINANCIAL INFORMATION
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--- page 360 ---
Administrative Expenses
Administrative expenses primarily consist o f employee compensatio n, listing expenses,
depreciation and amortization, professional service fees, office expenses, entertainment expenses,
travel expenses and others. Employee compensation represented salaries, bonus, employee
benefits and share-based compensation paid to a dministrative employees. Listing expenses
r e p r e s e n t e de x p e n s e si nr e l a t i o nt ot h eL i s t i n g .Depreciation and amortization represented the
expenses associated with the wear and tear and gradual reduction in value of office equipment
charged under administrative expenses. Professional service fees represented costs for services
provided by external experts, including legal, c onsulting, and auditing services. A portion of the
professional service fees was attributable to c onsulting and advisory services related to our
strategic initiatives, including corporate governance e nhancements and opera tional improvements,
as well as expenses associated with our previous A-share listing attempt, such as legal due
diligence, prospectus preparatio n, and other listing-related matte rs. Office expenses represent the
costs associated with the day-to-day operations of our Group, including office supplies, utilities,
equipment maintenance, communication services, and other general office-related expenses
necessary to support our administrative functions. Entertainment expenses represent the costs
incurred for meals and hospitality by our administrative staff during r egular business operations.
Travel expenses represent costs incurred by employees for administration of our Company,
including airfare, accommodations, and other transportation costs.
The following table sets forth a breakdown of a dministrative expenses in absolute amount
and percentage of total administrative expenses for the years/periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Employee compensation . . . . . . . . . 85,459 67.5 99,054 60.9 78,697 50.3 30,849 61.1 26,277 57.5
L i s t i n ge x p e n s e .............. –––– 17,993 11.5 484 1.0 2,126 4.7
Depreciation and amortization . . . . . 14,953 11.8 17,706 10.9 17,781 11.4 7,177 14.2 8,299 18.2
Professional service fees . . . . . . . . 8,563 6.8 19,419 11.9 11,786 7.5 2,683 5.3 1,426 3.1
Office expenses . . . . . . . . . . . . . 5,788 4.6 7,014 4.3 9,777 6.2 3,297 6.5 3,103 6.8
Entertainment expenses . . . . . . . . . 4,597 3.6 8,971 5.5 7,153 4.6 2,459 4.9 2,527 5.5
Travel expenses . . . . . . . . . . . . . 1,988 1.6 4,312 2.6 4,272 2.7 1,145 2.3 1,194 2.6
O t h e r s *.................. 5 , 1 6 8 4 . 1 6 , 2 7 2 3 . 9 9 , 0 1 1 5 . 8 2 , 4 1 2 4 . 7 7 2 0 1 . 6
Total ................... 126,516 100.0 162,748 100.0 156,470 100.0 50,506 100.0 45,672 100.0
Note:
* Primarily includes testing fees for batteries, property insurance e xpenses, rent expenses, and utilities.
FINANCIAL INFORMATION
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--- page 361 ---
Research and Development Expenses
Research and development expenses primarily consist of employee compensation, materials
and utilities costs; depreciation and amortization, and others. Employee compensation represented
salaries, bonus, shared –based compensation and employee benefits paid to employees involved in
the R&D activities. Materials and utilities expenses represented the expense of raw material we
used in the process of R&D activities. Depreciatio n and amortization primarily represented the
expenses associated with the depreci ation of R&D equipment and facilities.
The following table sets forth a breakdown of research and development expenses in
absolute amount and percentage of total research and development expenses for the years/periods
indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Employee compensation . . . . . . . . . 54,865 54.5 62,462 55.4 63,711 57.7 25,482 57.8 25,781 46.7
Materials and utilities expense s . . . . 31,485 31.3 32,548 28.9 25,67 5 23.2 11,956 27.1 19,669 35.6
Depreciation and amortization . . . . . 7,604 7.6 7,573 6.7 12,814 11.6 4,386 9.9 6,448 11.7
O t h e r s *.................. 6 , 7 2 2 6 . 6 1 0 , 2 2 0 9 . 0 8 , 2 7 8 7 . 5 2 , 2 6 5 5 . 2 3 , 3 5 1 6 . 1
Total ................... 100,676 100.0 112,803 100.0 110,478 100.0 44,089 100.0 55,249 100.0Note:
* Primarily includes testing fees for products under development and collaborative R&D expenses.
Impairment Losses on Financi al and Contract Assets, Net
Impairment losses on financial and contract as sets, net represented net impairment losses on
financial and contract assets, inc luding trade and bills receivables, other receivables and contract
assets. Impairment losses on financial and con tract assets, net amounted to RMB22.6 million,
RMB6.3 million, RMB19.2 million and RMB0.0 1 million in 2022, 2023, 2024 and the five
months ended May 31, 2025, respectively.
FINANCIAL INFORMATION
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--- page 362 ---
Other Expenses
Other expenses primarily represented pro perty tax, urban land use tax, stamp duty,
impairment losses on assets of a dis posal group classified as held for sale, and loss on disposal of
non-current assets. The following table sets forth a breakdown of other expenses for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
Property tax . . . . . . . . . . . . . . . 4,020 18.7 4,181 12.2 5,012 24.8 1,795 31.7 2,227 19.7
Urban land use tax . . . . . . . . . . . 4,303 20.0 2,596 7.6 3,772 18.7 1,152 27.4 2,019 17.5
Stamp duty . . . . . . . . . . . . . . . . 2,272 10.6 2,833 8.3 2,841 14.1 935 16.5 1,337 11.6
Impairment losses on assets of a
disposal group classified as held
for sale (1) ............... –– 15,747 46.1 ––––––
Loss on disposal of non-current assets 32 0.1 1,704 5.0 484 2.4 42 0.7 280 2.4
Others
(2) . . . . . . . . . . . . . . . . . . 10,840 50.6 7,084 20.8 8,060 40.0 1,339 23.7 5,660 48.8
Total ................... 21,467 100.0 34,145 100.0 20,169 100.0 5,663 100.0 11,573 100.0
Notes:
(1) Represents the impairment loss on assets and liabilities of Huifeng J uneng Technology (Huai ’an) Co., Ltd.
(‘‘Huai ’an Huifeng Juneng ’’) that were held for sale. Assets and liabilities of Huai ’a nH u i f e n gJ u n e n gh e l df o rs a l e
are recorded at the lower of the cost and net realizable va lue. We determines the net re alizable value of assets and
liabilities of Huifeng Juneng Technology held for sale by r eference to the estimated sa les prices, which takes into
account a number of factors including the recent prices of similar business types and disposal consideration
negotiated with potential third-party buyers. In 2 023, impairment loss on assets and liabilities of ‘Huai ’an Huifeng
Juneng that were held for sale amounted to RMB 15.7 million. See Note 25 to the Accountants ’ Report in Appendix
I to this prospectus for further details.
(2) Primarily includes income from financial product investments, futures liquidation gains and losses, income from
derecognition of receivables, bank fees, and charitable donations. These items are one-off in nature and were not
recurring during the Track Record Period.
Finance Costs
Finance costs include interest costs on bank and other borrowings as well as interest costs
on lease liabilities. Finance costs amounted t o RMB49.4 million, RMB30.0 million, RMB19.8
million and RMB12.0 million in 2022, 2023, 2024 and the five months ended May 31, 2025,
respectively.
FINANCIAL INFORMATION
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Share of Profits and Losses of an Associate
Share of profits and losses of an associate represented our proportionate share of the net
income or loss of an associate of our Company. Share of profits and losses of an associate
amounted to a loss of RMB0.6 million, a loss of RMB0.5 million, a gain of RMB0.4 million and
a gain of RMB0.03 million in 2022, 2023, 2024 and the five months ended May 31, 2025,
respectively.
Income Tax Expense
Income tax expense amounted to RMB37.6 m illion, RMB61.0 million, RMB49.4 million
and RMB14.7 million in 2022, 2023, 2024 a nd the five months ended May 31, 2025,
respectively. Our Company obtained High and New Technology Enterprise (HNTE) certificate
and was subject to a corporate income tax rate of 15% during the Track Record Period and up to
2026. This qualification is subject to review by the relevant tax authority in the PRC for every
three years.
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Five Months Ended May 31, 2025 Compared with Five Months Ended May 31, 2024
Revenues
Revenues increased from RMB1,394.2 million i n the five months ended May 31, 2024 to
RMB1,866.6 million in the five months ended May 31, 2025.
Revenues by Application Scenario
From the perspective of revenues by application scenario, revenues from sales of batteries
used in telecom base stations increased from RMB746.8 million in the five months ended May
31, 2024 to RMB792.8 million in the five months ended May 31, 2025, primarily due to
increased marked demand, as the sales volume increased from 1,272.6 MWh in the five months
ended May 31, 2024 to 1,484.7 MWh in the five months ended May 31, 2025. The average
selling price of batteries used in telecom base sta tion slightly decreased from RMB586.8/kWh in
the five months ended May 31, 2024 to RMB534.0/kWh in the five months ended May 31, 2025,
mainly as a result of (i) our strategic decision to lower prices in order to expand the market and
(ii) decrease in the price of raw materials, n amely LFP, which is a key component in battery
production.
Revenues from sales of batteries used in data centers increased from RMB397.0 million in
the five months ended May 31, 2024 to RMB872. 9 million in the five months ended May 31,
2025 primarily due to increased marked demand, as the sales volume increased from 758.0 MWh
in the five months ended May 31, 2024 to 1,655.3 MWh in the five months ended May 31, 2025.
The average selling price of batteries used in data centers remained relatively stable, from
RMB523.8/kWh to RMB527.4/kWh.
FINANCIAL INFORMATION
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--- page 364 ---
Revenues from batteries used in electrical energy storage settings decreased from RMB132.4
million in the five months ended May 31, 2024 to RMB68.7 million in the five months ended
May 31, 2025 primarily due to a decrease in sales volume, from 158.0 MWh in the five months
ended May 31, 2024 to 86.5 MWh in the five months ended May 31, 2025, which is mainly due
to a greater portion of orders secured during the period are expected to be completed and
recognized in the second half of 2025. The average selling price of batteries used in electrical
energy storage settings slightly decreased fro m RMB838.0/kWh to RMB794.6/kWh, primarily due
to the pricing dynamics, which is in line with ma rket trends, according to Frost & Sullivan.
Revenues from batteries used in other settin gs decreased from RMB86.6 million in the five
months ended May 31, 2024 to RMB80.6 million in the five months ended May 31, 2025
primarily due to a decrease in sales volume from 198.5 MWh in the five months ended May 31,
2024 to 150.4 MWh in the five months ended May 31, 2025, mainly as a result of slower order
intake; partially offset by an increase of average selling price from RMB436.0/kWh to
RMB535.8/kWh, primarily due t o recognition of our brand awa reness and product quality.
Revenues by Product
Revenues from sales of lithium-ion batteri es increased from RMB435.6 million in the five
months ended May 31, 2024 to RMB457.5 millio n in the five months ended May 31, 2025
primarily due to an increase in sales volume from 517,875 kWh in the five months ended May 31,
2024 to 768,679 kWh in the five months ended May 31, 2025, as a result of increased market
demand for our lithium-ion batteries. The increa se was partially offset by a decrease in average
selling price from RMB841.1/kWh t o RMB595.1/kWh, primarily du e to a decline in raw material
costs and overall market pricing levels.
Revenues from sales of lead-acid batteries increased from RMB927.1 million in the five
months ended May 31, 2024 to RMB1,357.5 millio n in the five months ended May 31, 2025. The
increase was due to (i) an increase in sales volume from 1,869.2 MWh in the five months ended
May 31, 2024 to 2,608.2 MWh in the five months ended May 31, 2025, as a result of growing
demand; (ii) an increase in average selling price from RMB496.0/kWh in t he five months ended
May 31, 2024 to RMB520.5/kWh in the five months ended May 31, 2025, as a result of (i) our
improved recognition of our brand awareness and product quality and (ii) an increase in raw
material costs, particularly the prices of lead ingots and battery casings, which is in line with
industry trend, according to Frost & Sullivan.
Revenues from others increased from RMB31.5 million in the five months ended May 31,
2024 to RMB51.6 million in the five months ended May 31, 2025.
FINANCIAL INFORMATION
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--- page 365 ---
Cost of Sales
Cost of sales increased from R MB1,119.1 million in the five months ended May 31, 2024 to
RMB1,588.1 million in the five months ended May 31, 2025.
From the perspective of analysis by applicatio n scenario, cost of sales for batteries used in
telecom base stations increased from RMB582. 0 million in the five months ended May 31, 2024
to RMB659.3 million in the five months ended May 31, 2025. The increase in cost of sales for
batteries used in telecom base stations was primar ily attributable to the increased sales volume of
batteries used in telecom base stations, which wa s generally in line with the increase in revenues
from sales of batteries used in telecom base sta tions. Cost of sales of batteries used in data
centers increased from RMB335.4 million in t he five months ended May 31, 2024 to RMB753.1
million in the five months ended May 31, 2025. Such an increase was primarily due to the
increased sales volume of batteries used in da ta centers, which was generally in line with the
increase in revenues from sales of batteries used in data centers. Cost of sales of batteries used in
electrical energy storage settings decrease d from RMB102.4 million in the five months ended
May 31, 2024 to RMB63.7 million in the five months ended May 31, 2025, primarily due to a
decrease in sales volume during the period. Cost of sales of batteries used in other settings
decreased from RMB71.1 million in the five mo nths ended May 31, 2024 to RMB64.7 million in
the five months ended May 31, 2025.
From the perspective of analysis by product, cos t of sales of lithium-ion batteries increased
from RMB317.3 million in the five months ende d May 31, 2024 to RMB373.5 million in the five
months ended May 31, 2025, primarily due to an increase in sales volume of lithium-ion batteries.
Cost of sales from sales of lead-acid batteri es increased from RMB773.5 million in the five
months ended May 31, 2024 to RMB1,167.3 m illion in the five months ended May 31, 2025,
mainly due to (i) the increase in sales volume of l ead-acid batteries and (ii) fluctuation of raw
material costs, primarily lead ingots and battery casings.
Gross Profit and Gross Profit Margin
As a result of the foregoing, gross profit i ncreased from RMB275.1 million in the five
months ended May 31, 2024 to RMB278.6 million i n the five months ended May 31, 2025. Gross
profit margin decreased from 19.7% in the fiv e months ended May 31, 2024 to 14.9% in the five
months ended May 31, 2025.
Gross Profit and Gross Profit Margin by Application Scenario
From the perspective of gross profit and gross profit margin by application scenario, gross
profit from sales of batteries in telecom base s tations decreased from RMB164.8 million in the
five months ended May 31, 2024 to RMB133.5 million in the five months ended May 31, 2025
while the gross profit margin decreased from 22.1% in the five months ended May 31, 2024 to
16.8% in the five months ended May 31, 2025. The decrease of gross profit margin was primarily
due to our strategic decision to lower p rices in order to expand the market.
FINANCIAL INFORMATION
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--- page 366 ---
Gross profit from sales of batteries used in data centers increased from RMB61.6 million in
the five months ended May 31, 2024 to RMB119. 9 million in the five months ended May 31,
2025, while the gross profit margin decreased from 15.5% in the five months ended May 31, 2024
to 13.7% in the five months ended May 31, 2025. The decrease in gross profit margin was
primarily due to our decision to accept competitiv e pricing in response to prevailing market
trends. Batteries used in data centers primarily c onsist of lead-acid batteries, and the price of lead
ingots increased during the period.
Gross profit from batteries used in electric al energy storage settings decreased from
RMB30.0 million in the five months ended May 31, 2024 to RMB5.0 million in the five months
ended May 31, 2025 while the gross profit margin decreased from 22.7% in the five months
ended May 31, 2024 to 7.2% in the five months ended May 31, 2025. The decrease in gross profit
margin was primarily due to (i) a decline in sales volume, which weakened economies of scale
and led to an increase in per unit cost of production and (ii) downward pricing trend, as driven by
industry-wide pricing pressure.
Gross profit from other settings remained st able from RMB15.5 million in the five months
ended May 31, 2024 to RMB15.9 million in the fi ve months ended May 31, 2025 and the gross
profit margin also remained relatively stable from 17.9% in the five months ended May 31, 2024
to 19.7% in the five months ended May 31, 2025.
Gross Profit and Gross Profit Margin by Product
Gross profit of lithium-ion batteries decr eased from RMB11.8 million in the five months
ended May 31, 2024 to RMB83.9 million in the five months ended May 31, 2025. Gross profit
margin of sales of lithium-ion batteries decrea sed 27.2% in the five months ended May 31, 2024
to 18.3% in the five months ended May 31, 2025. This decrease was primarily driven by
downward trend of market price and intensified market competition, which led to lower average
selling prices.
Gross profit of lead-acid batteries increased from RMB153.6 million in the five months
ended May 31, 2024 to RMB190.2 million in the five months ended May 31, 2025. Gross profit
margin of sales of lead-acid batteries slightly decreased from 16.6% in the five months ended
May 31, 2024 to 14.0% in the five months ended May 31, 2025, primarily due to the average
selling price of lead-acid batteries incr easing at a slower pace than the unit cost.
Gross profit of others increased from RMB 3.2 million in the five months ended May 31,
2024 to RMB4.4 million in the five months ended May 31, 2025. Gross profit margin of others
decreased from 10.3% in the five months ended May 31, 2024 to 8.5% in the five months ended
May 31, 2025, primarily due to we collected and paid for waste from our customers, and then
sold it to waste processors. Due to the natural fl uctuations in waste prices driven by supply and
demand, there was a time lag between coll ection and sale for a particular batch.
FINANCIAL INFORMATION
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--- page 367 ---
O t h e rI n c o m ea n dG a i n s
Other income and gains increased from RMB3 7.7 million in the five months ended May 31,
2024 to RMB40.5 million in the five months ended M ay 31, 2025, primarily due to an increase in
government grants in the five months ended May 31, 2025.
Selling and Marketing Expenses
Selling and marketing expenses increased fro m RMB50.1 million in the five months ended
May 31, 2024 to RMB53.3 million in the five months ended May 31, 2025. Employee
compensation decreased from RMB34.1 millio n in the five months ended May 31, 2024 to
RMB27.2 million in the five months ended May 31, 2025, primarily du e to a decrease in the
salary of selling and marketing employees. Bus iness development expenses increased from
RMB2.7 million in the five months ended May 31, 2024 to RMB8.8 million in the five months
ended May 31, 2025, primarily due to increased in vestment in customer acquisition activities and
overseas market expansion. Travel expenses increased from RMB4.2 million in the five months
ended May 31, 2024 to RMB6.8 million in the five months ended May 31, 2025, primarily due to
increased domestic and international travel relat ed to sales activities and participation in industry
exhibitions and client engagement events.
Administrative Expenses
Administrative expenses decreased from RMB 50.5 million in the five months ended May 31,
2024 to RMB45.7 million in the five months en ded May 31, 2025. Employee compensation
decreased from RMB30.8 million in the five mo nths ended May 31, 2024 to RMB22.1 million in
the five months ended May 31, 2025, which was primarily due to our initiatives to optimize
workforce allocation and enhance operational effi ciency within administrative functions. Listing
expenses increased from RMB0.5 million in t he five months ended May 31, 2024 to RMB2.1
million in the five months ended May 31, 2025, which was in relation to the Listing and the
Global Offering.
Research and Development Expenses
Research and development expenses increas ed from RMB44.1 million in the five months
ended May 31, 2024 to RMB55.2 million in the five months ended May 31, 2025. Employee
compensation remained stable at RMB25.5 million and 24.1 million in the five months ended
May 31, 2024 and 2025, respectively. Materi als and utilities costs increased from RMB12.0
million in the five months ended May 31, 2024 to RMB19.7 million in the five months ended
May 31, 2025, mainly due to the expansion of r esearch and developm ent activities, which
required higher consumption of raw materials and energy.
FINANCIAL INFORMATION
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Impairment Losses on Financi al and Contract Assets, Net
Impairment losses on financial and contract assets, net, decreased from RMB3.9 million in
the five months ended May 31, 2024 to RMB0.01 m illion in the five months ended May 31, 2025
primarily due to the normalization of credit r isk conditions, as no material new impairment
indicators were identified in the five months ended May 31, 2025.
Other Expenses
Other expenses increased from RMB5.7 millio n in the five months ended May 31, 2024 to
RMB11.6 million in the five months ended M ay 31, 2025, primarily due to an increase in
property tax and land use tax expenses.
Finance Costs
Finance costs increased from RMB5.6 milli on in the five months ended May 31, 2024 to
RMB12.0 million in the five months ended May 31, 2025, primarily due to (i) an increase in
interest expenses as a result of higher borrowi ngs, and (ii) an increase in interests on lease
liabilities associated with our manufacturing facility in Malaysia.
Share of Profits and Losses of an Associate
Share of profits and losses of an associate decreased from a gain of RMB0.3 million in the
five months ended May 31, 2024 to a gain of RM B0.03 million in the five months ended May 31,
2025.
Income Tax Expense
Income tax expense decreased from RMB21. 3 million in the five months ended May 31,
2024 to RMB14.7 million in the five months ended May 31, 2025, which was attributed to (i) a
decrease in profit before tax, re sulting in lower taxable income, and (ii) an increase in research
and development expenses, which led to a lowe r effective tax rate due to additional super-
deduction incentives.
Profit for the Period
As a result of the above, profit for the peri od decreased from RMB139.7 million in the five
months ended May 31, 2024 to RMB126.7 millio n in the five months ended May 31, 2025.
FINANCIAL INFORMATION
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--- page 369 ---
YEAR TO YEAR COMPARISON OF RESULTS OF OPERATIONS
Year ended December 31, 2024 Compared to Year ended December 31, 2023
Revenues
Revenues increased from RMB4,259.8 millio n in 2023 to RMB4,498.5 million in 2024.
Revenues by Application Scenario
From the perspective of revenues by application scenario, revenues from sales of batteries
used in telecom base stations decreased fro m RMB2,464.0 million in 2023 to RMB2,299.4
million in 2024. Sales volume of batteries used in telecom base stations increased from 3,648.9
MWh in 2023 to 4,046.3 MWh in 2024, which was in turn due to the increase in demand of
battery products used in telecom base station by our customers. The average selling price of
batteries used in telecom base stations decreased from RMB675.3/kWh in 2023 to
RMB568.3/kWh in 2024, primarily due to the decrease in the price of raw materials, namely
LFP, which is a key component in battery production. The decrease in the price of LFP, driven by
improved production efficiencies, increased supply, and a reduction in cost of raw material across
the supply chain, directly lowered the manufactur ing cost of batteries. As a result, this enabled
manufacturers, including us, to adjust pricing to remain competitive in the market.
Revenues from sales of batteries used in data centers increased from RMB899.9 million in
2023 to RMB1,391.9 million in 2024, which was d ue to an increase in demand of batteries used
in data centers, evidenced by the increase in sal es volume of batteries used in data centers from
1,636.0 MWh in 2023 to 2,656.4 MWh in 2024. The increase in sales volume of batteries used in
data centers was due to the rising demand driven by the rapid development of AI and cloud
computing. These technological advancements have significantly increased the need for robust
data storage and processing capab ilities, leading to a higher demand fo r reliable battery solutions
in data centers. Average selling price of batteri es used in data centers decreased from RMB550.1/
kWh in 2023 to RMB524.0/kWh in 2024, primarily because we strategically maintained a
relatively competitive average selling price for b atteries used in data centers to preserve
relationships with our customers and take effort to maintain and promote our position as a leader
in the market.
Revenues from batteries used in electrical energy storage settings decreased from RMB488.0
million in 2023 to RMB450.8 million in 2024. Sales volume of batteries used in electrical energy
storage settings increased from 482.2 MWh in 2023 to 597.7 MWh in 2024. The increase in sales
volume was due to increase in demand of our batte ries used in electrical energy storage settings
by our customers. Average selling price of batteries used in electrical energy storage settings
decreased from RMB1,012.0/kWh in 2023 to RMB754.3/kWh in 2024, primarily as a result of the
decrease in prices of raw material, namely LFP, wh ich is generally in line with the industry trend,
according to Frost & Sullivan. The decrease in the price of LFP enabled manufacturers, including
us, to adjust pricing to remain competitive in the market.
FINANCIAL INFORMATION
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--- page 370 ---
Revenues from batteries used in other settin gs decreased from RMB 339.9 million in 2023 to
RMB261.1 million in 2024, which was primarily du e to the decrease in sales volume of batteries
used in other settings. Sales volume of batteries used in other settings decreased from 739.3 MWh
in 2023 to 546.8 MWh in 2024, due to the decrease in orders placed by our customers in relation
to batteries used in other settings. The average s elling price of batteries used in other settings
remained stable at RMB459.7/kWh in 2023 and RMB477.5/kWh in 2024.
Revenues by Product
Revenues from sales of lithium-ion batteries decreased from RMB1,854.6 million in 2023 to
RMB1,496.0 million in 2024, which in turn was du e to the decrease in average selling price of
lithium-ion batteries which also decreased fro m RMB979.2/kWh in 2023 to RMB698.6/kWh in
2024 which was in turn primarily due to the decr eases in the market price of lithium-ion batteries
and the price of raw materials. According to Fro st & Sullivan, the market price of lithium-ion
batteries decreased from RMB1.09/Wh in 2023 to RMB0.63/Wh in 2024, and the market price of
lithium carbonate decreased from RMB272.3 tho usand per ton in 2023 to RMB95.9 thousand per
ton in 2024. Sales volume of lithium-ion batte ries increased from 1,894.0 MWh in 2023 to
2,141.5 MWh in 2024, which was primarily due to in crease in demand of our lithium-ion batteries
by our customers.
Despite the relatively stable demand of lithium- ion batteries applied in telecom stations in
2024 compared in 2023, we belie ve that lithium ion batteries has huge growth potential in big
data and telecom applications. With the rapid expansion of global data centers and their
increasing adoption of lithium-ion batte ries, driven by lithium-ion batteries ’ intelligent battery
capacity management and longer life cycle to ha ndle peak shaving and valley filling, supporting
the sustainable electricity supply, the lithium-io n batteries applied in data center are expected to
reach 173.1 GWh in 2030, representing a CAGR of 106.3% from 1.1 GWh in 2023. According to
Frost & Sullivan, in 2024, we ranked the first among global telecom and data center energy
storage battery providers in terms of shipment volume, achieving a market share of 11.1%. We
believe we are well positioned to capture the growi ng market demand of lithium-ion batteries and
achieve future growth.
Revenues from sales of lead-acid batteries increased from RMB2,337.2 million in 2023 to
RMB2,907.2 million in 2024. Average selling pri ce of lead-acid batteries remained stable at
RMB506.7/kWh in 2023 and RMB509 .5/kWh in 2024. According to Frost & Sullivan, despite the
increasing raw materials costs of lead ingots, the market price of lead-acid batteries remained
relatively stable at RMB0.51/Wh and RMB0.54/Wh in 2023 and 2024, respectively. Given the
relatively stable market price of lead-acid batte ries, it is our business decision not to increase in
our selling price of lead-acid batteries to mainta in and promote leading market share in the energy
storage business for big-data and telecommunication industries, especially the lead-acid batteries
applied in data centers, desp ite of the increased raw material costs. The selling price of our
batteries sold to customers under framework sales agreement is also subject to the price
adjustment mechanism. For details, see ‘‘Business — Sales, Marketing and Customers — Pricing ’’
FINANCIAL INFORMATION
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in this prospectus. The adjustment in the sellin g price of our lead-acid batteries under the price
adjustment mechanism, balanced with our price s trategy to accept more competitive base prices,
resulted in the average selling price of our lead-aci d batteries remaining relatively stable in 2024.
S a l e sv o l u m eo fl e a d - a c i db a t t e r i e si n c r e a s e df r o m4 , 6 1 2 . 3M W hi n2 0 2 3t o5 , 7 0 5 . 7M W hi n
2024 due to the increase in demand of lead-acid ba tteries, particularly for batteries used in data
centers.
Revenues from others increased from RMB 68.0 million in 2023 to RMB95.3 million in
2024, which was primarily due to an increase in the sales volume of waste materials generated
during our lead-acid battery production process.
Cost of Sales
Cost of sales increased from RMB3,393.0 m illion in 2023 to RMB3,747.6 million in 2024
primarily due to an increase in sales volume, w hich correspondingly led to an increase in
associated costs.
From the perspective of analysis by applicatio n scenario, cost of sales for batteries used in
telecom base stations decrea sed from RMB1,885.6 million in 2023 to RMB1,829.0 million in
2024. The decrease in cost of sales for batteries used in telecom base stations was primarily
attributable to the decrease in price of raw mat erial, partially offset by the increase in sales
volume of batteries used in telecom base stations . Cost of sales of batteries used in data centers
increased from RMB730.0 million in 2023 to RMB 1,200.8 million in 2024. Such an increase was
primarily due to the increased sales volume of batteries used in data centers, which was generally
in line with the increase in revenues from sales of batteries used in data centers. Cost of sales of
batteries used in electrical energy storage se ttings remained stable at RMB406.5 million in 2023
and RMB410.4 million in 2024. Cost of sales of batte ries used in other settings decreased from
RMB308.4 million in 2023 to RMB214.9 million in 2024, which was also primarily due to the
decrease in sales volume of batteries.
From the perspective of analysis by product, cos t of sales from sales of lithium-ion batteries
decreased from RMB1,430.2 million in 2023 to R MB1,188.3 million in 2024 primarily due to the
decrease in price of raw material, partially offset by in the increase in sales volume of lithium-ion
batteries. Cost of sales from sales of lead-ac id batteries increased from RMB1,900.4 million in
2023 and RMB2,466.8 million in 2024 due to the incr ease in sales volume of lead-acid batteries.
Cost of sales of others increased from RM B62.5 million in 2023 to RMB92.5 million in
2024 primarily due to the increase in the volume of wastes.
Gross Profit and Gross Profit Margin
As a result of the foregoing, gross profit decreased from RMB866.8 million in 2023 to
RMB750.9 million in 2024. Gross profit margin d ecreased from 20.3% in 2023 to 16.7% in 2024.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin by Application Scenario
From the perspective of gross profit and gross profit margin by application scenario, gross
profit from sales of batteries in telecom base s tations decreased from RMB578.4 million in 2023
to RMB470.3 million in 2024, and the gross pro fit margin decreased from 23.5% in 2023 to
20.5% in 2024. This was primarily driven by a decrease in the gross profit margin of lead-acid
batteries, resulting from an inc rease in raw material costs.
Gross profit from sales of batteries used in data centers decreased from RMB169.9 million
in 2023 to RMB191.1 million in 2024, and the gros s profit margin decreased from 18.9% in 2023
to 13.7% in 2024. This decrease was primarily driven by an increase in raw material costs,
particularly lead ingots. Additionally, the decr ease in gross profit marg in was influenced by our
decision to accept competitive pricing in response to prevailing market trends.
Gross profit from batteries used in electric al energy storage settings decreased from
RMB81.5 million in 2023 to RMB40.4 million in 2024, w hile the gross profit margin decreased
from 16.7% in 2023 to 9.0% in 2024. The decrease in gross profit margin was primarily attributed
to a decrease in the average selling price of batteries used in electrical energy storage settings. In
response to the competitive landscape in the elect rical energy storage market, we aligned the
average selling prices of our batteries used in elec trical energy storage settings with the market
price, resulting in the decrease d gross profit margin in 2024.
Gross profit from other settings increa sed from RMB31.4 million in 2023 to RMB46.2
million in 2024, and the gross profit margin inc reased from 9.3% in 2023 to 17.7% in 2024. The
increase in gross profit margin was primarily attr ibuted to our strategic focus on partnering with
valued customers. By providing tailored solut ions and high-quality products, we were able to
enhance efficiency and value, resulting i n the increase in gross profit margin.
Gross Profit and Gross Profit Margin by Product
Gross profit of lithium-ion batteries d ecreased from RMB424.4 million in 2023 to
RMB307.7 million in 2024. Gross profit margin of sal es of lithium-ion batteries decreased from
22.9% in 2023 to 20.6% in 2024. This decrease was primarily driven by competition in the
electrical energy storage market, resulting in a de crease in gross profit margin of batteries used in
electrical energy storage settings.
Gross profit of lead-acid batteries rema ined stable at RMB436.9 million in 2023 and
RMB440.4 million in 2024. Gross profit margin of sa les of lead-acid batteries decreased from
18.7% in 2023 to 15.1% in 2024 due to the fluctuation in price of raw materials. According to
Frost & Sullivan, lead ingots, th e primary raw material for lead -acid batteries, account for
approximately 60.0% of their total production cost, making them a significant factor in
determining battery prices. In 2024, the averag e price of lead ingots increased to RMB16,858.8
per ton, driven by the growing demand for lead.
FINANCIAL INFORMATION
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--- page 373 ---
Gross profit of others decreased from RMB5 .5 million in 2023 to RMB2.8 million in 2024.
Gross profit margin of others decreased from 8.1% in 2023 to 2.9% in 2024. We collected and
paid for waste from our customers, and then sold it to waste processors. The purchase price of the
waste is determined based on the market price in the month it is collected and recorded as a cost
of sales. The sales price is determined based on the market price in the month it is sold and
recorded as revenue. Due to the natural fluctuations in waste prices driven by supply and demand,
there was a time lag between collec tion and sale for a particular batch.
O t h e rI n c o m ea n dG a i n s
Other income and gains increased from RMB 77.7 million in 2023 to RMB115.6 million in
2024, primarily due to an increase in additiona l VAT deduction from RMB0.8 million in 2023 to
RMB40.6 million in 2024, due to the additional 5 % deduction calculated based on the input VAT
from the VAT payable enjoyed by certain compan ies within our Group and partially offset by a
decrease in interest income from RMB19.3 million in 2023 to RMB14.8 million in 2024 due to a
decrease in interest rate, and a decrease in fo reign exchange gains of RMB12.3 million in 2023 to
RMB10.6 million in 2024, which in turn was prim arily due to fluctuations in the exchange rate
between the U.S. dollar and RMB.
Selling and Marketing Expenses
Selling and marketing exp enses decreased from RMB1 51.8 million in 2023 to RMB138.0
million in 2024, primarily due to a decrease in employee compensation from RMB102.8 million
in 2023 to RMB74.6 million in 2024, which was a ttributable to improved efficiency and lower
incentive compensation. Travel expenses in creased from RMB14.7 million in 2023 to RMB16.3
million in 2024, which was due to an increase in s ales-related travel overseas. Advertising and
promotional expenses increased from RMB7. 2 million in 2023 to RMB14.2 million in 2024 which
was in turn due to a higher number of overseas exhi bitions, leading to increased advertising and
promotional expenses.
Administrative Expenses
Administrative expenses decreased from RMB 162.7 million in 2023 to RMB156.5 million in
2024. Employee compensation decreased fro m RMB99.1 million in 2023 to RMB78.7 million in
2024 which was primarily due to our initiatives to optimize workforce allocation and enhance
operational efficiency within administrative fun ctions. Listing expenses increased from nil in 2023
to RMB18.0 million in 2024, which was in relation to the Listing and the Global Offering.
Professional service fees decreased from RMB 19.4 million in 2023 to RMB11.8 million in 2024
due to the procurement of professional service in 2023 in relation to the listing attempt of our
Shares on the Shenzhen Stock Exchange. The listing application was withdrawn in 2024.
FINANCIAL INFORMATION
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--- page 374 ---
Research and Development Expenses
Research and development expenses decreased from RMB112.8 million in 2023 to
RMB110.5 million in 2024. Employee compensa tion remained stable at RMB62.5 million in
2023 and RMB63.7 million in 2024. Materials and utilities costs decreased from RMB32.5
million in 2023 to RMB25.7 million in 2024, due to a decrease in the cost of raw material
associated with R&D activities which was in turn d ue to the decrease in raw material prices and
our improved R&D efficiency, which allowed f or the use of less material in our R&D activities.
Impairment Losses on Financi al and Contract Assets, Net
Impairment losses on financial and contrac t assets, net increased from RMB6.3 million in
2023 to RMB19.2 million in 2024 due to the increase i n impairment of trade and bills receivables
as a result of our increasing trade and bills r eceivables balance as o f December 31, 2024.
Other Expenses
Other expenses decreased from RMB34.1 m illion in 2023 to RMB20.2 million in 2024,
primarily due to the decrease in impairment losse s on assets of a disposal group classified as held
for sale from RMB15.7 million in 2023 to nil in 2024.
Finance Costs
Finance costs decreased from RMB30.0 million in 2023 to RMB19.8 million in 2024,
primarily due to the decrease in interest and principals of bank and other borrowings.
Share of Profits and Losses of an Associate
Share of profits and losses of an associate i ncreased from a loss of RMB0.5 million in 2023
to a gain of RMB0.4 million in 2024 due to the increase in profit from such associate.
Income Tax Expense
Income tax credit/(expense) decreased f rom RMB61.0 million in 2023 to RMB49.4 million
in 2024, which was attributed to the decreased net profit before income tax during the year.
Profit for the Year
As a result of the above, profit for the y ear decreased from RMB385.2 million in 2023 to
RMB353.3 million in 2024.
Year Ended December 31, 2023 Compared With Year Ended December 31, 2022
Revenues
Revenues increased from RMB4,072.5 millio n in 2022 to RMB4,259.8 million in 2023.
FINANCIAL INFORMATION
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--- page 375 ---
Revenues by Application Scenario
Revenues from sales of batteries used in telecom base stations decreased from RMB2,641.0
million in 2022 to RMB2,464.0 million in 2023, wh ich was in turn due to the decrease in sales
volume of batteries used in telecom base stations from 4,252.8 MWh in 2022 to 3,648.9 MWh in
2023 as a result of the slowdown in new telecom bas e station construction. Average selling price
of batteries used in telecom base stations increased from RMB621.0/kWh in 2022 to
RMB675.3/kWh in 2023, primarily resulted fro m our ability to charge higher price from our
customers due to the supply-demand dynamics a nd in recognition of our brand awareness and
product quality.
Revenues from sales of batteries used in data centers increased from RMB764.8 million in
2022 to RMB899.9 million in 2023, w hich was in turn due to an increase in demand of batteries
used in data centers, evidenced by the increase in sales volume of batteries used in data centers
from 1,397.3 MWh in 2022 to 1,636.0 MWh in 2023. Increase in sales volume of batteries used
in data centers was in turn due to the supply-dem and dynamics, which allowed us to capitalize on
the growing market demand and secure a larger ma rket share. Average selling price of batteries
used in data centers remained stable at RMB547.4/kWh in 2022 and RMB550.1/kWh in 2023.
Revenues from electrical energy storage increased from RMB302.4 million in 2022 to
RMB488.0 million in 2023, which was primarily du e to the increase in sales volume from 329.4
MWh in 2022 to 482.2 MWh in 202 3 and the increase in average selling price from RMB918.0/
kWh to RMB1,012.0/kWh. The increase in sales volume was due to our entry into new markets
and creating new products to cater to various customer requirements. Increase in the average
selling price was primarily due to the change in the structure of the products sold, as we sold
more batteries at higher selling price.
Revenues from other settings increased f rom RMB281.9 million in 2022 to RMB339.9
million in 2023, which was primarily due to the in crease in sales volume and average selling
price. Sales volume of batteries used in othe r settings increased from 613.4 MWh in 2022 to
739.3 MWh in 2023 due to the supply-demand dyna mics and the positive perception of our brand
and product reliability by customers, allowing us to successfully secure more orders. Average
selling price of batteries used in other settings remained stable at RMB459.6/kWh in 2022 and
RMB459.7/kWh in 2023.
Revenues by Product
From the perspective of revenues by product, increase in revenues was primarily due to the
increase in revenues from sales of lithium-ion batteries from RMB1,568.5 million in 2022 to
RMB1,854.6 million in 2023, which in turn due to an i ncrease in demand of lithium-ion batteries,
evidenced by the increase in sales volume of lith ium-ion batteries increased from 1,654.1 MWh in
2022 to 1,894.0 MWh in 2023. Average selling pric e of lithium-ion batteries remained stable at
RMB948.3/kWh in 2022 and RMB979.2/kWh in 2023.
FINANCIAL INFORMATION
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Revenues from sales of lead-acid batteries re mained stable at RMB2,421.6 million in 2022
and RMB2,337.2 million in 2023. Sales volume o f lead-acid batteries decreased from 4,938.9
MWh in 2022 to 4,612.3 MWh in 2023, which was primarily due to the decrease in demand of
lead-acid batteries. Average selling price of lead -acid batteries remained stable at RMB490.3/kWh
in 2022 and RMB506.7/kWh in 2023.
Revenues from others decr eased from RMB82.3 million i n 2022 to RMB68.0 million in
2023, which was primarily due to a decrease in the volume of wastes.
Cost of Sales
Cost of sales remained stable at RMB3,38 2.9 million in 2022 and RMB3,393.0 million in
2023 primarily due to our ability to control cost effic iencies while simultaneously increasing sales
volume and revenues.
From the perspective of analysis by application scenario, cost of sales batteries used in
telecom base stations decrea sed from RMB2,216.4 million in 2022 to RMB1,885.6 million in
2023. Such a decrease was primarily due to the decreased sales volume of batteries used in
telecom base stations. Cost of sales of batteries used in data centers increased from RMB634.0
million in 2022 to RMB730.0 million in 2023. Su ch an increase was primarily due to the
increased sales volume of batteries used in da ta centers. Cost of sales of batteries used in
electrical energy storage settings increased from RMB233.8 million in 2022 to RMB406.5 million
in 2023, which was primarily due to the increased sales volume of batteries used in electrical
energy storage settings. Cost of sales of batteri es used in other settings increased from RMB233.0
million in 2022 to RMB308.4 million in 2023, whic h was primarily due to the increase in sales
volume of batteries used in other settings.
From the perspective of analysis by product, cos t of sales from sales of lithium-ion batteries
increased from RMB1,279.1 million in 2022 to RMB 1,430.2 million in 2023 primarily due to an
increase in sales volume of lithium-ion batteries . Cost of sales from sales of lead-acid batteries
decreased from RMB2,028.2 million in 2022 t o RMB1,900.4 million in 2023 primarily due to a
decrease in sales volume of lead-acid batteries.
Cost of sales of others decreased from R MB75.6 million in 2022 to RMB62.5 million in
2023, primarily due to the decrease in the sales volume of battery wastes.
Gross Profit and Gross Profit Margin
As a result of the foregoing, gross profi t increased from RMB689.6 million in 2022 to
RMB866.8 million in 2023. Gross profit margin i ncreased from 16.9% in 2022 to 20.3% in 2023.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin by Application Scenario
From the perspective of gross profit and gross profit margin by application scenario, gross
profit from sales of batteries in telecom bas e stations increased from RMB424.6 million in 2022
to RMB578.4 million in 2023, while the gross pr ofit margin increased from 16.1% in 2022 to
23.5% in 2023. Such an increase was primarily due to the increase in average selling price of
batteries in telecom base stations and our ab ility to reduce costs and enhance production
efficiency. We invested in advanced technologies and automation, which significantly lowered
manufacturing costs and improve d overall operational efficiency.
Gross profit from sales of batteries in data centers increased fro m RMB130.8 million in
2022 to RMB169.9 million in 2023, while the gross profit margin increased from 17.1% in 2022
to 18.9% in 2023. Such an increase was primarily due to the growing demand for data storage and
processing capabilities, driven by the expansion o f cloud computing, and artificial intelligence
applications. This surge in demand led to higher sales volumes of batteries in data centers and
allowed us to benefit from economies of scale, a s the higher sales volume allowed us to reduce
per-unit costs and improve operational efficiency.
Gross profit from electrical energy stora ge settings increased from RMB68.6 million in
2022, to RMB81.5 million in 2023, while the gross profit margin decreased from 22.7% in 2022
to 16.7% in 2023. This decrease in gross profit margin was primarily due to a change in the
structure of the products sold, as we sold more batteries in electrical energy storage settings at
higher selling price but lower gross profit margin in recognition of our customer expansion needs.
Gross profit from other settings decrea sed from RMB58.9 million in 2022 to RMB31.4
million in 2023, while the gross profit margin de creased from 20.9% in 2022 to 9.3% in 2023 as
a result of changes in our product mix. We sold more batteries in others settings at higher prices
but with lower gross profit margins in 2023.
Gross Profit and Gross Profit Margin by Product
From the perspective of gross profit and gross profit margin by product, gross profit of
lithium-ion batteries increased from RMB 289.4 million in 2022 to R MB424.4 million in 2023.
Gross profit margin of sales of lithium-ion batteries increased from 18.5% in 2022 to 22.9% in
2023. Increase in gross profit margin of sales of lith ium-ion batteries was in turn primarily due to
the strong reputation our brand and products have with customers. Gross profit of lead-acid
batteries increased from RMB 393.5 million in 2022 to RMB436.9 million in 2023. Gross profit
margin of sales of lead-acid batteries increased from 16.2% in 2022 to 18.7% in 2023. This
increase was primarily due to our efforts to reduce costs, including optimizing the supply chain
and improving production efficiencies, which low ered the overall cost of production of lead-acid
batteries.
Gross profit of others decreased from RMB6 .7 million in 2022 to RMB5.5 million in 2023.
Gross profit margin of others remained stable at 8.2% in 2022 and 8.1% in 2023, respectively.
FINANCIAL INFORMATION
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O t h e rI n c o m ea n dG a i n s
Other income and gains increased from RMB50.6 million in 2022 to RMB77.7 million in
2023 primarily due to an increase in interest income from RMB3.4 million in 2022 to RMB19.3
million in 2023, an increase in governmental subsidies from RMB25.1 million in 2022 to
RMB36.4 million in 2023, which was in turn due to e nhanced government support for sustainable
energy initiatives and increased funding for te chnological innovation in the energy storage
industry; partially offset by a decrease in for eign exchange gains of RMB17.5 million in 2022 to
RMB12.3 million in 2023, which in turn was due to f luctuations in the exchange rate between the
U.S. dollar and the Chinese yuan.
Selling and Marketing Expenses
Selling and marketing expenses increas ed from RMB100.3 million in 2022 to RMB151.8
million in 2023 primarily due to an increase in e mployee compensation from RMB70.3 million in
2022 to RMB102.8 million in 2023, which was gen erally in line with our business expansion
from 2022 to 2023. Travel expe nses increased from RMB8.6 million in 2022 to RMB14.7 million
in 2023 which was due to the lifting of travel restrictions following the end of the COVID-19
pandemic, which led to an increa se in sales-related travel.
Administrative Expenses
Administrative expenses increased from RMB 126.5 million in 2022 to RMB162.7 million in
2023, primarily due to the increase in empl oyee compensation RMB85.5 million in 2022 to
RMB99.1 million in 2023, which was generally in line with our business expansion in 2023, and
the increase in professional service fees from RMB8.6 million in 2022 to RMB21.0 million in
2023, which was in turn attributed to the prepa ration of the listing attempt of our Shares on the
Shenzhen Stock Exchange.
Research and Development Expenses
Research and development expenses in creased from RMB100.7 million in 2022 to
RMB112.8 million in 2023, primary due to the increase in the employee compensation from
RMB54.9 million in 2022 to RMB62.5 million in 2023, and the increase in material and utility
costs, which was generally in line with our research development during the corresponding years.
Impairment Losses on Financi al and Contract Assets, Net
Impairment losses on financial and contract assets, net changed from a loss of RMB22.6
million in 2022 to a loss of RMB6.3 million in 2023, primarily due to a decrease in impairment
losses on accounts receivable from RMB21. 5 million in 2022 to RMB5.3 million in 2023, which
was in turn due to our enhanced credit control measures and improved collection processes.
FINANCIAL INFORMATION
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Other Expenses
Other expenses increased from RMB21. 5 million in 2022 to RMB34.1 million in 2023,
primarily due to an increase in impairment losses o n assets of a disposal group classified as held
for sale, which represented the impairment loss of assets and liabilities of Huai ’an Huifeng
Juneng, which was classified as a disposal group held for sale.
Finance Costs
Finance costs decreased from RMB49.4 million in 2022 to RMB30.0 million in 2023,
primarily due to the decrease in interest on bank and other borrowings to optimize our capital
structure.
Share of Profits and Losses of an Associate
Share of profits and losses of an associate gen erally remained stable at RMB0.6 million in
2022 and RMB0.5 million in 2023.
Income Tax Credit/(Expense)
Income tax expense increased from a tax expense of RMB37.6 million in 2022 to RMB61.0
million in 2023, which was attributed to the increase in profit before tax of RMB318.7 million in
2022 and RMB446.2 million in 2023.
Profit for the Year
As a result of the above, profit for the year increased from RMB281.0 million in 2022 to
RMB385.2 million in 2023.
FINANCIAL INFORMATION
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DISCUSSION OF CERTAIN SELECTED ITEMS FROM THE CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
The following table sets forth selected info rmation from our consolidated statements of
financial position as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
ASSETS
Non-current Assets
P r o p e r t y ,p l a n ta n de q u i p m e n t ........ 8 3 2 , 0 4 6 1 , 0 8 4 , 2 4 7 1 , 2 1 7 , 1 2 4 1 , 1 8 1 , 8 0 7
R i g h t - o f - u s ea s s e t s ............... 1 3 5 , 6 2 8 1 5 6 , 7 0 6 1 6 5 , 1 0 8 1 6 3 , 3 2 7
O t h e ri n t a n g i b l ea s s e t s ............ 7 , 3 5 2 7 , 1 4 9 8 , 3 2 1 7 , 7 8 8
I n v e s t m e n ti na na s s o c i a t e.......... 1 6 , 8 1 3 1 6 , 3 3 8 1 6 , 7 6 6 1 6 , 7 9 8
Prepayments, other receivables and other
a s s e t s ..................... 2 , 6 8 6 7 , 1 4 4 2 , 3 5 8 1 , 7 4 8
C o n t r a c ta s s e t s ................. 6 , 9 0 8 8 , 4 1 0 1 3 , 1 5 4 1 3 , 2 8 4
D e f e r r e dt a xa s s e t s ............... 4 6 , 4 9 6 6 7 , 1 8 8 7 4 , 1 1 3 8 1 , 4 7 9
R e s t r i c t e dc a s h ................. – 35,392 23,567 24,401
Total non-current assets ........... 1,047,929 1,382,574 1,520,511 1,490,542
Current assets
I n v e n t o r i e s .................... 5 3 6 , 9 6 2 4 5 9 , 2 3 4 5 1 3 , 5 0 6 7 7 3 , 7 7 9
Trade and bills receivables . . . ....... 1 , 8 6 2 , 2 1 1 1 , 6 0 9 , 3 1 8 2 , 3 1 8 , 2 8 1 2 , 3 8 6 , 5 6 3
C o n t r a c ta s s e t s ................. 1 , 6 0 8 7 , 0 2 0 5 4 6 7 2 9
Prepayments, other receivables and other
a s s e t s ..................... 8 2 , 7 3 0 6 3 , 9 3 0 8 5 , 2 9 0 1 2 7 , 0 4 1
Financial assets at fair value through profit
o rl o s s ..................... –– 86,000 –
Debt investments at fair value through
o t h e rc o m p r e h e n s i v ei n c o m e ....... 6 , 9 0 9 1 5 , 6 5 5 3 , 0 7 3 2 , 2 2 5
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ....... –– 3,355 –
R e s t r i c t e dc a s h ................. 2 2 8 , 7 4 0 3 0 3 , 4 9 7 2 3 5 , 1 3 4 2 1 4 , 5 9 2
C a s ha n dc a s he q u i v a l e n t s.......... 2 7 0 , 2 6 4 4 7 9 , 0 4 0 3 9 5 , 2 3 4 6 1 6 , 9 4 0
Assets of a disposal group classified as
h e l df o rs a l e ................. – 7,634 ––
Total current assets .............. 2,989,424 2,945,328 3,640,419 4,122,920
FINANCIAL INFORMATION
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As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
LIABILITIES
Current liabilities
Trade and bills payables ........... 7 0 1 , 8 7 6 8 3 7 , 1 7 2 9 7 3 , 9 7 9 1 , 2 2 5 , 6 3 7
O t h e rp a y a b l e sa n da c c r u a l s......... 4 1 1 , 3 6 1 4 1 3 , 3 1 4 5 5 8 , 6 7 8 5 2 5 , 3 9 2
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ....... –– 842 489
Contract liabilities . . ............. 3 6 , 7 7 8 6 3 , 0 1 4 3 9 , 6 4 0 3 9 , 8 9 7
Interest-bearing bank and other borrowings 944,845 410,528 673,333 847,726
D e f e r r e dg o v e r n m e n tg r a n t s ......... 1 2 , 8 1 7 1 7 , 6 3 3 2 0 , 8 7 8 2 0 , 9 9 2
L e a s el i a b i l i t i e s ................. 5 , 1 2 8 6 , 4 9 6 8 , 0 1 7 6 , 8 0 2
T a xp a y a b l e................... 2 5 , 6 6 6 2 9 , 6 7 0 2 7 , 9 0 8 8 , 9 7 1
D u et or e l a t e dp a r t i e s............. 4 , 8 3 4 3 , 7 7 1 5 , 7 2 0 1 0 , 9 9 3
P r o v i s i o n s.................... 7 , 3 0 0 7 , 7 9 4 7 , 1 5 8 7 , 8 9 3
Liabilities directly associated with the
a s s e t sc l a s s i f i e da sh e l df o rs a l e ..... – 1,472 ––
Total current liabilities ........... 2,150,605 1,790,864 2,316,153 2,694,792
Net current assets ............... 838,819 1,154,464 1,324,266 1,428,128
Total assets less current liabilities .... 1,886,748 2,537,038 2,844,777 2,918,670
Non-current liabilities
Interest-bearing bank and other borrowings 51,200 297,425 255,404 259,270
D e f e r r e dg o v e r n m e n tg r a n t s ......... 7 3 , 2 5 2 1 1 8 , 4 9 0 1 6 1 , 6 2 1 1 5 6 , 7 2 2
L e a s el i a b i l i t i e s ................. 4 , 8 6 4 3 , 8 9 3 8 , 5 9 7 8 , 3 0 6
P r o v i s i o n s.................... 2 9 , 3 0 4 3 2 , 0 6 9 3 1 , 6 9 4 3 3 , 9 0 0
Total non-current liabilities ........ 158,620 451,877 457,316 458,198
Net assets .................... 1,728,128 2,085,161 2,387,461 2,460,472
Equity
S h a r ec a p i t a l ................... 3 5 8 , 2 6 9 3 5 8 , 2 6 9 3 5 8 , 2 6 9 3 5 8 , 2 6 9
O t h e rr e s e r v e s .................. 1 , 3 6 9 , 8 5 9 1 , 7 2 6 , 8 9 2 2 , 0 2 9 , 1 9 2 2 , 1 0 2 , 2 0 3
1,728,128 2,085,161 2,387,461 2,460,472
Total equity ................... 1,728,128 2,085,161 2,387,461 2,460,472
FINANCIAL INFORMATION
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Assets
Property, Plant and Equipment
Property, plant and equipment primarily cons ist of buildings, plants, machinery, office
equipment, and construction in progress. Property, plant and equipment increased from
RMB832.0 million as of December 31, 2022 to RM B1,084.2 million as of December 31, 2023,
mainly in line with the expansion and construc tion progress of our plant. This increase was
primarily due to the expansion in our buildings, plants, and machinery, as there were related
investments starting with the construction of a plant in Xiangyang, Hubei in May 2023. Property,
plant and equipment increased further to R MB1,217.1 million as of December 31, 2024, which
was primarily due to the commissioning and investment the construction of the plant in
Xiangyang, Hubei. Our property, plants and equip ment slightly decrease dt oR M B 1 , 1 8 1 . 8m i l l i o n ,
primarily due to ongoing capital expenditures recorded under construction in progress in
Malaysia.
Right-of-Use Assets
Right-of-use assets mainly related to leased p remises of plants, warehouses, and offices.
Right-of-use assets increased from RMB135.6 million as of December 31, 2022 to RMB156.7
million as of December 31, 2023, mainly due to the increase in the carrying value of leasehold
land. Right-of-use assets furt her increased to RMB165.1 millio n as of December 31, 2024, mainly
due to the addition of new leased plants. Right -of-use assets remained relatively stable at
RMB163.2 million as of May 31, 2025.
Other Intangible Assets
Other intangible assets mainly represented intellectual properties in connection with our
business operation. Other intangible assets re mained stable at RMB7.4 million as of December 31,
2022 and RMB7.1 million as of December 31, 2023. Ot her intangible assets further increased to
RMB8.3 million as of December 31, 2024, main ly due to the enhancements made to our ERP
system and other softwares in relation to our daily operation. Other intangible assets remained
stable at RMB7.8 million as of May 31, 2025.
Investment in an Associate
Investment in an associate mainly related to our holding of an 18% equity stake in
Shuangdeng Tianpe ng. Investment in an associate remained stable at RMB16.8 million, RMB16.3
million, RMB16.8 million and RMB16.8 million a s of December 31, 2022, 2023 and 2024, and
the five months ended May 31, 2025, respectively.
FINANCIAL INFORMATION
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Prepayments, Other Receivables and Other Assets
Prepayments, other receivables, and other assets mainly related to prepaid value-added tax
and prepayments for the purchase of raw material such as lead ingots, lead alloys and lithium iron
phosphate, which are necessary for our daily operations, as well as deposits, and other
receivables. The following table sets forth breakdown of prepayments, other receivables, and
other assets as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Prepayments, other receivables and
other assets
N o n - c u r r e n tp o r t i o n .............. 2 , 6 8 6 7 , 1 4 4 2 , 3 5 8 1 , 7 4 8
C u r r e n tp o r t i o n................. 8 2 , 7 3 0 6 3 , 9 3 0 8 5 , 2 9 0 1 2 7 , 0 4 1
Total ....................... 85,416 71,074 87,648 128,789
Prepayments, other receivables and other a ssets decreased from RMB85.4 million as of
December 31, 2022 to RMB71.1 million as of Dec ember 31, 2023, mainly due to a decrease in
prepayments of raw materials to our supplie rs from RMB66.8 million as of December 31, 2022 to
RMB27.0 million as of December 31, 2023. Prepaym ents, other receivab les and other assets
increased to RMB87.6 million as of Decembe r 31, 2024, mainly due to an increase in
prepayments for value-added tax and security deposits. Prepayments, other receivables and other
assets increased to RMB128.8 million as of May 31, 2025, primarily as a result of an increase in
prepayments for procurement of energy storage batteries sector and a rise in other assets related to
our Hubei facility.
As of July 31, 2025, RMB32.3 million, or 25.1%, of our prepayments, other receivables and
other assets outstanding as of May 31, 2025, had been subsequently settled or utilized.
Deferred Tax Assets
Deferred tax assets primarily represented cre dit impairment provisions, asset impairment
provisions, deductible losses, and deferred income. Deferred tax assets amounted to RMB46.5
million, RMB67.2 million, RMB74.1 million a nd RMB81.5 million as of December 31, 2022,
2023 and 2024, and the five months ended May 31, 2025. The movement of deferred tax assets
during the Track Record Period was primarily due to changes in impairment provisions,
recognition and utilization of de ductible losses and timing diffe rences related to deferred
government grants and accrued expenses.
FINANCIAL INFORMATION
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Inventories
Inventories primarily include raw material, work-in-progress and finished goods. Inventories
decreased from RMB537.0 million as of Dece mber 31, 2022 to RMB459.2 million as December
31, 2023, mainly due to the decreas e in raw material. Inventories increased to RMB513.5 million
as of December 31, 2024 due to the increase in stocking of work-in-progress and finished goods
as well as the decrease in impairment allowance. Inventories increased to RMB773.8 million as of
May 31, 2025, primarily due to an increase in stocking of work-in-progress and finished goods.
The provision for inventory impairment is based on a detailed assessment of the net
realizable value of inventory items compared to their carrying amounts. This process involves
evaluating market conditions, including fluctua tions in raw material prices, and considering
factors such as demand forecasts and obsolescence risks. The provision for impairment loss
recognized of inventories amounted to R MB14.8 million, RMB53.8 million, RMB31.5 million
and RMB31.0 million as of December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, respectively. The increases in provision for impairment loss of inventories in 2023 were
primarily due to the fluctuation of the price o f raw materials, which led to a decrease in the
recoverable amount of inventories to below their carrying amount. The provision for impairment
loss decreased in 2024 as the market price of raw materials was less volatile in 2024 compared to
2023, which resulted in a decrease in the differences between the net recoverable amount of
inventory and its carrying amount. The provision for impairment loss remained stable as of May
31, 2025. For details of fluctua tion on raw material prices, see ‘‘Industry Overview — Battery
and Raw Materials Price Analysis ’’in this prospectus.
The following table sets forth inventory turnover days for the years/periods indicated.
Year Ended December 31, As of May 31,
2022 2023 2024 2025
I n v e n t o r yt u r n o v e rd a y s *........... 5 2 . 2 5 2 . 8 4 6 . 7 6 0 . 8
Note:
* Inventory turnover days for each year/period equals the average of the beginning and ending balances of inventory
for that year/period divided by the corresponding cost of sale for the year/period, multiplied by 360 days or 150
days for a year/period.
Inventory turnover days remained stable at 52.2 days in 2022 and 52.8 days in 2023.
Inventory turnover days decreased to 46.7 days i n 2024 due to our improved inventory utilization
efficiency. Inventory turnover days slightly increased to 60.8 days in the five months ended May
31, 2025, mainly due to higher inventory levels maintained to support rising customer demands.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our inventories as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n6m o n t h s................ 5 3 0 , 0 2 4 4 5 6 , 0 5 6 5 1 0 , 7 3 1 7 6 4 , 2 4 5
7t o1 2m o n t h s ................. 6 , 9 3 8 3 , 1 7 8 2 , 7 7 5 9 , 5 3 4
A b o v e1y e a r.................. ––––
Total ....................... 536,962 459,234 513,506 773,779
As of July 31, 2025, RMB545.4 million, or 70.5 %, of our inventories outstanding as of May
31, 2025, had been subsequently sold or utilized.
Trade and Bills Receivables
We had trade and bills receivables of RMB 1,862.2 million, RMB1,609.3 million,
RMB2,318.3 million and RMB2,386.6 million a s of December 31, 20 22, 2023, 2024, and May
31, 2025. Trade receivables and bills receivables primarily represented the outstanding amounts
due from customers in connection with the pro ducts we provide. The table below sets forth
breakdowns of trade, bills and other re ceivables as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
T r a d er e c e i v a b l e s ................ 1 , 8 7 6 , 8 0 8 1 , 6 0 1 , 1 0 0 2 , 3 0 3 , 2 0 8 2 , 3 8 6 , 1 8 7
Bills receivables . . . ............. 7 1 , 3 8 4 8 4 , 4 6 7 1 0 8 , 1 8 6 9 1 , 6 4 6
Less: Impairment loss allowance for trade
and bills receivables ............ ( 8 5 , 9 8 1 ) ( 7 6 , 2 4 9 ) ( 9 3 , 1 1 3 ) ( 9 1 , 2 7 0 )
Total ....................... 1,862,211 1,609,318 2,318,281 2,386,563
Trade receivables mainly related to sales made to customers in the telecom and data centers
industries. These receivables represent amounts owed by customers for batteries delivered
rendered in the ordinary course of our business. Trade receivables decreased from RMB1,876.8
million as of December 31, 2022 to RMB1,601.1 m illion as of December 31, 2023, mainly due to
the improved collection of receivables as we i mplemented more stringent credit control and
collection practices, resulting in more timel y payments from customers and a reduction in
outstanding receivables. Trade receivables in creased to RMB2,303.2 million as of December 31,
2024. As market demand continued to grow over 2024, especially for batteries used in data
centers, we recorded higher portion of revenues in the six months ended December 31, 2024,
compared to the six months ended December 31, 2023. Normally, revenues generated in the
second half of a year are not due as of the year-end, resulting in an increase in trade receivables
balance as of December 31, 2024. Trade receivables increased to RMB2,386.2 million as of May
31, 2025, mainly due to an increase in revenue, which led to a corresponding rise in outstanding
receivables.
FINANCIAL INFORMATION
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Bills receivables mainly related to commercia l transactions with customers made through
bank acceptance bills. Bills receivables incr eased from RMB71.4 million as of December 31,
2022 to RMB84.5 million as of D ecember 31, 2023, mainly due t o higher sales volumes and an
increase in payments made through bank acceptanc e bills. Bills receivables further increased to
RMB108.2 million as of December 31, 2024, mainl y due to an increase in customer payments
made through bank acceptance bills. Bills rece ivables decreased to RMB91.6 million as of May
31, 2025, mainly due to a shift in customer paym ent preferences from bank-accepted bills to
direct bank transfers.
We seek to maintain strict control over our outstanding receivables and have a credit control
department to minimize credit risk. Our manage ment regularly reviews the recoverability of our
outstanding balances and when appropriate, provides for impairment of these trade receivables.
Trade and bills receivables relating to customer s with known financial difficulties or significant
doubt on collection are assessed individually for impairment allowance. The remaining trade and
bills receivables are grouped and collectively a ssessed for impairment allowance. Under the
collective approach, an impairment analysis is performed at each reporting date using a provision
matrix to measure expected credit losses. The provision rates are based on aging analysis for
grouping of customers that have similar loss pa tterns. Generally, trade and bills receivables are
written off according to management approval. See Note 20 to the Accountants ’ Report included
in Appendix I to this prospectus. We believe that our exposure to the risks of being unable to
collect payments is immaterial.
Expected loss rates of trade receivables applied to the different age buckets during the Track
Record Period are based on historical loss rates over the past years. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivabl es. Our Group has identified the Gross Domestic
Product ( ‘‘GDP’’) to be the most relevant factor, and the other factors such as historical global
all-industry default rate data and annual defaulted corporate bond and loan recoveries, and
accordingly adjusts the historical loss rates based on expected changes in the growth of GDP in
China. During the Track Record Period, there was no significant fluctuation for such factors,
hence no significant fluctuation for the overall expected credit loss rates. As a result of the
foregoing, we applied similar expected credit loss rate during the Track Record Period.
The following table sets forth an aging analy sis of trade and bills receivables as of the dates
indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n6m o n t h s................ 1 , 5 3 9 , 7 9 4 1 , 3 5 3 , 1 0 9 2 , 0 0 2 , 8 4 2 2 , 0 7 4 , 7 8 7
7t o1 2m o n t h s ................. 2 1 9 , 8 5 9 1 6 2 , 3 3 0 2 0 7 , 9 0 5 2 0 4 , 5 6 1
1t o2y e a r s ................... 8 8 , 9 3 5 8 4 , 6 3 0 1 0 0 , 4 4 8 1 0 0 , 9 9 4
2t o3y e a r s ................... 1 1 , 9 7 6 8 , 7 7 2 6 , 1 3 2 5 , 4 4 9
3t o4y e a r s ................... 1 , 6 4 7 4 7 7 9 5 4 7 7 2
Total ....................... 1,862,211 1,609,318 2,318,281 2,386,563
FINANCIAL INFORMATION
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The following table sets forth trade and bills r eceivables turnover days for the years/periods
indicated.
Year Ended December 31,
Five Months
Ended
May 31,
2022 2023 2024 2025
Trade and bills receiva bles turnover days* .... 1 3 6 . 5 1 4 6 . 7 1 5 7 . 2 1 8 9 . 0
Note:
* Trade and bills receivables turnover days for each year /period equals the average of the beginning and ending
balances of trade and bills receivables for that year/p eriod divided by the corresponding revenues for the year,
multiplied by 360 days/150 days for a year/period.
The increase in trade and bills receivables t urnover days in 2023 w as primarily due to
slower collection of trade and bills receivable s. According to Frost & Sullivan, such trends are
consistent with market practice s. The trade and bills receivables turnover days further increased to
157.2 days in 2024, primarily due to slower collection of trade and bill receivables and the higher
portion of revenues recorded in the second half of the year. As market demand continued to grow
in 2024, especially for batteries used in data centers, a significant portion of revenues was
generated in the second half of 2024. Revenues generated in the second half of the year are
typically not due as of the year-end because of the cr edit terms provided to customers, resulting
in a higher level of outstanding receivables. This, together with extended collection against the
backdrop of unfavorable overall m arket conditions contributed to th e further increase in trade and
bills receivables turnov er days in 2024. The trade and bills re ceivables turnover days further
increased to 189.0 days in the five months ended May 31, 2025, primarily due to (i) relatively
low revenue during the first five months of the y ear, which inflated the turnover ratio, and (ii)
delayed payments from certain customers. Duri ng the Track Record Period, our trade and bills
receivables turnover days remained relatively h igh, primarily due to (i) a considerable number of
our customers are state-owned enterprises, whose payment cycles are generally longer as a result
of more complex internal approval procedures; and (ii) a significant portion of our energy storage
batteries are for telecom base stations and d ata centers, which typically involve longer
construction and deployment timelines compared to other application scenarios, thereby leading
to slower payment collection. This is because such projects are often executed in phases, with
payments tied to specific construction or commissioning milestones. In contrast, companies
engaged in the sales of battery cells, which typica lly do not participate in project construction and
are only responsible for product delivery, tend to experience faster payment collection. The longer
payment cycle associated with telecom and data center projects is also consistent with industry
norms and is a common characteristic across market participants engaged in this segment, as
confirmed by Frost & Sullivan. According to Fros t & Sullivan, compared with market participants
that primarily generate revenue from product sales without involvement in project construction or
FINANCIAL INFORMATION
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--- page 388 ---
integration, we are more frequently engaged in project-based deliveries that require coordination
with multiple stakeholders and alignment with co nstruction or commissioning schedules. This
business model inherently extends the payment collection period relative to those peers.
The following table sets forth the trade and bills receivables and the subsequent settlement
of such trade and bills receivables by age group as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
Trade and
Bills
Receivables
Subsequent
Settlement
Trade and
Bills
Receivables
Subsequent
Settlement
Trade and
Bills
Receivables
Subsequent
Settlement
Trade and
Bills
Receivables
Subsequent
Settlement
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Within 6 months . . . . . . 1,539,794 1,532,139 1,353,109 1,275,816 2,002,842 1,267,826 2,074,787 288,885
7 to 12 months . . . . . . . 219,859 218,538 162,330 147,538 207,905 53,043 204,561 19,877
1 to 2 years . . . . . . . . . 88,935 84,884 84,630 77,992 100,448 57,159 100,994 7,891
2 to 3 years . . . . . . . . . 11,976 11,286 8,772 5,437 6,132 2,881 5,449 470
3 to 4 years . . . . . . . . . 1,647 1,250 477 280 954 179 772 37
Total ............. 1,862,211 1,848,096 1,609,318 1,507,062 2,318,281 1,381,088 2,386,563 317,160
The following tables set forth breakdowns of revenues by customer type for the years/
periods indicated.
For the year ended December 31, For the five months ended May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 % RMB ’000 %
SOEs* . . . . . . . . . . . . . . . . . . . 2,311,712 56.8 2,170,749 51.0 1,740,450 38.7 519,618 37.3 522,947 28.0
Other companies . . . . . . . . . . . . . 1,760,768 43.2 2,089,028 49.0 2,758,072 61.3 874,567 62.7 1,343,661 72.0
Total ................... 4,072,480 100.0 4,259,777 100.0 4,498,522 100.0 1,394,185 100.0 1,866,608 100.0
Note:
* Including sales to governments, which are generally similar in nature and account for a small portion of our total
revenues.
The following tables set forth breakdowns of tr ade and bills receivable s balance by customer
type as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
S O E s * ...................... 1 , 0 9 3 , 9 4 7 7 5 4 , 2 6 4 9 8 7 , 4 0 5 8 0 7 , 6 1 7
O t h e rc o m p a n i e s................ 7 6 8 , 2 6 4 8 5 5 , 0 5 4 1 , 3 3 0 , 8 7 6 1 , 5 7 8 , 9 4 6
Total ....................... 1,862,211 1,609,318 2,318,281 2,386,563
FINANCIAL INFORMATION
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Note:
* Including sales to governments, which are generally similar in nature and account for a small portion of our total
trade and bills receivables.
As of July 31, 2025, RMB613.5 million, or 25. 7%, of trade and bills receivables as of May
31, 2025 had been subsequently settled. As of July 31, 2025, we have RMB11.9 million in
unsettled trade and bill receivables that are subje ct to disputes, claims, or legal proceedings.
Based on the expected credit loss (ECL) model, we have made full impairment provisions for
these unsettled receivables. Our Directors are o f the view that these matters have no material
adverse impact on our business operations and financial performance. Save as disclosed above,
we did not experience any material credit loss during the Track Record Period.
Our Directors are of the view that there ar e no material recoverability issues for the
remaining trade and bills receivab les due to the following reasons:
 Strong customer creditworthiness : The majority of our trade and bills receivables are
attributable to state-owned enterprises ( ‘‘SOEs ’’) and publicly listed companies. These
entities have demonstrated strong creditworth iness, with no material defaults recorded
during the Track Record Period. Their financ ial strength and reliability, combined with
an average settlement period consistent with industry norms (according to Frost &
Sullivan), support the recovera bility of these receivables. W hile extended credit cycles
may lengthen turnover days, these are typical for customers of this nature.
 Improved payment structures : The relatively low subsequent settlement rate reflects
the typical payment structures of the energy storage battery industry, where payments
are tied to the completion of specific proje ct milestones (e.g., design, production,
installation, and final acceptance). Delays in these milestones, caused by procedural
approvals or inspections, extend payment timelines but are procedural in nature and do
not indicate material credit risks. Significant progress has been made in reducing aged
receivables. Trade and bills receivables aged 2 to 3 years decreased from RMB12.0
million in 2022 to RMB6.1 million in 2024, an d further decreased to RMB5.4 million
in the five months ended May 31, 2025, and those aged 3 to 4 years decreased from
RMB1.7 million to RMB1.0 million, and further to RMB0.8 million, during the same
year/period.
 Low exposure to disputes : As of July 31, 2025, only RMB11.9 million of unsettled
receivables (less than 1% of the total receivables balance) were subject to disputes,
claims, or legal proceedings. Full provisions have been made for these receivables
under our expected credit loss (ECL) model, reflecting our prudent risk management
practices.
FINANCIAL INFORMATION
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To mitigate delays in collecting trade and bills receivables, we have implemented a range of
targeted measures to address the root causes of payment delays and improve receivables
management efficiency:
 Enhanced Customer Communication : We have assigned dedicated account managers
to major customers to maintain regular communication, address potential payment
issues proactively, and expedite internal a pproval processes. Scheduled meetings are
held to resolve procedural bo ttlenecks, such as delays caus ed by documentation errors
or internal hierarchies on the customer ’s end.
 Optimized Credit Terms : Based on detailed risk assessments, we have implemented
stricter payment terms for higher-risk customers, such as requiring upfront deposits or
shorter payment intervals.
 Streamlined Invoicing, Paym ent and Collection Processes : We have digitized and
automated invoice preparation to ensure p rompt and accurate issuance, minimizing
manual errors and reducing delays. Additionally, an online portal provides customers
with real-time access to billing and paymen t records, enabling faster reconciliation and
resolution of discrepancies. Our receivables management team conducts weekly
reviews of overdue accounts, prioritizing h igh-value or long-ov erdue balances. We
engage customers through multiple channe ls to address delays and provide tailored
solutions. For significantly overdue acco unts with no resolution, we escalate to legal
proceedings or third-party collection agencies.
 Strengthened Risk Management : We have enhanced our Know Your Customer
(KYC) and credit evaluation processes to thoroughly assess new customers ’ financial
standing, payment history, and creditworthiness. For existing customers, periodic
reviews are conducted to identify emerging risks and take preemptive measures.
Restricted Cash
Restricted cash were deposited to banks for the issue of letter of credits. We had restricted
cash of RMB228.7 million and RM B338.9 million as of December 3 1, 2022, 2023 respectively.
The increases in the restricted cash were mainl y due to the higher requirement for collateral
associated with increased bills payables and le tter of credits. Restricted cash decreased to
RMB258.7 million as of December 31, 2024, which wa s due to the counterparty, recognizing our
creditworthiness, lowered the margin ratio required for the bills payables. Restricted cash further
decreased to RMB239.0 million as of May 31, 2025, mainly due to a reduction in bank deposits
pledged as security for bank guarantees.
FINANCIAL INFORMATION
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Cash and Cash Equivalents
We had cash and cash equivalents of RMB 270.3 million, RMB479.0 million, RMB395.2
million and RMB616.9 million as of December 3 1, 2022, 2023 and 2024, and the five months
ended May 31, 2025, respectively. The increases in cash and cash equivalents were mainly due to
the increase in cash generated from operating a ctivities. For details of movement of cashflows
during the Track R ecord Period, see ‘‘ — Liquidity and Capital Resources – Cash Flows ’’ in this
section.
Net Assets and Net Current Assets
Net assets amounted to RMB1,728.1 million, RMB2,085.2 million, RMB2,387.5 million and
RMB2,460.5 million as of December 31, 2022, 2023 and 2024, and the five months ended May
31, 2025, respectively. The fluctuation of our net assets during the Track Record Period were
primarily due to (i) total comprehensive income g enerated for the respective year, (ii) issue of
shares, (iii) share-based compensation reserve an d (iv) dividend distributed during the respective
year.
Net current assets amounted to RMB838.8 m illion, RMB1,154.5 million, RMB1,324.3
million and RMB1,428.1 million as of December 31, 2022, 2023 and 2024, and the five months
ended May 31, 2025, respectively. See ‘‘ — Liquidity and Capital Resources — Net Current
Assets ’’ of this section for the reasons for the fluctu ation of net current assets during the Track
Record Period.
Liabilities
Trade and Bills Payables
We had trade and bills payables of RMB7 01.9 million, RMB837.2 million, RMB974.0
million and RMB1,225.6 million as of December 31, 2022, 2023 and 2024, and the five months
ended May 31, 2025, respectively. Trade and bills payables were outstanding amount due to third
parties, mainly our suppliers fo r raw material and service provide rs. Certain suppliers with long-
term partnership allowed us to pay on credit given our increasing business scale and good
credibility. The movement of trade and bills pa yables during the Track Record Period was
generally in line with our business expansion during the Track Record Period.
The following table sets forth an aging analysis of trade and bills payables as of the dates
indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r .................. 7 0 1 , 8 7 6 8 3 7 , 1 7 2 9 7 3 , 9 7 9 1 , 2 2 5 , 6 3 7
Total ....................... 701,876 837,172 973,979 1,225,637
FINANCIAL INFORMATION
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The following table sets forth trade and bills payables turnover days for the years/periods
indicated.
Year Ended December 31,
Five Months
Ended May 31,
2022 2023 2024 2025
Trade and bills payables turnove r days* . . 69.3 81.6 87.0 103.9
Note:
* Trade and bills payables turnover days for each year/period equals the average of the beginning and ending balances
of trade and bills payables for that year/period divided by the corresponding cost of revenues for the year,
multiplied by 360 days/150 days for a year/period.
Trade and bills payables turnover days incre ased from 69.3 days in 2022 to 81.6 days in
2023 then increased to 87.0 days in 2024, and further increased to 103.9 days for the five months
ended May 31, 2025, primarily due to extended payment terms negotiated with suppliers to
manage working capital more effectively and to support increased procurement volumes.
As of July 31, 2025, RMB588.6 million, or 48.0%, of trade and bills payables as of May 31,
2025 had been subsequently settled.
Other Payables and Accruals
Other payables and accruals primarily consiste d of salary payables, which included accrued
payroll and welfare, and other tax payables. Other payables and accruals increased from
RMB411.4 million as of Decem ber 31, 2022 to RMB413.3 millio n as of December 31, 2023,
mainly due to an increase in year-e nd bonuses payable to our staffs and increased tax liabilities.
Other payables increased to RMB558.7 millio n as of December 31, 2024, mainly due to the
increase in payable for purchase of property, plant and equipment in 2024. Other payables and
accruals decreased to RMB 525.4 million as of May 31, 2025, mainly due to a decrease in
outstanding payables related to th e procurement of long-term assets.
Interest-Bearing Bank and Other Borrowings
Interest-bearing bank and other borrowings pri marily consisted of short-term and long-term
loans from financial institutions, as well as oth er forms of credit facilities used to support our
working capital and capital expen diture requirements. Interest-bearing bank and other borrowings
amounted to RMB996.0 million, RM B708.0 million, RMB928.7 m illion and RMB1,107.0 million
as of December 31, 2022, 2023 and 2024, and the five months ended May 31, 2025. The
movement of interest-bearing bank and other borrowings as of December 31, 2022 and 2023 was
generally due to our efforts to manage our financing needs and optimize our capital structure in
response to changing business requirements and market conditions. Interest-bearing bank and
FINANCIAL INFORMATION
– 381 –


--- page 393 ---
other borrowings increased to RMB928.7 m illion as of December 31, 2024 and RMB1,107.0
million as of May 31, 2025, which was primarily due to our increased working capital demand in
response to our business growth. Our overall financing demand is generally in line with the pace
of our business development, as reflected in the balances of our interest-bearing bank and other
borrowings. Among these, borrowi ngs under supplier finance agr eements were RMB47.4 million,
RMB10.0 million, RMB332.8 million and RMB453. 9 million for the respective periods. The
increased adoption of supplier finance reflects a structural shift in our financing approach, driven
by the advantages of such arrangements, rather than any material expansion in our overall
financing needs. Compared with traditional loa ns, supply chain finance agreement offers faster
processing and greater operational efficiency – applications can typically be submitted online and
funds are often disbursed on the same day or, at the latest, the following business day. In
addition, supply chain finance is generally not s ubject to the same lending quota restrictions as
conventional bank loans, enabling more flexible access to financing. The adoption of supplier
finance agreements has not resulted in any loss of bargaining power with our suppliers, as
confirmed by our Directors. Commercial terms with our suppliers, including pricing and payment
schedules are not adversely affected by the use of such arrangements. In addition, the effective
interest rates under our supplier f inance arrangements were similar to those of our traditional
short-term bank borrowings during the Track Reco rd Period. The table below sets forth interest-
bearing bank and other borrowings as of the dates indicated.
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Interest-bearing bank and other
borrowings
C u r r e n tp o r t i o n................. 9 4 4 , 8 4 5 4 1 0 , 5 2 8 6 7 3 , 3 3 3 8 4 7 , 7 2 6
N o n - c u r r e n tp o r t i o n .............. 5 1 , 2 0 0 2 9 7 , 4 2 5 2 5 5 , 4 0 4 2 5 9 , 2 7 0
Total ....................... 996,045 707,953 928,737 1,106,996
Deferred Government Grants
Deferred government grants primarily consisted of subsidies and financial assistance
received from government entities, which are reco gnized as income over t he years necessary to
match them with the related costs they are intended to compensate. Deferred government grants
increased from RMB86.1 million as of Decembe r 31, 2022 to RMB136.1 million as of December
31, 2023, mainly related to the government grants we received in connection with the
construction of the plant in Xiangyang, Hubei. Deferred government grants further increased to
RMB182.5 million as of December 31, 2024 due t o the new government grant we received in
2024. Deferred government grants remained rel atively stable at RMB177.7 million as of May 31,
2025.
FINANCIAL INFORMATION
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Liabilities Directly Associated with the Assets Classified as Held for Sale
Liabilities directly associated with the assets classified as held for sale represents our
beneficial ownership in Huai ’an Huifeng Juneng, which was classified as a disposal group held
for sale. As of December 31, 2023, final negotiations for the sale of Huai ’an Huifeng Juneng
were in progress and Huai ’an Huifeng Juneng was classified as a disposal group held for sale. In
August 2024, Huifeng Juneng entered into an equ ity transfer agreement with an unaffiliated third
party and the equity transfer was completed as of May 31, 2025. For details, see Note 25 to the
Accountants ’ Report included in Appendix I to this prospectus.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
The following table sets forth our consolidated statements of cash flows for the years/
periods indicated.
Year Ended December 31,
Five Months Ended
May 31,
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
P r o f i tb e f o r et a x ............... 3 1 8 , 6 7 0 4 4 6 , 1 7 8 4 0 2 , 7 1 2 1 6 1 , 0 3 1 1 4 1 , 3 8 0
Adjustments for reconcile profit before
t a xt on e tc a s hf l o w s :.......... 4 9 6 , 2 2 0 6 3 1 , 9 6 1 5 4 0 , 7 4 5 1 8 7 , 3 7 5 2 1 5 , 4 9 5
Cash flows generated from operating
activities . ................. 1 5 , 0 7 0 9 6 5 , 6 0 7 3 0 4 , 6 3 3 2 3 , 4 1 2 4 1 2 , 4 7 1
I n t e r e s tr e c e i v e d ............... 3 , 4 0 2 1 9 , 2 6 0 1 4 , 8 1 4 5 , 9 9 0 4 , 0 1 2
I n c o m et a x e sp a i d .............. ( 3 , 0 9 7 ) ( 7 7 , 6 5 3 ) ( 5 8 , 0 6 8 ) ( 4 1 , 3 5 3 ) ( 4 0 , 9 8 0 )
Net cash flows generated from
operating activities ........... 15,375 907,214 261,379 (11,951) 375,503
Net cash flows used in investing
activities .................. (55,708) (338,316) (154,484) (59,135) (33,860)
Net cash flows generated from/(used
in) financing activities ......... 184,080 (376,137) (203,783) (140,415) (123,107)
Net increase/(decrease) in cash and
cash equivalents ............. 143,747 192,761 (96,888) (211,501) 218,536
Cash and cash equivalents at
beginning of year/period ........ 99,032 270,264 479,582 479,582 395,234
Effect of foreign exchange rate changes,
n e t ...................... 2 7 , 4 8 5 1 6 , 5 5 7 1 2 , 5 4 0 4 , 0 5 3 3 , 1 7 0
Cash and cash equivalents included in
assets of a disposal group classified
a sh e l df o rs a l e.............. – 542 – 145 –
Cash and cash equivalents at end of
year/period ................ 270,264 479,582 395,234 272,134 616,940
FINANCIAL INFORMATION
– 383 –


--- page 395 ---
Net Cash Flows Generated from Operating Activities
Net cash flows generated from operating ac tivities amounted to RMB375.5 million for the
five months ended May 31, 2025, which primarily consists of profit before tax of RMB141.4
million, adjusted for certain non-cash and non-ope rating items. Adjustments for such non-cash
and non-operating items primarily include (i) depreciation of items of property, plant and
equipment of RMB63.6 million, (ii) finance costs of RMB12.0 million, (iii) amortization of
deferred government grants of RMB8.8 million. Th e amount was further adjusted by income tax
paid and changes in working cap ital, primarily including (i) an increase in trade and bills
payables of RMB534.0 million, (ii) an increase in trade and bills receivables and contract assets
of RMB67.0 million, and (iii) an increase in prepayments, other receivables and other assets of
RMB42.7 million.
Net cash flows generated from operating ac tivities amounted to RMB261.4 million in 2024,
which primarily consists of profit before tax o f RMB402.7 million, adjusted for certain non-cash
and non-operating items. Adjustments for suc h non-cash and non-operating items primarily
include (i) depreciation of items of property , plant and equipment of RMB126.3 million, (ii)
finance costs of RMB19.8 million and (iii) amor tization of deferred government grants of
RMB18.5 million. The amount was further adjus ted by interest received of RMB14.8 million,
income tax paid of RMB58.1 million, and changes in working capital, primarily including (i)
increase in trade and bills receivables and contra ct assets of RMB712.8 million, (ii) increase in
trade and bills payables of RMB450.0 million, and ( iii) increase in other payables and accruals of
RMB14.0 million.
Net cash flows generated from operating ac tivities amounted to RMB907.2 million in 2023,
which primarily consists of profit before tax o f RMB446.2 million, adjusted for certain non-cash
and non-operating items. Adjustments for suc h non-cash and non-operating items primarily
include (i) depreciation of items of property, p lant and equipment of RMB110.4 million, and (ii)
impairment of inventories of R MB39.0 million. The amount was fu rther adjusted by interest
received of RMB19.3 million, income tax paid of RMB77.7 million, and changes in working
capital, primarily including (i) decrease in tra de and bills receivables of RMB229.1 million, (ii)
increase in trade and bills payables of RMB135.3 million, and (iii) increase i n restricted cash of
RMB110.1 million.
Net cash flows generated from operating activities amounted to RMB15.4 million in 2022,
which primarily consists of profit before tax o f RMB318.7 million, adjusted for certain non-cash
and non-operating items. Adjustments for suc h non-cash and non-operating items primarily
include (i) finance costs of RMB49.4 million, (ii) depreciation of items of property, plant and
equipment of RMB116.6 million and (iii) foreign e xchange differences, net of RMB17.5 million.
The amount was further adjusted by interest r eceived of RMB3.4 million, income tax paid of
RMB3.1 million, and changes in working capital, primarily including (i) increase in trade and
bills payables of RMB136.4 million, (ii) incr ease in inventories of RMB94.3 million, and (iii)
decrease in prepayments, other receiva bles and other assets of RMB82.2 million.
FINANCIAL INFORMATION
– 384 –


--- page 396 ---
Net Cash Flows Used in Investing Activities
Net cash flows used in investing activities for the five months ended May 31, 2025
amounted to RMB33.9 million, which primarily co nsisted of (i) purchases of items of property,
plant and equipment of RMB126.7 million and (ii) purchase of other intangible assets of RMB0.7
million. These outflows were partially offset by (i) proceeds from disposal of financial assets at
fair value through profit or loss of RMB86.9 millio n and (ii) receipt of government grants related
to the acquisition of property, plant and equipment of RMB4.0 million.
Net cash flows used in investing activities i n 2024 was RMB154.5 million, which consists
primarily of (i) purchases of items of property, plant and equipment of RMB155.6 million, (ii)
purchase of other intangible assets of RMB4. 8 million, and partially offset by (iii) receipt of
government grants for p roperty, plant and equipment of RMB64.9 million.
Net cash flows used in investing activities i n 2023 was RMB338.3 million, which consists
primarily of (i) purchases of items of property, plant and equipment of RMB382.2 million, (ii)
purchase of right-of-use assets of RMB24.9 million, and partially offset by (iii) receipt of
government grants for p roperty, plant and equipment of RMB68.4 million.
Net cash flows used in investing activities in 2022 was RMB55.7 million, which consists
primarily of (i) purchases of items of property, plant and equipment of RMB80.6 million, (ii)
purchase of other intangible assets of RMB3. 8 million, and partially offset by (iii) receipt of
government grants for p roperty, plant and equipment of RMB26.0 million.
Net Cash Flows (Used in)/Generated from Financing Activities
Net cash flows used in financing activitie s for the five months ended May 31, 2025
amounted to RMB123.1 million, which primarily consisted of (i) repayment of bank loans of
RMB249.5 million, (ii) interest paid of RMB1 1.8 million, and (iii) principal portion of lease
payments of RMB6.3 million. These outflow s were partially offset by new bank loans of
RMB145.4 million.
Net cash flows used in financing activities i n 2024 was RMB203.8 million, which consists
primarily of (i) repayment of bank loans of RMB 452.3 million, (ii) interest paid of RMB19.3
million, and partially offset by (iii) new bank loan of RMB358.2 million.
Net cash flows used in financing activities i n 2023 was RMB376.1 million, which consists
primarily of (i) repayment of bank loans of RMB 1,297.6 million, (ii) interest paid of RMB29.6
million, and partially offset by (iii) new bank loan of RMB1,005.2 million.
Net cash flows generated from financing ac tivities in 2022 was RMB184.1 million, which
consists primarily of (i) new bank loan of RMB1 ,676.3 million, (ii) issu e of share of RMB385.5
million, partially offset by (iii) repayme nt of bank loans of RMB1,822.6 million.
FINANCIAL INFORMATION
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Net Current Assets
As of December 31,
As of
May 31,
As of
June 30,
2022 2023 2024 2025 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Current assets
I n v e n t o r i e s ....................... 536,962 459,234 513, 506 773,779 881,316
Trade and bills receivables . ............ 1 , 862,211 1,609,318 2,318, 281 2,386,563 2,371,477
C o n t r a c ta s s e t s .................... 1 , 6 0 8 7 , 0 2 0 5 4 6 7 2 9 1 7 6
Prepayments, other receivables and ot her assets 82,730 63, 930 85,290 127,041 130,615
Financial assets at fair value through profit or
l o s s ......................... –– 86,000 ––
D u ef r o mar e l a t e dp a r t y.............. ––– 1,051 871
Debt investments at fair value through other
c o m p r e h e n s i v ei n c o m e .............. 6 , 9 0 9 1 5 , 6 5 5 3 , 0 7 3 2 , 2 2 5 1 4 , 8 6 0
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s .......... –– 3,355 – 700
R e s t r i c t e dc a s h.................... 228,740 303,497 235, 134 214,592 204,307
C a s ha n dc a s he q u i v a l e n t s............. 270,264 479,040 395, 234 616,940 605,734
Assets of a disposal group classified as held for
s a l e ......................... – 7,634 –––
Total current assets ................. 2,989,424 2,945,328 3,640, 419 4,122,920 4,210,056
As of December 31,
As of
May 31,
As of
June 30,
2022 2023 2024 2025 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Current liabilities
Trade and bills payables 701, 876 837,172 973,979 1,225,637 1,314,797
Other payables and accruals 411,361 413,314 558,678 525,392 403,709
Derivative financial instruments –– 842 489 –
Contract liabilities 36,778 63,014 39, 640 39,897 86,861
Interest-bearing bank and other b orrowings 944,845 410, 528 673,333 847,726 898,938
Lease liabilities 5, 128 6,496 8,017 6,802 6,484
Tax payable 25,666 29, 670 27,908 8,971 11,874
Deferred government grants 12,817 17,633 20, 878 20,992 20,468
Due to related parties 4 ,834 3,771 5,720 10,993 12,746
Provisions 7,300 7,794 7,158 7,893 7,999
2,150,605 1,789,392 2,316, 153 2,694,792 2,763,876
Liabilities directly associated with the assets
classified as held for sale – 1,472 –––
Total current liabilities 2,150,605 1,790,864 2,316,153 2,694,792 2,763,876
Net current assets 838,819 1,154,464 1,324,266 1,428,128 1,446,180
FINANCIAL INFORMATION
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--- page 398 ---
Net current assets increased from RMB838.8 million as of December 31, 2022 to
RMB1,154.5 million as of December 31, 2023, w hich was primarily due to the increase in
restricted cash from RMB228.7 million to RMB303.5 million, the decrease in interest-bearing
bank and other borrowings from RMB944. 8 million as of December 31, 2022 to RMB410.5
million as of December 31, 2023, partially offset by the decrease in trade and bills receivables
from RMB1,862.2 million as of December 31, 20 22 to RMB1,609.3 million as of December 31,
2023.
Net current assets increased to RMB1,324 .3 million as of December 31, 2024, which was
primarily due to increase in trade and bills recei vables from RMB1,606.6 million to RMB2,318.3
million, increase in financial assets at fair value through profit or loss from nil to RMB86.0
million and increase in prepayments, other recei vables and other assets from RMB63.9 million to
RMB85.3 million.
Net current assets increased to RMB1,4 28.1 million as of May 31, 2025, which was
primarily due to an increase in inventories from RMB513.5 million to RMB773.8 million,
increase in cash and cash equivalents from RMB 395.2 million to RMB616.9 million, and increase
in prepayments, other receivables and other assets from RMB85.3 million to RMB127.0 million.
Net current assets increased to RMB1,4 46.2 million as of June 30, 2025, which was
primarily due to (i) an increase in inventori es from RMB773.8 million to RMB881.3 million, (ii)
an increase in debt investments at fair value through other comprehensive income from RMB2.2
million to RMB14.9 million, and (iii) an increase in prepayments, other receivables and other
assets from RMB127.0 million to RMB130.6 million.
Working Capital Sufficiency
Taking into account our available financial resources including our cash and cash equivalent
on hand, our cash inflows from ope rating activities and the proc eeds from the Global Offering,
our Directors are of the view that, we have sufficient financial resources to operate of at least the
next 12 months from the date of this prospectus. Our Directors confirmed that there has been no
material defaults on trade and non-trade payables and borrowings, and/or breaches of covenants
during the Track Record Period and up to the date of the prospectus and there are no material
uncertainties related to events or conditions wh ich, individually or collectively, may cast
significant doubt on our ab ility to continue operation.
INDEBTEDNESS
Indebtedness mainly included (i) bank and oth er borrowings, and (ii) lease liabilities during
the Track Record Period. Except as disclosed in the table below, we did not have any material
mortgages, charges, debentures , loan capital, debt securities, loans, bank overdrafts or other
similar indebtedness, finance lease or hire purch ase commitments, liabilities under acceptances
(other than normal trade bills), acceptance cred its, which are either guar anteed, ung uaranteed,
secured or unsecured, or guarantees or other c ontingent liabilities as of June 30, 2025. We did not
FINANCIAL INFORMATION
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have any material covenants and undertakings on outstanding debts, guarantees, pledge of key
assets or other contingent obligations, and breaches during the Track Record Period and up to the
Latest Practicable Date. After du e and careful consideration, our Directors confirm that there had
been no material change in indebtedness since June 30, 2025 and up to the date of this
prospectus. The following table sets forth details of indebtedness as of the dates indicated.
As of December 31,
As of
May 31,
As of
June 30,
2022 2023 2024 2025 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Interest-bearing bank and other borrowings
Non-current ...................... 5 1 , 2 0 0 297,425 255,404 259,270 246,298
Current ......................... 944,845 410,528 673, 333 847,726 898,938
Total interest-bearing bank and other
borrowings .................... 996,045 707,953 928,737 1,106,996 1,145,236
Lease liabilities
Non-current ...................... 4 , 8 6 4 3 , 8 9 3 8 , 5 9 7 8 , 3 0 6 7 , 8 2 6
Current ......................... 5 , 1 2 8 6 , 4 9 6 8 , 0 1 7 6 , 8 0 2 6 , 4 8 4
Total lease liabilities ................ 9,992 10,389 16, 614 15,108 14,310
Interest-Bearing Bank and Other Borrowings
Interest-bearing bank and other borrowi ngs amounted to RMB996.0 million, RMB708.0
million, RMB928.7 million, RMB1,107.0 mill ion and RMB1,145.2 million as of December 31,
2022, 2023 and 2024 and May 31 and June 30, 2025, respectively. See also ‘‘ — Discussion of
Certain Selected Items from the Consolidated Statements of Financial Position — Liabilities —
Interest-Bearing Bank and Other Borrowings ’’in this section.
Certain of bank and other borrowings was secured by buildings, leasehold land, and trade
and bills receivables. For details, i ncluding amounts of total committed and unrestricted available
facilities interest rates for each major type of borrowings and maturity analysis of financial
liabilities, see Note 29 to the Accountants ’ Report included in Appendix I to this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had not been in
violation of any of the covenants pursuant to the applicable loan and other borrowings agreements
we entered into with the banks. We are not subject to other material financial covenants under
any agreements with respect to any bank loans or other borrowings. There was no delay or default
in the repayment of borrowings during the Track Record Period. Taking our financial position
into consideration, we are able to abide by these covenants amid current market conditions and
that our capital raising abilities were not materially affected as of June 30, 2025. Save as
disclosed above and the Global Offering, we do not have any material external financing plan as
of the Latest Practicable Date.
FINANCIAL INFORMATION
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--- page 400 ---
During the Track Record Period and up to t he Latest Practicable Date, we have not
experienced any difficulty in obtaining bank loa ns and other borrowings, default in payment of
bank loans and other borrowings or breach of covenants.
As of June 30, 2025, we had banking fac ilities of RMB4,565.1 million, of which
RMB1,145.2 million had been utilized.
Lease Liabilities
Lease liabilities represented ob ligations under lease a greements for our operational facilities
and equipment. Lease liabilities amounted to RMB10.0 million, RMB10.4 million, RMB16.6
million and RMB15.1 million as of Decembe r 31, 2022, 2023, 2024 and May 31, 2025,
respectively. The increases in lease liabilities w ere primarily due to the addition of new leased
properties in Shenzhen, Guangdong in connection with our R&D center in Shenzhen, Guangdong.
CONTINGENT LIABILITIES
We did not have any material contingent lia bilities as of December 31, 2022, 2023, 2024,
and May 31, 2025 and the Latest Practicable Date.
RELATED PARTY TRANSACTIONS
The following table sets forth breakdown of our related party transactions during the Track
Record Period.
For the year ended December 31,
For the five
months ended
May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Sales of goods to a related party (1) . . . . 16,796 13,917 33,500 13,789
Purchases of products/services from related
parties (1) ................... 1 5 , 7 5 5 1 6 , 9 1 6 2 0 , 8 0 0 1 3 , 9 9 4
Rental expenses to a related party (2) . . . 5,132 4,833 5,085 2,689
Compensation of key management
personnel (3) ................. 2 6 , 8 0 5 3 0 , 9 1 8 2 4 , 5 8 7 8 , 6 4 5
Notes:
(1) The transactions involve sales of goods, including, waste lead slag for recycling, to Shuangdeng Tianpeng; and (ii)
Purchases of products, including, recycled lead, from Shuangdeng Tianpeng ( ‘‘Tianpeng Transactions ’’). The
pricing for Tianpeng Transactions was primarily based on (i) arm ’s length negotiation; (ii) comparable market price;
(iii) the total sales/purchase volume of the transaction. The pricing and credit terms for Tianpeng Transactions are
comparable those similar transactions with the Independent Third Parties and no favorable terms has been granted
to/by Shuangdeng Tianpeng. The pri ces are mutually agreed after taking the preva iling market prices into
consideration. The transactions were trade in nature, and our Directors and management will consider a series of
factors to determine whether to continue such an arrangement upon Listing and the Global Offering, in the best
interest of our Group.
FINANCIAL INFORMATION
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--- page 401 ---
(2) We have entered into lease agreements in respect of buildings from a related party. The transactions were made
according to the prices and terms agreed with the related parties. The transactions were trade in nature, and our
Directors and management will consider a series of factors to determine whether to continue such an arrangement
upon Listing and the Globa l Offering, in the best interest of our Group.
(3) Compensation of key management personnel includes salaries, allowances and benefits in kind, performance related
bonuses and share incentive compensation. The transactions were non-trade in nature, and it is estimated that we
will continue to compensate our key management personnel for their performance and contribution to the operation
of our Group upon Listing.
Related party transactions were mainly sales o f goods to and purchases of products/services
from related parties, compensation of key management personnels. The transactions between our
Group and the related parties were made according to the prices and terms agreed with the related
parties. The prices are mutually agreed after taking the prevailing market prices into
consideration. The amounts due from related par ties are unsecured, interest-free and repayable on
demand. Our management considers there is no significant credit risk for amounts due from
related parties. The amounts due to related par ties is unsecured, interest-free and has no fixed
terms of repayment. We have amounts due to related parties which are non-trade in nature, and
such amounts were settled before the Lastest Prac ticable Date. For details, including the terms of
the arrangements, see Note 39 to the Accountants ’ Report included in Appendix I to this
prospectus. Our Directors are of the view that the material related party transactions during the
Track Record Period were conducted on an arm ’s length basis.
For details of of certain transactions with parties who will, upon the Global Offering,
become connected persons (as defined in the Listing Rules) of our Company, see ‘‘Connected
Transactions ’’in this prospectus.
CAPITAL EXPENDITURE
Capital expenditure amount ed to RMB158.4 million, RMB420.6 million, RMB290.0 million
and RMB33.5 million in 2022, 2023, 2024, and the five months ended May 31, 2025,
respectively. We funded these expenditures with cash generated from operations during the Track
Record Period. Upon completion of the Global Offering, we plan to fund our future capital
expenditures with cash generated from operating ac tivities and proceeds from the Global Offering.
CAPITAL COMMITMENTS
As of May 31, 2025, we did not have any significant capital commitments.
FINANCIAL INFORMATION
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--- page 402 ---
KEY FINANCIAL RATIO
The table below sets forth key finan cial ratio as of the dates indicated.
For the year ended/
As of December 31,
For the five
months ended/
As of May 31,
2022 2023 2024 2025
Gross Profit Margin (1) ............. 1 6 . 9 % 2 0 . 3 % 1 6 . 7 % 1 4 . 9 %
N e tP r o f i tM a r g i n(2) .............. 6 . 9 % 9 . 0 % 7 . 9 % 6 . 8 %
Debt to Asset Ratio (3) ............. 5 7 . 2 % 5 1 . 8 % 5 3 . 7 % 5 6 . 2 %
Current Ratio (4) ................. 1 . 4 1 . 6 1 . 6 1 . 5 %
Return on Equity (5) .............. 2 0 . 2 % 2 0 . 2 % 1 5 . 8 % 5 . 2 %
Gearing Ratio (6) ................. 5 8 . 2 % 3 4 . 5 % 3 9 . 6 % 4 5 . 6 %
Quick Ratio (7) .................. 1 . 1 1 . 4 1 . 4 1 . 2
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenues for the year/period and multiplied by 100%.
(2) Net profit margin is calculated using profit and total comprehensive income for the year divided by revenues for the
year/period and multiplied by 100%.
(3) Debt to asset ratio is calcu lated using total liabilities divided by tota l assets as of the end of the year/period and
multiplied by 100%.
(4) Current ratio is calculated using cu rrent assets divided by cur rent liabilities as of the e nd of the year/period.
(5) Return on equity is calculated using net profit for the year divided by the average of total equity as of the beginning
and ending of the year/peri od and multip lied by 100%.
(6) Gearing ratio is calculated using total debt (including b ank and other borrowings, and lease liabilities) divided by
shareholders ’ equity as of the end of the year/ period and multiplied by 100%.
(7) Quick ratio is calculated using total cu rrent assets less inventorie s divided by total current liabilities as of the end of
the year/period.
MARKET RISK DISCLOSURE
Our management has assessed that the fair values of cash and cash equivalents, time
deposits, financial assets included in prepaym ents and other receivables, trade and bills
receivables, due from related parties, trade and bills payables, financi al liabilities included in
other payables and accruals, due to related parties and current portion of interest-bearing bank
borrowings approximate to their carrying amounts largely due to the short-term maturities of these
instruments.
Our finance department headed by the finance manager is responsible for determining the
policies and procedures for the fair value measurement of financial instruments. At the end of
each year comprising the Track Record Period, the finance department analyzes the movements in
the values of financial instrume nts and determines the major inpu ts applied in the valuation. The
valuation is reviewed and approved by the chief financial officer.
FINANCIAL INFORMATION
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The fair values of the financial assets and lia bilities are included at the amount at which the
instrument could be exchanged in a current tran saction between willing parties, other than in a
forced or liquidation sale. The following method s and assumptions were used to estimate the fair
values:
The fair values of the non-current portion of interest-bearing bank borrowings have been
calculated by discounting the expected future cash flows using rates currently available for
instruments with similar terms, credit risk and re maining maturities. The changes in fair value as
a result of our own non-performance risk for interest-bearing bank borrowings as at the end of
each year comprising the Track Record Pe riod were assessed to be insignificant.
We invest in unlisted investments, which represent wealth management products issued by
banks in mainland China. We have estimated the fai r value of these unlisted investments by using
a discounted cash flow valuation model based on t he market interest rates of instruments with
similar terms and risks. The fair values have b een assessed to be approximate to their carrying
amounts. The discount for lack of marketab ility represents the amounts of premiums and
discounts determined by our Group that market participants would take into account when pricing
the investments.
We follow a prudent investment approach for wealth management products, focusing on
capital preservation and stable returns. Our i nvestments are primarily in unlisted wealth
management products issued by reputable banks in mainland China. These products are selected
for their low-risk profiles, predictable cash f lows, and alignment with our overall financial
strategy of optimizing liquidity manage ment while balancing risk and return.
To ensure proper oversight and mitigate risks, w e have established a robust internal control
mechanism for managing these investments. All potential investments are subject to a rigorous
evaluation process, which involves assessing the r isk-return profile, the creditworthiness of the
issuing bank, and compliance with our investm ent policies. Once investments are made, we
conduct continuous monitoring of their performance and credit risk, with regular updates provided
to senior management and the Board. Additionally , our internal audit team periodically reviews
the investment process to ensure adherence to regulatory requirements and internal policies.
Our management team has significant expertise in evaluating and managing financial
investments, particularly wealth management products. With strong backgrounds in finance,
accounting, and risk management, our team is well-equipped to analyze market trends, assess
risks, and make informed decisions. We also rem ain vigilant about changes in financial markets
and regulatory developments, which allows us to manage our investments proactively and
effectively.
FINANCIAL INFORMATION
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--- page 404 ---
The Board is actively involved in overseeing and governing our investment activities. It
approves our overall investment policy to ensure alignment with our strategic objectives and
provides oversight for key decisions regarding wealth management investments. Any proposed
investment that exceeds a predetermined threshold or carries a higher level of risk requires prior
approval from the Board. Furthermore, the Board receives regular reports on the performance and
risk assessment of our investments, enabling it to provide ongoing guidance and oversight.
Investments in wealth management products are s ubject to a multi-level approval process. Both
the management team and the Board are involved, depending on the size and risk profile of the
investment. This rigorous approval framework ensures that all investment decisions are
thoroughly scrutinized and align with our financial and risk management objectives. The
investment in these assets will be subject to the c ompliance with Chapter 14 of the Listing Rules
upon the Listing and the Global Offering.
Our principal financial instruments, other than derivatives, comprise cash and cash
equivalents and bank borrowings. The main purpose of these financial instruments is to support
our operations. We have various ot her financial assets and liabilities such as trade receivables and
trade payables, which arise directly from its operations.
The main risks arising from our financial instrum ents are interest rate risk, foreign currency
risk, credit risk and liquidity risk. The management of our Company and the financial instruments
division of our Company is responsible for the daily risk management by the operating
management through functional departments (e.g., our credit management department reviews the
credit sales incurred by our Company on a case-by-case basis) Our internal audit department
conducts daily supervision of the implementation for our risk management policies and
procedures, and reports the re levant findings in a timely manner to our audit committee. The
overall objective of our risk management is to esta blish risk management policies that minimize
the risks associated with various types of financial instruments without unduly affecting our
competitiveness and resilience.
Interest Rate Risk
Our exposure to the risk of changes in fair value relates primarily to our bank borrowings
with a floating interest rate.
Foreign Currency Risk
Foreign currency risk is the risk of loss resultin g from changes in foreign currency exchange
rates. Fluctuations in exchange rates between RMB and other currencies in which we conduct
business may affect our financial condition and results of operations. We seek to limit its
exposure to foreign currency risk by minimizing its net foreign currency position. The following
table sets forth a sensitivity test on fluctuatio n of exchange rates for the years indicated to a
reasonably possible change in US$ and RMB exchange rates, with all other variables held
constant, of our profit or loss before tax (due to changes in the fair value of monetary assets and
liabilities).
FINANCIAL INFORMATION
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--- page 405 ---
As of December 31, As of May 31,
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Change in foreign exchange rates
+/-5% +/-15,502 +/-13,192 +/-21,367 +/-31,027
+/-10% +/-31,004 +/-26,384 +/-42,734 +/-62,054
+/-15% +/-46,506 +/-39,576 +/-64,101 +/-93,081
+/-20% +/-62,008 +/-52,768 +/-85,468 +/-124,108
Credit Risk
We trade only with recognized and creditworthy third parties and there is no requirement for
collateral. It is our policy that all customers who wish to trade on credit terms are subject to
credit verification procedures . In addition, receivable balances are monitored on an ongoing basis
and our exposure to bad debts is not significant. Concentrations of credit risk are managed by
customer/counterparty a n db yi n d u s t r ys e c t o r .
Liquidity Risk
We monitor our exposure to liquidity risk by re gularly monitoring short-term and long-term
liquidity requirements, as well as compliance with borrowing agreements to ensure that adequate
cash reserves and readily reali zable liquidity are maintained.
The liquidity of our Group is primarily depe ndent on its ability to maintain adequate cash
inflows from operations to meet its debt oblig ations as they fall due, and its ability to obtain
external financing to meet its committed future capital expenditure. For details of the maturity
profile of our financial liabilities as of the end of each year comprising the Track Record Period,
based on the contractual undiscounted payments, see Note 43 to the Accountants ’ Report included
in Appendix I to this prospectus.
Capital Management
The primary objectives of our capital managemen t are to safeguard our ability to continue as
a going concern, so that it can continue to provide returns to shareholders and benefits to other
stakeholders, by pricing services commensurately with the level of risk.
We manage our capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristic s of the underlying assets. To maintain or adjust
the capital structure, we may adjust the dividen d payment to shareholders, return capital to
shareholders or issue new shares. The Group is not subject to any externally imposed capital
requirements. No changes were made in the objectiv es, policies or processes for managing capital
during the Track Record Period.
FINANCIAL INFORMATION
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--- page 406 ---
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
During the Track Record Period and as of the Latest Practicable Date, we had not entered
into any off-balance sheet transactions.
DIVIDENDS
As of the Latest Practicable Date, we do not ha ve a dividend policy. Our Board may declare
dividends in the future after taking into account factors, including results of operations, financial
condition, cash requirements and availability an d other factors as it may deem relevant at such
time. PRC laws require that dividends be paid only o ut of our distributable profits. Distributable
profits are our after-tax profits, less appropriations to statutory and other reserves that we are
required to make. No dividend may be declared or paid other than out of our profits and reserves
lawfully available for distribution, including share premium. Our earning per share was RMB0.85,
RMB1.08, RMB0.99 and RMB 0.35 in 2022, 2023, 2024 and the five months ended May 31,
2025, respectively. We declared dividend of nil, RMB0.135, RMB0.206, and RMB0.170 per
ordinary share for the years ended December 31, 2022, 2023, 2024 and the five months ended
May 31, 2025, respectively, all of which had been paid in full. For details, see Note 11 to the
Accountants ’ Report included in Appendix I to this prospectus.
Our ability to declare and pay dividends w ill depend on the availability of dividends
received from group companies in the PRC and other jurisdictions. Pursuant to PRC laws,
dividends shall be paid only out of the net profit calculated according to PRC accounting
principles, which differ in many aspects from generally accepted accounting principles in other
jurisdictions, including IFRSs. PRC laws also requi re foreign-invested enterprises to set aside at
least 10% of its after-tax profits as the statu tory common reserve fund until the cumulative
amount of the statutory common reserve fund reaches 50% or more of such enterprises ’ registered
capital, if any, to fund its statutory common reser ves, which are not available for distribution as
cash dividends. Distributions from our subsidiaries may also be restricted if they incur debt or
losses or in accordance with any restrictive coven ants in bank credit facilities or other agreements
that we or our subsidiaries may enter into in the future.
LISTING EXPENSES
Listing expenses represent professional fe es, underwriting commission, and other fees
incurred in connection with the Global Offering.
FINANCIAL INFORMATION
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--- page 407 ---
As of May 31, 2025, listing expenses in an aggregate of RMB20.1 million were incurred
and charged to our consolidated statement of pro fit or loss, and RMB8.2 million will be deducted
from equity upon the Listing. We expect an add itional listing expenses of approximately
RMB56.6 million (HK$62.2 million), of which approximately RMB 17.3 million (HK$19.0
million) will be charged to our consolidated statements of profit or loss after May 31, 2025, and
the remaining balance of approximately RM B39.3 million (HK$43.2 million) is expected to be
deducted from equity. The listing expenses above are t he latest practicable estimate for reference
only, and the actual amount may differ from this estimate.
We expect to incur a total of RMB84.9 million (HK$93.4 million) of listing expenses,
including (1) underwriting-re lated expenses, which include sponsor fee and underwriting
commissions, of approximately RMB38.4 million ( HK$42.2 million), and (2) non-underwriting
related expenses of approxima tely RMB46.5 million (HK$51.1 million), which include (i) fees
and expenses of legal advisors and the Repor ting Accountant of approximately RMB27.9 million
(HK$30.7 million) and (ii) other fees and expens es of approximately RMB18.6 million (HK$20.4
million), assuming the Over-allotment Option is not exercised and based on the Offer Price of
HK$14.51 per Offer Share. Our listing expenses as a percentage of gross proceeds is 11.0%, at an
Offer Price of HK$14.51 per Share, and assuming the Over-allotment Option is not exercised.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
have been prepared in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on the Stock Exchange of Hong Kong Limited and with reference to Accounting
Guideline 7
Preparation of Pro Forma Financial Informa tion for inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Pub lic Accountants for illustration purposes only,
and is set out here to illustrate the effects of the Global Offering on the consolidated net tangible
assets of our Group attributable to owners of the parent as of May 31, 2025 as if the Global
Offering had taken place on May 31, 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and becau se of its hypothetical nature, it may not give a
true picture of the consolidated net tangible assets of our Group attributable to owners of the
parent had the Global Offering been completed as of May 31, 2025 or as of any future dates.
The unaudited pro forma statement of adjusted consolidated net tangible assets is prepared
based on the consolidated net tangible assets of our Group attributable to owners of the parent as
of May 31, 2025 as set out in the Accountants ’ Report in Appendix I to this Prospectus and is
adjusted for the effects described below.
FINANCIAL INFORMATION
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--- page 408 ---
Consolidated
net tangible
assets of our
Group
attributable to
owners of the
parent as of
May 31, 2025
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets of our
Group as of
May 31, 2025
Unaudited pro forma adjusted
consolidated net tangible
assets per Share as of
May 31, 2025
RMB ’000 (1) RMB ’000 (2) RMB ’000 RMB (3)(5) HK$ (4)(5)
B a s e do na nO f f e rP r i c eo f
H K $ 1 4 . 5 1p e rS h a r e.....
2,452,684 707,892 3,160,576 7.58 8.34
Notes:
(1) The consolidated net tangible assets of our Group attributable to owners of the parent as of May 31, 2025 was
extracted from the Accountants ’ Report set out in Appendix I to this Prosp ectus, which is based on the consolidated
net assets of our Group attributable to owners of the parent as of May 31, 2025 of RMB2,460,472,000 less
intangible assets of RMB7,788,000.
(2) The estimated net proceeds from the Global Offering are based on actual offer prices of HK$14.51 per Share,
respectively, after deduction of underwriting fees and commissions and other related expenses payable by the
Company (excluding the listing expense that have been charged to profit or loss during the Track Record Period)
and does not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option.
The estimated net proceeds from the Global Offering are converted into Renminbi at an exchange rate of
RMB0.9094 to HK$1.00,
(3) The unaudited pro forma adjusted consolidated net tangi ble assets attributable to owne rs of the parent per Share is
arrived at by dividing the unaudited pro forma adjusted net tangible assets by 416,826,000 shares, being the number
of shares in issue assuming that the Global Offering had been completed on May 31, 2025, without taking account
of the exercise of the Ov er-allotment Option.
(4) For the purpose of this unaudited pro forma statement of adjusted net tangible assets, the balances stated in RMB
are converted into HK$ at the rate of RMB0.9094 to HK$1.00.
(5) No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of our
Group to reflect any trading result or other transactions entered into subsequent to May 31, 2025.
FINANCIAL INFORMATION
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--- page 409 ---
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that as of the date of the prospectus, there has been no material
adverse change in our financial, operational or prospects since May 31, 2025, being the latest
balance sheet date of our consolidated financial statements as set out in the Accountant ’s Report
in Appendix I to this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
We confirm that, as of the Latest Practicable Date, there were no circumstances that would
give rise to disclosure required under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
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--- page 410 ---
FUTURE PLANS
For details, see ‘‘Business — Our Strategies ’’in this prospectus.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$756.3 million (assuming an Offer Price of HK $14.51 per Offer Share), assuming the Over-
Allotment Option is not exercised, after de ducting the underwritin g fees and commissions
(assuming the full payment of the discretionary incentive fee) and estimated expenses payable by
us.
We intend to use the net proceeds we will receive from the Global Offering for the
following purposes:
I. Approximately 40.0% of the net proceeds, or HK$302.6 million, will be used for the
construction of a lithium-ion batteries prod uction facility in Southeast Asia, which is
one of our key development strategies. The lith ium-ion batteries production facility to
be constructed in Southeast Asia will primarily be used for producing batteries for data
centers in order to cultivate our second gr owth pillar and increase our markets share
regarding energy storage products for data centers. For details, see ‘‘Business — Our
Strategies — Further develop our data center business ’’in this prospectus. For the year
ended December 31, 2024, our lithium-ion b attery production capacity reached 2.13
GWh. In response to the growing downstream demands and to better service our
overseas markets, we will further expand our production capacity by constructing a
lithium-ion battery production facility w ith a designed annual production capacity of
approximately 3.0 GWh. Our current lithiu m-ion battery production lines primarily
manufacture energy storage batteries for telecom base stations and electrical energy
storage settings and we do not have a dedicated production line for high-rate
lithium-ion battery products specifically fo r data centers. Due to shifting market trends
and the rising demand from data centers, we plan to establish a dedicated production
line for lithium-ion batteries specifica lly designed for data center applications.
Additionally, we plan to expand our production capacity in Southeast Asia to serve our
overseas market and enhance our global market presence, with a particular focus on
Southeast Asian, European, and African market. For details, see ‘‘Business — Our
Strategies — Expand our global presence ’’ in this prospectus. The Southeast Asian
energy storage market has witnessed substantial growth in recent years, fueled by the
region ’s evolving demographics and economic advancements. From 2020 to 2024,
Southeast Asian GDP grew at a robust CAGR of 6.9%, with projections indicating a
rise from USD3.5 trillion i n 2025 to USD4.6 trillion by 2029, achieving a CAGR of
6.8%. Concurrently, driven by the increasing population and rising expenditures, there
is a growing demand for energy storage batteries in Southeast Asian region,
FUTURE PLANS AND USE OF PROCEEDS
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--- page 411 ---
particularly in nations like Indonesia and Vietnam. Beyond Southeast Asia, both
Europe and Africa offer large market potentials. Europe is accelerating the deployment
of renewable energy, since the EU has raised its binding renewable energy target for
2030 from 32% to at least 42.5%. The accelerated deployment of energy storage will
help Europe absorb the newly installed r enewable energy capacity and reduce its
reliance on external energy sources. In Africa, where the grid infrastructure is weak
and power supply is unstable in remote areas, approximately 600 million people still
lack access to electricity. The large-scale deployment of energy storage systems,
especially distributed energy storage systems, will effectively address Africa ’se n e r g y
shortage problem. In particular:
i. approximately 8.8%, or HK$66.5 million, will be used for the payment of
construction costs of the main production p lant(s) and ancillary infrastructures,
such as warehouses, employee dormitories and offices. We plan to acquire a plot
of land covering approximately 30,000 square meters for the construction of new
production facilities;
ii. approximately 28.0%, or HK$211.8 m illion, will be used for the purchase and
installation of production equipment and software for the manufacturing of
batteries. We plan to purchase equipment including but not limited to (i) batteries
production equipment, such as mixing m achines (machines used for positive and
negative pulping, including automati c feeding and stock transfer); coating
machines (double-sided coating of positiv e and negative battery terminals); and
cell assembly system (a system which can complete welding, core-closing and
shell insertion processes); (ii) public au xiliary facilities, such as ventilation
systems (including but not limited to a ir conditioners and dehumidifiers),
building structure (such as doors and win dows) and lighting system; (iii) battery
testing equipment, such as scanning electron microscopy and electrolyte detection
equipment for morphology detection; and (iv) other relevant supporting software,
such as monitoring systems, servers, and office software;
iii. approximately 2.4%, or HK$18.2 m illion, will be used for the salaries of
management team as well as construction and production related employees. We
plan to primarily manage and operate ov erseas production facility through the
deployment of domestic staff, supplemen ted by local recruitment. We anticipate
having a workforce of around 50 em ployees at our production facility in
Southeast Asia; and
iv. approximately 0.8%, or HK$6.1 million, will be used for trial productions and
other early-stage expenses, among others, costs for obtaining various permits and
licenses, fees for handling local government procedures and service fees for
third-party agencies such as lawyers.
FUTURE PLANS AND USE OF PROCEEDS
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II. Approximately 35.0% of th e net proceeds, or HK$264.7 million, is intended to be used
to fund the establishment of a research and development center in Taizhou focusing on
the research and development of: (i) enhanced energy storage battery life; (ii) solid
state battery; (iii) sodium-ion battery; an d (iv) BMS technology. We believe that R&D
is vital for achieving our business success. For details, see ‘‘Business — Our Strategies
— Continue to invest in R&D ’’ in this prospectus. Our existing R&D centers in
Taizhou, Shenzhen, Beijing and Xiangyang mainly focus on innovations in battery
manufacturing processes and development of specific batteries. For details, see
‘‘Business – Research and Development ’’ in the prospectus. As we are dedicated to
further improve our capabilit ies in the underlying and fou ndational science of energy
storage batteries, we plan to establish a ne w R&D center in Taizhou in replace of the
existing Taizhou R&D center, focusing on cu tting-edge battery technology research,
including but not limited to the developme nt and iteration of battery cells. This new
R&D center aims to further our developme nt of underlying battery technology. In
contrast, the remaining existing R&D cent ers in Shenzhen, Beijing and Xiangyang will
continue to concentrate on enhancing produ ction efficiency. Therefore, the new R&D
center will differ fundamentally from the existing ones in its focuses and objectives.
With distinct focuses, the new and existin g R&D centers will complement each other
to achieve a comprehensive enhancement of our R&D capabilities.
In particular, we plan to allocate (i) 7.7% of the the net proceeds, or HK$58.2 million,
for construction of the research and development center; (ii) 14.0% of the the net
proceeds, or HK$105.9 million, for the acquisition of equipment and software,
including but not limited to chemical dissolv ing tank, filter, battery high altitude low
pressure testing machines and other test eq uipment, as well as three-dimensional
software, office software, simulation softw are and other software systems; (iii) 10.5%
of the the net proceeds, or HK$79.4 million, fo r the recruitment of the research related
staff; and (iv) 2.8% of the net proceed s, or HK$21.2 million, for the execution of
research projects.
III. Approximately 15.0% of th e net proceeds, or HK$113.4 million, is intended to be used
to strengthen our overseas sales and marketing so that we can enhance our global
presence, better serve our overseas customers and boost our international sales. For
details, see ‘‘Business — Our Strategies — Further enhance and expand our energy
storage business with customer-centric approach ’’ and ‘‘Business — Our Strategies —
Expand our global presence ’’ in this prospectus. We plan to establish a sales and
marketing center in Singapore. Leveraging on the new sales and marketing center, we
expect to further our business growth in Southeast Asia, especially in Singapore,
Malaysia and India. In particular:
i. approximately 2.1%, or HK$15.9 millio n, will be used for to pay the rent for
leased properties used for offices of our overseas sales and marketing team;
FUTURE PLANS AND USE OF PROCEEDS
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ii. approximately 8.7%, or HK$65.8 million, will be used for the recruitment of
sales and marketing staff. We plan to d eploy our sales and marketing staff in
overseas locations, leveraging their expe riences and insights to attract target
companies and drive brand awareness. We plan to recruit additional sales and
marketing experts skilled in internationa l trade, digital marketing and marketing
analysis, ensuring our strategies are both innovative and effective; and
iii. approximately 4.2%, or HK$31.8 milli on, will be used to carry out promotional
activities in the regions that we are expanding to. We plan to actively participate
in overseas product exhibitions and conferences to increase our exposure and
brand recognition in international markets, thereby attracting more overseas
customers. We plan to participate in a seri es of international exhibitions focusing
on overseas energy storage, telecomm unications, global photovoltaics, and
industry-specific events.
IV. Approximately 10.0% of the net proceed s, or HK$75.6 million, will be used to provide
funding for working capital and other general corporate purposes.
The table below sets forth the expected imple mentation timetable of our planned use of our
proceeds for the purposes listed above, which is subject to changes based on our actual needs and
market conditions at the relevant time:
2025 2026 2027 Total
(HK$ in millions)
Construction of a lithium-ion batteries
production facility in Southeast Asia
(construction costs of the main
production plant(s) and ancillary
infrastructures, purchase and installation
of production equipment and software,
recruitment of employees, and trial
productions and other early-stage
expenses) 77.8 140.7 84.1 302.6
Establishment of a new research and
development center (construction of the
R&D center, acquisition of equipment
and software, recruitment of R&D staff,
and execution of research projects) 69.9 116.5 78.3 264.7
Strengthen our overseas sales and
marketing (rent for overseas offices,
recruitment of sales and marketing staff,
and promotional activities) 37.8 37.8 37.8 113.4
Provide funding for working capital and
other general corporate purposes 25.2 25.2 25.2 75.6
FUTURE PLANS AND USE OF PROCEEDS
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--- page 414 ---
Any additional proceeds received from the exer cise of the Over-allotment Option will also
be allocated to the above purposes on a pro-rata basis. In the event that the Over-allotment Option
is exercised in full, we will receive net pr oceeds of HK$878.6 millio n (after deducting the
estimated underwriting commissions and other f ees and expenses payable by us in connection
with the Global Offering and assuming an Offer Price of HK$14.51 per Share.
To the extent that the net proceeds are not immediately applied to the above purposes, we
intend to deposit the net proceeds into short-term in terest-bearing accounts at licensed commercial
banks and/or other authorised financial institutio ns (as defined under the Securities and Futures
Ordinance or applicable laws and reg ulations in other jurisdictions).
FUTURE PLANS AND USE OF PROCEEDS
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--- page 415 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
Huatai Financial Holdings (Hong Kong) Limited
CCB International Capital Limited
ICBC International Securities Limited
ABCI Securities Company Limited
Livermore Holdings Limited
China Galaxy International Secu rities (Hong Kong) Co., Limited
UNDERWRITING
This Prospectus is published solely in connection with the Hong Kong Public Offering. The
Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offeri ng is expected to be fully underwritten by the
International Underwriters.
The Global Offering comprises the Hong Kong P ublic Offering of initially 5,856,000 Hong
Kong Offer Shares and the International Offe ring of initially 52,701,000 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
Pursuant to the Hong Kong Underwriting Agr eement, our Company is offering the Hong
Kong Offer Shares for subscription on the terms a nd conditions set out in this Prospectus and the
Hong Kong Underwriting Agreement.
Subject to (a) the Listing Committee granting a pproval for the listing of, and permission to
deal in, the H Shares to be offered pursuant to the Global Offering (including any additional H
Shares that may be issued pursuant to the exercise of the the Over-allotment Option) on the Main
Board of the Stock Exchange and such approval not subsequently having been revoked prior to
the commencement of trading of the H Shares on the Stock Exchange and (b) certain other
conditions set out in the Hong Kong Underwriting A greement, the Hong Ko ng Underwriters have
agreed severally but not jointly to procure subscribers for, or themselves to subscribe 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 c onditional on, among other things, the
International Underwriting Agreement having b een executed and becoming unconditional and not
having been terminated in accordance with its terms.
Grounds for Termination
The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for the
Hong Kong Offer Shares under the Hong Kon g Underwriting Agreement are subject to
termination. If at any time prior to 8:00 a.m. on the day that trading in the H Shares commences
on the Stock Exchange:
(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 in or affecting Hong Kong, the PRC, the United States, the
United Kingdom, the European Union (or any member thereof), Singapore, or
other jurisdictions relevant to the G roup 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, tax ation, equity securities or c urrency exchange rate or
controls or any monetary or trading se ttlement 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 (in cluding, without limitation, conditions
and sentiments in stock and bond markets, money and foreign exchange markets,
t h ei n t e r - b a n km a r k e t sa n dc r e d i tm a r k e t s )i no ra f f e c t i n ga n yR e l e v a n t
Jurisdictions, or affecting an inv estment in the Offer Shares; or
UNDERWRITING
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--- page 417 ---
(iii) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of g overnment, declaration of a regional,
national or international emergency or war, calamity, crisis, economic sanctions,
strikes, labor disputes, other industria l 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 escalat ion, mutation or aggravation of diseases,
accident or interruption or delay in tran sportation, 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 terro rism (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 impo sition 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 York 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 ge neral moratorium on banking activities in
or affecting any of the Relevant Jurisdi ctions or any disruption in commercial
banking or foreign exchange trading or securities settlement or clearing services,
procedures or matters in or affecting a ny of the Relevant Jurisdictions; or
(vi) other than with the prior written consent o f 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 or other regulatory or political body or
organization of any public action or investigation against any member of the
Group or a director 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
UNDERWRITING
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--- page 418 ---
(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
(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 or any aspect of the Global
Offering with the Listing Rules or any other applicable laws; or
(xi) any litigation, dispute, legal action o r claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of the Group or any Controlling S hareholder or any Director or senior
management members as named in this prospectus; or
(xii) any contravention by any member of th e Group or any Director of the Listing
Rules or applicable laws; or
(xiii) any non-executive Director or independ ent non-executive Director vacates his or
her office, or being charged with an indictable offense or is prohibited by
operation of law or otherwise disqualifie d from taking directorship of a company;
or
(xiv) 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 a ggregate, 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 e ffect, whether directly or indirectly, on the
assets, liabilities, business, business operatio n, 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
(‘‘Material Adverse Effect ’’);
(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 impr acticable, inadvisable, inexpedient or
incapable for any material part of the Hon g 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 U nderwriting Agreement); or
UNDERWRITING
– 407 –


--- page 419 ---
(4) has or will or may have the effect of maki ng any part of the Hong Kong Underwriting
Agreement (including underwriting) inca pable 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
(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 (as defined in the
Hong Kong Underwriting Agreement), 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, intentio n 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 the Controlling Shareholders in the Hong Kong
Underwriting Agreement or the Inter national 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 Pa rties (as defined in the Hong Kong
Underwriting Agreement) pursuant t o the indemnities in the Hong Kong
Underwriting Agreement; or
(v) any breach of any of the obligations or undertakings imposed upon the Company
or the Controlling Shareholders or any cor nerstone investor (as applicable) to the
Hong Kong Underwriting Agr eement, the Internationa l Underwriting Agreement
or the Cornerstone Investment Agreement; or
(vi) there is any change or development involving a prospective change, constituting
or having a material adverse effect; or
UNDERWRITING
– 408 –


--- page 420 ---
(vii) that the Chairman of the Board, any executive 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
(viii) any executive Director or any membe r 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
(ix) 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
(x) 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 t he Over-allotment Option) is refused or
not granted, other than subject to custom ary 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
(xi) any person (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
(xii) any prohibition on the Company for whatever reason fro m offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(xiii) any person (other than the Joint Spo nsors and the Overall Coordinators) has
withdrawn or sought to withdraw its consent to being named in any of the
Offering Documents (as defined in the Hong Kong Underwr iting Agreement) or
to the issue of any of the Offering Documents (as defined in the Hong Kong
Underwriting Agreement); or
(xiv) 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 ente rs 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
UNDERWRITING
– 409 –


--- page 421 ---
(xv) (A) the notice of acceptance of the CSRC Filings 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 amendmen t 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 th e CSRC Rules or any other applicable
laws which has Material Adverse Effect; or
(xvi) 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 Agreement signed with the cornerstone
investor, have been withdrawn, terminated or cancelled, or with respect to which
the payment of the relevant orders and/or investment commitment has not been
received or settled in the stipulated time and manner or otherwise,
then, in each case, the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) may, in their sole and absolute discretion and upon giving notice in
writing to the Company, terminate the Hong Ko ng Underwriting Agreement with immediate
effect.
UNDERWRITING
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--- page 422 ---
Undertakings to the Stock Exchan ge pursuant to the Listing Rules
(A) Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the Stock
Exchange that it will not issue any further Shares, or securities convertible into equity securities
of our Company (whether or not of a class already listed) or enter into any agreement to such an
issue within six months from the Listing Date (wh ether or not such issue of Shares or securities
will be completed within six months from the Lis ting Date), except (a) pursuant to the Global
Offering including pursuant to t he Over-allotment Option or (b) under any of the circumstances
provided under Rule 10.08 of the Listing Rules.
(B) Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rul es, each of the Controlling Shareholders has
irrevocably and unconditionally undertaken to the Stock Exchange and our Company that, except
in compliance with the requirements of the Listing R ules, he/she/it will not and will procure that
the relevant registered holder(s) will not, either directly or indirectly:
(i) in the period commencing on the date by re ference to which disclosure of his/her/its
shareholding in our Company is made in this Prospectus and ending on the date which
is six months from the Listing Date (the ‘‘First Six-Month Period ’’), dispose of, nor
enter into any agreement to dispose of or otherwise create any options, rights, interests
or encumbrances in respect of any of the securities of our Company in respect of
which he/she/it is shown in this Prospectus to be the beneficial owner(s); and
(ii) in the period of six months commencing on the date on which the First Six-Month
Period expires (the ‘‘Second Six-Month Period ’’), dispose of, nor enter into any
agreement to dispose of or otherwise cr eate any options, rights, interests or
encumbrances in respect of a ny of the securities referred to in paragraph (a) above if,
immediately following such disposal or upon the exercise or enforcement of such
options, rights, interests or encumbrances , he/she/it would cease to be a controlling
shareholder (as defined in the Listing Rules) of our Company or a member of the
group of Controlling Shareholders of our C ompany or would together with the other
Controlling Shareholders cease to be controllin g shareholders (as defined in the Listing
Rules) of our Company.
UNDERWRITING
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--- page 423 ---
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders has irrevocably and unconditionally undertaken to the Stock Exchange and our
Company that, within the period commencing on the date by reference to which disclosure of his/
her/its shareholding in our Company is made in t his Prospectus and ending on the date which is
twelve months from the Listing Date, he/she/it will and will procure that the relevant registered
holder(s) will:
(i) when he/she/it pledges or charges any s ecurities of our Company beneficially owned
by him/her/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, immediately inform our Company of such pledge/charge together with
the number of the securities so pledged or charged; and
(ii) when he/she/it receives any indication, either verbal or written, from the pledgee or
chargee that any of the pledged/charged se curities will be disposed of, immediately
inform our Company of such indications.
Our Company will inform the Stock Exchange as soon as it has been informed of the
matters referred to in paragraph (a) and (b) above (if any) by any of the Controlling Shareholders
and subject to the then requirements of the Li sting Rules disclose such matters by way of an
announcement which is published in accordance with Rule 2.07C of the Listing Rules as soon as
possible.
Undertakings pursuant to the Hong Kong Underwriting Agreement
(A) Undertakings by our Company and the Controlling Shareholders in respect of our Company
Pursuant to the Hong Kong Underwriting Agreement, except for the offer and sale of the
Offer Shares pursuant to the Global Offering (including pursuant to the Over-allotment Option)
and otherwise pursuant to the Listing Rules, during the period commencing on the date of the
Hong Kong Underwriting Agreement and ending on, and including, the First Six-Month Period,
our Company has undertaken to each of the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Hong Kong Underwriters, the Capital Market Intermediaries and the Joint Sponsors not to,
without the prior written consent of the Joint Spon sors and Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters, which shall not be unreasonably withheld or
delayed) and unless in compliance with the requirements of the Listing Rules (particularly, Rule
10.08 of the Listing Rules):
UNDERWRITING
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--- page 424 ---
(i) allot, issue, sell, accept subscription for, offer to allot, issue, repurchase, sell, contract
or agree to allot, issue or sell, mortgage, charge, pledge, assign, hypothecate, lend,
grant or sell any option, warrant, contract or right to subscribe for or purchase, grant
or purchase any option, warrant, contract or r ight to allot, issue or sell, or otherwise
transfer or dispose of or create a mortgage, charge, pledge, lien, option, restriction,
right of first refusal, right of pre-emption, claim, defect, right, interest or preference
granted to any third-party, or any other encumbrance or security interest of any kind
(an ‘‘Encumbrance ’’) over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indirectly, conditionally or unconditionally, or
repurchase, any legal or beneficial interest in the share capital or any other equity
securities of our Company, as applicable, or any intere st in any of the foregoing
(including, without limitation, any securitie s 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 equity se curities of our Company, as applicable), or
deposit any share capital or other equity se curities of our Company, as applicable, with
a depositary in connection with the i ssue 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 Shares or
other securities of our Company, or any shares or other securities of such other
member of the Group, as applicable, or any interest in any of the foregoing (including,
without limitation, any e quity securities convertib le into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights to
purchase, any Shares); or
(iii) enter into any transaction with the same economic effect as any transaction specified in
( i )o r( i i )a b o v e ;o r
(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 foregoing transactions in (i), (ii) or (iii) above is to be settled by
delivery of share capital or such other equity s ecurities in cash or otherwise (whether or not the
issue of such share capital or other equity secur ities will be completed within the First Six-Month
Period). Our Company further agreed 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 agre es to or announces any
intention to effect any such tra nsaction during 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 ma rket for any Shares or other securities of our
Company. Each of Mr. Yang and Ms. Qian Wuzhen （錢五珍）has undertaken to each of the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and
the Capital Market Intermediaries to pro cure our Company to comply with the above
undertakings.
UNDERWRITING
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(B) Undertakings by the Controlling Sha reholders in respect of themselves
Each of Mr. Yang and Ms. Qian Wuzhen （錢五珍）has jointly and severally undertaken to
each of our Company, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters, the Capital Market Intermediaries and the Joint Sponsors that, except pursuant to
the Global Offering (including pursuant to the O ver-allotment Option), 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:
(a) he, she or it will not, and will procure tha t each of the Controlling Shareholders and
the relevant registered holder(s), any nominee or trustee holding on trust for it and the
companies controlled by it will not, at any time during the First Six-Month Period, (i)
sell, offer to sell, contract or agree to 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 over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indi rectly, conditionally or unconditionally, any
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 Shares
or any such other securities, as applicable or any interest in any of the foregoing), or
deposit any Shares or other securities of o ur 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 of any Shares or other securitie s of our Company or any interest therein
(including, without limitation, any securitie s convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights to
purchase, any Shares or any such other secur ities, as applicable or any interest in any
of the foregoing), or (iii) enter into any tr ansaction 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 speci fied 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 Shares or other securities of our Company or in cash or otherwise (whether
or not the transactions will be completed w ithin the First Six-Month Period or the
Second Six-Month Period);
UNDERWRITING
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--- page 426 ---
(b) he, she or it will not, during the Second Six-Month Period, enter into any of the
transactions specified in (a)(i), (a)(ii ) or (a)(iii) above or offer to or agree to or
announce any intention to effect any such tra nsaction 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, he, she or it will cease to be a
‘‘controlling shareholder ’’ (as the term is defined in the Listing Rules) of our
Company; and
(c) until the expiry of the Second Six-Month Period, in the event that he, she or it enters
into any of the transactions specified in ( a)(i), (a)(ii) or (a)(iii) above, offers to or
agrees to or announces any intention to effect any such transaction, he, she or it will
take all reasonable steps to ensure that he, she or it will not create a disorderly or false
market in the securities of our Company.
The above restrictions shall not prevent the Controlling Shareholder s from (i) purchasing
additional Shares or other securities of the Comp any and disposing of such additional Shares or
securities of the Company in acco rdance with the Listing Rules, p rovided that any such purchase
or disposal does not contravene the lock-up a rrangements with the Controlling Shareholders
referred to in this undertaking or the complianc e by our Company with the minimum public float
requirement under the Listing Rules, and (ii) using the Shares or other securities of our Company
or any interest therein beneficially owned by them as security (including a charge or a pledge) in
favor of an authorized institution (as defined in t he Banking Ordinance (Chapter 155 of the Laws
of Hong Kong)) for a bona fide c ommercial loan, provided tha t (a) the relevant Controlling
Shareholder will immediately i nform our Company and the Overall Coordinators in writing of
such pledge or charge together with the number o f Shares or other securities of the Company so
pledged or charged if and when it/he/she or the rele vant registered holder(s) pledges or charges
any Shares or other securities of the Company ben eficially owned by it/him/her, and (b) when the
relevant Controlling Shareholder r eceives indications, either ver bal or written, from the pledgee or
chargee of any Shares that any of the pledge d or charged Shares or other securities of our
Company will be disposed of, it/he/she will immediately inform our Company and the Overall
Coordinators of such indications.
Our Company has undertaken to the Joint Sponsors, the Sponsor-Overall Coordinators, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Hong Kong Underwriters and the Capital Market Intermediaries that upon receiving
such information in writing from any Control ling Shareholder, he/she/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 rel evant authorities, and make a public disclosure in
relation to such information by way of an announcement.
UNDERWRITING
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--- page 427 ---
Hong Kong Underwriters ’ Interests in our Company
Save for their respective obligations under the Hong Kong Underwriting Agreement, as of
the Latest Practicable Date, none of the Hong K ong Underwriters was interested, legally or
beneficially, directly or indirectly, in any Sh ares or any securities of any member of the 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, a ny Shares or any securities of any member of the
Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portio n of the H Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement.
International Offering
International Underwriting Agreement
In connection with the Interna tional Offering, our Company expects to enter into the
International Underwriting Agreement with, am ong others, the International Underwriters on or
around Friday, August 22, 2025. Under the Intern ational Underwriting Agreement and subject to
the Over-allotment Option, the International Unde rwriters would, subject to certain conditions set
out therein, agree severally but not jointly to procure subscribers for, or themselves to subscribe
for, their respective applicable proportions of the I nternational Offer Shares initially being offered
pursuant to the International Offering. It is expected that the International Underwriting
Agreement may be terminated on similar gr ounds as the Hong Kong Underwriting Agreement.
Potential investors should note that in the event t hat the International Underwriting Agreement is
not entered into or is terminated, the Global Offering will not proceed. For details, see ‘‘Structure
of the Global Offering — The International Offering ’’in this prospectus.
Over-allotment Option
Our Company is 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 Listing Date until 30 days after the last day for lodging
applications under the Hong Kong Public Offering, being Saturday, September 20, 2025, pursuant
to which our Company may be required to issue u pt oa na d d i t i o n a l8 , 7 8 3 , 5 0 0HS h a r e s ,a tt h e
Offer Price, to cover over-allocations (if any) i n the International Offering. For details, see
‘‘Structure of the Global Offering — Over-allotment Option ’’in this Prospectus.
UNDERWRITING
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--- page 428 ---
Commissions and Expenses
The Underwriters and the Capital Market Int ermediaries will receive an underwriting
commission of 2.0% of the aggregate Offer Price of all the Offer Shares (including any Offer
Shares to be issued pursuant to the exercise o f the Over-allotment Option), if any, (the ‘‘Fixed
Fees ’’) out of which they will pay any sub-underwriting commissions and other fees.
The Underwriters and the Capital Market Int ermediaries may receive a discretionary
incentive fee of up to 2.0% 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), if any (the
‘‘Discretionary Fees ’’).
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering, the
underwriting commission will not be paid to th e Hong Kong Underwriters but will instead be
paid, at the rate applicable to the Internatio nal Offering, to the relevant International
Underwriters.
The amount and respective en titlement among the Underwriters and the Capital Market
Intermediaries of which is expected to be deter mined before the Listing Date in compliance with
the Listing Rules. Assuming the Discretionary Fe es are paid in full, the ratio of the Fixed Fees
and the Discretionary Fees paid or payable to all Underwriters and all Capital Market
Intermediaries is 45:55.
The aggregate underwriting commissions and f ees together with the Stock Exchange listing
fees, the SFC transaction levy, AFRC transactio n levy and the Stock Exchange trading fee, legal
and other professional fees and printing and all other expenses relating to the Global Offering are
estimated to be approximately HK$93.4 million (as suming the full payment of the discretionary
incentive fee and the Over-allotment Option is not exercised), which will be made by our
Company.
Indemnity
Each of our Company and the Controlling Shareholders has agreed to indemnify the Hong
Kong Underwriters for certain losses which they may suffer or incur, including losses arising
from the performance of their obligations under the Hong Kong Underwriting Agreement and any
breach by any of our Company and the Controlling S hareholders of the H ong Kong Underwriting
Agreement.
UNDERWRITING
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--- page 429 ---
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offeri ng and the International Offering (together,
the ‘‘Syndicate Members ’’) and their affiliates may each in dividually undertake a variety of
activities (as further described below) which do n ot form part of the underwriting or stabilizing
process.
The Syndicate Members and their affiliates a re diversified financial institutions with
relationships in countries around the world. Th ese 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 acc ount of others. In the ordinary course of their
various business activities, the S yndicate Members and their respe ctive affiliates may purchase,
sell or hold a broad array of investments and ac tively trade securities, derivatives, loans,
commodities, currencies, credit default swaps and other financial instruments for their own
account and for the accounts of t heir customers. Such investment and trading activities may
involve or relate to assets, securities and/or instruments of our Company 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 the Group ’sl o a n sa n do t h e r
debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the H Shares, entering into transactions with
those buyers and sellers in a principal capacity, i ncluding as a lender to initial purchasers of the H
Shares (which financing may be secured by the H Shares) in the Global Offering, proprietary
t r a d i n gi nt h eHS h a r e s ,a n de n t e r i n gi n t oo v e rthe counter or listed derivative transactions or
listed or unlisted securities transactions (includi ng 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 hed ging activity by those entities involving, directly
or indirectly, the buying and selling of the H Sha res, which may have a negative impact on the
trading price of the H Shares. All such activitie s 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 securitie s or indices including the H Shares, in units of
funds that may purchase the H Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or th eir affiliates of any listed securities having
the H Shares as their underlying securities, whet her on the Stock Exchange or on any other stock
exchange, the rules of the stock exchange may re quire 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.
UNDERWRITING
– 418 –


--- page 430 ---
All such activities may occur both during a nd after the end of the stabilizing period
described in the section headed ‘‘Structure of the Global Offering ’’ in this Prospectus. Such
activities may affect the market price or value of t he 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 o f these activities, the Syndicate Members will
be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the S tabilizing Manager or its affiliates or any
person acting for it) must not, in connectio n with the distribution of the Offer Shares,
effect any transactions (including issu ing or entering into any option or other
derivative transactions relating to the Offe r Shares), whether in the open market or
otherwise, with a view to stabilizing or maintaining the market price of any of the
Offer Shares at levels other than those which might otherwise prevail in the open
market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, pr ice rigging and stock market manipulation.
Certain of the Syndicate Members or their res pective affiliates have provided from time to
time, and expect to provide in the future, investm ent banking and other services to our Company
and each of its affiliates for which such Syndica te Members or their respective affiliates have
received or will receive cus tomary fees and commissions.
In addition, the Syndicate Members or their re spective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
UNDERWRITING
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--- page 431 ---
THE GLOBAL OFFERING
This Prospectus is published in connection w ith the Hong Kong Public Offering as part of
the Global Offering. China International Cap ital Corporation Hong Kong Securities Limited,
Huatai Financial Holdings (Hong Kong) Limited and CCB International Capital 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 beh alf 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 as mentioned in this Prospectus.
58,557,000 Offer Shares will initially be ma de available under the Global Offering
comprising:
(a) the Hong Kong Public Offering of initially 5,856,000 H Shares (subject to
reallocation) in Hong Kong as described in the sub-section ‘‘ — The Hong Kong
Public Offering ’’in this section below; and
(b) the International Offering of initially 52,7 01,000 H Shares (subject to reallocation and
the Over-allotment Option) outside the Unite d States (including with professional,
institutional, corporate and other investor s whom we anticipate may have a reasonable
demand for the H Shares in Hong Kong) in offshore transactions in reliance on
Regulation S as described i n the sub-section headed ‘‘ — The International Offering ’’
in this section below.
Investors may either:
(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest for International Offer Shares under the International
Offering,
but may not do both.
The Offer Shares will represent approximately 14.05% of the total Shares in issue
immediately following the completion of the Global Offering, assuming the Over-allotment
Option is not exercised. If the Over-allotment O ption is exercised in full, the Offer Shares
(including H Shares issued pursuant to the full exercise of the Over-allotment Option) will
represent approximately 15.82% of the total Shar es in issue immediately following the completion
of the Global Offering and the issue of Offer Shares pursuant to the Over-allotment Option.
References in this Prospectus to applicatio ns, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 432 ---
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 5,856,000 H Shares (subject to reallocation) for
subscription by the public in Hong Kong at the O ffer Price, representing 10% of the total number
of Offer Shares initially available under the Glob al Offering. The number of Offer Shares initially
offered under the Hong Kong Public Offering, subject to any reallocation of Offer Shares between
the International Offering and the Hong Kong Public Offering, will represent approximately
1.40% of the total Shares in issue immediately following the completion of the Global Offering
(assuming 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. Prof essional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in shares
and other securities and corporate entities that r egularly invest in shares and other securities.
Completion of the Hong Kong Public Offeri ng is subject to the conditions set out in the
sub-section headed ‘‘ — Conditions of the Global Offering ’’in this section.
Allocation
Allocation of Offer Shares to i nvestors 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 alloca tion than others who have applied for the same
number of Hong Kong Offer Shares, and those applicants who are not successful in the ballot
may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below) will
be divided equally into two pools (with any odd lots being allocated to pool A): pool A and pool
B. The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to applicants
who have applied for Hong Kong Offer Sha res with an aggregate price of HK$5 million
(excluding the brokerage, the SFC transactio n levy, AFRC transaction levy and the Stock
Exchange trading fee payable) or less. The Hon g Kong Offer Shares in pool B will be allocated
on an equitable basis to applicants who hav e applied for Hong Kong Offer Shares with an
aggregate price of more than HK$5 million (excluding the brokerage, the SFC transaction levy,
AFRC transaction levy and the Stock Exchange tr ading fee payable) and up to the total value in
pool B.
STRUCTURE OF THE GLOBAL OFFERING
– 421 –


--- page 433 ---
Applicants should be aware that applicatio ns in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose of
the immediately preceding paragraph only, the ‘‘price ’’ for Hong Kong Offer Shares means the
price payable on application therefor (without r egard 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 suspecte d multiple applications under the Hong Kong
Public Offering and any application for more than 50% of the 5,856,000 Offer Shares initially
comprised in the Hong Kong Public Offering (that is 2,928,000 Offer Shares) is liable to be
rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the discretion
of the Overall Coordinators. Subject to the allocation cap described in the subsequent paragraph,
the Overall Coordinators may in their discretion r eallocate Offer Shares from the International
Offering to the Hong Kong Public Offering to sa tisfy valid applications under the Hong Kong
Public Offering. In addition, if the Hong Kong Pub lic 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 unsubscribe d Hong Kong Offer Shares in such amounts as they
deem appropriate.
In each case, the additional Offer Shares reallo cated to the Hong Kong Public Offering will
be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspond ingly 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 2,927,500 Offer Shares may be
reallocated from the Internatio nal Offering to the Hong Kong Public Offering, so that the total
number of Offer Shares available for subscription under the Hong Kong Public Offering will
increase up to 8,783,500 Offer Shares, representing approximately 15% of the number of Offer
Shares initially available under the Global Offering (before exercise of the Over-allotment Option)
in accordance with Chapter 4.14 of the Guide f or New Listing Applicants. In the circumstance
where the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong
Offer Shares are undersubscribed, there will be no reallocation from the International Offering to
the Hong Kong Public Offering, and no over-allocation of H Shares to the Hong Kong Public
Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 434 ---
Given the initial allocation of the Offer Share s to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide and the provision of Paragraph 4.2(b) o f 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 bet ween the Hong Kong Public Offering and the
International Offering will be disclosed in the results announcement of the Global Offering, which
is expected to be published on Monday, August 25, 2025.
Where the International Offer Shares are unde rsubscribed, if the Hong Kong Offer Shares
are also undersubscribed, the Global Offering will not proceed unless the Underwriters would
subscribe or procure subscribers for their respective applicable proportions of the Offer Shares
b e i n go f f e r e dw h i c ha r en o tt a k e nu pu n d e rt h eGlobal Offering on the terms and conditions of
this Prospectus and the Underwriting Agreements.
Applications
Each applicant under the Hong Kong Pub lic Offering will be required to give an
undertaking and confirmation in the applica tion 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 I nternational Offering. Such applicant ’s application is liable
to be rejected if such undertaking and/or confirmation is/are breached and/or untrue (as the case
may be) or if he/she/it has been or will be placed or allocated International Offer Shares under the
International Offering.
Applicants under the Hong Kong Public Offering are required to pay, on application (subject
to application channel), the Offer Price of HK$14 .51 per Offer Share in a ddition to the brokerage,
the SFC transaction levy, AFRC transaction lev y and the Stock Exchange trading fee payable on
each Offer Share, amounting to a total of HK$7,328.17 for one board lot of 500 H Shares. For
details, see ‘‘How to Apply for Hong Kong Offer Shares ’’in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 435 ---
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
The International Offering will consist o f an offering of initially 52,701,000 H Shares,
representing 90.0% of the total number of Offe r Shares initially available under the Global
Offering (subject to reallocation and the Ove r-allotment Option). The number of Offer Shares
initially offered under the International Offeri ng, subject to any reallocation of Offer Shares
between the International Offering and the H ong Kong Public Offering, will represent
approximately 12.64% of the total Shares in issue immediately following the completion of the
Global Offering (assuming the Over-allotment Option are not exercised).
Allocation
Pursuant to the International Offering, the I nternational Offer Shares will be conditionally
placed on behalf of our Company by the Interna tional Underwriters or through selling agents
appointed by them. The International Offering w ill include selective marketing of Offer Shares to
institutional and professional investors and oth er investors anticipated to have a sizable demand
for such Offer Shares. Professional investors generally include brokers, dealers, companies
(including fund managers) whose ordinary busine ss involves dealing in shares and other securities
and corporate entities which regularl y invest in shares and other securities.
Allocation of Offer Shares under the International Offering will be effected in accordance
with the ‘‘book-building ’’ process described in the subsection headed ‘‘ — Pricing — Determining
the Offer Price ’’ in this section and based on a number of fac tors, including the level and timing
of demand, total size of the relevant investor ’s invested assets or equity assets in the relevant
sector and whether or not it is expected that that investor is likely to buy further H Shares, and/or
hold or sell its H Shares, after the Listing. Th is basis of allocation is intended to result in a
distribution of the Offer Shares which is likely t o lead to the establishment of a solid and stable
professional and institutional shareholder base t o the benefit of our Group and our Shareholders
as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require an
investor who has been offered (or has indicated an interest for) Offer Shares under the
International Offering and who has made an application under the Hong Kong Public Offering to
provide sufficient information to the Overall Coordinators so as to allow them to identify the
relevant applications under the Hong Kong Public Offering and to ensure that they are excluded
from any allocation of Offer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International Offering
may change as a result of the exercise of the Ov er-allotment Option in whole or in part and/or
any reallocation of unsubscribed Offer Shares originally included in the Hong Kong Public
Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 436 ---
OVER-ALLOTMENT OPTION
In connection with the Global Offering, our Company is expected to grant the Over-
allotment Option to the International Underwrite rs, exercisable by the Overall Coordinators (for
themselves and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the Int ernational Underwriters will have the right,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the Listing Date until 30 days after the last day for lodging
applications under the Hong Kong Public Offering, being Saturday, September 20, 2025, to
require our Company to issue up to an aggregate of 8 ,783,500 additional H Shares, representing
not more than 15.0% of the total number of Offer Shares under the Global Offering, at the Offer
Price under the International Offering to, cover over-allocations (if any) in the International
Offering.
If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto will represent approximately 2.06% of our issued share capital immediately
following the completion of the Global Offering an d 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 ma y bid for, or purchase, the securities in the
secondary market during a specified period of time, to retard and, if possible, prevent a decline in
the initial public market price of the securities b elow 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 Sta bilizing Manager (or its affiliates or any
person acting for it), on behalf of the Underwriters , may over-allocate or effect transactions with a
view to stabilizing or supporting the market price of the H Shares at a level higher than that
which might otherwise prevail for a limited peri od after the Listing Date. However, there is no
obligation on the Stabilizing Manager (or its affi liates or any person acting for it) to conduct any
such stabilizing action. Such stabilizing action, if taken, (a) will be cond ucted at the absolute
discretion of the Stabilizing Manager (or its aff iliates or any person acting for it) and in what the
Stabilizing Manager reasonably regards as t he best interest of our Company, (b) may be
discontinued at any time and (c) is required to be brought to an end within 30 days of the last day
for lodging applications under the Hong Kong Public Offering, being Saturday, September 20,
2025.
STRUCTURE OF THE GLOBAL OFFERING
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Stabilization action permitted in Hong Kong pur suant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) ove r-allocating for the purpose of preventing or
minimizing any reduction in the market price of t he H Shares, (b) selling or agreeing to sell the H
Shares so as to establish a short position in them f or the purpose of preventing or minimizing any
reduction in the market price of the H Shares, (c) purchasing, or agreeing to purchase, the H
Shares pursuant to the Over-allo tment Option in order to close out any position established under
paragraph (a) or (b) above, (d) purchasing, or agreeing to purchase, any of the H Shares for the
sole purpose of preventing or minimizing any re duction in the market price of the H Shares, (e)
selling or agreeing to sell any H Shares in order to liquidate any position established as a result of
those purchases and (f) offering or attempting to d o anything as described in paragraph (b), (c),
( d )o r( e )a b o v e .
Specifically, prospective applicants for and in vestors in the Offer Shares should note that:
(a) the Stabilizing Manager (or its affiliates o r any person acting for it) may, in connection
with the stabilizing action, main tain a long position in the H Shares;
(b) there is no certainty as to the extent t o which and the time or period for which the
Stabilizing Manager (or its affiliates or a ny person acting for it) will maintain such a
long position;
(c) liquidation of any such long position by t he Stabilizing Manager (or its affiliates or
any person acting for it) and selling in the open market may have an adverse impact on
the market price of the H Shares;
(d) no stabilizing action can be taken to supp ort 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 lodg ing applications under the Hong Kong Public
Offering, being Saturday, September 20 , 2025. After this date, when no further
stabilizing action may be taken, demand fo r the H Shares, and therefore the price of
the H Shares, could fall;
(e) the price of the H Shares cannot be assured to stay at or above the Offer Price by the
taking of any stabilizing action; and
(f) stabilizing bids or transactions effected in the course of the stabilizing action may be
made at any price at or below the Offer Price and can, therefore, be done at a price
below the price paid by applicants for, or investors in, the Offer Shares.
In order to effect stabilization actions, the St abilizing Manager will arrange cover of up to
an aggregate of 8,783,500 H Shares representing up to approximately 15% of the number of Offer
Shares being offered initially u nder the Global Offering), through delayed delivery arrangements
with investors who have been allocated Offer Shares in the International Offering. The delayed
delivery arrangements (if specifically agreed by an investor) relate only to the delay in the
delivery of the Offer Shares to such investor and t he Offer Price for the Offer Shares allocated to
such investor will be paid on the Listing Date.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rule s of the SFO will be made within seven days of the
expiration of the stabilization period.
STRUCTURE OF THE GLOBAL OFFERING
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Over-allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or its affiliates or any pers on acting for it) may cover such over-allocations
by exercising the Over-allotment Option in full or in part, by using H Shares purchased by the
Stabilizing Manager (or its affiliates or any pers on acting for it) in the secondary market at prices
that do not exceed the Offer Price, or by a combination of these methods.
PRICING AND ALLOCATION
The Offer Price will be HK$14.51 per H Share, unless otherwise announced by our
Company no later than the morning of the last day for lodging applications under the Hong Kong
Public Offering, as further explained below.
The Offer Price will be HK$14.51 per Offer Share, unless otherwise announced, as further
explained below. Applicants under the Hong Kong Public Offering are required to pay, on
application (subject to application channel), the Offer Price of HK$14.51 per Offer Share plus
brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and
Stock Exchange trading fee of 0.00565%, amounting to a total of HK$7,328.17 for one board lot
of 500 H Shares.
The International Underwriters will be solicitin g from prospective inve stors indications of
interest in acquiring Offer Shares in the Intern ational Offering. Prospective professional and
institutional investors will be required to s pecify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as ‘‘book-building, ’’ is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
they deem appropriate, based on th e level of interest expressed by prospective investors during
the book-building process in respect of the International Offering, and with the consent of our
Company, reduce the number of Offer Shares offered and/or the Offer Price 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 a ca se, our Company will, as soon as practicable
following the decision to make such reduction, an d 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 www.shuangdeng.com.cn and
www.hkexnews.hk , respectively, an announcement, cancel the offer and relaunch the offer on
FINI at the revised number of Offer Shares and/or the revised Offer Price and the requirements
under Rule 11.13 of the Listing Rules (which include the issue of a supplemental prospectus or a
new prospectus (as appropriate)). Upon issue of such announcement or supplemental prospectus
(as appropriate), the number of the Offer Shares o ffered in the Global Offering and/or the revised
Offer Price will be final and conclusive.
STRUCTURE OF THE GLOBAL OFFERING
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Before submitting applications for the Hong Ko ng Offer Shares, app licants should have
regard to the possibility that any announcement or s upplemental prospectus (as appropriate) of a
reduction in the number of Offer Shares and/or the Offer Price may not be made until the last day
for lodging applications under the Hong Kong Public Offering. In the absence of any such
announcement or cancellation and relaunch of offer, the number of Offer Shares will not be
reduced and/or the Offer Price, if agreed upon by th e Overall Coordinators (for themselves and on
behalf of the Underwriters) and our Company, will under no circumstances be set outside the
Offer Price as stated in this Prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators (for
themselves and on behalf of the Underwriters) may , at their discretion, reallocate the number of
Offer Shares to be offered in the Hong Kong Publ ic Offering and the International Offering.
The level of indications of interest in the Inter national Offering, the level of applications in
the Hong Kong Public Offering, the basis of allo cations 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 m anner described in the section headed ‘‘How to Apply for
Hong Kong Offer Shares — B. Publication of Results ’’in this Prospectus.
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Ho ng Kong Underwriters under
the terms and conditions of the Hong Kong Underwriting Agreement.
Our Company expects to enter into the Interna tional Underwriting Agreement relating to the
International Offering on or around Friday, August 22, 2025.
These underwriting arrangement s, including the Underwriting Agreements, are summarized
in the section headed ‘‘Underwriting ’’in this Prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications fo r Offer Shares will be conditional on:
(a) the Listing Committee granting approval f or the listing of, and permission to deal in,
the H Shares to be issued pursuant to the G lobal Offering (including any additional H
Shares that may be issued pursuant to the exercise of the Over-allotment Option) on
the Main Board of the Stock Exchange and such approval and permission not
subsequently having been withdrawn or revoked prior to the Listing Date;
STRUCTURE OF THE GLOBAL OFFERING
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--- page 440 ---
(b) the execution and delivery of the Intern ational Underwriting Agreement on or about
Friday, August 22, 2025; and
(c) the obligations of the Hong Kong Under writers under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement b ecoming and remaining unconditional and not
having been terminated in accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such cond itions 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.
The consummation of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering becoming unconditional and not
having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waive d prior to the dates and times specified, the
Global Offering will lapse and the Stock Exchan ge will be notified immediately. Notice of the
lapse of the Hong Kong Public Offering will be published by our Company on the websites of our
Company and the Stock Exchange at www.shuangdeng.com.cn and www.hkexnews.hk ,
respectively, on the next day following such laps e. In such a situation, all application monies
will be returned, without interest, o n the terms set out in the section headed ‘‘How to Apply for
Hong Kong Offer Shares – D. Dispatch/Collection of Share Certificates and Refund of
Application Monies ’’ in this Prospectus. In the meantime, all application monies will be held in
separate bank account(s) with the receiving banks or other bank(s) in Hong Kong licensed under
the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
H Share certificates for the Offer Shares w ill only become valid evidence of title at 8:00
a.m. on Tuesday, August 26, 2025, provided that the Global Offering has become unconditional
in all respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Tuesday, August 26, 2025, it is expected that dealings in the H Shares on the
Stock Exchange will commence at 9:00 a.m. on Tuesday, August 26, 2025. The H Shares will be
traded in board lots of 500 H Shares each and the stock code of the H Shares will be 6960.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 441 ---
IMPORTANT NOTICE TO APPLICANTS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic applicatio n process for the Hong Kong Public Offering
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk under
the ‘‘HKEXnews > New Listings > New Listing Information ’’ section and our website at
www.shuangdeng.com.cn .
The contents of this prospectus are identical to th e prospectus as registered with the Registrar
of Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit
you are applying:
 are 18 years of age or older;
 have a Hong Kong address (for the White Form eIPO service only); and
 are outside the United States, and are no t a United States Person (as defined in
Regulation S under the U.S. Securities Act).
Unless permitted by the Listing Rules, y ou cannot apply for any Hong Kong Offer
Shares if you or the person(s) for whose benefit you are applying:
 are an existing Shareholder or its/his/her close associates;
 are a Director, Supervisor or any of his/her close associates;
 are a core connected person (as defined in the Listing Rules) of the Company or
will become a core connected person of the Company immediately upon
completion of the Global Offering; or
 have been allocated or have applied for any International Offer Shares or
otherwise participated in the International Offering.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 442 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, August
18, 2025 and end at 12:00 noon on Thursday, August 21, 2025 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
White Form eIPO
service
www.eipo.com.hk Applicants who
would like to receive
a physical Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
a n di s s u e di ny o u r
own name.
From 9:00 a.m. on
Monday, August 18,
2025 to 11:30 a.m. on
Thursday, August 21,
2025 (Hong Kong
time).
The latest time for
completing full
payment of
application monies
will be 12:00 noon on
Thursday, August 21,
2025 (Hong Kong
time).
HKSCC EIPO
channel
Your broker or
custodian who is a
HKSCC Participant
will submit
electronic
application
instruction(s) on
your behalf
through HKSCC ’s
FINI system in
accordance with
your instructions.
Applicants who
would not like to
receive a physical
Share certificate.
Hong Kong Offer
Shares successfully
applied for will be
allotted and issued in
t h en a m eo fH K S C C
Nominees, deposited
directly into CCASS
a n dc r e d i t e dt oy o u r
designated HKSCC
Participant ’ss t o c k
account.
Contact your broker
or custodian for the
earliest and latest
time for giving such
instructions, as this
m a yv a r yb yb r o k e r
or custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service inte rruptions, and you are advised not to wait until
the last day for applications to apply for Hong Kong Offer Shares.
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--- page 443 ---
For those applying through the White Form eIPO service, once you complete
payment in respect of any application instruction given by you or for your benefit through
the White Form eIPO service to make an application f or Hong Kong Offer Shares, an
actual application shall be deemed to have been made. If you are a person for whose benefit
the application instructions are given, you sh a l lb ed e e m e dt oh a v ed e c l a r e dt h a to n l yo n e
set of application instructions has been giv en 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
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 a n application instruction under the White Form
eIPO service more than once and obtaining diffe rent application reference numbers without
effecting full payment in respect of a partic ular reference number will not constitute an
actual application.
If you apply through the White Form eIPO service, you are deemed to have
authorized the White Form eIPO Service Provider to apply on the terms and conditions in
this prospectus, as supplemented and amended by the terms and conditions of the White
Form eIPO service.
By instructing your broker or custodian to apply for 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 re levant 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 the HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instruction given by you or for your benefit
to HKSCC (in which case an applicatio n will be made by HKSCC Nominees on your
behalf) provided such application instr uction 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 444 ---
3. Information Required to Apply
You must provide the following in formation with your application:
For Individual/Joint Applican ts For Corporate Applicants
 Full name(s) (2) as shown on your
identity document
 Full name(s) (2) a ss h o w no ny o u r
identity document
 Identity document ’s issuing country or
jurisdiction
 Identity document ’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. Hong Kong identity card
(‘‘HKID ’’); or
ii. National identification document;
or
iii. Passport; and
 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  Identity document number
Notes:
(1) If you are applying through the White Form eIPO service, you are required t o provide a valid e-mail
address, a contact telephone number and a Hong Kong address. You are also required to declare that the
identity information provided by you follows the requirements as describ ed in Note 2 below. In particular,
where you cannot provide a HKID number, you must confirm that you do not hold a HKID.
(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 na mes will be accepted. The o rder 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 use d if an entity has a LEI certificate.
(3) If the applicant is a trustee, the client i dentification data ( ‘‘CID’’) of the trustee, as set out above, will be
required. If the applicant is an inves tment fund (i.e. a collective inves tment scheme, or CIS), the CID of the
asset management company or the individual fund, as appropriate, which has opened a trading account with
the broker will be required, as above
(4) The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 445 ---
(5) If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document ’s issuing country or jurisdiction, the identity document type; and (ii) the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each of
the joint beneficial owners. If you do not include this information, the application will be treated as being
made for your benefit
(6) If an application is made by an unlis ted 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 St ock 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 be yond a specified amount in a distribution of either profits or capital).
For those applying through the HKSCC EIPO channel and making an application
under a power of attorney, the Overall Coordinators may accept it at their discretion and on
any conditions they think fit, in cluding evidence of the attorney ’s authority.
Failing to provide any required informatio n may result in your application being
rejected.
4. Permitted Number of Hong Kon g Offer Shares for Application
Board lot size : 500 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on application/
successful allotment
: Hong Kong Offer Shares are available for
application in specifi ed board lot sizes only.
Please refer to the amount payable associated with
each specified board lot size in the table below.
The Offer Price is HK$14.51 per Offer Share, plus
brokerage of 1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of 0.00015% and
the Stock Exchange trading fee of 0.00565%.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require
you to pre-fund your application in such amount as
determined by the broker or custodian ,b a s e do n
the applicable laws and regulations in Hong Kong.
You are responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Offer
Shares you applied for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 446 ---
By instructing your broke ro rc u s t o d i a nt oa p p l y
for Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the Offer
Price, brokerage, SFC transaction levy, AFRC
transaction levy and the Stock Exchange trading
fee by debiting the relevant nominee bank account
at the designated bank for your broker or
custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you have
selected. You must pay the respective maximum
amount payable on application in full upon
application for Hong Kong Offer Shares.
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED
FOR AND PAYMENTS
No. of Hong
Kong Offer
Shares
applied for
Amount
payable on
application (2)
No. of Hong
Kong Offer
Shares
applied for
Amount
payable on
application (2)
No. of Hong
Kong Offer
Shares
applied for
Amount
payable on
application (2)
No. of Hong
Kong Offer
Shares
applied for
Amount
payable on
application (2)
HK$ HK$ HK$ HK$
500 7,328.17 6,000 87,938.00 40,000 586,253.33 400,000 5,862,533.35
1,000 14,656.33 7,000 102,594.33 45,000 659,535.00 500,000 7,328,166.68
1,500 21,984.50 8,000 117,250.66 50,000 732,816.67 600,000 8,793,800.01
2,000 29,312.66 9,000 131,907.01 60,000 879,380.01 700,000 10,259,433.35
2,500 36,640.83 10,000 146,563.34 70,000 1,025,943.33 800,000 11,725,066.68
3,000 43,969.01 15,000 219,845.01 80,000 1,172,506.67 900,000 13,190,700.01
3,500 51,297.17 20,000 293,126.68 90,000 1,319,070.00 1,000,000 14,656,333.36
4,000 58,625.34 25,000 366,408.33 100,000 1,465,633.34 1,500,000 21,984,500.03
4,500 65,953.50 30,000 439,689.99 200,000 2,931,266.66 2,000,000 29,312,666.70
5,000 73,281.67 35,000 512,971.66 300,000 4,396,900.00 2,928,000
(1) 42,913,744.05
(1) Maximum number of Hong Kong Offer Share you may apply for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 447 ---
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock
Exchange trading fee and AFRC transaction levy. If your application is
successful, brokerage will be paid to the Exchange Participants (as defined in the
Listing Rules) and the SFC transaction l evy, the Stock Exchange trading fee and
AFRC transaction levy are paid to the S tock Exchange (in the case of the SFC
transaction levy, collected by the Sto ck Exchange on behalf of the SFC; and in
the case of the AFRC transaction levy, collected by the Stock Exchange on
behalf of the AFRC).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying
investor in your application as required under the paragraph headed ‘‘ — A. Application for
Hong Kong Offer Shares — 3. Information Required to Apply ’’ in this section. If you are
suspected of submitting or causing to be submitted more than one application, all of your
applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) the
HKSCC EIPO channel or (iii) both channels concu rrently are prohibited and will be
rejected. If you have made an application through the White Form eIPO service or the
HKSCC EIPO channel, you or the person(s) for whose benefit you have made the
application shall not apply for any International Offer Shares.
6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
the HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or
the Overall Coordinators (or their agents or nominees), as our agents, to execute
any documents for you and to do on your behalf all things necessary to register
any Hong Kong Offer Shares allocated to you in your name or in the name of
HKSCC Nominees as required by the Articles of Association, and (if you are
applying through the HKSCC EIPO channel) to deposit the allotted Hong Kong
Offer Shares directly into CCASS for the credit of your designated HKSCC
Participant ’s stock account on your behalf;
(ii) confirm that you have read and understood the terms and conditions and
application procedures set out in this prospectus and the designated website of
the White Form eIPO service (or as the case may be, the agreement you entered
into with your broker or custodian), and agree to be bound by them;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 448 ---
(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 the Hong Kong Public Offering
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
r e l i e do n l yo nt h ei n f o r m a t i o na n dr e p r e sentations 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 info rmation or representations;
(vi) agree that we, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Capital Market Intermediaries,
the Joint Bookrunners, the Joint Lead Managers, the Underwriters, our and their
respective directors, officers, employees , partners, agents, advisors and other
parties involved in the Global Offering (the ‘‘Relevant Persons ’’), the H Share
Registrar, the White Form eIPO Service Provider and HKSCC will not be liable
for any information and representations not in this prospectus and any
supplement to it;
(vii) undertake and confirm that you or the person(s) for whose benefit you have made
the application have not applied for or taken up, or indicated an interest in, and
will not apply for or take up, or indicate an interest in, any International Offer
Shares nor participated in the International Offering;
(viii) agree to disclose the details of your a pplication 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 specified under the paragraph headed
‘‘ — G. Personal Data ’’in this section;
(ix) 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;
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(x) 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 resu lt of the ballot by the H Share Registrar
by way of publication of the results at th e time and in the manner as specified in
the paragraph headed ‘‘ — B. Publication of Results ’’in this section;
(xi) confirm that you are aware of the situations specified in the paragraph headed
‘‘ — C. Circumstances in Which You Will Not Be Allocated Hong Kong Offer
Shares ’’in this section;
(xii) agree that your application or HKSCC Nominees ’ application, any acceptance of
it and the resulting contract will be gove rned by and construed in accordance
with the laws of Hong Kong;
(xiii) agree and warrant that you have comp lied with the Companies Ordinance, the
Companies (Winding Up and Miscella neous Provisions) Ordinance, the PRC
Company Law, 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 conditio ns contained in this prospectus;
(xiv) represent, warrant and undertake th at (a) you understand that the Hong Kong
Offer Shares have not been and will not b e registered under the U.S. Securities
Act; and (b) you and the person(s) for whose benefit you have made the
application are outside the United State s( a sd e f i n e di nR e g u l a t i o nS )o ra r ea
person described in paragraph (h)(3) of Rule 902 of Regulation S;
(xv) confirm that (a) your application or HKSCC Nominees ’ application on your
behalf is not financed directly or indirectly by the Company, any of the directors,
supervisors, chief executives, substantial shareholder(s) or existing shareholder(s)
of the Company or any of its subsidiaries or any of their respective close
associates; and (b) you are not accustomed or will not be accustomed to taking
instructions from the Company, any of the directors, supervisors, chief
executives, substantial shareholder(s) or existing shareholder(s) of the Company
or any of its subsidiaries or any of their re spective close associates in relation to
the acquisition, disposal, voting or oth er disposition of the Shares registered in
your name or otherwise held by you;
(xvi) warrant that the information you have provided is true and accurate;
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(xvii) 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;
( x v i i i) agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(xix) authorize us to place your name(s) or the name of HKSCC Nominees on our
register of members as the holder(s) of any Hong Kong Offer Shares allocated to
you and such other registers as may be required under the Memorandum and
Articles of Association, and we and/or our agents to send any Share certificate(s)
and/or any White Form e-Refund payment instructions and/or any refund
check(s) to you or the first-named applicant for joint application to the address
specified in your application instructions by ordinary post at your own risk,
unless you are eligible to collect the Share certificate(s) and/or refund check(s) in
person;
(xx) 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;
(xxi) (if the application is made for your own b enefit) warrant that no other application
has been or will be made for your benefit by giving application instructions to
HKSCC directly or indirectly or through the White Form eIPO service or by
you or by anyone as your agent or by any other person; and
( x x i i ) (if you are making the application as an agent for the benefit of another person)
warrant that (a) 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 application instructions to HKSCC and (b) you
have due authority to give application instructions on behalf of that other person
as its agent.
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B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel
Website The designated results of allocations website
at www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
‘‘search by ID ’’function.
The full list of (i) wholly or partially successful
applicants using the White Form eIPO service
and HKSCC EIPO channel, and (ii) the number
of Hong Kong Offer Shares conditionally allotted
to them, among other things, will be displayed on
the ‘‘Allotment Results ’’page of the White
Form eIPO service at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/
eIPOAllotment ).
24 hours, from 11:00 p.m.
on Monday, August 25, 2025
to 12:00 midnight on
Sunday, August 31, 2025
(Hong Kong time).
The Stock Exchange ’s website at
www.hkexnews.hk and our website at
www.shuangdeng.com.cn , which will provide
links to the above-mentioned websites of the H
Share Registrar.
No later than 11:00 p.m. on
Monday, August 25, 2025
(Hong Kong time).
Telephone +852 2862 8555
- the allocation results telephone enquiry line
provided by the H Share Registrar
Between 9:00 a.m. and
6:00 p.m., on
Tuesday, August 26, 2025,
Wednesday, August 27,
2025, Thursday, August 28,
2025 and Friday, August 29,
2025 (Hong Kong time).
For those applying through the HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Friday, August 22, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and rev iew the allotment result from 6:00 p.m. on
Friday, August 22, 2025 (Hong Kong time) on a 24-hour basis, and should report any
discrepancies on allotments to HKSCC as soon as practicable.
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Allocation Announcement
We expect to announce the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public O ffering and the basis of allocations of the Hong
Kong Offer Shares on the Stock Exchange ’s website at www.hkexnews.hk and our website at
www.shuangdeng.com.cn by no later than 11:00 p.m. on Monday, August 25, 2025 (Hong Kong
time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares w ill be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing d ate 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 suspecte d multiple applications. For details, see ‘‘ —
A. Application for Hong Kong Offer Shares 5. — Multiple Applications Prohibited ’’in
this section;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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 the Underwriting Agreements do not become unconditional or are terminated; or
 the Company or the Overall Coordinators believe that by accepting your application, it
or they would violate applicable secur ities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Par ticipants and HKSCC, HKSCC Participants
will be required to hold sufficient application fund s on deposit with their designated bank before
balloting. After balloting of Hong Kong Offer Sha res, the receiving bank will collect the portion
of these funds required to s ettle each HKSCC Participant ’s actual Hong Kong Offer Share
allotment from their designated bank.
There is a risk of money settlement failure. In t he extreme event of m oney settlement failure
by a HKSCC Participant (or its designated ba nk), who is acting on your behalf in settling
payment for your allotted shares, HKSCC will co ntact 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 settle ment 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 Par ticipant. 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 SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one 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 Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the Shares. No receipt will be
issued for sums paid on application.
Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date,
which is expected to be Tuesday, August 26, 2025 (Hong Kong time), provided that the Global
Offering has become unconditional in all respec ts and the right of termination described in the
section headed ‘‘Underwriting ’’ in this prospectus has not been exercised. Investors who trade
Shares prior to the receipt of Share certificates or prior to the Share certificates becoming valid
evidence of title do so entirely at their own risk.
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The right is reserved to retain any Share cer tificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate
For physical share
certificates of equal
or over 1,000,000
Offer Shares issued
under your own
name
Collection in person from the H
Share Registrar, Computershare
Hong Kong Investor Services
Limited at Shops 1712-1716, 17th
Floor, Hopewell Centre, 183 Queen ’s
Road East, Wan Chai, Hong Kong.
Time: from 9:00 a.m. to 1:00 p.m.
on Tuesday, August 26, 2025 (Hong
Kong time)
If you are an individual, you must
not authorize any other person to
collect for you. If you are a
corporate applicant, your authorized
representative must bear a letter of
authorization from your corporation
stamped with your corporation ’s
chop.
Both individuals and authorized
representatives must produce, at the
time of collection, evidence of
identity acceptable to the H Share
Registrar.
Note: If you do not collect your
Share certificate(s) personally within
the time above, it/they will be sent to
the address specified in your
application instructions by ordinary
post at your own risk.
Share certificate(s) will be
issued in the name of HKSCC
Nominees, deposited into
C C A S Sa n dc r e d i t e dt oy o u r
designated HKSCC
Participant ’s stock account.
No action by you is required.
For physical share
certificates of less
than 1,000,000 Offer
Shares issued under
your own name
Your Share certificate(s) will be sent
to the address specified in your
application instructions by ordinary
post at your own risk.
Time: Monday, August 25, 2025
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White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus a pplication monies paid by you
Date Tuesday, August 26, 2025 Subject to the arrangement
between you and your broker
or custodian.
Responsible party H Share Registrar Your broker or custodian.
Application monies
paid through single
bank account
White Form e-Refund payment
instructions to your designated bank
account.
Your broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it.
Application monies
paid through
multiple bank
accounts
Refund check(s) will be dispatched
to the address specified in your
application instructions by ordinary
post at your own risk.
Except in the event of any Severe Weather Signals (as defined below) in force in Hong
Kong on Monday, August 25, 2025 rendering it impossible for the relevant Share certificates to
be dispatched to HKSCC in a timely manner, we sh all procure the H Share Registrar to arrange
for delivery of the supporting documents and Share certificates in accordance with the
contingency arrangements as agreed between them. For details, see ‘‘ — E. Severe Weather
Arrangements ’’in this section.
E. SEVERE WEATHER ARRANGEMENTS
The application lists will not open or close on Thursday, August 21, 2025 if there is/are:
 a tropical cyclone warning signal number 8 or above;
 a ‘‘black ’’rainstorm warning; and/or
 Extreme Conditions
(collectively, ‘‘Severe Weather Signals ’’)
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, August
21, 2025 (Hong Kong time).
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon (Hong Kong time).
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Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the Li sting Date. Should there be any changes to the
dates mentioned in the section headed ‘‘Expected Timetable ’’in this prospectus, an announcement
will be made and published on the Stock Exchange ’s website at www.hkexnews.hk and our
website at www.shuangdeng.com.cn of the revised timetable.
If a Severe Weather Signal is hoisted on Monday, August 25, 2025, the H Share Registrar
will make appropriate arrangements for the de livery of the share certificates to the CCASS
Depository ’s service counter so that they would be available for trading on Tuesday, August 26,
2025, and for physical share certificates of less than 1,000,000 Offer Shares issued under your
own name, despatch will be made by ordinary post when the post office re-opens after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Monday, August 25, 2025 or on
Tuesday, August 26, 2025.
If a Severe Weather Signal is hoisted on Tuesday, August 26, 2025, for physical share
certificates of equal or over 1,000,000 Offer Shares issued under your own name, you may collect
your share certificates from the H Share Registrar ’s office after the Severe Weather Signal is
lowered or cancelled (e.g. in the afternoon of Tuesday, August 26, 2025 or on Wednesday,
August 27, 2025.
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock ad mission requirements of HKSCC, the 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 Shares on the Stock Exchange 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 t he General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made ena bling the Shares to be admitted into CCASS.
You should seek the advice of your broker or other professional advisors for details of those
settlement arrangements as such arrangeme nts may affect your rights and interests.
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--- page 457 ---
G. PERSONAL DATA
The following Personal Information Collec tion 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. Such personal data may include c lient identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have read,
understood and agree to all of the terms of the Personal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection State ment informs 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.
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 despatch of S hare certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Your personal data may be used, held, processed and/or stored (by whatever means) for the
following purposes:
 processing your application and refund check and White Form e-Refund payment
instruction(s), where applicable, verif ication of compliance with the terms and
application procedures set out in this prosp ectus and announcing results of allocation
of Hong Kong Offer Shares;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 458 ---
 compliance with applicable laws and re gulations 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 Company ’s register of members;
 verifying identities of applicants for and hol ders 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 pr ofiles of the holder of the H Shares;
 disclosing relevant information t o facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discha rge their obligations to applicants for and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants for and holders of the H Shares may from time to time agree.
4. Transfer of Personal Data
P e r s o n a ld a t ah e l db yt h eC o m p a n ya n dt h eHS h a re 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 outsid e Hong Kong) the personal data to, from or with any
of the following:
 the Company ’s appointed agents such as financial advisors, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar for the purposes of providing its services or
facilities or performing its functions in acc ordance with its rules or procedures and
operating FINI and CCASS (including where applicants for the Hong Kong Offer
Shares request a deposit into CCASS);
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 459 ---
 any agents, contractors or third-party se rvice providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with thei r respective business operations;
 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
purposes 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 for
and holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed or
dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of
Hong Kong).
6. Access to and Correction of Personal Data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and
to correct any data that is inaccurate. The Company and the H Share Registrar have the right to
charge a reasonable fee for the processing of such requests. All requests for access to data or
correction of data should be addressed to the Company, at the Company ’s registered address
disclosed in the section headed ‘‘Corporate Information ’’ in this prospectus or as notified from
time to time, for the attention of the joint compa ny secretaries, or the H Share Registrar for the
attention of the priv acy compliance officer.
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--- page 460 ---
The following is the text of a report, prepare d for the purpose of incorporation in this
prospectus, received from the Reporting Accountants, Ernst & Young, Certified Public
Accountants.
ACCOUNTANTS ’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHUANGDENG GROUP CO., LTD. AND CHINA INTERNATIONAL
CAPITAL CORPORATION HONG KONG SECURITIES LIMITED, HUATAI FINANCIAL
HOLDINGS (HONG KONG) LIMITED AND CCB INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of SHUANGDENG GROUP Co., Ltd. (the
‘‘Company ’’) and its subsidiaries (together, the ‘‘Group ’’) set out on pages I-4 to I-152, which
comprises the consolidated statements of profit or loss, statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years
ended 31 December 2022, 2023 and 2024, and the five months ended 31 May 2025 (the
‘‘Relevant Periods ’’), and the consolidated statements of financial position of the Group and the
statements of financial position of the Compan y as at 31 December 2022, 2023 and 2024 and 31
May 2025 and and material accounting policy information and other explanatory information
(together, the ‘‘Historical Financial Information ’’). The Historical Financial Information set out
on pages I-4 to I-152 forms an integral part of this report, which has been prepared for inclusion
in the prospectus of the Company dated 18 August 2025 (the ‘‘Prospectus ’’) in connection with
the initial listing of the shares of the Comp any on the Main Board of The Stock Exchange of
Hong Kong Limited (the ‘‘Stock Exchange ’’).
Directors ’ responsibility for the Histori cal Financial Information
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in
note 2.1 to the Historical Financial Information, and for such internal control as the directors
determine is necessary to enable the preparation o f the Historical Financial Information that is
free from material misstatement, whether due to fraud or error.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 1


--- page 461 ---
Reporting accountants ’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200
Accountants ’ Reports on Historical Financial
Information in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants ( ‘‘HKICPA ’’). This standard requires that we comply with ethical standards and plan
and perform our work to obtain reasonable assurance about whether the Historical Financial
Information is free from material misstatement.
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, whethe r due to fraud or error. In making those risk
assessments, the reporting accountants cons ider internal contro l relevant to the entity ’s preparation
of the Historical Financial Information that giv es a true and fair view in accordance with the basis
of preparation set out in note 2.1 to the Historical Financial Information in order to design
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity ’s internal control. Our work also included evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overa ll presentation of the Historical Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants ’ report, a true and fair view of the financial position of the Group and the Company
as at 31 December 2022, 2023 and 2024 and 31 May 2025 and of the financial performance and
cash flows of the Group for each of the Relevant Periods in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 2


--- page 462 ---
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which
comprises the consolidated statement of profit or loss, statement of comprehensive income,
statement of changes in equity and statement of cash flows for the five months ended 31 May
2024 and other explanatory information (the ‘‘Interim Comparative Financial Information ’’).
The directors of the Company are responsible for the preparation of the Interim Comparative
Financial Information in accord ance with the basis of preparation set out in note 2.1 to the
Historical Financial Information. Our respons ibility is to express a conclusion on the Interim
Comparative Financial Information based on our review. We conducted our review in accordance
with Hong Kong Standard on Review Engagements 2410
Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the HKICPA. A review consists of
making inquiries, primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially less in scope than an
audit conducted in accordance w ith Hong Kong Standards on Aud iting and consequently does not
enable us to obtain assurance that we would beco me 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 b elieve that the Interim Comparative Financial
Information, for the purposes of the accountants ’ report, is not prepared, in all material respects,
in accordance with the basis of preparation set out in note 2.1 to the Historical Financial
Information.
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 3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which contains information about
the dividends paid by the Company in respect of the Relevant Periods.
Ernst & Young
Certified Public Accountants
Hong Kong
18 August 2025
APPENDIX I ACCOUNTANTS ’ REPORT
I – 3


--- page 463 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of
this accountants ’ report.
The financial statements of the Group for the Relevant Periods, on which the
Historical Financial Information is based, were audited by Ernst & Young in accordance
with International Standards on Auditing issued by the International Auditing and Assurance
Standards Board (the ‘‘Underlying Financial Statements ’’).
The Historical Financial Inform ation is presented in Renminbi ( ‘‘RMB’’) and all values
are rounded to the nearest thousand (RMB ’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 4


--- page 464 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
REVENUES ..................... 5 4,072,480 4,259,777 4,498,522 1,394,185 1,866,608
C o s to fs a l e s .................... ( 3 , 382,884) (3,393,009) (3,747,639) (1,119,099) (1,588,050)
G r o s sp r o f i t..................... 689,596 866,768 750,883 275,086 278,558
O t h e ri n c o m ea n dg a i n s .............. 5 50,614 77,718 115,584 37,727 40,533
S e l l i n ga n dm a r k e t i n ge x p e n s e s ......... ( 100,255) (151,785) (138,043) (50,102) (53,254)
A d m i n i s t r a t i v ee x p e n s e s .............. ( 126,516) (162,748) (156,470) (50,506) (45,672)
R e s e a r c ha n dd e v e l o p m e n tc o s t s ......... ( 100,676) (112,803) (110,478) (44,089) (55,249)
Impairment losses on financial and contract
a s s e t s ,n e t..................... ( 2 2 , 6 0 7 ) ( 6 , 3 4 7 ) ( 1 9 , 1 8 1 ) 3 , 9 0 8 ( 1 0 )
O t h e re x p e n s e s................... ( 2 1 , 4 6 7 ) ( 3 4 , 1 4 5 ) ( 2 0 , 1 6 9 ) ( 5 , 6 6 3 ) ( 1 1 , 5 5 6 )
F i n a n c ec o s t s.................... 7 (49,372) (30,005) (19,842) (5,626) (12,002)
Share of profits and losses of an associate . . (647) (475) 428 296 32
PROFIT BEFORE TAX ............. 6 318,670 446,178 402,712 161,031 141,380
I n c o m et a xe x p e n s e ................ 10 (37,645) (60,975) (49,381) (21,339) (14,677)
PROFIT FOR THE YEAR/PERIOD . . . . . 281,025 385,203 353,331 139,692 126,703
Attributable to:
O w n e r so ft h ep a r e n t .............. 281,019 385,203 353,331 139,692 126,703
N o n - c o n t r o l l i n gi n t e r e s t s ............ 6 ––––
281,025 385,203 353,331 139,692 126,703
EARNINGS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT
Basic:
P r o f i tf o rt h ey e a r / p e r i o d( R M B )....... 12 0.85 1.08 0.99 0.39 0.35
Diluted:
P r o f i tf o rt h ey e a r / p e r i o d( R M B )....... 12 0.85 1.08 0.99 0.39 0.35
APPENDIX I ACCOUNTANTS ’ REPORT
I – 5


--- page 465 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
PROFIT FOR THE YEAR/PERIOD . . . . . 281,025 385,203 353,331 139,692 126,703
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences:
Exchange differences on translation of foreign
o p e r a t i o n s ..................... ( 3 9 ) ( 3 6 ) 2 3 3 6 2 1 8
Net other comprehensive income that may be
reclassified to profit or loss in subsequent
p e r i o d s....................... ( 3 9 ) ( 3 6 ) 2 3 3 6 2 1 8
OTHER COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD, NET OF TAX (39) (36) 233 62 18
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD .......... 280,986 385,167 353,564 139,754 126,721
Attributable to:
O w n e r so ft h ep a r e n t .............. 280,969 385,167 353,564 139,754 126,721
N o n - c o n t r o l l i n gi n t e r e s t s ............ 1 7 ––––
280,986 385,167 353,564 139,754 126,721
APPENDIX I ACCOUNTANTS ’ REPORT
I – 6


--- page 466 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December As at 31 May
2022 2023 2024 2025
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000
NON-CURRENT ASSETS
P r o p e r t y ,p l a n ta n de q u i p m e n t ........... 13 832,046 1,084,247 1,217,124 1,181,807
R i g h t - o f - u s ea s s e t s .................. 14 135,628 156,706 165,108 163,237
O t h e ri n t a n g i b l ea s s e t s ............... 18 7,352 7,149 8,321 7,788
I n v e s t m e n ti na na s s o c i a t e............. 16 16,813 16,338 16,766 16,798
Prepayments, other receivables and other assets 17 2,686 7,144 2,358 1,748
C o n t r a c ta s s e t s .................... 21 6,908 8,410 13,154 13,284
D e f e r r e dt a xa s s e t s .................. 15 46,496 67,188 74,113 81,479
R e s t r i c t e dc a s h.................... 24 – 35,392 23,567 24,401
Total non-current assets . . . ............ 1 , 047,929 1,382,574 1,520,511 1,490,542
CURRENT ASSETS
I n v e n t o r i e s ....................... 19 536,962 459,234 513,506 773,779
Trade and bills receivables . ............ 20 1,862,211 1,609,318 2,318,281 2,386,563
C o n t r a c ta s s e t s .................... 21 1,608 7,020 546 729
Prepayments, other receivables and other assets 17 82,730 63,930 85,290 127,041
Financial assets at fair value through profit or
l o s s ......................... 22 –– 86,000 –
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s .......... 22 –– 3,355 –
D u ef r o mar e l a t e dp a r t y.............. 39 ––– 1,051
Debt investments at fair value through other
c o m p r e h e n s i v ei n c o m e .............. 23 6,909 15,655 3,073 2,225
R e s t r i c t e dc a s h.................... 24 228,740 303,497 235,134 214,592
C a s ha n dc a s he q u i v a l e n t s............. 24 270,264 479,040 395,234 616,940
2,989,424 2,937,694 3,640,419 4,122,920
Assets of a disposal group classified as held for
s a l e ......................... 25 – 7,634 ––
T o t a lc u r r e n ta s s e t s ................. 2 , 989,424 2,945,328 3,640,419 4,122,920
APPENDIX I ACCOUNTANTS ’ REPORT
I – 7


--- page 467 ---
As at 31 December As at 31 May
2022 2023 2024 2025
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000
CURRENT LIABILITIES
T r a d ea n db i l l sp a y a b l e s .............. 26 701,876 837,172 973,979 1,225,637
Other payables and accruals ............ 27 411,361 413,314 558,678 525,392
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s .......... 22 –– 842 489
C o n t r a c tl i a b i l i t i e s.................. 28 36,778 63,014 39,640 39,897
Interest-bearing bank and other borrowings . . . 29 944,845 410,528 673,333 847,726
Deferred government grants ............ 30 12,817 17,633 20,878 20,992
L e a s el i a b i l i t i e s .................... 14 5,128 6,496 8,017 6,802
T a xp a y a b l e...................... 2 5 , 6 6 6 2 9 , 6 7 0 2 7 , 9 0 8 8 , 9 7 1
D u et or e l a t e dp a r t i e s................ 39 4,834 3,771 5,720 10,993
P r o v i s i o n s....................... 31 7,300 7,794 7,158 7,893
2,150,605 1,789,392 2,316,153 2,694,792
Liabilities directly associated with the assets
c l a s s i f i e da sh e l df o rs a l e ............ 25 – 1,472 ––
T o t a lc u r r e n tl i a b i l i t i e s ............... 2 , 150,605 1,790,864 2,316,153 2,694,792
NET CURRENT ASSETS ............. 838,819 1,154,464 1,324,266 1,428,128
TOTAL ASSETS LESS CURRENT
LIABILITIES ................... 1 , 886,748 2,537,038 2,844,777 2,918,670
NON-CURRENT LIABILITIES
Interest-bearing bank and other borrowings . . . 29 51,200 297,425 255,404 259,270
Deferred government grants ............ 30 73,252 118,490 161,621 156,722
L e a s el i a b i l i t i e s .................... 14 4,864 3,893 8,597 8,306
P r o v i s i o n s....................... 31 29,304 32,069 31,694 33,900
Total non-current liabilities. ............ 158,620 451,877 457,316 458,198
N e ta s s e t s ....................... 1 , 728,128 2,085,161 2,387,461 2,460,472
EQUITY
Equity attributable to owners of the parent
S h a r ec a p i t a l ...................... 32 358,269 358,269 358,269 358,269
R e s e r v e s........................ 33 1,369,859 1,726,892 2,029,192 2,102,203
1,728,128 2,085,161 2,387,461 2,460,472
T o t a le q u i t y...................... 1 , 728,128 2,085,161 2,387,461 2,460,472
APPENDIX I ACCOUNTANTS ’ REPORT
I – 8


--- page 468 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYYear ended 31 December 2022
Attributable to owners of the parent
Notes Share capital
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Exchange
fluctuation
reserve
Retained
profits Total
Non-
controlling
interests Total Equity
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
At 1 January 2022 . 330,000 63,475 19,216 93,497 (715) 545,611 1,051,084 6 1,051,090
Profit for the year. . ––––– 281,019 281,019 6 281,025
Other
comprehensive
income for the
year:
Exchange
differences on
translation of
foreign operations . –––– (50) – (50) 11 (39)
Total
comprehensive
income for the
y e a r .......... –––– (50) 281,019 280,969 17 280,986
Issue of shares . . . .
32 28,269 357,217 –––– 385,486 – 385,486
Share-based
compensation
r e s e r v e........
34 –– 10,589 ––– 10,589 – 10,589
Appropriation to
statutory reserves . ––– 24,238 – (24,238) –––
Withdrawal of non-
controlling
i n t e r e s t s ....... ––––––– (23) (23)
At 31 December
2022 . . . . . . . . . 358,269 420,692* 29,805* 117,735* (765)* 802,392* 1,728,128 – 1,728,128
APPENDIX I ACCOUNTANTS ’ REPORT
I – 9


--- page 469 ---
Year ended 31 December 2023
Attributable to owners of the parent
Notes Share capital
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Exchange
fluctuation
reserve
Retained
profits Total Equity
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
At 1 January 2023 . . . . . . . . . . . . . . . . . . . . . . 358,269 420,692 29,805 117,735 (765) 802,392 1,728,128
P r o f i tf o rt h ey e a r ....................... ––––– 385,203 385,203
Other comprehensive income for the year:
Exchange differences on translation of foreign
o p e r a t i o n s ........................... –––– (36) – (36)
Total comprehensive income for the year. . . . . . . . –––– (36) 385,203 385,167
S h a r e - b a s e dc o m p e n s a t i o nr e s e r v e ............
34 –– 20,232 ––– 20,232
D i v i d e n d .............................
11 ––––– (48,366) (48,366)
A p p r o p r i a t i o nt os t a t u t o r yr e s e r v e s ............ ––– 38,817 – (38,817) –
At 31 December 2023 . . . . . . . . . . . . . . . . . . . . 358,269 420,692* 50,037* 156,552* (801)* 1,100,412* 2,085,161
APPENDIX I ACCOUNTANTS ’ REPORT
I – 10


--- page 470 ---
Year ended 31 December 2024
Attributable to owners of the parent
Notes Share capital
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Exchange
fluctuation
reserve
Retained
profits Total Equity
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2024 . . . 358,269 420,692 50,037 156,552 (801) 1,100,412 2,085,161
Profit for the year. . . . ––––– 353,331 353,331
Other comprehensive
income for the year:
Exchange differences
on translation of
foreign operations . . –––– 233 – 233
Total comprehensive
income for the year . –––– 233 353,331 353,564
Share-based
compensation
r e s e r v e ..........
34 –– 22,539 ––– 22,539
D i v i d e n d .......... 11 ––––– (73,803) (73,803)
Appropriation to
statutory reserves . . . ––– 29,970 – (29,970) –
At 31 December 2024 . 358,269 420,692* 72,576* 186,522* (568)* 1,349,970* 2,387,461
Five months ended 31 May 2024
Attributable to owners of the parent
Note Share capital
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Exchange
fluctuation
reserve
Retained
profits Total Equity
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2024 . . . 358,269 420,692 50,037 156,552 (801) 1,100,412 2,085,161
Profit for the period
(unaudited) . . . . . . . ––––– 139,692 139,692
Other comprehensive
income for the period
(unaudited):
Exchange differences
on translation of
foreign operations
(unaudited) . . . . . . . –––– 62 – 62
Total comprehensive
income for the period
(unaudited) . . . . . . . –––– 62 139,692 139,754
Share-based
compensation reserve
(unaudited) . . . . . . .
34 –– 9,380 ––– 9,380
At 31 May 2024
(unaudited) . . . . . . . 358,269 420,692 59,417 156,552 (739) 1,240,104 2,234,295
APPENDIX I ACCOUNTANTS ’ REPORT
I – 11


--- page 471 ---
Five months ended 31 May 2025
Attributable to owners of the parent
Notes Share capital
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Exchange
fluctuation
reserve
Retained
profits Total Equity
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2025 . . . 358,269 420,692 72,576 186,522 (568) 1,349,970 2,387,461
Profit for the period . . ––––– 126,703 126,703
Other comprehensive
income for the period:
Exchange differences
on translation of
foreign operations . . –––– 18 – 18
Total comprehensive
income for the period –––– 18 126,703 126,721
Share-based
compensation reserve 34 –– 7,196 ––– 7,196
D i v i d e n d .......... 11 ––––– (60,906) (60,906)
At 31 May 2025. . . . . 358,269 420,692* 79,772* 186,522* (550)* 1,415,767* 2,460,472
* These reserve accounts comprise the consolidated reserves of RMB1,369,859,000, RMB1,726,892,000,
RMB2,029,192,000 and RMB2, 102,203,000 in the consolidated statemen ts of financial position as at 31 December
2022, 2023 and 2024 and 31 May 2025, respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 12


--- page 472 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
CASH FLOWS FROM OPERATING
ACTIVITIES
P r o f i tb e f o r et a x .................. 318,670 446,178 402,712 161,031 141,380
Adjustments for:
F i n a n c ec o s t s.................... 7 49,372 30,005 19,842 5,626 12,002
Share of profits and losses of an associate . . 647 475 (428) (296) (32)
I n t e r e s ti n c o m e................... 5 (3,402) (19,260) (14,814) (5,990) (4,012)
(Gain)/loss on disposal of items of property,
p l a n ta n de q u i p m e n t.............. ( 1 1 0 ) ( 3 5 ) ( 1 5 ) – 17
Gain on disposal of right-of-use assets . . . . – (40) –– (22)
L o s so nd i s p o s a lo fas u b s i d i a r y ........ 35 –– 147 ––
Gain on financial assets at fair value through
p r o f i to rl o s s .................. –––– (914)
Loss/(gain) on derivative financial instruments –– 2,748 – (1,535)
Fair value (gain)/loss on derivative financial
i n s t r u m e n t s .................... 22 –– (2,513) – 3,002
Depreciation of items of property, plant and
e q u i p m e n t .................... 13 116,642 110,371 126,283 44,368 63,560
D e p r e c i a t i o no fr i g h t - o f - u s ea s s e t s ....... 14 9,176 9,473 12,925 5,022 6,652
Amortisation of other intangible assets . . . . 18 2,275 2,557 3,623 1,464 1,274
Amortisation of deferred government grants . 30 (13,800) (16,811) (18,521) (7,137) (8,785)
Provision/(reversal of provision) for trade and
bills receivables and contract assets, net . . 22,105 6,687 18,185 (5,151) (717)
Provision/(reversal of provision) for
prepayments, other receivables and other
a s s e t s ,n e t .................... 5 0 2 ( 3 4 0 ) 9 9 6 1 , 2 4 3 7 2 7
Impairment losses on assets of a disposal
g r o u pc l a s s i f i e da sh e l df o rs a l e ....... 25 – 15,747 –––
I m p a i r m e n to fi n v e n t o r i e s ............. 19 1,030 39,011 (22,338) (18,216) (552)
F o r e i g ne x c h a n g ed i f f e r e n c e s ,n e t ........ ( 1 7 , 4 7 6 ) ( 1 2 , 2 8 9 ) ( 1 0 , 6 2 6 ) ( 3 , 9 6 9 ) ( 3 , 7 4 6 )
S h a r ei n c e n t i v ep l a ne x p e n s e ........... 1 0 , 5 8 9 2 0 , 2 3 2 2 2 , 5 3 9 9 , 3 8 0 7 , 1 9 6
496,220 631,961 540,745 187,375 215,495
APPENDIX I ACCOUNTANTS ’ REPORT
I – 13


--- page 473 ---
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
(Increase)/decrease in trade and bills
r e c e i v a b l e sa n dc o n t r a c ta s s e t s ........ ( 657,377) 229,095 (712,836) (4,649) (67,030)
Decrease/(increase) in prepayments, other
r e c e i v a b l e sa n do t h e ra s s e t s ......... 8 2 , 2 1 0 1 7 , 2 8 7 ( 1 3 , 0 9 3 ) ( 8 5 , 9 6 2 ) ( 4 2 , 6 5 5 )
Increase in due from a related party . . . . . . –––– (1,051)
(Increase)/decrease in amounts due to related
p a r t i e s ....................... ( 3 9 4 ) ( 1 , 0 6 3 ) 1 , 9 4 9 2 , 0 3 0 4 , 8 7 1
( I n c r e a s e ) / d e c r e a s ei ni n v e n t o r i e s........ ( 9 4 , 3 3 7 ) 3 8 , 7 1 7 ( 3 1 , 9 3 4 ) ( 113,738) (259,721)
Increase/(decrease) in trade and bills payables 136,379 135,296 449,989 (109,763) 534,002
Increase/(decrease) in other payables and
accruals . . . ................... 5 2 , 7 4 1 ( 4 , 1 3 2 ) 1 4 , 0 1 0 ( 1 6 , 8 9 4 ) 5 , 6 5 4
I n c r e a s e / ( d e c r e a s e )i np r o v i s i o n......... 7 , 8 4 6 3 , 2 5 9 ( 1 , 0 1 1 ) ( 1 , 5 1 3 ) 2 , 9 4 1
(Decrease)/increase in contract liabili ties . . . (8,552) 26,236 (23,374) 46,264 257
Decrease in deferred government grants . . . . (900) (900) –––
Decrease/(increase) in restricted cas h. . . . . . 1,234 (110,149) 80,188 120,262 19,708
Cash flows generated from operating
a c t i v i t i e s..................... 1 5 , 0 7 0 965,607 304,633 23,412 412,471
Interest received . . . ............... 3 , 4 0 2 1 9 , 2 6 0 1 4 , 8 1 4 5 , 9 9 0 4 , 0 1 2
I n c o m et a x e sp a i d ................. ( 3 , 0 9 7 ) ( 7 7 , 6 5 3 ) ( 5 8 , 0 6 8 ) ( 4 1 , 3 5 3 ) ( 4 0 , 9 8 0 )
Net cash flows generated from operating/
( u s e di n )a c t i v i t i e s............... 1 5 , 3 7 5 907,214 261,379 (11,951) 375,503
continued/...
APPENDIX I ACCOUNTANTS ’ REPORT
I – 14


--- page 474 ---
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of items of property, plant and
e q u i p m e n t .................... ( 8 0 , 6 1 9 ) ( 382,245) (155,639) (95,794) (126,722)
Proceeds from disposal of items of property,
p l a n ta n de q u i p m e n t.............. 1 , 7 3 5 2 , 8 1 0 5 , 0 5 7 9 3 3 6 7
P u r c h a s eo fr i g h t - o f - u s ea s s e t s .......... – (24,922) (6,520) (92) –
P u r c h a s eo fo t h e ri n t a n g i b l ea s s e t s ....... ( 3 , 8 2 4 ) ( 2 , 3 5 4 ) ( 4 , 7 9 5 ) ( 3 , 4 8 2 ) ( 7 4 1 )
Receipt of government grants for property,
p l a n ta n de q u i p m e n t.............. 2 6 , 0 0 0 6 8 , 3 9 5 6 4 , 8 9 7 4 0 , 1 4 0 4 , 0 0 0
D i s p o s a lo fas u b s i d i a r y ............. 35 –– 5,640 ––
Purchase of items of financial assets at fair
value through profit or loss . . ....... –– (86,000) ––
Purchase of derivative financial instruments . –– (12,251) ––
Sold of items of derivative financial
i n s t r u m e n t s .................... –––– 2,322
Proceeds from disposal of financial assets at
fair value through profit or loss ....... 1 , 0 0 0 ––– 86,914
Recovery of value-added tax attributable to
the acquisition of property, plant, and
e q u i p m e n t .................... –– 35,127 ––
Net cash flows used in investing activities . . (55,708) (338,316) (154,484) (59,135) (33,860)
CASH FLOWS FROM FINANCING
ACTIVITIES
P r o c e e d sf r o mi s s u eo fs h a r e s .......... 385,486 ––––
Withdrawal of non-controlling interests . . . . (23) ––––
N e wb a n kl o a n s ................... 1 , 676,311 1,005,160 358,172 100,871 145,361
R e p a y m e n to fb a n kl o a n s ............. ( 1 , 822,564) (1,297,556) (452,251) (232,054) (249,480)
D i v i d e n d sp a i d................... – (48,366) (73,803) ––
I n t e r e s tp a i d ..................... ( 4 8 , 8 3 7 ) ( 2 9 , 6 1 4 ) ( 1 9 , 3 1 1 ) ( 5 , 4 0 1 ) ( 1 1 , 7 6 9 )
P a y m e n to fl i s t i n ge x p e n s e s........... –– (7,477) – (714)
P r i n c i p a lp o r t i o no fl e a s ep a y m e n t s ....... ( 5 , 7 5 8 ) ( 5 , 3 7 0 ) ( 8 , 5 8 2 ) ( 3 , 6 0 6 ) ( 6 , 2 7 2 )
I n t e r e s tp a i df o rl e a s ep a y m e n t s ......... ( 5 3 5 ) ( 3 9 1 ) ( 5 3 1 ) ( 2 2 5 ) ( 2 3 3 )
Net cash flows generated from/(used in)
f i n a n c i n ga c t i v i t i e s ............... 184,080 (376,137) (203,783) (140,415) (123,107)
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 475 ---
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS ........ 143,747 192,761 (96,888) (211,501) 218,536
Cash and cash equivalents at beginning of
y e a r / p e r i o d .................... 9 9 , 0 3 2 270,264 479,582 479,582 395,234
Effect of foreign exchange rate changes, net . 27,485 16,557 12,540 4,053 3,170
CASH AND CASH EQUIVALENTS AT
END OF YEAR/PERIOD .......... 270,264 479,582 395,234 272,134 616,940
ANALYSIS OF BALANCES OF CASH
AND CASH EQUIVALENTS
C a s ha n db a n kb a l a n c e s .............. 270,264 479,040 395,234 271,989 616,940
Cash and cash equivalents as stated in the
s t a t e m e n t so ff i n a n c i a lp o s i t i o n....... 24 270,264 479,040 395,234 271,989 616,940
Cash and cash equivalents included in assets
of a disposal group classified as held for
s a l e ........................ 25 – 542 – 145 –
Cash and cash equivalents as stated in the
s t a t e m e n t so fc a s hf l o w s ........... 270,264 479,582 395,234 272,134 616,940
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 476 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
31 May
2022 2023 2024 2025
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000
NON-CURRENT ASSETS
P r o p e r t y ,p l a n ta n de q u i p m e n t ................. 13 329,326 351,976 345,875 336,174
R i g h t - o f - u s ea s s e t s ........................ 14 85,418 84,407 83,474 83,297
O t h e ri n t a n g i b l ea s s e t s ..................... 18 4,675 5,009 5,746 5,218
I n v e s t m e n ti na na s s o c i a t e................... 16 10,310 9,836 10,263 10,295
I n v e s t m e n t si ns u b s i d i a r i e s ................... 1 190,945 280,960 297,015 297,697
Prepayments, other receivables and other assets . . . . . . 17 1,234 4,910 1,567 953
C o n t r a c ta s s e t s .......................... 21 6,908 8,410 13,154 13,284
D e f e r r e dt a xa s s e t s ........................ 15 33,123 44,767 42,767 43,219
R e s t r i c t e dc a s h.......................... 24 – 34,816 22,992 23,825
Total non-current assets . . . .................. 661,939 825,091 822,853 813,962
CURRENT ASSETS
I n v e n t o r i e s ............................. 19 383,540 358,128 331,651 541,540
Trade and bills receivables . .................. 20 1,849,593 1,606,630 2,287,046 2,288,934
C o n t r a c ta s s e t s .......................... 21 1,608 7,020 546 729
Prepayments, other receivables and other assets . . . . . . 17 42,900 28,077 75,640 95,691
Financial assets at fair value through profit or loss . . . . 22 –– 86,000 –
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ................ 22 –– 3,355 –
Debt investments at fair value through other
c o m p r e h e n s i v ei n c o m e .................... 23 6,252 15,655 3,073 2,061
D u ef r o mr e l a t e dp a r t i e s .................... 39 55,911 28,231 82,024 152,842
R e s t r i c t e dc a s h.......................... 24 195,944 241,617 199,500 170,229
C a s ha n dc a s he q u i v a l e n t s................... 24 220,582 455,382 349,502 587,911
T o t a lc u r r e n ta s s e t s ....................... 2 , 756,330 2,740,740 3,418,337 3,839,937
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 477 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY (continued)
As at 31 December
As at
31 May
2022 2023 2024 2025
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000
CURRENT LIABILITIES
T r a d ea n db i l l sp a y a b l e s .................... 26 459,342 486,909 667,276 731,867
Other payables and accruals .................. 27 259,438 275,087 285,840 305,106
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ................ 22 –– 842 489
C o n t r a c tl i a b i l i t i e s........................ 28 36,251 57,880 36,470 38,087
I n t e r e s t - b e a r i n gb a n ka n do t h e rb o r r o w i n g s ......... 29 737,012 349,617 625,642 785,939
Deferred government grants .................. 30 8,926 10,637 10,797 10,650
L e a s el i a b i l i t i e s .......................... 14 5,163 6,496 6,917 6,229
T a xp a y a b l e............................ 2 1 , 2 7 8 1 5 , 3 4 5 2 2 , 3 7 4 6 , 6 1 7
D u et or e l a t e dp a r t i e s...................... 39 153,137 190,438 179,331 355,482
P r o v i s i o n s............................. 31 7,300 7,794 7,158 7,893
T o t a lc u r r e n tl i a b i l i t i e s ..................... 1 , 687,847 1,400,203 1,842,647 2,248,359
NET CURRENT ASSETS ................... 1 , 068,483 1,340,537 1,575,690 1,591,578
TOTAL ASSETS LESS CURRENT LIABILITIES . . . 1,730,422 2,165,628 2,398,543 2,405,540
NON-CURRENT LIABILITIES
I n t e r e s t - b e a r i n gb a n ka n do t h e rb o r r o w i n g s ......... 29 – 69,000 60,000 –
Deferred government grants .................. 30 38,725 53,618 46,737 42,391
L e a s el i a b i l i t i e s .......................... 14 4,042 3,893 4,624 4,641
P r o v i s i o n s............................. 31 29,304 32,069 31,694 33,900
Total non-current liabilities. .................. 7 2 , 0 7 1 158,580 143,055 80,932
N e ta s s e t s ............................. 1 , 658,351 2,007,048 2,255,488 2,324,608
EQUITY
S h a r ec a p i t a l ............................ 32 358,269 358,269 358,269 358,269
O t h e rr e s e r v e s ........................... 33 1,300,082 1,648,779 1,897,219 1,966,339
T o t a le q u i t y............................ 1 , 658,351 2,007,048 2,255,488 2,324,608
APPENDIX I ACCOUNTANTS ’ REPORT
I – 18


--- page 478 ---
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
SHUANGDENG GROUP Co., Ltd. (the ‘‘Company ’’, formerly known as ‘‘JIANGSU
SHUANGDENG Co., Ltd. ’’) was a joint stock company with limited liability established in
the People ’s Republic of China ( ‘‘PRC’’) on 28 December 2011 by Mr. Yang Shanji （楊善
基）,M r .Q i a nS h a n ’gao（錢善高）, Mr. Zhu Shiping （祝士平）, Mr. Zhou Yuezhang （周躍
章）, Mr. Zhou Ping （周平）,M r .Z h o uW e i g a n g（周偉鋼）and Mr. Zhai Lifeng （翟立鋒）.
The registered office of the Company is located at No. 999, Tianmu West Road, Jiangyan
Economic Development Zone, Taizhou, Jiangsu Province, PRC.
During the Relevant Periods, the Comp any and its subsidiaries (together, the
‘‘Group ’’) are principally engaged in the research and development, manufacture and sale
of lead-acid energy storage battery products a nd lithium-ion energy storage battery products.
As at the date of this report, the Company had direct and indirect interests in its
subsidiaries, all of which are private limited liability companies, the particulars of which are
set out below:
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 479 ---
Name* Notes Place and date of incorporation
Registered
paid-in capital
Percentage of equity
attributable
to the Company Principal activities
Direct Indirect
Hubei Shuangdeng Runyoung New Energy Co.,
Ltd.*（「湖北雙登潤陽新能源有限公司」）
(‘‘Shuangdeng Runyoung ’’) .............
(a) Hubei
20-July-2007
RMB56,000,000 100 – Lead-acid energy
storage battery
research and
development,
production and sales
Beijing Shuangdeng Huifeng Juneng
Technology Co., Ltd.*
（「北京雙登慧峰聚能科技有限公司」）
(‘‘Huifeng Juneng ’’)..................
(b) Beijing
5-March-2012
RMB30,000,000 100 – Battery research and
development
Jiangsu Shuangdeng Front New Energy Co.,
Ltd.*（「江蘇雙登富朗特新能源有限公司」）
(‘‘Shuangdeng Front ’’)................
(c) Shanghai
13-Nov-2006
RMB75,466,200 100 – Lithium-ion energy
storage battery
research and
development
production and sales
Hubei Shuangdeng Energy Storage Technology
Co., Ltd.*（「湖北雙登儲能科技有限公司」）
(‘‘Shuangdeng Energy Storage ’’).........
(d) Hubei
23-Dec-2022
RMB100,000,000 100 – Lithium-ion energy
storage battery
research and
development
production and sales
APPENDIX I ACCOUNTANTS ’ REPORT
I – 20


--- page 480 ---
Name* Notes Place and date of incorporation
Registered
paid-in capital
Percentage of equity
attributable
to the Company Principal activities
Direct Indirect
SHUANGDENG HOLDINGS INC.
(‘‘US Shoto ’’) .......................
(e) United States
29-Oct-2019
USD1,000,000 100 – Shareholding platform
SHOTO ENERGY LLC ( ‘‘SHOTO ENERGY ’’)
(f) United States
21-Nov-2019
USD300,000 – 100 Energy storage battery
sales
SHOTO SINGAPORE PTE. LTD.
(‘‘SINGAPORE SHOTO ’’) .............
(g) Singapore
12-Jan-2023
SGD10,000 100 – Shareholding platform
SHOTO ENERGY PTE. LTD. ( ‘‘SINGAPORE
SHOTO ENERGY ’’) ..................
(h) Singapore
21-March-2023
SGD10,000 – 100 Energy storage battery
sales
SHOTO TECHNOLOGY (MALAYSIA)
SDN.BHD. ( ‘‘Malaysia SHOTO ’’) ........
(i) Malaysia
18-March-2024
RM1,000 – 100 Energy storage battery
production and sales
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 481 ---
(a) Shuangdeng Runyoung is registered as a limited liability company under PRC law. The statutory financial
statements for the year ended 31 December 2022, prepared under PRC Generally Accepted Accounting Principles
(‘‘PRC GAAP ’’) were audited by Jiangsu Mingrui Accounting F irm Ltd., a certified p ublic accounting firm
registered in the PRC. The st atutory financial statements for this en tity for the years ended 31 December 2023 and
2024, prepared under PRC Generally Accepted Accounting Principles ( ‘‘PRC GAAP ’’) were audited by Hubei
Huaren Zhiyuan Accounting Fir m, a certified public accounting firm registered in the PRC.
(b) Huifeng Juneng is registered as a limited liability co mpany under PRC law. No audited financial statements have
been prepared for this entity for the years ended 31 Dece mber 2022, 2023 and 2 024, as the entity was not subject to
any statutory audit requirements under the relevant ru les and regulations in its juri sdiction of incorporation.
(c) Shuangdeng Front is re gistered as a limited liability company under PRC law. The statutory fina ncial statements for
the years ended 31 December 2022 a nd 2023, prepared under PRC GAAP were audited by Jiangsu Mingrui
Accounting Firm Ltd., a certified public accounting firm registered in the PRC. The statutory financial statements
for the year ended 31 December 2024 , prepared under PRC GAAP where audi ted by Shanghai Certified Public
Accountants (Special General Partners), a certified public accounting firm registered in the PRC.
(d) Shuangdeng Energy Storage is registered as a limited liability company under PRC law. No audited financial
statements have been prepared for this entity for the ye ars ended 31 December 2022 and 2023, as the entity was not
subject to any statutory audit requirements under the relevant rules and regulations in its jurisdiction of
incorporation. The statutory financial statements for the year ended 31 December 2024, prepared under PRC
Generally Accepted A ccounting Principles ( ‘‘PRC GAAP ’’) were audited by Hubei Huaren Zhiyuan Accounting
Firm, a certified public accountin g firm registered in the PRC.
(e) US Shoto is registered as a limited liability company unde r United States law. No audite d financial statements have
been prepared for this entity for the years ended 31 Dece mber 2022, 2023 and 2 024, as the entity was not subject to
any statutory audit requirements under the relevant ru les and regulations in its juri sdiction of incorporation.
(f) SHOTO ENERGY is registered as a limited liability co mpany under United States law. No audited financial
statements have been prepared for this entity for the years ended 31 December 2022, 2023 and 2024, as the entity
was not subject to any statutory audit requirements under the relevant rules and regulations in its jurisdiction of
incorporation.
(g) SINGAPORE SHOTO is regist ered as a limited liability company under Singa pore law. The statutory financial
statements for the year ended 31 December 2023, prepared under Financial Reporting Standards of Singapore
(‘‘FRSs ’’) were audited by ACHIEVE PAC PUBLIC ACCOUNTANTS AND CHARTERED ACCOUNTANTS,
SINGAPORE, a certified public accountin g firm registered in Singa pore. The statutory financ ial statements for the
year ended 31 Decem ber 2024, prepared unde r FRSs were audited by Ernst & Young LLP, SINGAPORE, a certified
public accounting firm registered in Singapore.
(h) SINGAPORE SHOTO ENERGY is registe red as a limited liability company under Singapore law . The statutory
financial statements for the year ended 31 December 2023, prepared under FRSs were audited by ACHIEVE PAC
PUBLIC ACCOUNTANTS AND CHARTERED ACCOUNTANTS, SI NGAPORE, a certified public accounting firm
registered in Singapore. The statutory financial statements for the year ended 31 December 2024, prepared under
FRSs were audited by Ernst & Young LLP, SINGAPORE, a certified public accounting firm registered in
Singapore.
(i) Malaysia SHOTO is registered as a lim ited liability company under Malaysia law. The statu tory financial statements
for the year ended 31 December 2024, prepared un der Malaysian Private Entities Reporting Sta ndard and the
requirements of the Companies Act 2016 in Malaysia were audited by M essrs. DAXIN KF&C PLT, a certified
public accounting firm reg istered in Malaysia.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 482 ---
The Group was ultimately controlled by Mr. Yang Shanji.
The following table illustrates the details of investments in subsidiaries of the
Company:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Shuangdeng Runyoung . . . .......................... 5 0 , 8 5 0 5 1 , 5 8 1 5 2 , 0 3 0 5 2 , 0 5 1
H u i f e n gP o l yE n e r g y .............................. 3 0 , 0 3 0 3 1 , 1 3 2 3 2 , 1 9 4 3 2 , 5 1 4
Shuangdeng Front . . .............................. 106,915 107,689 108,349 108,356
C h i n a s h o t oF r a n c eS A S * * ........................... 3 8 4 –––
Shuangdeng Energy Storage .......................... – 87,740 101,629 101,963
Pakistan Shoto***** . .............................. 5 5 ––
U SS h o t o ...................................... 2 , 7 6 1 2 , 7 6 1 2 , 7 6 1 2 , 7 6 1
S I N G A P O R ES H O T O .............................. – 52 52 52
FU SHUANG INVESTMENT LIMITED *** . ............... ––––
Anhui Shuangdeng New Energy Co., Ltd.
（安徽雙登新能源有限公司）
(‘‘Anhui Shuangdeng ’’)**** . . ...................... ––––
T o t a l ........................................ 190,945 280,960 297,015 297,697
* The English names of these companies registered in the PRC represent the translated names of these companies as
no English names have been registered.
** The company was deregistered in April 2023.
*** The company was deregistered in October 2022 and the paid-in capital is HKD 1.00.
**** The company was deregistered in May 2023 and the paid-in capital is nil.
***** The company was deregistered in December 2024.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 483 ---
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS
Accounting Standards, which comprise all stan dards and interpretations approved by the
International Accounting Standards Board. All IFRS Accounting Standards effective for the
accounting period commencing from 1 January 2025, together with the relevant transitional
provisions, have been consistently applied by the Group in the preparation of the Historical
Financial Information throughout the Relevant Periods and in the period covered by the
Interim Comparative Financial Information.
The Historical Financial Information has been prepared under the historical cost
convention, except for wealth management produc ts, bills receivables classified as financial
assets at fair value through other comprehensiv e income and derivative financial instruments
which have been measured at fair value. Disposal groups held for sale are stated at the lower
of their carrying amounts and fair values less c osts to sell as further explained in note 2.3.
The Historical Financial Information is presented in RMB and all values are rounded to the
nearest thousand except when otherwise indicated.
Basis of consolidation
The Historical Financial Information i ncludes the financial statements of the
Company and its subsidiaries (collectively referred to as the ‘‘Group ’’)f o rt h e
Relevant Periods. A subsidiary is an entity (i ncluding a structured entity), directly or
indirectly, controlled by the Company. Control is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee (i.e., existing rights
that give the Group the current ability to dir ect the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in
control. When the Company has less than a ma jority of the voting or similar rights of
an investee, the Group considers all relevant facts and circumstances in assessing
whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group ’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting
period as the Company, using consistent accounting policies. The results of
subsidiaries are consolidated from the date on which the Group obtains control, and
continue to be consolidated until the date that such control ceases.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 24


--- page 484 ---
Profit or loss and each component of other comprehensive income are attributed
to the owners of the parent of the Group and to the non-controlling interests, even if
this results in the non-controlling interests having a deficit balance. All intra-group
assets and liabilities, equity, income, expe nses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three elements of
control described above. A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidia ry, it derecognises the related assets
(including goodwill), liabi lities, any non-controlling interest and the exchange
fluctuation reserve; and recognises the fair value of any investment retained and any
resulting surplus or deficit in profit or loss. The Group ’s share of components
previously recognised in other comprehensive income is reclassified to profit or loss or
retained profits, as appropriate, on the same basis as would be required if the Group
had directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and amended IFRS Accounting
Standards, that have been issued but are not yet effective, in Historical Financial
Information. The Group intends to apply these new and amended IFRS Accounting
Standards, if applicable, w hen they become effective.
IFRS 18
Presentation and Disclosure in Financial Statements 2
IFRS 19 Subsidiaries without Public Accountability: Disclosures 3
Amendments to IFRS 9
and IFRS 7
Amendments to the Classification and Measurement of
Financial Instruments 1
Amendments to IFRS 9
and IFRS 7
Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10
and IAS 28
Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture 4
Annual Improvements to
IFRS Accounting
Standards – Volume 11
Amendments to
IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual periods beginning on or after 1 January 2027
3 Effective for reporting periods beginning on or after 1 January 2027
4 No mandatory effective date yet determined but available for adoption
APPENDIX I ACCOUNTANTS ’ REPORT
I – 25


--- page 485 ---
The Group is in the process of making a detailed assessment of the impact of these
new and amended IFRS Accounting Standards upon initial application. So far, the Group
considers that these new and amended IFRS Accounting Standards, except for IFRS 18, may
result in changes in certain accounting po licies and no significant impact on the Group ’s
financial performance and financial position i s expected in the period of initial application.
The application of IFRS 18 is not expected to ha ve material impact on the financial position
of the Group but is expected to affect the presentation of the statement of profit or loss and
statement of cash flows (additional disclosure w ill be included in the financial statements).
The Group will continue to assess t h ei m p a c to fI F R S1 8o nt h eG r o u p ’s financial
information.
2.3 MATERIAL ACCOUNTING POLICY
Investments in associates
An associate is an entity in which the Grou p has a long-term interest of generally
not less than 20% of the equity voting rights and over which it has significant
influence. Significant influence is the power to participate in the financial and
operating policy decisions of the investee, but is not control or joint control over those
policies.
The Group ’s investments in associates are stated in the consolidated statement of
financial position at the Group ’s share of net assets under the equity method of
accounting, less any impairment losses.
Adjustments are made to bring into line a ny dissimilar accounting policies that
may exist.
The Group ’s share of the post-acquisition results and other comprehensive
income of associates is included in the con solidated statement of profit or loss and
consolidated other comprehensive income , respectively. In addition, when there has
been a change recognised directly in the equ ity of the associate, the Group recognises
its share of any changes, when applicable, in the consolidated statement of changes in
equity. Unrealised gains and losses resultin g from transactions between the Group and
its associates are eliminated to the extent of the Group ’s investments in the associates,
except where unrealised losses provide evidence of an impairment of the assets
transferred. Goodwill arising from the acqui sition of associates is included as part of
the Group ’s investments in associates.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 26


--- page 486 ---
If an investment in an associate becomes an investment in a joint venture or vice
versa, the retained interest is not remeasured. Instead, the investment continues to be
accounted for under the equity method. In all other cases, upon loss of significant
influence over the associate, the Gr oup measures and recognises any retained
investment at its fair value. Any differe nce between the carrying amount of the
associate upon loss of significant influence or joint control and the fair value of the
retained investment and proceeds from disposal is recognised in profit or loss.
When an investment in an associate is classified as held for sale, it is accounted
for in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued
Operations .
Fair value measurement
The Group measures its wealth management products, derivative financial
instruments and bills receivables at fair value at the end of each of the Relevant
Periods. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transac tion between market participants at the
measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either in the principal
market for the asset or liability, or in the ab sence of a principal market, in the most
advantageous market for the asset or liability. The princi pal or the most advantageous
market must be accessible by the Group. T he fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market partic ipants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market
participant ’s ability to generate economic benefits by using the asset in its highest and
best use or by selling it to another market participant that would use the asset in its
highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the
Historical Financial Information are cate gorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical
assets or liabilities
APPENDIX I ACCOUNTANTS ’ REPORT
I – 27


--- page 487 ---
Level 2 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is observable, either directly
or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the Historical Financial
Information on a recurring basis, the Gr oup determines whether transfers have
occurred between levels in the hierarchy by reassessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the
end of each of the Relevant Periods.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for
an asset is required (other than inventories, contract assets, deferred tax assets,
financial assets and non-current assets/a disposal group classified as held for sale), the
asset ’s recoverable amount is estimated. An asset ’s recoverable amount is the higher of
the asset ’s or cash-generating unit ’s value in use and its fair value less costs of
disposal, and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of
assets, in which case the recoverable amount is determined for the cash-generating unit
to which the asset belongs. In testing a cash-generating unit for impairment, a portion
of the carrying amount of a corporate asset (e.g., a headquarters building) is allocated
to an individual cash-generating unit if it can be allocated on a reasonable and
consistent basis or, otherwise, to the s mallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds
its recoverable amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. An
impairment loss is charged to the statement of profit or loss in the period in which it
arises in those expense categories consist ent with the function of the impaired asset.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 488 ---
An assessment is made at the end of each of the Relevant Periods as to whether
there is an indication that previously recognised impairment losses may no longer exist
or may have decreased. If such an indication exists, the recoverable amount is
estimated. A previously recognised impairment loss of an asset other than goodwill is
reversed only if there has been a change in the estimates used to determine the
recoverable amount of that asset, but not to an amount higher than the carrying amount
that would have been determined (net of any depreciation/amortisation) had no
impairment loss been recognised for the asset in prior years. A reversal of such an
impairment loss is credited to the statement of profit or loss in the period in which it
arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person ’s family and that
person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a
parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a
parent, subsidiary or fellow s ubsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an
associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of
employees of either the Group or an entity related to the Group; and
the sponsoring employers of the post-employment benefit plan;
(vi) the entity is controlled or jointly controlled by a person identified in
(a);
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 489 ---
(vii) a person identified in (a)(i) has significant influence over the entity or
is a member of the key management personnel of the entity (or of a
parent of the entity); and
(viii) the entity, or any member of a gro up of which it is a part, provides
key management personnel services to the Group or to the parent of
the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at
cost less accumulated depreciation and any impairment losses. When an item of
property, plant and equipment is classified as held for sale or when it is part of a
disposal group classified as held for sale, it is not depreciated and is accounted for in
accordance with IFRS 5, as further explained in the accounting policy for ‘‘Non-
current assets and disposal groups held for sale. ’’ The cost of an item of property,
plant and equipment comprises its purchase pr ice and any directly attributable costs of
bringing the asset to its working cond ition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put
into operation, such as repairs and maintenance, is normally charged to the profit or
loss in the period in which it is incurred. In situations where the recognition criteria
are satisfied, the expenditure for a major inspection is capitalised in the carrying
amount of the asset as a replacement. Where significant parts of property, plant and
equipment are required to be replaced at intervals, the Group recognises such parts as
individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each
item of property, plant and equipment to its residual value over its estimated useful
life. The principal annual rates used for this purpose are as follows:
Buildings 4.75%
Leasehold improvements 15.70-23.77%
Plant and machinery 4.75-9.50%
Motor vehicles 19.00%
Furniture and others 19.00%
Where parts of an item of property, plant and equipment have different useful
lives, the cost of that item is allocated on a reasonable basis among the parts and each
part is depreciated separately. Residual values, useful lives and the depreciation
method are reviewed, and adjusted if appropriate, at the end of each of the Relevant
Periods.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 490 ---
An item of property, plant and equipment i ncluding any significant part initially
recognised is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on disposal or retirement
recognised in the profit or loss in the year the asset is derecognised is the difference
between the net sales proceeds and the carrying amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not
depreciated. It is reclassified to the appr opriate category of property, plant and
equipment when completed and ready for use.
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups are classified as held for sale if their
carrying amounts will be recovered principa lly through a sales transaction rather than
through continuing use. For this to be the case, the asset or disposal group must be
available for immediate sale in its presen t condition subject only to terms that are
usual and customary for the sale of such assets or disposal groups and its sale must be
highly probable. All assets and liabilities of a subsidiary classified as a disposal group
are reclassified as held for sale regardless of whether the Group retains a non-
controlling interest in its former subsidiary after the sale.
Non-current assets and disposal groups (other than investment properties and
financial assets) classified as held for sale are measured at the lower of their carrying
amounts and fair values less costs to sell. Property, plant and equipment and intangible
assets classified as held for sale are not depreciated or amortised.
Intangible assets
Intangible assets acquired separately a re measured on initial recognition at cost.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are subse quently amortised over the useful economic
life and assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation p eriod and the amortisation method for an
intangible asset with a finite useful life are re viewed at least at each financial year end.
Software
Software is stated at cost less any impairment losses and is amortised on the
straight-line basis over its estimated useful life of 5 years.
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 491 ---
Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease. A contract is, or contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets. The Group recognises lease
liabilities to make lease payments and right-o f-use assets representing the right to use
the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is
the date the underlying asset is available for use). Right-of-use assets are measured at
cost, less accumulated depreciation and any impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost o f right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made at
or before the commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the shorter of the lease terms and
the estimated useful lives of the assets as follows:
Leasehold land 50 years
Buildings 2 to 6 years
If ownership of the leased asset transfers to the Group by the end of the lease
term or the cost reflects the exercise of a purchase option, depreciation is calculated
using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the
present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for te rmination of a lease, if the lease term
reflects the Group exercising the option t o terminate the lease. The variable lease
payments that do not depend on an index or a rate are recognised as an expense in the
period in which the event or conditio n that triggers the payment occurs.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 492 ---
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement da te because the interest rate implicit in the
lease is not readily determinable. After th e commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying a mount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in lease payments (e.g., a
change to future lease payments resultin g from a change in an index or rate) or a
change in assessment of an option to purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term leas e recognition exemption to its short-term
leases of machinery and equipment (that is those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option). It
also applies the recognition exemption for leas es of low-value assets to leases of office
equipment and laptop computers that are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are
recognised as an expense on a straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initia l recognition, as subsequently measured at
amortised cost, fair value through other comprehensive income, and fair value through
profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset ’s contractual cash flow characteristics and the Group ’s business model
for managing them. With the exception of trade receivables that do not contain a
significant financing component or for which the Group has applied the practical
expedient of not adjusting the effect of a significant financing component, the Group
initially measures a financial a sset at its fair value plus in the case of a financial asset
not at fair value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component or for which the Group has applied the
practical expedient are measured at the transaction price determined under IFRS 15 in
accordance with the policies set out for ‘‘Revenues recognition ’’below.
In order for a financial asset to be classified and measured at amortised cost or
fair value through other comprehensive income, it needs to give rise to cash flows that
are solely payments of principal and interest ( ‘‘SPPI ’’) on the principal amount
outstanding. Financial assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective of the business model.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 493 ---
The Group ’s business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business model
determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets, or both. Fina ncial assets classified and measured at
amortised cost are held within a business model with the objective to hold financial
assets in order to collect contractual cash f lows, while financial assets classified and
measured at fair value through other compre hensive income are held within a business
model with the objective of both holding to collect contractual cash flows and selling.
Financial assets which are not held within the aforementioned business models are
classified and measured at fair value through profit or loss.
Purchases or sales of financial assets t hat require delivery of assets within the
period generally established by regulation or convention in the marketplace are
recognised on the trade date, that is, the date that the Group commits to purchase or
sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as
follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective
interest method and are subject to impairment. Gains and losses are recognised in the
profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest
income, foreign exchange revaluation and impairment losses or reversals are
recognised in the profit or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair value changes are recognised in
other comprehensive income. Upon dereco gnition, the cumulative fair value change
recognised in other comprehensive income is recycled to the profit or loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of
financial position at fair value with net cha nges in fair value recognised in the profit or
loss.
This category includes wealth management products and derivative instruments.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 494 ---
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a
group of similar financial assets) is prima rily derecognised (i.e., removed from the
Group ’s consolidated statement of financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or
h a sa s s u m e da no b l i g a t i o nt op a yt h ereceived cash flows in full without
material delay to a third party under a ‘‘pass-through ’’ arrangement; and
either (a) the Group has transferred s ubstantially all the risks and rewards
of the asset, or (b) the Group has n either transferred nor retained
substantially all the risks and reward s of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if, and to what extent, it has
retained the risk and rewards o f ownership of the asset. When it has neither transferred
nor retained substantially all the risks and re wards of the asset nor transferred control
of the asset, the Group continues to recognise the transferred asset to the extent of the
Group ’s continuing involvement. In that case, t h eG r o u pa l s or e c o g n i s e sa na s s o c i a t e d
liability. The transferred asset and the asso ciated liability are measured on a basis that
reflects the rights and obligatio ns that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the
maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses ( ‘‘ECLs ’’)f o ra l l
debt instruments not held at fair value through profit or loss. ECLs are based on the
difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 35


--- page 495 ---
General approach
ECLs are recognised in two stages. For credit exposures for which there has not
been a significant increase in credit risk s ince initial recognition, ECLs are provided
for credit losses that result from default events that are possible within the next 12
months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since in itial recognition, a loss allowance is required
for credit losses expected over the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).
At each reporting date, the Group assesses w hether the credit risk on a financial
instrument has increased si gnificantly since initial recognition. When making the
assessment, the Group compares the risk of a default occurring on the financial
instrument as at the reporting date with the r isk of a default occurring on the financial
instrument as at the date of initial recog nition and considers reasonable and
supportable information that is available without undue cost or effort, including
historical and forward-looking information. The Group considers that there has been a
significant increase in credit risk when contractual payments are more than 60 days
past due.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a financial
asset to be in default when internal or external information indicates that the Group is
unlikely to receive the outstanding contr actual amounts in full before taking into
account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows.
Debt investments at fair value through other comprehensive income and financial
assets at amortised cost are subject to impairment under the general approach and they
are classified within the following stages for measurement of ECLs, except for trade
receivables, bills receivables and contract assets which apply the simplified approach
as detailed below:
Stage 1 – Financial instruments for which credit risk has not increased
significantly since initial recognitio n and for which the loss allowance
is measured at an amount equal to 12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly
since initial recognition but that ar e not credit-impaired financial
a s s e t sa n df o rw h i c ht h el o s sa l l o w a n c ei sm e a s u r e da ta na m o u n t
equal to lifetime ECLs
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 496 ---
Stage 3 – Financial assets that are credit-impa ired at the reporting date (but that
are not purchased or originated credit-impaired) and for which the loss
allowance is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables, bills receivable s and contract assets that do not contain a
significant financing component or when the Group applies the practical expedient of
not adjusting the effect of a significant financing component, the Group applies the
simplified approach in calculating ECLs. Under the simplified approach, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at the end of each of the Relevant Periods. The Group has established a
provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at i nitial recognition, as loans and borrowings
or payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of di rectly attributable transaction costs.
The Group ’s financial liabilities include trade a nd bills payables, certain other
payables and accruals, amounts due to related parties, and interest-bearing bank and
other borrowings.
The Group classifies financial liab ilities that arise from a supplier finance
arrangement within trade and bills payables in the statement of financial position if
they have a similar nature and function to trade payables. This is the case if the
supplier finance arrangement is part of the working capital used in the Group ’sn o r m a l
operating cycle, the level of security provided is similar to trade payables and the
terms of the liabilities that are part of the supply chain finance arrangement are not
substantially different from the terms of trade payables that are not part of the
arrangement. Cash flows related to liabilities arising from supplier finance
arrangements that are classified in trade and bills payables in the statement of
financial position are included in operating activities in the statement of cash flows.
Otherwise, the financial liabilities are clas sified in interest-bearing bank and other
borrowings in the statement of financial position and the related cash flows are
included in financing activities in the statement of cash flows.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 497 ---
Subsequent measurement
The subsequent measurement of financial liabilities depends on their
classification as follows:
Financial liabilities at amortised cost (t rade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing
borrowings are subsequently measured at amortised cost, using the effective interest
rate method unless the effect of discountin g would be immaterial, in which case they
are stated at cost. Gains and losses are recognised in the profit or loss when the
liabilities are derecognised as well as through the effective interest rate amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integr al part of the effective interest rate. The
effective interest rate amortisation is included in finance costs in the profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised wh en the obligation under the liability is
discharged or cancelled, or expires.
When an existing financial liability is re placed by another from the same lender
on substantially different terms, or the ter ms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the
original liability and a recognition of a new liability, and the difference between the
respective carrying amounts is recognised in the profit or loss.
Derivative financial instruments
Initial recognition and subs equent measurement
The Group uses derivative financial instruments, such as commodity contracts.
Such derivative financial instruments are in itially recognised at fair value on the date
on which a derivative contract is entered into and are subsequently remeasured at fair
value. Derivatives are carried as assets wh en the fair value is positive and as liabilities
when the fair value is negative.
The fair value of commodity purchase c ontracts that meet the definition of a
derivative as defined by IFRS 9 is recognised in the profit or loss as cost of sales.
Commodity contracts that are entered into and continue to be held for the purpose of
the receipt or delivery of a non-financial item in accordance with the Group ’s expected
purchase, sale or usage requirements are held at cost.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 38


--- page 498 ---
Any gains or losses arising from changes in fair value of derivatives are taken
directly to the profit or loss, except for t he effective portion of cash flow hedges,
w h i c hi sr e c o g n i s e di no t h e rc o m p r e h e n s i v eincome and later reclassified to profit or
loss when the hedged item affects profit or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
determined on the weighted average basis. Net realisable value is based on estimated
selling prices less any estimated costs to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on
hand and at banks, and short-term highly liquid deposits with a maturity of generally
within three months that are readily conver tible into known amounts of cash, subject to
an insignificant risk of changes in value a nd held for the purpose of meeting short-
term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents comprise cash on hand and at banks, and short-term deposits as defined
above, less bank overdrafts which are repayable on demand and form an integral part
of the Group ’s cash management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has
arisen as a result of a past event and it is probable that a future outflow of resources
will be required to settle the obligation, provided that a reliable estimate can be made
of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision
is the present value at the end of each of the Relevant Periods of the future
expenditures expected to be required to s ettle the obligation. The increase in the
discounted present value amount arising from the passage of time is included in
finance costs in the profit or loss.
The Group provides for warranties in relation to the sale of certain industrial
products for general repairs of defects occurring during the warranty period. Provisions
for these assurance-type warranties grant ed by the Group are initially recognised based
on sales volume and past experience of the level of repairs and returns, discounted to
their present values as appropriate. The warranty-related cost is revised annually.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 499 ---
Income tax
Income tax comprises current and deferred tax. Income tax relating to items
recognised outside profit or loss is recognis ed outside profit or loss, either in other
comprehensive income or directly in equity.
Current tax assets and liabilities are me asured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of the Relevant Periods,
taking into consideration interpretations and practices prevailing in the countries in
which the Group operates.
Deferred tax is provided, using the liab ility method, on all temporary differences
at the end of each of the Relevant Periods between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences,
except:
 when the deferred tax liability arises from the initial recognition of
goodwill or an asset or liability in a t ransaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal
taxable and deductible temporary differences; and
 in respect of taxable temporary differences associated with investments in
subsidiaries and associates, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all d eductible temporary differences, and
the carryforward of unused tax credits and any unused tax losses. Deferred tax assets
are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary diffe rences, and the carryforward of unused tax
credits and unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences
arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss and does not give
rise to equal taxable and deductible temporary differences; and
APPENDIX I ACCOUNTANTS ’ REPORT
I – 40


--- page 500 ---
 in respect of deductible temporary differences associated with investments
in subsidiaries and assoc iates, deferred tax assets are only recognised to the
extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the
temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each of the
Relevant Periods and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised defe rred tax assets are reasse ssed at the end of each of the
Relevant Periods and are recognised to the extent that it has become probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be recovered.
Deferred tax assets and liabilities are meas ured at the tax rates that are expected
to apply to the period when the asset is rea lised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted by the end of each
of the Relevant Periods.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group
has a legally enforceable right to set off curr ent tax assets and current tax liabilities
and the deferred tax assets and deferred tax liabilities relate to income taxes levied by
the same taxation authority on either th e same taxable entity or different taxable
entities which intend either to settle current tax liabilities and assets on a net basis, or
to realise the assets and settle the liabilitie s simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be settled
or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied
with. When the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the costs, for which it is intended to compensate,
are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income
account and is released to the profit or loss over the expected useful life of the
relevant asset by equal annual instalments.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 41


--- page 501 ---
Revenues recognition
Revenues from contracts with customers
Revenues from contracts with customers is recognised when control of goods or
services is transferred to the customers at an amount that reflects the consideration to
which the Group expects to be entitled in e xchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of
consideration is estimated to which the Group will be entitled in exchange for
transferring the goods or services to the c ustomer. The variable consideration is
estimated at contract inception and constrained until it is highly probable that a
significant revenues reversal in the amount of cumulative revenues recognised will not
occur when the associated uncertainty with the variable consideration is subsequently
resolved.
Sales of products
Revenues from sales of goods primarily arises from sales of lead-acid battery,
lithium ion battery and others, which is recognised at the point in time when control of
the products is transferred to the customer, generally on the acceptance of the
products.
Other income
Interest income is recognised on an accrual basis using the effective interest rate
method by applying the rate that exactly discounts the estimated future cash receipts
over the expected life of the financial instrument or a shorter period, when appropriate,
to the net carrying amount of the financial asset.
Contract assets
If the Group performs by transferring goods or services to a customer before
being unconditionally entitled t o the consideration under th e contract terms, a contract
asset is recognised for the earned considera tion that is conditional. Contract assets are
subject to impairment assessment, details of which are included in the accounting
policies for impairment of financial assets. T hey are reclassified to trade receivables
when the right to the consideration becomes unconditional.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 502 ---
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due
(whichever is earlier) from a customer before the Group transfers the related goods or
services. Contract liabilities are recogni sed as revenues when the Group performs
under the contract (i.e., transfers control of the related goods or services to the
customer).
Contract costs
Other than the costs which are capitalised as inventories, property, plant and
equipment and intangible assets, costs incu rred to fulfil a contract with a customer are
capitalised as an asset if all of the following criteria are met:
(a) The costs relate directly to a contract or to an anticipated contract that the
entity can specifically identify.
(b) The costs generate or enhance resources of the entity that will be used in
satisfying (or in continuing to satisfy) performance obligations in the future.
(c) The costs are expected to be recovered.
The capitalised contract costs are amortised and charged to the profit or loss on a
systematic basis that is consistent with the transfer to the customer of the goods or
services to which the asset relates. Other contract costs are expensed as incurred.
Share-based payments
The Company operates an employee share scheme. Employees (including
directors) of the Group receive remuneration in the form of share-based payments,
whereby employees render services in exchange for equity instruments ( ‘‘equity-
settled transactions ’’). The cost of equity-settled transactions with employees for
grants is measured by reference to the fair value at the date at which they are granted,
further details of which are given in note 34 to the Historical Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense,
together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are ful filled. The cumulativ e expense recognised
for equity-settled transactions at the end of each of the Relevant Periods until the
vesting date reflects the extent to which the lock-up restricted period has expired and
the Group ’s best estimate of the number of equity instruments that will ultimately vest.
The charge or credit to profit or loss for a period represents the movement in the
cumulative expense recognised as at the beginning and end of that period.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 43


--- page 503 ---
Service conditions are not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions being met is assessed as part
of the Group ’s best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are refl ected within the grant date fair value. Any
other conditions attached to an award, but w ithout an associated service requirement,
are considered to be non-vesting conditions . Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate expensing of an award unless
there are also service and/or performance conditions.
For awards that do not ultimately vest b ecause non-market performance and/or
service conditions have not been met, no expense is recognised. Where awards include
a market or non-vesting condition, the transac tions are treated as vesting irrespective
of whether the market or non-vesting conditio n is satisfied, provided that all other
performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an
expense is recognised as if the terms had not been modified, if the original terms of
the award are met. In addition, an expense i s recognised for any modification that
increases the total fair value of the share-based payments, or is otherwise beneficial to
the employee as measured at the date of modification.
Where an equity-settled award is cancelle d, it is treated as if it had vested on the
date of cancellation, and any expense not yet recognised for the award is recognised
immediately. This includes any award wher e non-vesting conditio ns within the control
of either the Group or the employee are not met. However, if a new award is
substituted for the cancelled award, and is designated as a replacement award on the
date that it is granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional share dilution
in the computation of earnings per share.
Other employee benefits
Social pension plans
The Group has social pension plans for its employees arranged by local
government labour and security authorities. The Group makes contributions on a
monthly basis to the social pension plans. The contributions are charged to profit or
loss as they become payable in accordance with the rules of the social pension plans.
The Group ’s liability in respect of these funds is limited to the contributions payable in
each of the Relevant Periods.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 44


--- page 504 ---
Housing fund and other social insurances
The Group has participated in defined soc ial security contribution schemes for its
employees pursuant to the relevant laws and regulations of the PRC. These include a
housing fund, basic medical insurance, unemployment insurance, injury insurance and
maternity insurance. The Gro up makes monthly contributions to the housing fund and
other social insurances. The contributions are charged to profit or loss on an accrual
basis. The Group ’s liability in respect of these fu nds is limited to the contributions
payable in each of the Relevant Periods.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, i.e., assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are capitalised as part of the cost of
those assets. The capitalisation of such bo rrowing costs ceases when the assets are
substantially ready for their intended u se or sale. All other borrowing costs are
expensed in the period in which they are incurred. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a lia bility when they are approved by the
shareholders in a general meeting.
Foreign currencies
These Historical Financial Informatio n are presented in RMB, which is the
Company ’s functional currency. Each entity in th e Group determines its own functional
currency and items included in the Historical Financial Information of each entity are
measured using that functional currency. Fo reign currency transactions recorded by the
entities in the Group are initially recorded us ing their respective functional currency
rates prevailing at the dates of the trans actions. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency rates of
exchange ruling at the end of each of the Relevant Periods. Differences arising on
settlement or translation of monetary items are recognised in the profit or loss.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 45


--- page 505 ---
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange ra tes at the dates of the initial transactions.
Non-monetary items measured at fair value i n a foreign currency are translated using
the exchange rates at the date when the fair value was measured. The gain or loss
arising on translation of a non-monetary ite m measured at fair value is treated in line
with the recognition of the gain or loss on change in fair value of the item (i.e.,
translation difference on the item whose fair value gain or loss is recognised in other
comprehensive income or profit or loss is also recognised in other comprehensive
income or profit or loss, respectively).
In determining the exchange rate on in itial recognition of the related asset,
expense or income on the derecognition of a non-monetary asset or non-monetary
liability relating to an advance considerati on, the date of initial transaction is the date
on which the Group initially recognises th e non-monetary asse t or non-monetary
liability arising from the advance conside ration. If there are multiple payments or
receipts in advance, the Group determines the transaction date for each payment or
receipt of the advance consideration.
The functional currencies of certain over seas subsidiaries ar e currencies other
than RMB. As at the end of the reporting per iod, the assets and liabilities of these
entities are translated into RMB at the exchange rates prevailing at the end of the
reporting period and their statements of p rofit or loss are translated into RMB at the
exchange rates that approximate to those p revailing at the dates of the transactions.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group ’s Historical Financial Information requires management
to make judgements, estimates and assump tions that affect the reported amounts of
revenues, expenses, assets an d liabilities, and their accompanying disclosures, and the
disclosure of contingent liabilities. Uncertaint y about these assumptions and estimates could
result in outcomes that could require a mater ial adjustment to the carrying amounts of the
assets or liabilities affected in the future.
Judgements
Determining significant influence over entities in which the Group holds less than 20%
equity interest
Despite the fact that the Group ’s direct or indirect equity interest in Shuangdeng
Tianpeng Metallurgical Jiangsu Co., Ltd . was 18% which was lower than 20%, the
Group had significant influence with a board representative assigned and had the right
to participate in the financial and operating policy decisions of Shuangdeng Tianpeng
Metallurgical Jiangsu Co., Ltd.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 506 ---
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is
probable that taxable profit will be availa ble against which the losses can be utilised.
Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and level of future taxable
profits together with future tax planning strategies.
During the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025, The Group has tax losses of RMB4,118,000, RMB7,482,000,
RMB19,253,000 and RMB1,332,000, respectively, carried forward. These losses
related to subsidiaries that have a history of losses, have not expired, and may not be
used to offset taxable income elsewhere in the Group. The subsidiaries have neither
any taxable temporary difference nor any t ax planning opportunities available that
could partly support the recognition of these losses as deferred tax assets. On this
basis, the Group has determined that it cannot recognise deferred tax assets on the tax
losses carried forward.
If the Group had been able to recognise all unrecognised deferred tax assets, the
profit and equity would have increased by RMB859,000, RMB2,691,000,
RMB3,782,000 and RMB48,000, respectively, for the years ended 31 December 2022,
2023 and 2024 and the five months ended 31 May 2025. Further details on deferred
taxes are disclosed in note 15 to the Historical Financial Information.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of each of the Relevant Periods, that have a significant risk of
causing a material adjustment to the carry ing amounts of assets and liabilities within
the next financial year, are described below:
Provision for expected credit losses on trade receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade receivables and
contract assets. The provision rates are bas ed on the ageing analysis of customers that
have similar loss patterns.
The provision matrix is initially based on the Group ’s historical observed default
rates. The Group will calibrate the matrix to a djust the historical credit loss experience
with forward-looking information. For instance, if forecast economic conditions (i.e.,
gross domestic product) are expected to deteriorate over the next year which can lead
to an increased number of defaults in the manu facturing sector, the historical default
rates are adjusted. At each reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 47


--- page 507 ---
The assessment of the correlation among historical observed default rates,
forecast economic conditions and ECLs is a significant estimate. The amount of ECLs
is sensitive to changes in circumstances an d forecast economic conditions. The Group ’s
historical credit loss experience and for ecast of economic conditions may also not be
representative of a customer ’s actual default in the future. The information about the
ECLs on the Group ’s trade receivables and contract assets is disclosed in note 20 and
note 21 to the Historical Financial Information, respectively.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of each of the Relevant Periods, that have a significant risk of
causing a material adjustment to the carry ing amounts of assets and liabilities within
the next financial year, are described below:
Leases – Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and
therefore, it uses an incremental borrowing rate ( ‘‘IBR’’) to measure lease liabilities.
The IBR is the rate of interest that the Group would have to pay to borrow over a
similar term, and with a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what the Group ‘‘would have to pay ’’, which requires estimation
when no observable rates are available (such as for subsidiaries that do not enter into
financing transactions) or when it needs to be adjusted to reflect the terms and
conditions of the lease (for example, when leases are not in the subsidiary ’s functional
currency). The Group estimates the IBR using observable inputs (such as market
interest rates) when availabl e and is required to make certain entity-specific estimates
(such as the subsidiary ’s stand-alone credit rating).
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-
financial assets (including the right-of-use assets) at the end of each of the Relevant
Periods. Indefinite life intangible assets ar e tested for impairme nt annually and at other
times when such an indicator exists. Ot her non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be
recoverable. An impairment exists when the carrying value of an asset or a cash-
generating unit exceeds its recoverable amount, which is the higher of its fair value
less costs of disposal and its value in use. The calculation of the fair value less costs
of disposal is based on available data from binding sales transactions in an arm ’s
length transaction of similar assets or observable market prices less incremental costs
for disposing of the asset. When value in use calculations are undertaken, management
must estimate the expected future cash flows from the asset or cash-generating unit
and choose a suitable discount rate in order to calculate the present value of those cash
flows.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 48


--- page 508 ---
Write-down of inventories
The Group ’s inventories are stated at the lower of cost and net realisable value.
The Group writes down its inventories bas ed on estimates of the realisable value with
reference to the ageing and conditions of th e inventories, together with the economic
circumstances on the marketability of such in ventories. Inventories will be reviewed
annually for write-down, if appropriate. Further details of the inventories are set out in
note 19 to the Historical Financial Information.
Useful lives and residual values of items of property, plant and equipment
In determining the useful lives and residua l values of items of property, plant and
equipment, the Group has to consider various factors, such as technical or commercial
obsolescence arising from changes or improvements in the production and provision of
services, or from a change in the market demand for the product or service output of
the asset, expected usage of the asset, expected physical wear and tear, care and
maintenance of the asset, and legal or si milar limits on the use of the asset. The
estimation of the useful life of the asset is based on the experience of the Group with
similar assets that are used in a similar w ay. Additional depreciation is made if the
estimated useful lives and/or residual values of items of property, plant and equipment
are different from previous estimation. Useful lives and residual values are reviewed at
the end of each of the Relevant Periods based on changes in circumstances. Further
details of the property, plant and equipment are set out in note 13 to the Historical
Financial Information.
Provision
The Group makes a provision for product warranty for the sale of battery
products according to the be st expected settlement under the sales agreement. The
provision amount takes into account the Group ’s recent claims, past warranty data and
the weight of all possible results and the ir related probabilities. As the Group
continues to upgrade its product design and introduce new models, the recent claims
may not represent the claims it will face in the future for past sales. Any increase or
decrease in provision will affect the profit or loss in future years. Further details of the
provision are set out in note 31 to the Historical Financial Information.
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into one single business unit that is
the sale of lead-acid energy storage battery pr oducts and lithium-ion energy storage battery
products. Management reviews the overall re sults and financial position of the Group as a
whole based on the same accounting policies set out in note 2.3 to the Historical Financial
Information. Accordingly, the Group has only one single operating segment and no further
analysis of the single segment is presented.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 49


--- page 509 ---
Geographical information
(a) Revenues from external customers
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Mainland China. . . . . . . . 3,394,555 3,330,829 3,608,974 1,031,966 1,546,929
Overseas . . . . . . . . . . . . 677,925 928,948 889,548 362,219 319,679
Total revenues . . . . . . . . 4,072,480 4,259,777 4,498,522 1,394,185 1,866,608
The revenues information above is based on the locations of the direct customers
who signed the sales agreements with the Group.
(b) Non-current assets
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
M a i n l a n dC h i n a ............. 9 9 3 , 9 6 3 1 , 2 6 9 , 2 9 9 1 , 3 8 8 , 4 8 1 1 , 3 5 1 , 1 5 6
O v e r s e a s ................. –– 18,838 18,474
Total non-current assets . . . . . . . 993,963 1,269,299 1,407,319 1,369,630
The non-current asset information above is based on the locations of the assets
and excludes financial instruments and deferred tax assets.
Information about major customers
Revenues from a single customer, including group of entities which are known to
be under common control, accounted for over 10% of the Group ’s total revenues
during the Relevant Periods and the five months ended 31 May 2024 is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Customer A 990,257 907,533 589,642 N/A 189,496
Customer B N/A N/A N/A 142,128 N/A
APPENDIX I ACCOUNTANTS ’ REPORT
I – 50


--- page 510 ---
5. REVENUES, OTHER INCOME AND GAINS
An analysis of revenues is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Revenues from contracts
with customers . . . . . . 4,072,480 4,2 59,777 4,498,522 1,394,185 1,866,608
Revenues from contracts with customers
(i) Disaggregated revenues information
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Types of goods or services
Sales of lithium-Ion battery
products . . . . . . . . . . . 1,568,531 1,854,556 1,495,978 435,600 457,479
Sales of lead-acid battery
products . . . . . . . . . . . 2,421,622 2,337,230 2,907,232 927,108 1,357,504
Others (a) . . . . . . . . . . . . 82,327 67,991 95,312 31,477 51,625
Total . . . . . . . . . . . . . . . 4,072,480 4,259,777 4,498,522 1,394,185 1,866,608
Timing of revenues
recognition
Goods transferred at a point
in time . . . . . . . . . . . . 4,072,480 4,259,777 4,498,522 1,394,185 1,866,608
(a) The amounts mainly include revenues from sales of waste including lead slag, used batteries, and
electricity sales.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 51


--- page 511 ---
The following table shows the amounts of revenues recognised in each of the Relevant
Periods and the five months ended 31 May 2024 that were included in the contract liabilities
at the beginning of each of the Relevant Periods and recognised from performance
obligations satisfied in previous years:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Sales of goods . . . . . . . . . . . . . 45,330 36,778 63,014 63,014 39,640
(ii) Performance obligations
Information about the Group ’s performance obligations is summarised below:
Sales of goods
The performance obligation is satisfied upon the acceptance of the lead-acid
battery products, lithium-Ion battery pr oducts and others by the customers and
payment is generally due within 30 to 120 days from delivery.
The amounts of transaction price allo cated to the performance obligations
(unsatisfied or partially unsatisfied) as at the end of each of the Relevant Periods
and the five months ended 31 May 2024 is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Amounts expected to
be recognised as
revenues:
Within one year . . . 36,778 63,014 39,640 109,278 39,897
APPENDIX I ACCOUNTANTS ’ REPORT
I – 52


--- page 512 ---
O t h e ri n c o m ea n dg a i n s
An analysis of other income and gains is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Government grants related
to
– Assets (i). . . . . . . . . . . 13,800 16,811 18,521 7,137 8,785
– Income . . . . . . . . . . . . 11,303 18,785 20,850 1,017 5,417
Additional VAT deduction
( i i ) ............... – 764 40,556 17,934 12,792
Interest income . . . . . . . . 3,402 19,260 14,814 5,990 4,012
Foreign exchange gains, net 17,476 12,289 10,626 3,969 3,746
Compensation income . . . 603 4,497 359 189 872
Rental income. . . . . . . . . 1,338 2,245 2,794 1,029 1,207
Others . . . . . . . . . . . . . . 2,692 3,067 7,064 462 3,702
Total . . . . . . . . . . . . . . . 50,614 77,718 115,584 37,727 40,533
(i) The Group has received certain government grants related to assets for inves tments in equipment and
plant. The grants related to assets were recognised in profit or loss over the useful lives of the
relevant assets. Details of these grants related to assets are set out in note 30 to the Historical
Financial Information.
(ii) According to the regulations of Ministry of Fina nce and the State Administ ration of Taxation, certain
entities within the Group can enjoy an additional 5 % deduction calculated based on the input value-
added tax ( ‘‘VAT’’) from the VAT payable.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 513 ---
6. PROFIT BEFORE TAX
The Group ’s profit before tax is arrived at after charging/(crediting):
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
C o s to fi n v e n t o r i e ss o l d ......... 3 , 382,884 3,393,009 3,747,639 1,119,099 1,588,050
Depreciation of property, plant and
e q u i p m e n t ............... 13 116,642 110,371 126,283 44,368 63,560
Depreciation of right-of-use assets . . 14 9,176 9,473 12,925 5,022 6,652
Amortisation of other intangible assets 18 2,275 2,557 3,623 1,464 1,274
Research and development costs * . . . 38,207 42,767 33,953 14,221 23,020
Lease payments not included in the
measurement of lease liabilities . . 14 3,957 4,511 5,817 2,540 2,524
Auditor ’sr e m u n e r a t i o n ......... 8 4 0 3 , 8 0 7 2 , 2 1 9 1 , 0 8 2 1 7 7
L i s t i n ge x p e n s e s ............. –– 17,993 436 2,126
Employee benefit expense (excluding
directors ’ and chief executive ’s
remuneration (note 8)):
W a g e sa n ds a l a r i e s ............ 292,019 335,495 311,649 115,995 119,715
Pension scheme contributions . . . . . 31,039 38,393 34,281 12,759 13,170
Share incentive plan expense. . . . . . 8,033 17,356 16,206 7,699 3,596
Foreign exchange differences, net . . . ( 17,476) (12,289) (10,626) (3,969) (3,746)
Impairment losses on financial and
contract assets, net:
Impairment of trade and bills
receivables, net . ........... 20 21,495 5,254 17,526 (4,875) (1,437)
Impairment of contract assets, net . . 21 610 1,433 659 (276) 720
Impairment of financial assets
included in prepayments, other
receivables and other assets . . . . 502 (340) 996 1,243 727
Impairment losses on assets of a
disposal group classified as held
f o rs a l e ................. – 15,747 –––
Provision for product warranty . . . .
31 30,719 36,516 38,436 12,497 17,324
Write-down/(reversal of write-down)
of inventories to net realisable
v a l u e .................. 19 1,030 39,011 (22,338) (18,216) (552)
* Research and development costs do not include expenses relating to staff costs, depreciation and amortisation
expenses, which are included in the respective total amounts disclosed separately above for each of these
types of expenses.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 54


--- page 514 ---
7. FINANCE COSTS
An analysis of finance costs is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Interest on bank and other borrowings . . . . . . 49,212 30,970 23,191 8,770 11,769
I n t e r e s to nl e a s el i a b i l i t i e s............. 5 3 5 3 9 1 5 3 1 2 2 5 2 3 3
Total interest expense on financial liabilities not
at fair value through profit or loss . . . . . . 49,747 31,361 23,722 8,995 12,002
L e s s :I n t e r e s tc a p i t a l i s e d .............. ( 3 7 5 ) ( 1 , 3 5 6 ) ( 3 , 8 8 0 ) ( 3 , 3 6 9 ) –
T o t a l .......................... 4 9 , 3 7 2 3 0 , 0 0 5 1 9 , 8 4 2 5 , 6 2 6 1 2 , 0 0 2
8. DIRECTORS ’ AND CHIEF EXECUTIVE ’S REMUNERATION
Directors ’ and chief executive ’s remuneration for the Relevant Periods, disclosed
pursuant to the Listing Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong
Companies Ordinance and Part 2 of the Companies (Disclosure of Information about
Benefits of Directors) Regulation, is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
F e e s ........................... 4 0 0 4 5 0 4 6 8 1 8 8 1 8 9
Other emoluments:
Salaries, allowances and benefits in k ind . . . . 3,447 3,544 4,172 1,584 1,567
Performance related bonuses * ........... 1 2 , 8 5 6 1 3 , 4 9 6 1 0 , 4 8 6 4 , 3 7 0 2 , 4 5 4
S h a r ei n c e n t i v ep l a ne x p e n s e ............ 2 , 5 5 6 2 , 8 7 6 6 , 3 3 3 1 , 6 8 1 3 , 6 0 0
S u b t o t a l ......................... 1 8 , 8 5 9 1 9 , 9 1 6 2 0 , 9 9 1 7 , 6 3 5 7 , 6 2 1
T o t a l .......................... 1 9 , 2 5 9 2 0 , 3 6 6 2 1 , 4 5 9 7 , 8 2 3 7 , 8 1 0
* Certain executive directors of t he Company are entitled to bonus pa yments which are determined as a
percentage of the profit after tax of the Group.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 55


--- page 515 ---
During the years ended 31 December 2022 and 31 December 2024, certain directors
were granted awarded shares, in respect of their services to the Group, further details of
which are set out in note 34 to the Historical Financial Information. The fair value of such
awarded shares, which has been recognised in profit or loss over the vesting period, was
determined as at the date of grant and the am ount included in the Historical Financial
Information for the years ended 31 December 2022 and 2024 and the five months ended 31
May 2024 and 2025, is included in the above directors ’ and chief executives ’ remuneration
disclosures.
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods
and the five months ended 31 May 2024 were as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Mr. Wang Jinliang . (iii) 250 300 150 125 –
Dr. Yin Junming . . 150 150 150 63 63
M r .W a n gJ i n ....
(iv) –– 84 – 63
M r .W a n gX i.... (v) –– 84 – 63
T o t a l ......... 4 0 0 4 5 0 4 6 8 1 8 8 1 8 9
(b) Directors and supervisors
The remuneration of each director and the chief executive of the Company during
the Relevant Periods and the five months ended 31 May 2024 is set out below:
2022
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Share
incentive
plan expense
Total
remuneration
RMB’000 RMB ’000 RMB ’000 RMB ’000
Executive directors:
Dr. Yang Rui ** ........... 1 , 0 3 7 6 , 1 8 0 – 7,217
Dr. Yang Baofeng . . . . . . . . . 852 4,980 1,642 7,474
Subtotal . . . . . . . . . . . . . . . . 1,889 11,160 1,642 14,691
Non-executive director:
Mr. Qian Shan ’g a o ........ 3 0 1 –– 301
Supervisors:
Mr. Wang Zhaobin . . . . . . . . 823 1,471 806 3,100
Ms. Sun Caiyun . . . . . . . . . . 224 148 108 480
Mr. Huang Xuegong . . . . . . . 210 77 – 287
S u b t o t a l ................ 1 , 2 5 7 1 , 6 9 6 9 1 4 3 , 8 6 7
T o t a l.................... 3 , 4 4 7 1 2 , 8 5 6 2 , 5 5 6 1 8 , 8 5 9
APPENDIX I ACCOUNTANTS ’ REPORT
I – 56


--- page 516 ---
2023
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Share
incentive
plan expense
Total
remuneration
RMB’000 RMB ’000 RMB ’000 RMB ’000
Executive directors:
Dr. Yang Rui . . . . 1,049 4,116 – 5,165
Dr. Yang Baofeng . 948 7,037 1,962 9,947
Subtotal . . . . . . . . 1,997 11,153 1,962 15,112
Non-executive
director:
Mr. Qian Shan ’gao 300 –– 300
Supervisors:
Mr. Wang Zhaobin (i) 298 1,614 – 1,912
Mr. Lou Zhiqiang . (ii) 446 429 806 1,681
Ms. Sun Caiyun . . 286 206 108 600
Mr. Huang Xuegong 217 94 – 311
Subtotal . . . . . . . . 1,247 2,343 914 4,504
Total . . . . . . . . . . . . 3,544 13,496 2,876 19,916
2024
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Share
incentive
plan expense
Total
remuneration
RMB’000 RMB ’000 RMB ’000 RMB ’000
Executive directors:
Dr. Yang Rui . . . . 973 3,695 3,152 7,820
Dr. Yang Baofeng . 901 3,745 1,335 5,981
Ms. He Rong . . . .
(vi) 840 2,639 999 4,478
Subtotal . . . . . . . . 2,714 10,079 5,486 18,279
Non-executive
director:
Mr. Qian Shan ’gao 300 –– 300
Supervisors:
Mr. Lou Zhiqiang . 645 286 739 1,670
Ms. Sun Caiyun . . 288 75 108 471
Mr. Huang Xuegong 225 46 – 271
Subtotal . . . . . . . . 1,158 407 847 2,412
Total . . . . . . . . . . . . 4,172 10,486 6,333 20,991
APPENDIX I ACCOUNTANTS ’ REPORT
I – 57


--- page 517 ---
Five months ended 31 May 2024 (unaudited)
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Share
incentive
plan expense
Total
remuneration
RMB’000 RMB ’000 RMB ’000 RMB ’000
Executive directors:
Dr. Yang Rui . . . . 364 1,540 – 1,904
Dr. Yang Baofeng . 337 1,561 818 2,716
Ms. He Rong . . . . (vi) 309 1,100 482 1,891
Subtotal . . . . . . . . 1,010 4,201 1,300 6,511
Non-executive
director:
Mr. Qian Shan ’gao 125 –– 125
Supervisors:
Mr. Lou Zhiqiang . 238 119 336 693
Ms. Sun Caiyun . . 119 31 45 195
Mr. Huang Xuegong 92 19 – 111
Subtotal . . . . . . . . 449 169 381 999
Total . . . . . . . . . . . . 1,584 4,370 1,681 7,635
Five months ended 31 May 2025
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Share
incentive
plan expense
Total
remuneration
RMB’000 RMB ’000 RMB ’000 RMB ’000
Executive directors:
Dr. Yang Rui . . . . 363 872 2,627 3,862
Dr. Yang Baofeng . 336 872 370 1,578
Ms. He Rong . . . .
(vi) 304 614 370 1,288
Subtotal . . . . . . . . 1,003 2,358 3,367 6,728
Non-executive
director:
Mr. Qian Shan ’gao 125 –– 125
Supervisors:
Mr. Lou Zhiqiang . 231 67 224 522
Ms. Sun Caiyun . . 112 18 9 139
Mr. Huang Xuegong 96 11 – 107
Subtotal . . . . . . . . 439 96 233 768
Total . . . . . . . . . . . . 1,567 2,454 3,600 7,621
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 518 ---
** Dr. Yang Rui is the chief executive of the Company during the Relevant Periods.
(i) Mr. Wang Zhaobin has tendered his resignation with effect from 27 April 2023 due to age.
(ii) Mr. Lou Zhiqiang has been appointed as a supervisor of the Company with effect from April 2023.
(iii) Mr. Wang Jinliang has been appointed as an independent director of the Company with effect from
December 2015 and has tendered his resignation with effect from 12 June 2024 due to age.
(iv) Mr. Wang Jin has been appointed as an independent director of the Company with effect from June
2024.
(v) Mr. Wang Xi has been appointed as an independent director of the Company with effect from June
2024.
(vi) Ms. He Rong has been appointed as an executive director of the Company with effect from June
2024. She is also the chief financial officer of the Company.
There was no arrangement under which a director waived or agreed to waive any
remuneration during the Relevant Periods.
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the years ended 31 December 2022, 2023 and
2024 and the five months ended 31 May 2024 and 2025 included three, three, four, four and
four directors and supervisor, respectively, details of whose remuneration are set out in note
8 to the Historical Financial Information.
Details of the remuneration for the remaining two, two, one, one and one highest paid
employees who are neither directors, supervisors nor the chief executive of the Company
during the years ended 31 December 2022, 2023 and 2024 and the five months ended 31
May 2024 and 2025 are as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Salaries, allowances and benefits
i nk i n d ................. 1 , 5 2 0 1 , 8 0 7 8 3 2 3 0 9 3 0 8
Performance related bonuses . . . . 4,387 6,785 1,802 751 419
Share incentive plan expense. . . . 1,642 1,962 493 336 112
Total . . . . . . . . . . . . . . . . . . . . 7,549 10,554 3,127 1,396 839
APPENDIX I ACCOUNTANTS ’ REPORT
I – 59


--- page 519 ---
The number of non-director, non-supervisor and non-chief executive highest paid
employees whose remuneration fell with in the following bands is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Nil to HKD1,000,000 –––– 1
HKD1,000,001 to HKD1,500,000 –––––
HKD1,500,001 to HKD2,000,000 ––– 1 –
HKD2,500,001 to HKD3,000,000 –––––
HKD3,000,001 to HKD3,500,000 –– 1 ––
HKD3,500,001 to HKD4,000,000 1 ––––
HKD4,500,001 to HKD5,000,000 1 1 –––
HKD5,000,001 to HKD5,500,000 –––––
HKD7,000,001 to HKD7,500,000 – 1 –––
T o t a l 22111
During the Relevant Periods and the five months ended 31 May 2024, awarded shares
were granted to two non-director, non-supervisor and non-chief executive highest paid
employees in respect of their services to the Group, further details of which are included in
the disclosures in note 34 to the Historical Fi nancial Information. The fair value of such
awarded shares, which has been recognised in profit or loss over the vesting period, was
determined as at the date of grant and the am ount included in the Historical Financial
Information is included in the above non-director and non-chief executive highest paid
employees ’ remuneration disclosures.
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived
from the countries or jurisdictions in whic h members of the Group are domiciled and
operate.
Under the Law of the PRC on Enterprise Income Tax (the ‘‘EIT Law ’’)a n dt h e
Implementation Regulation of the EIT Law, the EIT rate of the PRC subsidiaries is 25%
unless they are subject to preferential tax as set out below:
The Company was qualified as a High and New Technology Enterprise in 2019 and
2022 and is entitled to a preferential tax rate of 15% from 2019 to 2024. This qualification
is subject to review by the re levant tax authority in the P RC for every three years.
Shuangdeng Front was qualified as a High and New Technology Enterprise in 2021
and 2024 and is entitled to a preferential tax rate of 15% from 2021 to 2026. This
qualification is subject to review by the relev ant tax authority in the PRC for every three
years.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 60


--- page 520 ---
Shuangdeng Runyoung was qualified as a High and New Technology Enterprise in
2019 and 2022 and is entitled to a preferen tial tax rate of 15% from 2019 to 2024. This
qualification is subject to review by the relev ant tax authority in the PRC for every three
years.
Huifeng Juneng was qualified as a High and New Technology Enterprise in 2024 and
is entitled to a preferential tax rate of 15% from 2024 to 2026. This qualification is subject
to review by the relevant tax authority in the PRC for every three years.
Shuangdeng Energy Storage was qualified a s Micro and Small Enterprise pursuant to
the PRC tax regulations and entitled to prefere ntial tax rates of 2.5% for the year ended 31
December 2022.
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Current income tax – Mainland
C h i n a .................. 2 7 , 3 2 6 8 1 , 5 6 8 5 6 , 2 3 9 2 8 , 6 0 5 2 1 , 8 5 7
Current income tax – Overseas . . 96 99 67 9 186
Deferred income tax (note 15) . . . 10,223 (20,692) (6,925) (7,275) (7,366)
Income tax charge for the year/
period . . . . . . . . . . . . . . . . . 37,645 60,975 49,381 21,339 14,677
A reconciliation of the tax expense applicable to profit before tax using the statutory
rates for the countries or jurisdictions in which the Company and its subsidiaries are
domiciled to the tax expense at the ap plicable tax rate is as follows:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Profit before tax . . . . . . . . . . . . 318,670 446,178 402,712 161,031 141,380
Tax at the tax rate of 15% . . . . . 47,801 66,927 60,407 24,155 21,207
Effect of different tax rates of the
subsidiaries . . . . . . . . . . . . . . (209) 970 (4,337) (515) (29)
Expenses not deductible for tax . . 3,715 6,039 4,511 1,667 1,265
Additional deductible allowance
for research and development
costs . . . . . . . . . . . . . . . . . . (14,521) (15,652) (14,982) (6,197) (7,814)
Temporary difference and tax
losses not recognised . . . . . . . 859 2,691 3,782 2,229 48
Tax charge at the Group ’s
effective rate . . . . . . . . . . . . . 37,645 60,975 49,381 21,339 14,677
APPENDIX I ACCOUNTANTS ’ REPORT
I – 61


--- page 521 ---
11. DIVIDENDS
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
D i v i d e n d s ................. – 48,366 73,803 – 60,906
The Board of Directors declared the payment of a final dividend of RMBnil,
RMB0.135, RMB0.206, nil and RMB0.170 per ordinary share for the years ended 31
December 2022, 2023 and 2024 and the five months ended 31 May 2024 and 2025,
respectively.
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY
HOLDERS OF THE PARENT
The basic earnings per share is calculated ba sed on the profit attributable to the owners
of the parent and the weighted average number of ordinary shares outstanding during the
Relevant Periods and the five months ended 31 May 2024. The Group had no potentially
dilutive ordinary shares outstanding during the Relevant Periods and the five months ended
31 May 2024.
The calculations of basic and diluted earnings per share are based on:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Earnings
Profit attributable to ordinary equity holders of
the parent, used in the basic and diluted
e a r n i n g sp e rs h a r ec a l c u l a t i o n s ........ 281,019 385,203 353,331 139,692 126,703
Shares
Weighted average number of ordinary shares
outstanding during the year used in the
basic and diluted earnings per share
c a l c u l a t i o n s ................... 330,929,392 358,269,000 358,269,000 358,269,000 358,269,000
APPENDIX I ACCOUNTANTS ’ REPORT
I – 62


--- page 522 ---
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2022
At 1 January 2022:
C o s t ............. 3 5 1 , 2 8 8 6 , 5 5 3 7 4 2 , 3 7 9 7 , 8 7 1 8 1 , 5 8 8 2 1 2 , 2 0 3 1 , 4 0 1 , 8 8 2
Accumulated
depreciation and
i m p a i r m e n t....... ( 1 3 5 , 3 1 8 ) ( 4 , 9 0 0 ) ( 3 9 5 , 0 3 1 ) ( 6 , 4 6 2 ) ( 5 8 , 7 8 7 ) – (600,498)
Net carrying amount . . 215,970 1,653 347,348 1,409 22,801 212,203 801,384
At 1 January 2022, net
of accumulated
depreciation and
i m p a i r m e n t....... 2 1 5 , 9 7 0 1 , 6 5 3 3 4 7 , 3 4 8 1 , 4 0 9 2 2 , 8 0 1 2 1 2 , 2 0 3 8 0 1 , 3 8 4
A d d i t i o n s......... 5 3 3 , 4 6 0 1 2 1 , 0 8 4 3 , 7 1 6 6 , 9 5 7 1 3 , 6 5 9 1 4 8 , 9 2 9
D i s p o s a l s ......... ( 1 7 ) – (860) (439) (309) – (1,625)
Depreciation provided
d u r i n gt h ey e a r .... ( 1 7 , 2 3 4 ) ( 1 , 2 4 1 ) ( 8 6 , 0 1 0 ) ( 4 9 5 ) ( 1 1 , 6 6 2 ) – (116,642)
T r a n s f e r s .......... 2 8 , 0 3 3 – 185,330 289 11,411 (225,063) –
At 31 December 2022,
net of accumulated
depreciation and
i m p a i r m e n t....... 2 2 6 , 8 0 5 3 , 8 7 2 5 6 6 , 8 9 2 4 , 4 8 0 2 9 , 1 9 8 7 9 9 8 3 2 , 0 4 6
At 31 December 2022:
C o s t ............. 3 7 9 , 3 5 8 1 0 , 0 1 2 1 , 0 2 9 , 4 6 4 7 , 3 6 6 9 4 , 7 0 8 7 9 9 1 , 5 2 1 , 7 0 7
Accumulated
depreciation and
i m p a i r m e n t....... ( 1 5 2 , 5 5 3 ) ( 6 , 1 4 0 ) ( 4 6 2 , 5 7 2 ) ( 2 , 8 8 6 ) ( 6 5 , 5 1 0 ) – (689,661)
Net carrying amount . . 226,805 3,872 566,892 4,480 29,198 799 832,046
APPENDIX I ACCOUNTANTS ’ REPORT
I – 63


--- page 523 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2023
At 1 January 2023:
C o s t ............. 3 7 9 , 3 5 8 1 0 , 0 1 2 1 , 0 2 9 , 4 6 4 7 , 3 6 6 9 4 , 7 0 8 7 9 9 1 , 5 2 1 , 7 0 7
Accumulated
depreciation and
i m p a i r m e n t....... ( 1 5 2 , 5 5 3 ) ( 6 , 1 4 0 ) ( 4 6 2 , 5 7 2 ) ( 2 , 8 8 6 ) ( 6 5 , 5 1 0 ) – (689,661)
Net carrying amount . . 226,805 3,872 566,892 4,480 29,198 799 832,046
At 1 January 2023, net
of accumulated
depreciation and
i m p a i r m e n t....... 2 2 6 , 8 0 5 3 , 8 7 2 5 6 6 , 8 9 2 4 , 4 8 0 2 9 , 1 9 8 7 9 9 8 3 2 , 0 4 6
A d d i t i o n s......... 1 , 6 3 6 7 , 9 7 4 6 , 2 0 8 2 , 9 8 1 5 , 8 2 4 3 6 0 , 9 7 2 3 8 5 , 5 9 5
D i s p o s a l s ......... – (23) (2,269) (178) (305) – (2,775)
Reclassification to
assets of a disposal
group classified as
held for sale
(note 25) –– (20,248) ––– (20,248)
Depreciation provided
d u r i n gt h ey e a r .... ( 1 7 , 5 4 3 ) ( 1 , 6 9 4 ) ( 8 1 , 1 3 3 ) ( 1 , 3 6 9 ) ( 8 , 6 3 2 ) – (110,371)
T r a n s f e r s .......... –– 11,563 197 3,603 (15,363) –
At 31 December 2023,
net of accumulated
depreciation and
i m p a i r m e n t....... 2 1 0 , 8 9 8 1 0 , 1 2 9 4 8 1 , 0 1 3 6 , 1 1 1 2 9 , 6 8 8 3 4 6 , 4 0 8 1 , 0 8 4 , 2 4 7
At 31 December 2023:
C o s t ............. 3 8 0 , 9 9 4 1 7 , 9 6 3 1 , 0 0 1 , 1 8 9 9 , 7 8 2 1 0 0 , 9 9 6 3 4 6 , 4 0 8 1 , 8 5 7 , 3 3 2
Accumulated
depreciation and
i m p a i r m e n t....... ( 1 7 0 , 0 9 6 ) ( 7 , 8 3 4 ) ( 5 2 0 , 1 7 6 ) ( 3 , 6 7 1 ) ( 7 1 , 3 0 8 ) – (773,085)
Net carrying amount . . 210,898 10,129 481,013 6,111 29,688 346,408 1,084,247
APPENDIX I ACCOUNTANTS ’ REPORT
I – 64


--- page 524 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2024
At 1 January 2024:
C o s t ............. 3 8 0 , 9 9 4 1 7 , 9 6 3 1 , 0 0 1 , 1 8 9 9 , 7 8 2 1 0 0 , 9 9 6 3 4 6 , 4 0 8 1 , 8 5 7 , 3 3 2
Accumulated
d e p r e c i a t i o n ....... ( 1 7 0 , 0 9 6 ) ( 7 , 8 3 4 ) ( 5 2 0 , 1 7 6 ) ( 3 , 6 7 1 ) ( 7 1 , 3 0 8 ) – (773,085)
Net carrying amount . . 210,898 10,129 481,013 6,111 29,688 346,408 1,084,247
At 1 January 2024, net
of accumulated
d e p r e c i a t i o n ....... 2 1 0 , 8 9 8 1 0 , 1 2 9 4 8 1 , 0 1 3 6 , 1 1 1 2 9 , 6 8 8 3 4 6 , 4 0 8 1 , 0 8 4 , 2 4 7
A d d i t i o n s......... 6 2 9 3 , 9 5 2 1 2 , 2 6 0 1 , 1 9 1 1 5 , 6 5 1 2 3 0 , 5 1 9 2 6 4 , 2 0 2
D i s p o s a l s ......... – (73) (3,947) (35) (987) – (5,042)
Depreciation provided
d u r i n gt h ey e a r .... ( 2 2 , 1 7 9 ) ( 2 , 8 0 1 ) ( 8 9 , 0 5 5 ) ( 1 , 5 2 3 ) ( 1 0 , 7 2 5 ) – (126,283)
T r a n s f e r s .......... 1 5 7 , 6 2 4 – 398,859 – 17,964 (574,447) –
At 31 December 2024,
net of accumulated
depreciation and
i m p a i r m e n t....... 3 4 6 , 9 7 2 1 1 , 2 0 7 7 9 9 , 1 3 0 5 , 7 4 4 5 1 , 5 9 1 2 , 4 8 0 1 , 2 1 7 , 1 2 4
At 31 December 2024:
C o s t ............. 5 3 9 , 2 4 7 1 6 , 8 7 5 1 , 4 0 2 , 0 2 8 1 0 , 7 4 3 1 3 2 , 3 7 4 2 , 4 8 0 2 , 1 0 3 , 7 4 7
Accumulated
d e p r e c i a t i o n ....... ( 1 9 2 , 2 7 5 ) ( 5 , 6 6 8 ) ( 6 0 2 , 8 9 8 ) ( 4 , 9 9 9 ) ( 8 0 , 7 8 3 ) – (886,623)
Net carrying amount . . 346,972 11,207 799,130 5,744 51,591 2,480 1,217,124
APPENDIX I ACCOUNTANTS ’ REPORT
I – 65


--- page 525 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 May 2025
At 1 January 2025:
C o s t ............. 5 3 9 , 2 4 7 1 6 , 8 7 5 1 , 4 0 2 , 0 2 8 1 0 , 7 4 3 1 3 2 , 3 7 4 2 , 4 8 0 2 , 1 0 3 , 7 4 7
Accumulated
d e p r e c i a t i o n ....... ( 1 9 2 , 2 7 5 ) ( 5 , 6 6 8 ) ( 6 0 2 , 8 9 8 ) ( 4 , 9 9 9 ) ( 8 0 , 7 8 3 ) – (886,623)
Net carrying amount . . 346,972 11,207 799,130 5,744 51,591 2,480 1,217,124
At 1 January 2025, net
of accumulated
d e p r e c i a t i o n ....... 3 4 6 , 9 7 2 1 1 , 2 0 7 7 9 9 , 1 3 0 5 , 7 4 4 5 1 , 5 9 1 2 , 4 8 0 1 , 2 1 7 , 1 2 4
A d d i t i o n s......... 7 , 7 4 4 – 1,910 202 1,059 17,077 27,992
D i s p o s a l s ......... – (87) (206) (1) (90) – (384)
Depreciation provided
during the period . . . (10,549) (1,380) (45,231) (696) (5,704) – (63,560)
T r a n s f e r s .......... –– 3,216 – 200 (3,416) –
Exchange realignment . – 119 467 7 42 – 635
At 31 May 2025, net of
accumulated
d e p r e c i a t i o n ....... 3 4 4 , 1 6 7 9 , 8 5 9 7 5 9 , 2 8 6 5 , 2 5 6 4 7 , 0 9 8 1 6 , 1 4 1 1 , 1 8 1 , 8 0 7
At 31 May 2025:
C o s t ............. 5 4 6 , 9 9 1 1 6 , 9 0 9 1 , 4 0 5 , 1 1 3 1 0 , 9 3 2 1 3 3 , 2 7 6 1 6 , 1 4 1 2 , 1 2 9 , 3 6 2
Accumulated
d e p r e c i a t i o n ....... ( 2 0 2 , 8 2 4 ) ( 7 , 0 5 0 ) ( 6 4 5 , 8 2 7 ) ( 5 , 6 7 6 ) ( 8 6 , 1 7 8 ) – (947,555)
Net carrying amount . . 344,167 9,859 759,286 5,256 47,098 16,141 1,181,807
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the Group ’s
buildings with net carrying amounts of approximately RMB177,754,000, RMB164,245,000,
RMB125,114,000 and RMB427,178,000, respectively, were pledged to secure certain
interest-bearing bank and other borrowings o f the Group. Further details are given in note
29 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 66


--- page 526 ---
The Company
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2022
At 1 January 2022:
C o s t ............. 2 1 6 , 3 5 0 5 , 9 4 9 3 9 3 , 8 2 4 6 , 4 1 4 5 4 , 8 0 4 3 3 , 5 5 3 7 1 0 , 8 9 4
Accumulated
depreciation and
i m p a i r m e n t...... ( 6 7 , 2 6 5 ) ( 4 , 7 6 9 ) ( 2 1 1 , 8 4 8 ) ( 5 , 3 4 9 ) ( 3 6 , 1 8 2 ) – (325,413)
Net carrying amount . . 149,085 1,180 181,976 1,065 18,622 33,553 385,481
At 1 January 2022, net
of accumulated
depreciation and
i m p a i r m e n t...... 1 4 9 , 0 8 5 1 , 1 8 0 1 8 1 , 9 7 6 1 , 0 6 5 1 8 , 6 2 2 3 3 , 5 5 3 3 8 5 , 4 8 1
A d d i t i o n s......... – 2,720 15,577 3,598 3,714 3,024 28,633
D i s p o s a l s ......... ( 1 1 ) – (30,745) (439) (191) – (31,386)
Depreciation provided
during the year . . . (10,285) (932) (33,804) (403) (7,978) – (53,402)
T r a n s f e r s .......... –– 28,890 82 6,901 (35,873) –
At 31 December 2022,
net of accumulated
depreciation and
i m p a i r m e n t...... 1 3 8 , 7 8 9 2 , 9 6 8 1 6 1 , 8 9 4 3 , 9 0 3 2 1 , 0 6 8 7 0 4 3 2 9 , 3 2 6
At 31 December 2022:
C o s t ............. 2 1 6 , 3 3 9 8 , 6 6 9 4 0 3 , 5 9 1 5 , 5 8 5 6 2 , 0 4 1 7 0 4 6 9 6 , 9 2 9
Accumulated
depreciation and
i m p a i r m e n t...... ( 7 7 , 5 5 0 ) ( 5 , 7 0 1 ) ( 2 4 1 , 6 9 7 ) ( 1 , 6 8 2 ) ( 4 0 , 9 7 3 ) – (367,603)
Net carrying amount . . 138,789 2,968 161,894 3,903 21,068 704 329,326
APPENDIX I ACCOUNTANTS ’ REPORT
I – 67


--- page 527 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2023
At 1 January 2023:
C o s t ............. 2 1 6 , 3 3 9 8 , 6 6 9 4 0 3 , 5 9 1 5 , 5 8 5 6 2 , 0 4 1 7 0 4 6 9 6 , 9 2 9
Accumulated
depreciation and
i m p a i r m e n t...... ( 7 7 , 5 5 0 ) ( 5 , 7 0 1 ) ( 2 4 1 , 6 9 7 ) ( 1 , 6 8 2 ) ( 4 0 , 9 7 3 ) – (367,603)
Net carrying amount . . 138,789 2,968 161,894 3,903 21,068 704 329,326
At 1 January 2023, net
of accumulated
depreciation and
i m p a i r m e n t...... 1 3 8 , 7 8 9 2 , 9 6 8 1 6 1 , 8 9 4 3 , 9 0 3 2 1 , 0 6 8 7 0 4 3 2 9 , 3 2 6
A d d i t i o n s......... 1 7 6 6 , 9 4 6 5 5 7 2 , 4 8 3 4 , 7 5 5 5 6 , 2 5 5 7 1 , 1 7 2
D i s p o s a l s ......... –– (1,059) (157) (48) – (1,264)
Depreciation provided
during the year . . . (10,283) (1,274) (27,911) (1,061) (6,729) – (47,258))
T r a n s f e r s .......... –– 3,049 197 3,220 (6,466) –
At 31 December 2023,
net of accumulated
depreciation and
i m p a i r m e n t...... 1 2 8 , 6 8 2 8 , 6 4 0 1 3 6 , 5 3 0 5 , 3 6 5 2 2 , 2 6 6 5 0 , 4 9 3 3 5 1 , 9 7 6
At 31 December 2023:
C o s t ............. 2 1 6 , 5 1 5 1 5 , 6 1 5 3 9 7 , 7 7 4 7 , 9 1 7 6 9 , 2 1 6 5 0 , 4 9 3 7 5 7 , 5 3 0
Accumulated
depreciation and
i m p a i r m e n t...... ( 8 7 , 8 3 3 ) ( 6 , 9 7 5 ) ( 2 6 1 , 2 4 4 ) ( 2 , 5 5 2 ) ( 4 6 , 9 5 0 ) – (405,554)
Net carrying amount . . 128,682 8,640 136,530 5,365 22,266 50,493 351,976
APPENDIX I ACCOUNTANTS ’ REPORT
I – 68


--- page 528 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 December 2024
At 1 January 2024:
C o s t ............. 2 1 6 , 5 1 5 1 5 , 6 1 5 3 9 7 , 7 7 4 7 , 9 1 7 6 9 , 2 1 6 5 0 , 4 9 3 7 5 7 , 5 3 0
Accumulated
depreciation and
i m p a i r m e n t...... ( 8 7 , 8 3 3 ) ( 6 , 9 7 5 ) ( 2 6 1 , 2 4 4 ) ( 2 , 5 5 2 ) ( 4 6 , 9 5 0 ) – (405,554)
Net carrying amount . . 128,682 8,640 136,530 5,365 22,266 50,493 351,976
At 1 January 2024, net
of accumulated
depreciation and
i m p a i r m e n t...... 1 2 8 , 6 8 2 8 , 6 4 0 1 3 6 , 5 3 0 5 , 3 6 5 2 2 , 2 6 6 5 0 , 4 9 3 3 5 1 , 9 7 6
A d d i t i o n s......... 5 8 0 9 8 8 1 4 4 9 9 7 , 7 6 9 3 3 , 6 5 2 4 3 , 5 0 2
D i s p o s a l s ......... – (28) (877) (9) (28) – (942)
Depreciation provided
during the year . . . (11,478) (2,282) (26,264) (1,295) (7,342) – (48,661)
T r a n s f e r s .......... 2 7 , 2 2 0 – 49,530 – 6,602 (83,352) –
At 31 December 2024,
net of accumulated
depreciation and
i m p a i r m e n t...... 1 4 5 , 0 0 4 7 , 3 1 8 1 5 8 , 9 3 3 4 , 5 6 0 2 9 , 2 6 7 7 9 3 3 4 5 , 8 7 5
At 31 December 2024:
C o s t ............. 2 4 4 , 3 1 5 1 1 , 6 0 9 4 4 5 , 0 3 9 8 , 2 4 7 8 3 , 2 3 8 7 9 3 7 9 3 , 2 4 1
Accumulated
depreciation and
i m p a i r m e n t...... ( 9 9 , 3 1 1 ) ( 4 , 2 9 1 ) ( 2 8 6 , 1 0 6 ) ( 3 , 6 8 7 ) ( 5 3 , 9 7 1 ) – (447,366)
Net carrying amount . . 145,004 7,318 158,933 4,560 29,267 793 345,875
APPENDIX I ACCOUNTANTS ’ REPORT
I – 69


--- page 529 ---
Buildings
Leasehold
improvements
Plant and
machinery
Motor
vehicles
Furniture
and others
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
31 May 2025
At 1 January 2025:
C o s t ............. 2 4 4 , 3 1 5 1 1 , 6 0 9 4 4 5 , 0 3 9 8 , 2 4 7 8 3 , 2 3 8 7 9 3 7 9 3 , 2 4 1
Accumulated
d e p r e c i a t i o n ...... ( 9 9 , 3 1 1 ) ( 4 , 2 9 1 ) ( 2 8 6 , 1 0 6 ) ( 3 , 6 8 7 ) ( 5 3 , 9 7 1 ) – (447,366)
Net carrying amount . . 145,004 7,318 158,933 4,560 29,267 793 345,875
At 1 January 2025, net
of accumulated
d e p r e c i a t i o n ...... 1 4 5 , 0 0 4 7 , 3 1 8 1 5 8 , 9 3 3 4 , 5 6 0 2 9 , 2 6 7 7 9 3 3 4 5 , 8 7 5
A d d i t i o n s......... 1 , 3 2 9 – 851 154 455 8,294 11,083
D i s p o s a l s ......... – (73) (192) (1) (14) – (280)
Depreciation provided
during the period . . (4,850) (931) (10,661) (564) (3,498) – (20,504)
T r a n s f e r s .......... –– 1,013 – 146 (1,159) –
At 31 May 2025, net of
accumulated
d e p r e c i a t i o n ...... 1 4 1 , 4 8 3 6 , 3 1 4 1 4 9 , 9 4 4 4 , 1 4 9 2 6 , 3 5 6 7 , 9 2 8 3 3 6 , 1 7 4
At 31 May 2025:
C o s t ............. 2 4 5 , 6 4 4 1 1 , 5 3 6 4 4 4 , 5 3 5 8 , 3 8 1 8 3 , 7 8 1 7 , 9 2 8 8 0 1 , 8 0 5
Accumulated
d e p r e c i a t i o n ...... ( 1 0 4 , 1 6 1 ) ( 5 , 2 2 2 ) ( 2 9 4 , 5 9 1 ) ( 4 , 2 3 2 ) ( 5 7 , 4 2 5 ) – (465,631)
Net carrying amount . . 141,483 6,314 149,944 4,149 26,356 7,928 336,174
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the Company ’s
buildings with net carrying amounts of approximately RMB117,248,000, RMB108,290,000,
RMB125,114,000 and RMB122,163,000, respectively, were pledged to secure certain
interest-bearing bank and other borrowings o f the Company. Further details are given in
note 29 to the Historical Financial Information.
14. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The Group as a lessee
The Group has lease contracts mainly for various items of buildings used in its
operations. Leases of buildings generally have lease terms between 24 months and 72
months. Generally, the Group is restricted from assigning and subleasing the leased
assets outside the Group.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 70


--- page 530 ---
(a) Right-of-use assets
The carrying amounts of the Group ’s right-of-use assets and the movements
during each of the Relevant Periods are as follows:
The Group
Leasehold
land Buildings Total
RMB’000 RMB ’000 RMB ’000
A sa t1J a n u a r y2 0 2 2 ............ 1 2 8 , 7 8 5 1 0 , 5 1 0 1 3 9 , 2 9 5
A d d i t i o n s .................... – 5,598 5,598
D e p r e c i a t i o nc h a r g e ............. ( 3 , 1 8 0 ) ( 5 , 9 9 6 ) ( 9 , 1 7 6 )
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (89) (89)
As at 31 December 2022 and
1J a n u a r y2 0 2 3 .............. 1 2 5 , 6 0 5 1 0 , 0 2 3 1 3 5 , 6 2 8
A d d i t i o n s .................... 2 4 , 9 2 2 7 , 7 5 3 3 2 , 6 7 5
D e p r e c i a t i o nc h a r g e ............. ( 3 , 5 9 5 ) ( 5 , 8 7 8 ) ( 9 , 4 7 3 )
Reclassification to assets of a disposal
group classified as held for sale
(note 25) ................... – (1,000) (1,000)
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (1,124) (1,124)
As at 31 December 2023 and
1J a n u a r y2 0 2 4 .............. 1 4 6 , 9 3 2 9 , 7 7 4 1 5 6 , 7 0 6
A d d i t i o n s .................... 6 , 5 2 0 1 4 , 4 8 1 2 1 , 0 0 1
D e p r e c i a t i o nc h a r g e ............. ( 3 , 9 1 7 ) ( 9 , 0 0 8 ) ( 1 2 , 9 2 5 )
E x c h a n g er e a l i g n m e n t ........... – 326 326
As at 31 December 2024 and 1
January 2025 ................ 1 4 9 , 5 3 5 1 5 , 5 7 3 1 6 5 , 1 0 8
A d d i t i o n s .................... – 4,791 4,791
D e p r e c i a t i o nc h a r g e ............. ( 1 , 5 8 7 ) ( 5 , 0 6 5 ) ( 6 , 6 5 2 )
E x c h a n g er e a l i g n m e n t ........... – 230 230
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (240) (240)
A sa t3 1M a y2 0 2 5............. 1 4 7 , 9 4 8 1 5 , 2 8 9 1 6 3 , 2 3 7
APPENDIX I ACCOUNTANTS ’ REPORT
I – 71


--- page 531 ---
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
leasehold land with aggregate net carrying amounts of approximately
RMB115,276,000, RMB136,855,000 and RMB96,887,000 and RMB95,911,000,
respectively, was pledged to secure certain interest-bearing bank borrowings of the
Group. Further details are given in note 29 to the Historical Financial Information.
The Company
Leasehold
land Buildings Total
RMB’000 RMB ’000 RMB ’000
A sa t1J a n u a r y2 0 2 2 ............ 7 8 , 3 1 9 1 0 , 8 8 5 8 9 , 2 0 4
A d d i t i o n s .................... – 5,599 5,599
D e p r e c i a t i o nc h a r g e ............. ( 1 , 8 4 3 ) ( 7 , 4 5 2 ) ( 9 , 2 9 5 )
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (90) (90)
As at 31 December 2022 and
1J a n u a r y2 0 2 3 .............. 7 6 , 4 7 6 8 , 9 4 2 8 5 , 4 1 8
A d d i t i o n s .................... – 9,305 9,305
D e p r e c i a t i o nc h a r g e ............. ( 1 , 8 4 3 ) ( 7 , 3 4 9 ) ( 9 , 1 9 2 )
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (1,124) (1,124)
As at 31 December 2023 and
1J a n u a r y2 0 2 4 .............. 7 4 , 6 3 3 9 , 7 7 4 8 4 , 4 0 7
A d d i t i o n s .................... – 8,939 8,939
D e p r e c i a t i o nc h a r g e ............. ( 1 , 8 4 3 ) ( 9 , 1 1 4 ) ( 1 0 , 9 5 7 )
Revision of a lease term arising from a
change in the non-cancellable period
o fal e a s e .................. – 1,085 1,085
As at 31 December 2024 and 1
January 2025 ................ 7 2 , 7 9 0 1 0 , 6 8 4 8 3 , 4 7 4
A d d i t i o n s .................... – 5,285 5,285
D e p r e c i a t i o nc h a r g e ............. ( 7 6 8 ) ( 4 , 4 5 3 ) ( 5 , 2 2 1 )
Disposal as a result of decrease the
s c o p eo fl e a s e............... – (241) (241)
A sa t3 1M a y2 0 2 5............. 7 2 , 0 2 2 1 1 , 2 7 5 8 3 , 2 9 7
APPENDIX I ACCOUNTANTS ’ REPORT
I – 72


--- page 532 ---
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
leasehold land with aggregate net carrying amounts of approximately RMB76,476,000,
RMB74,633,000, RMB72,790,000 and RMB72,022,000, respectively, was pledged to
secure certain interest-bearing bank borrowings of the Company. Further details are
given in note 29 to the Historical Financial Information.
(b) Lease liabilities
The carrying amounts of lease liabilitie s and the movements during each of the
Relevant Periods are as follows:
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Carrying amount at the beginning of the
y e a r / p e r i o d................... 1 0 , 2 4 1 9 , 9 9 2 1 0 , 3 8 9 1 6 , 6 1 4
N e wl e a s e ..................... 5 , 5 9 8 7 , 7 5 3 1 4 , 4 8 1 4 , 7 9 1
Liabilities included in held for sale
(note 25) .................... – (822) ––
Accretion of interest recognised during
t h ey e a r / p e r i o d ................ 5 3 5 3 9 1 5 3 1 2 3 3
P a y m e n t s...................... ( 6 , 2 9 3 ) ( 5 , 7 6 1 ) ( 9 , 1 1 3 ) ( 6 , 5 0 5 )
Disposal as a result of decrease the scope
o fl e a s e ..................... ( 8 9 ) ( 1 , 1 6 4 ) – (262)
E x c h a n g er e a l i g n m e n t ............. –– 326 237
Carrying amount at the end of the year/
p e r i o d ...................... 9 , 9 9 2 1 0 , 3 8 9 1 6 , 6 1 4 1 5 , 1 0 8
Analysed into:
Current portion . . . . . . . . . . . . . . . . . . 5,128 6,496 8,017 6,802
Non-current portion . . . . . . . . . . . . . . . 4,864 3,893 8,597 8,306
APPENDIX I ACCOUNTANTS ’ REPORT
I – 73


--- page 533 ---
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Carrying amount at the beginning of the
y e a r / p e r i o d................... 1 1 , 0 3 8 9 , 2 0 5 1 0 , 3 8 9 1 1 , 5 4 1
N e wl e a s e ..................... 5 , 5 9 9 9 , 3 0 5 8 , 9 3 9 5 , 2 8 5
Accretion of interest recognised during
t h ey e a r / p e r i o d ................ 5 4 2 3 9 7 4 3 7 1 7 2
P a y m e n t s...................... ( 7 , 8 8 5 ) ( 7 , 3 5 4 ) ( 9 , 3 0 9 ) ( 5 , 8 6 6 )
Disposal as a result of decrease the scope
o fl e a s e ..................... ( 8 9 ) ( 1 , 1 6 4 ) – (262)
Revision of a lease term arising from a
change in the non-cancellable period
o fal e a s e.................... –– 1,085 –
Carrying amount at the end of the year/
p e r i o d ...................... 9 , 2 0 5 1 0 , 3 8 9 1 1 , 5 4 1 1 0 , 8 7 0
Analysed into:
Current portion . . . . . . . . . . . . . . . . . . 5,163 6,496 6,917 6,229
Non-current portion . . . . . . . . . . . . . . . 4,042 3,893 4,624 4,641
The maturity analysis of lease liabilities is disclosed in note 43 to the Historical
Financial Information.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Interest on lease liabilities 535 391 531 225 233
Depreciation charge of
right-of-use assets . . . . 9,176 9,473 12,925 5,022 6,652
Expense relating to short-
term leases . . . . . . . . . 3,957 4,511 5,817 2,540 2,524
Total amount recognised in
profit or loss . . . . . . . . 13,668 14,375 19,273 7,787 9,409
APPENDIX I ACCOUNTANTS ’ REPORT
I – 74


--- page 534 ---
The Company
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Interest on lease liabilities 542 397 437 190 172
Depreciation charge of
right-of-use assets . . . . 9,295 9,192 10,957 4,428 5,221
Expense relating to short-
term leases . . . . . . . . . 3,957 4,511 5,817 2,540 2,524
Total amount recognised in
profit or loss . . . . . . . . 13,794 14,100 17,211 7,158 7,917
(d) The total cash outflow for leases is disclosed in note 36 to the Historical
Financial Information.
Included in the lease liabilities, amoun ts of RMB8,925,000, RMB7,144,000,
RMB2,685,000 and RMB4,379,000 as at 31 December 2022, 2023 and 2024 and 31
May 2025, respectively, were due to related parties. Details are disclosed in note 39 to
the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 75


--- page 535 ---
15. DEFERRED TAX
The Group
The movements in deferred tax liabilities and a ssets during the year/period are as follows:
Deferred tax assets
Impairment of
financial and
contract
assets
Impairment of
inventories
and property,
plant and
equipment
Lease
liabilities
Losses
available for
offsetting
against
future
taxable
profits
Deferred
government
grants
Accrued
expenses Provisions Others Total
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
At 1 January 2022 . . . . . . . . . . . . . 10,000 2,235 1,536 13,504 11,215 14,056 4,314 1,436 58,296
Deferred tax credited/(charged)
to the profit or loss during the year(note 10) ................... 3 , 5 6 7 ( 1 3 ) ( 3 7 ) ( 9 , 0 7 2 ) 1 , 6 9 5 ( 6 , 0 9 9 ) 1 , 1 7 7 ( 1 , 4 3 6 ) ( 1 0 , 2 1 8 )
Gross deferred tax assets at
31 December 2022 . . . . . . . . . . . . 13,567 2,222 1,499 4,432 12,910 7,957 5,491 – 48,078
Deferred tax (charged)/credited to the
profit or loss during the year(note 10) ................... ( 1 , 2 0 7 ) 5 , 8 5 1 1 8 3 ( 1 , 8 2 2 ) 1 2 , 1 9 7 4 , 2 5 0 4 8 8 7 8 6 2 0 , 7 2 6
Gross deferred tax assets at
31 December 2023 . . . . . . . . . . . . 12,360 8,073 1,682 2,610 25,107 12,207 5,979 786 68,804
APPENDIX I ACCOUNTANTS ’ REPORT
I – 76


--- page 536 ---
Impairment of
financial and
contract
assets
Impairment of
inventories
and property,
plant and
equipment
Lease
liabilities
Losses
available for
offsetting
against
future
taxable
profits
Deferred
government
grants
Accrued
expenses Provisions Others Total
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
Gross deferred tax assets at
31 December 2023 and
1 January 2024. . . . . . . . . . . . . . . 12,360 8,073 1,682 2,610 25,107 12,207 5,979 786 68,804
Deferred tax credited/(charged) to the
profit or loss during the year(note 10) ................... 2 , 6 6 2 ( 2 , 9 1 1 ) 1 , 2 6 7 ( 2 , 6 1 0 ) 1 0 , 5 0 0 1 , 3 9 9 ( 1 5 1 ) ( 1 , 5 6 8 ) 8 , 5 8 8
Gross deferred tax assets at
31 December 2024 and
1J a n u a r y2 0 2 5 ............... 1 5 , 0 2 2 5 , 1 6 2 2 , 9 4 9 – 35,607 13,606 5,828 (782) 77,392
Deferred tax (charged)/credited to the
profit or loss during the period(note 10) ................... ( 2 7 8 ) ( 3 3 6 ) ( 5 3 5 ) 1 , 7 3 4 ( 4 8 9 ) 1 , 9 3 9 4 4 1 4 , 3 1 0 6 , 7 8 6
Gross deferred tax assets at
31 May 2025 . . . . . . . . . . . . . . . . 14,744 4,826 2,414 1,734 35,118 15,545 6,269 3,528 84,178
APPENDIX I ACCOUNTANTS ’ REPORT
I – 77


--- page 537 ---
Deferred tax liabilities
Fair value
changes on
financial
assets at fair
value
through
profit or loss
Right-of-use
assets Total
RMB’000 RMB ’000 RMB ’000
A t1J a n u a r y2 0 2 2 .............. – 1,577 1,577
Deferred tax charged/(credited) to the
statement of profit or loss during
the year (note 10) ............. 7 9 ( 7 4 ) 5
Gross deferred tax liabilities at
31 December 2022 and
1J a n u a r y2 0 2 3 .............. 7 9 1 , 5 0 3 1 , 5 8 2
Deferred tax (credite d)/charged to the
statement of profit or loss during
the year
(note 10) ............. ( 7 9 ) 1 1 3 3 4
Gross deferred tax liabilities at 31
December 2023 and 1 January 2024 – 1,616 1,616
Deferred tax charged to the statement
of profit or loss during the year
(note 10) ................... – 1,663 1,663
Gross deferred tax liabilities at
31 December 2024 and 1 January
2 0 2 5 ...................... – 3,279 3,279
Deferred tax credited to the statement
of profit or loss during the period
(note 10) ................... – (580) (580)
Gross deferred tax assets at
3 1M a y2 0 2 5 ................ – 2,699 2,699
APPENDIX I ACCOUNTANTS ’ REPORT
I – 78


--- page 538 ---
For presentation purposes, certain defe rred tax assets and liabilities have been
offset in the statement of financial posi tion. The following is an analysis of the
deferred tax balances of the Group for financial reporting purposes:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Net deferred tax assets recognised
in the consolidated statement of
financial position . ......... 4 6 , 4 9 6 6 7 , 1 8 8 7 4 , 1 1 3 8 1 , 4 7 9
Net deferred tax liabilities
recognised in the consolidated
statement of financial position . ––––
For the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025, the Group has tax losses arising overseas of RMB2,421,000,
RMB2,900,000, RMB5,369,000 and RMB6,835,000, respectively, that are available
indefinitely for offsetting against future ta xable profits of the companies in which the
losses arose.
For the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025, the Group also has tax losses arising in Mainland China of
RMB54,980,000, RMB36,444,000, RM38,314,000 and RMB40,080,000, respectively,
that will expire in one to ten years for offs etting against future taxable profits.
Deferred tax assets have not been recognised in respect of these losses as they
have arisen in subsidiaries that have been loss-making for some time and it is not
considered probable that taxable profits w ill be available against which the tax losses
can be utilised.
Deferred tax assets have not been recogn ised in respect of the following items:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Deductible temporary differences . 229 28,129 549 1,911
T a xl o s s e s ................ 2 7 , 8 5 2 2 2 , 0 7 2 4 1 , 2 8 6 3 9 , 8 4 5
Deferred tax assets have not been recognised in respect of the above items as it is
not considered probable that taxable profits will be available against which the above
items can be utilised.
There are no income tax consequences attaching to the payment of dividends by
the Company to its shareholders.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 79


--- page 539 ---
The Company
The movements in deferred tax liabilities and as sets during the year/period are as follows:
Deferred tax assets
Impairment
of financial
and contract
assets
Impairment
of
inventories
and
property,
plant and
equipment
Lease
liabilities
Losses
available for
offsetting
against
future
taxable
profits
Deferred
government
grants
Accrued
expenses Provisions
Derivative
financial
instruments Total
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
At 1 January 2022 . . . 9,237 1,921 1,656 6,034 7,569 11,073 4,314 – 41,804
Deferred tax credited/
(charged) to the
profit or loss during
the year. . . . . . . . . 3,520 (139) (275) (6,034) (421) (5,089) 1,177 – (7,261)
Gross deferred tax
assets at 31
December 2022 and
1 January 2023 . . . . 12,757 1,782 1,381 – 7,148 5,984 5,491 – 34,543
Deferred tax credited to
the profit or loss
during the year . . . . 342 4,701 177 – 2,490 3,492 488 – 11,690
APPENDIX I ACCOUNTANTS ’ REPORT
I – 80


--- page 540 ---
Impairment
of financial
and contract
assets
Impairment
of
inventories
and
property,
plant and
equipment
Lease
liabilities
Losses
available for
offsetting
against
future
taxable
profits
Deferred
government
grants
Accrued
expenses Provisions
Derivative
financial
instruments Total
RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000 RMB
’000
Gross deferred tax
assets at 31
December 2023 and
1 January 2024 . . . . 13,099 6,483 1,558 – 9,638 9,476 5,979 – 46,233
Deferred tax credited/
(charged) to the
profit or loss during
t h ey e a r ......... 2 , 7 0 5 ( 2 , 6 9 9 ) 1 7 3 – (1,008) (507) (151) 127 (1,360)
Gross deferred tax
assets at
31 December 2024
and 1 January 2025 . 15,804 3,784 1,731 – 8,630 8,969 5,828 127 44,873
Deferred tax (charged)/
credited to the profit
or loss during the
p e r i o d .......... ( 2 3 5 ) 3 5 ( 1 0 0 ) – (674) 624 441 (54) 37
Gross deferred tax
liabilities at
31 May 2025 . . . . . 15,569 3,819 1,631 – 7,956 9,593 6,269 73 44,910
APPENDIX I ACCOUNTANTS ’ REPORT
I – 81


--- page 541 ---
Deferred tax liabilities
Fair value
changes on
financial
assets at fair
value
through
profit or loss
Right-of-use
assets Total
RMB’000 RMB ’000 RMB ’000
A t1J a n u a r y2 0 2 2 .............. – 1,633 1,633
Deferred tax charged/(credited) to the
statement of profit or loss during
t h ey e a r ................... 7 9 ( 2 9 2 ) ( 2 1 3 )
Gross deferred tax liabilities at 31
December 2022 and 1 January 2023 79 1,341 1,420
Deferred tax (credite d)/charged to the
statement of profit or loss during
t h ey e a r ................... ( 7 9 ) 1 2 5 4 6
Gross deferred tax liabilities at 31
December 2023 and 1 January 2024 – 1,466 1,466
Deferred tax charged to the statement
of profit or loss during the year . . . – 640 640
Gross deferred tax liabilities at
31 December 2024 and
1J a n u a r y2 0 2 5 .............. – 2,106 2,106
Deferred tax credited to the statement
of profit or loss during the period. . – (415) (415)
Gross deferred tax assets at
3 1M a y2 0 2 5 ................ – 1,691 1,691
APPENDIX I ACCOUNTANTS ’ REPORT
I – 82


--- page 542 ---
For presentation purposes, certain defe rred tax assets and liabilities have been
offset in the statement of financial posi tion. The following is an analysis of the
deferred tax balances of the Company for financial reporting purposes:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Net deferred tax assets recognised
in the consolidated statement of
financial position . ......... 3 3 , 1 2 3 4 4 , 7 6 7 4 2 , 7 6 7 4 3 , 2 1 9
Net deferred tax liabilities
recognised in the consolidated
statement of financial position . ––––
For the year ended 31 December 2021, the Company has tax losses arising in
Mainland China of RMB39,955,000 that will ex pire in one to ten years for offsetting
against future taxable profits.
There are no income tax consequences attaching to the payment of dividends by
the Company to its shareholders.
16. INVESTMENT IN AN ASSOCIATE
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
S h a r eo fn e ta s s e t s ........... 1 6 , 8 1 3 1 6 , 3 3 8 1 6 , 7 6 6 1 6 , 7 9 8
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
S h a r eo fn e ta s s e t s ........... 1 0 , 3 1 0 9 , 8 3 6 1 0 , 2 6 3 1 0 , 2 9 5
The Group ’s other payable balances with the associate are disclosed in note 39 to
the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 83


--- page 543 ---
Particulars of the material associate are as follows:
Name
Particulars of
issued shares held
Place of
registration
and business
Percentage
of ownership
interest
attributable
to the Group Principal activity
Shuangdeng Tianpeng
Metallurgical Jiangsu Co., Ltd.
（「雙登天鵬冶金江蘇有限公司」）*
Registered capital
of RMB1 each
PRC/
Mainland
China
18% Recycling of
battery products
* The English name of the company represents the best effort made by the management of the Company to directly
translate the Chinese name as it does not register any official English name.
Despite the fact that the Group ’s equity interest in Shuangdeng Tianpeng
Metallurgical Jiangsu Co., Ltd. was 18% which was lower than 20%, the Group had
significant influence with a board representative assigned and had the right to
participate in the financial and operating policy decisions of Shuangdeng Tianpeng
Metallurgical Jiangsu Co., Ltd.
The following table illustrates the summari sed financial information in respect of
Shuangdeng Tianpeng Metallurgical Jiangsu Co., Ltd. reconciled to the carrying
amount in the consolidated financial statements:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
C u r r e n ta s s e t s .............. 4 1 , 8 9 2 1 2 7 , 9 5 1 2 4 5 , 4 7 1 2 4 5 , 5 8 5
N o n - c u r r e n ta s s e t s ........... 5 1 , 4 5 9 4 8 , 4 8 7 4 8 , 3 8 1 4 8 , 6 5 9
Current liabilities . . ......... ( 3 , 6 7 2 ) ( 7 0 , 9 9 3 ) ( 2 2 6 , 0 3 6 ) ( 2 2 7 , 0 5 2 )
Non-current liabilities . . . . . . . . (32 ,400) (50,800) (10,800) (10,000)
N e ta s s e t s ................. 5 7 , 2 7 9 5 4 , 6 4 5 5 7 , 0 1 6 5 7 , 1 9 2
Reconciliation to the Group ’s
interest in the associate:
Proportion of the Group ’s
o w n e r s h i p............... 1 8 % 1 8 % 1 8 % 1 8 %
Carrying amount of the investment 10,310 9,836 10,263 10,295
R e v e n u e s................. 5 2 2 , 4 9 8 7 9 7 , 7 6 9 1 , 3 3 3 , 7 1 1 6 2 1 , 4 1 0
(Loss)/profit for the year/period. . (5,027) (2,644) 2,373 180
Total comprehensive (loss)/income
f o rt h ey e a r / p e r i o d......... ( 5 , 0 2 7 ) ( 2 , 6 4 4 ) 2 , 3 7 3 1 8 0
APPENDIX I ACCOUNTANTS ’ REPORT
I – 84


--- page 544 ---
17. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Current
P r e p a y m e n t s ........ 6 6 , 7 5 5 2 6 , 9 5 7 4 0 , 9 2 1 6 9 , 5 0 2
Prepaid value-added tax (i) 6,423 31,078 5,478 17,959
Deposits and other
r e c e i v a b l e s ....... (ii) 9,552 5,895 38,891 39,580
82,730 63,930 85,290 127,041
Non-current
Prepayments for
property, plant and
e q u i p m e n t ........ 2 , 1 2 4 4 , 8 5 9 ––
Deposits and other
r e c e i v a b l e s ....... (ii) 562 2,285 2,358 1,748
T o t a l............. 2 , 6 8 6 7 , 1 4 4 2 , 3 5 8 1 , 7 4 8
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Current
P r e p a y m e n t s ........ 3 0 , 8 4 9 2 1 , 4 4 6 3 7 , 7 2 4 5 7 , 0 9 3
Prepaid value-added tax (i) 2,646 928 161 161
Deposits and other
r e c e i v a b l e s ....... (ii) 9,405 5,703 37,755 38,437
T o t a l............. 4 2 , 9 0 0 2 8 , 0 7 7 7 5 , 6 4 0 9 5 , 6 9 1
Non-current
Prepayments for
property, plant and
e q u i p m e n t ........ 1 , 0 2 2 2 , 6 6 1 ––
Deposits and other
r e c e i v a b l e s ....... (ii) 212 2,249 1,567 953
T o t a l............. 1 , 2 3 4 4 , 9 1 0 1 , 5 6 7 9 5 3
APPENDIX I ACCOUNTANTS ’ REPORT
I – 85


--- page 545 ---
(i) The Group ’s domestic sales of goods and rendering of services are subject to PRC value-added-tax
(‘‘VAT’’). Input VAT on purchases can be deducted from output VAT payable.
(ii) The financial assets included in the above balances relate to depo sits and other receivables which
were categorised in stage 1 at the end of each of the Relevant Periods. In calculating the expected
credit loss rate, the Group considers the historical loss rate and adjusts for forward-looking factors
and information. During the Relevant Periods, the deposits and other receivables had no recent history
of default and past due amounts. As at the end of each of the Relevant Periods, the loss allowance
was assessed to be minimal.
(iii) As at 31 December 2024 and 31 May 2025, the Group and the Company ’s deposits and other
receivables of RMB5,108,000 and RMB4,422,000 were pledged for future guarantee.
18. OTHER INTANGIBLE ASSETS
The Group
Software
RMB’000
31 December 2022
At 1 January 2022:
C o s t ........................................... 1 7 , 2 3 9
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 1 , 4 3 6 )
N e tc a r r y i n ga m o u n t ................................ 5 , 8 0 3
Cost at 1 January 2022, net of accumulated amortisation. . . . . . . . 5,803
A d d i t i o n s ........................................ 3 , 8 2 4
A m o r t i s a t i o np r o v i d e dd u r i n gt h ey e a r.................... ( 2 , 2 7 5 )
A t3 1D e c e m b e r2 0 2 2 ............................... 7 , 3 5 2
At 31 December 2022:
C o s t ........................................... 2 1 , 0 6 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 3 , 7 1 1 )
N e tc a r r y i n ga m o u n t ................................ 7 , 3 5 2
APPENDIX I ACCOUNTANTS ’ REPORT
I – 86


--- page 546 ---
Software
RMB’000
31 December 2023
At 1 January 2023:
C o s t ........................................... 2 1 , 0 6 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 3 , 7 1 1 )
N e tc a r r y i n ga m o u n t ................................ 7 , 3 5 2
Cost at 1 January 2023, net of accumulated amortisation. . . . . . . . 7,352
A d d i t i o n s ........................................ 2 , 3 5 4
A m o r t i s a t i o np r o v i d e dd u r i n gt h ey e a r.................... ( 2 , 5 5 7 )
A t3 1D e c e m b e r2 0 2 3 ............................... 7 , 1 4 9
At 31 December 2023:
C o s t ........................................... 2 3 , 4 1 7
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 6 , 2 6 8 )
N e tc a r r y i n ga m o u n t ................................ 7 , 1 4 9
31 December 2024
At 1 January 2024:
C o s t ........................................... 2 3 , 4 1 7
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 6 , 2 6 8 )
N e tc a r r y i n ga m o u n t ................................ 7 , 1 4 9
Cost at 1 January 2024, net of accumulated amortisation. . . . . . . . 7,149
A d d i t i o n s ........................................ 4 , 7 9 5
Amortisation provided during the period . . . . . . . . . . . . . . . . . . . (3,623)
A t3 1D e c e m b e r2 0 2 4 ............................... 8 , 3 2 1
At 31 December 2024:
C o s t ........................................... 2 8 , 2 1 2
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 9 , 8 9 1 )
N e tc a r r y i n ga m o u n t ................................ 8 , 3 2 1
APPENDIX I ACCOUNTANTS ’ REPORT
I – 87


--- page 547 ---
Software
RMB’000
31 May 2025
At 1 January 2025:
C o s t ........................................... 2 8 , 2 1 2
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 9 , 8 9 1 )
N e tc a r r y i n ga m o u n t ................................ 8 , 3 2 1
Cost at 1 January 2025, net of accumulated amortisation. . . . . . . . 8,321
A d d i t i o n s ........................................ 7 4 1
Amortisation provided during the period . . . . . . . . . . . . . . . . . . . (1,274)
A t3 1M a y2 0 2 5................................... 7 , 7 8 8
At 31 May 2025:
C o s t ........................................... 2 8 , 9 5 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 2 1 , 1 6 5 )
N e tc a r r y i n ga m o u n t ................................ 7 , 7 8 8
APPENDIX I ACCOUNTANTS ’ REPORT
I – 88


--- page 548 ---
The Company
Software
RMB’000
31 December 2022
At 1 January 2022:
C o s t ........................................... 1 6 , 9 3 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 1 , 3 8 3 )
N e tc a r r y i n ga m o u n t ................................ 5 , 5 5 0
Cost at 1 January 2022, net of accumulated amortisation. . . . . . . . 5,550
A d d i t i o n s ........................................ 7 9 5
A m o r t i s a t i o np r o v i d e dd u r i n gt h ey e a r.................... ( 1 , 6 7 0 )
A t3 1D e c e m b e r2 0 2 2 ............................... 4 , 6 7 5
At 31 December 2022:
C o s t ........................................... 1 7 , 7 2 8
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 3 , 0 5 3 )
N e tc a r r y i n ga m o u n t ................................ 4 , 6 7 5
Cost at 1 January 2023, net of accumulated amortisation. . . . . . . . 4,675
A d d i t i o n s ........................................ 2 , 2 3 5
A m o r t i s a t i o np r o v i d e dd u r i n gt h ey e a r.................... ( 1 , 9 0 1 )
A t3 1D e c e m b e r2 0 2 3 ............................... 5 , 0 0 9
At 31 December 2023:
C o s t ........................................... 1 9 , 9 6 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 4 , 9 5 4 )
N e tc a r r y i n ga m o u n t ................................ 5 , 0 0 9
APPENDIX I ACCOUNTANTS ’ REPORT
I – 89


--- page 549 ---
Software
RMB’000
31 December 2024
At 1 January 2024:
C o s t ........................................... 1 9 , 9 6 3
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 4 , 9 5 4 )
N e tc a r r y i n ga m o u n t ................................ 5 , 0 0 9
Cost at 1 January 2024, net of accumulated amortisation. . . . . . . . 5,009
A d d i t i o n s ........................................ 3 , 5 3 2
A m o r t i s a t i o np r o v i d e dd u r i n gt h ey e a r.................... ( 2 , 7 9 5 )
A t3 1D e c e m b e r2 0 2 4 ............................... 5 , 7 4 6
At 31 December 2024:
C o s t ........................................... 2 3 , 4 9 5
A c c u m u l a t e da m o r t i s a t i o n ............................. ( 1 7 , 7 4 9 )
N e tc a r r y i n ga m o u n t ................................ 5 , 7 4 6
31 May 2025
At 1 January 2025:
C o s t ........................................... 2 3 , 4 9 5
A c c u m u l a t e da m o r t i s a t i o n ............................ ( 1 7 , 7 4 9 )
N e tc a r r y i n ga m o u n t ................................ 5 , 7 4 6
Cost at 1 January 2025, net of accumulated amortisation. . . . . . . . 5,746
A d d i t i o n s ....................................... 3 5 3
Amortisation provided during the period . . . . . . . . . . . . . . . . . . . (881)
A t3 1M a y2 0 2 5................................... 5 , 2 1 8
At 31 May 2025:
C o s t ........................................... 2 3 , 8 4 8
A c c u m u l a t e da m o r t i s a t i o n ............................ ( 1 8 , 6 3 0 )
N e tc a r r y i n ga m o u n t ................................ 5 , 2 1 8
APPENDIX I ACCOUNTANTS ’ REPORT
I – 90


--- page 550 ---
19. INVENTORIES
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
R a wm a t e r i a l s .............. 1 3 0 , 6 8 9 5 0 , 4 9 9 6 2 , 5 0 1 1 0 9 , 7 4 5
W o r ki np r o g r e s s ............ 2 2 9 , 0 6 7 3 0 4 , 4 6 3 2 6 0 , 2 2 7 2 8 5 , 0 8 8
G o o d si nt r a n s i t ............ 6 0 , 1 7 2 2 9 , 0 3 7 3 0 , 4 2 6 2 6 , 6 1 2
F i n i s h e dg o o d s............. 1 3 1 , 8 4 4 1 2 9 , 0 5 6 1 9 1 , 8 3 5 3 8 3 , 2 6 5
551,772 513,055 544,989 804,710
Impairment allowance . . . . . . . . (14,810) (53,821) (31,483) (30,931)
T o t a l.................... 5 3 6 , 9 6 2 4 5 9 , 2 3 4 5 1 3 , 5 0 6 7 7 3 , 7 7 9
The movements in the loss allowance f or impairment of inventories are as
follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/
p e r i o d .................. 1 3 , 7 8 0 1 4 , 8 1 0 5 3 , 8 2 1 3 1 , 4 8 3
Provision for impairment losses,
n e t .................... 1 , 0 3 0 3 9 , 0 1 1 ( 2 2 , 3 3 8 ) ( 5 5 2 )
At the end of the year/period . . . 14,810 53,821 31,483 30,931
APPENDIX I ACCOUNTANTS ’ REPORT
I – 91


--- page 551 ---
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
R a wm a t e r i a l s .............. 7 7 , 8 4 0 3 0 , 5 8 1 2 7 , 9 7 7 6 6 , 0 3 9
W o r ki np r o g r e s s ............ 1 4 9 , 8 3 4 2 5 5 , 5 4 4 1 9 2 , 9 8 4 1 9 5 , 8 6 5
G o o d si nt r a n s i t ............ 6 0 , 1 7 2 2 9 , 0 3 7 3 0 , 4 2 6 2 6 , 6 1 2
F i n i s h e dg o o d s............. 1 0 7 , 5 7 6 8 6 , 1 8 4 1 0 5 , 4 9 1 2 7 8 , 4 8 5
395,422 401,346 356,878 567,001
Impairment allowance . . . . . . . . (11,882) (43,218) (25,227) (25,461)
T o t a l.................... 3 8 3 , 5 4 0 3 5 8 , 1 2 8 3 3 1 , 6 5 1 5 4 1 , 5 4 0
The movements in the loss allowance f or impairment of inventories are as
follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/
p e r i o d .................. 1 1 , 2 5 8 1 1 , 8 8 2 4 3 , 2 1 8 2 5 , 2 2 7
Provision for impairment losses,
n e t .................... 6 2 4 3 1 , 3 3 6 ( 1 7 , 9 9 1 ) 2 3 4
At the end of the year/period . . . 11,882 43,218 25,227 25,461
APPENDIX I ACCOUNTANTS ’ REPORT
I – 92


--- page 552 ---
20. TRADE AND BILLS RECEIVABLES
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
T r a d er e c e i v a b l e s ........... 1 , 8 7 6 , 8 0 8 1 , 6 0 1 , 1 0 0 2 , 3 0 3 , 2 0 8 2 , 3 8 6 , 1 8 7
Bills receivables . . . ......... 7 1 , 3 8 4 8 4 , 4 6 7 1 0 8 , 1 8 6 9 1 , 6 4 6
I m p a i r m e n t ................ ( 8 5 , 9 8 1 ) ( 7 6 , 2 4 9 ) ( 9 3 , 1 1 3 ) ( 9 1 , 2 7 0 )
T o t a l.................... 1 , 8 6 2 , 2 1 1 1 , 6 0 9 , 3 1 8 2 , 3 1 8 , 2 8 1 2 , 3 8 6 , 5 6 3
Denominated in RMB . . . . . . . . 1,596,408 1,371,254 2,075,333 2,160,339
D e n o m i n a t e di nU S D ......... 2 6 3 , 0 6 4 2 3 5 , 3 9 1 2 3 9 , 1 2 8 2 2 2 , 1 0 7
D e n o m i n a t e di nE U R ......... 2 , 7 3 9 2 , 6 7 3 3 , 8 2 0 4 , 1 1 7
T o t a l.................... 1 , 8 6 2 , 2 1 1 1 , 6 0 9 , 3 1 8 2 , 3 1 8 , 2 8 1 2 , 3 8 6 , 5 6 3
The Group ’s trading terms with its customers are mainly on credit. The credit
term is generally one to six months. The Gr oup seeks to maintain strict control over its
outstanding receivables and has a credit control process to minimise credit risk. The
Group does not hold any collateral or oth er credit enhancements over its trade
receivable balances. Trade receiv ables are non-interest-bearing.
The Group ’s bills receivables were all aged within six months and were not past
due.
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the bills
receivables with net carrying amounts of RMB8,509,000, RMB208,000, RMB236,000
and RMB5,785,000 respectively, were pledged to secure certain of interest-bearing
bank borrowings of the Group (note 29).
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the trade
receivables with net carrying amounts of RMB312,319,000, RMB33,096,000,
RMB116,553,000 and RMB142,348,000 respectively, were pledged to secure certain
of the interest-bearing bank borrowings of the Group (note 29).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 93


--- page 553 ---
An ageing analysis of the Group ’s trade and bills receivables, based on the
revenues recognition date and net of loss allowance, as at the end of each of the
Relevant Periods is as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n6m o n t h s............ 1 , 5 3 9 , 7 9 4 1 , 3 5 3 , 1 0 9 2 , 0 0 2 , 8 4 2 2 , 0 7 4 , 7 8 7
7t o1 2m o n t h s............. 2 1 9 , 8 5 9 1 6 2 , 3 3 0 2 0 7 , 9 0 5 2 0 4 , 5 6 1
1t o2y e a r s ............... 8 8 , 9 3 5 8 4 , 6 3 0 1 0 0 , 4 4 8 1 0 0 , 9 9 4
2t o3y e a r s ............... 1 1 , 9 7 6 8 , 7 7 2 6 , 1 3 2 5 , 4 4 9
3t o4y e a r s ............... 1 , 6 4 7 4 7 7 9 5 4 7 7 2
T o t a l.................... 1 , 8 6 2 , 2 1 1 1 , 6 0 9 , 3 1 8 2 , 3 1 8 , 2 8 1 2 , 3 8 6 , 5 6 3
The movements in the loss allowance for impairment of trade and bills
receivables are as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/
p e r i o d .................. 6 4 , 5 2 1 8 5 , 9 8 1 7 6 , 2 4 9 9 3 , 1 1 3
Impairment losses, net . . . . . . . . 21,495 5,254 17,526 (1,437)
Amount written off as
u n c o l l e c t i b l e............. ( 3 5 ) ( 2 , 9 8 2 ) ( 6 6 2 ) ( 4 0 6 )
Reclassification to assets of a
disposal group classified as held
f o rs a l e ................. – (12,004) ––
At the end of the year/period . . . 85,981 76,249 93,113 91,270
The Group applies the simplified approac h in calculating ECLs for trade and bills
receivables. Trade and bills receivables relating to customers with known financial
difficulties or significant doubt on collec tion are assessed individually for impairment
allowance. The remaining trade and bills re ceivables are grouped and collectively
assessed for impairment allowance. Under the collective approach, an impairment
analysis is performed at each reporting date using a provision matrix to measure
expected credit losses. The provision rates are based on the ageing analysis for
grouping of customers that have similar loss patterns. The calculation reflects the
probability-weighted outcome, the tim e value of money and reasonable and
supportable information that is available at the reporting date about past events,
current conditions and forecas ts of future economic conditions. Generally, trade and
bills receivables are written off according to management ’s approval.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 94


--- page 554 ---
During the Relevant Periods, there was no s ignificant fluctuation for the overall
expected credit loss rates, so the Group a dopted similar expected credit loss rate.
Set out below is the information about the credit risk exposure on the Group ’’s
trade and bills receivables using a provision matrix:
As at 31 December 2022
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit
losses
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 14,275 14,275 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 1,569,826 30,032 1,539,794
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 3 1 , 4 3 1 1 1 , 5 7 2 2 1 9 , 8 5 9
A g e d1t o2y e a r s......... 1 5 . 0 0 1 0 4 , 6 2 8 1 5 , 6 9 3 8 8 , 9 3 5
A g e d2t o3y e a r s......... 3 0 . 0 0 1 7 , 1 0 9 5 , 1 3 3 1 1 , 9 7 6
A g e d3t o4y e a r s......... 8 0 . 0 0 8 , 2 3 7 6 , 5 9 0 1 , 6 4 7
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 2 , 6 8 6 2 , 6 8 6 –
T o t a l.................... 1 , 9 4 8 , 1 9 2 8 5 , 9 8 1 1 , 8 6 2 , 2 1 1
As at 31 December 2023
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 90.25 19,025 17,168 1,857
Provision on a collective basis
Aged less than 6 months . . . . 2.00 1,377,282 26,030 1,351,252
A g e d7t o1 2m o n t h s ....... 5 . 0 0 1 7 0 , 8 7 4 8 , 5 4 4 1 6 2 , 3 3 0
A g e d1t o2y e a r s......... 1 5 . 0 0 9 9 , 5 6 5 1 4 , 9 3 5 8 4 , 6 3 0
A g e d2t o3y e a r s......... 3 0 . 0 0 1 2 , 5 3 2 3 , 7 6 0 8 , 7 7 2
A g e d3t o4y e a r s......... 8 0 . 0 0 2 , 3 8 6 1 , 9 0 9 4 7 7
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 3 , 9 0 3 3 , 9 0 3 –
T o t a l.................... 1 , 6 8 5 , 5 6 7 7 6 , 2 4 9 1 , 6 0 9 , 3 1 8
APPENDIX I ACCOUNTANTS ’ REPORT
I – 95


--- page 555 ---
As at 31 December 2024
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 15,483 15,483 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 2,041,930 39,088 2,002,842
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 1 8 , 8 4 7 1 0 , 9 4 2 2 0 7 , 9 0 5
A g e d1t o2y e a r s......... 1 5 . 0 0 1 1 8 , 1 7 4 1 7 , 7 2 6 1 0 0 , 4 4 8
A g e d2t o3y e a r s......... 3 0 . 0 0 8 , 7 6 0 2 , 6 2 8 6 , 1 3 2
A g e d3t o4y e a r s......... 8 0 . 0 0 4 , 7 7 0 3 , 8 1 6 9 5 4
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 3 , 4 3 0 3 , 4 3 0 –
T o t a l.................... 2 , 4 1 1 , 3 9 4 9 3 , 1 1 3 2 , 3 1 8 , 2 8 1
As at 31 May 2025
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 11,915 11,915 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 2,115,798 41,011 2,074,787
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 1 5 , 3 2 7 1 0 , 7 6 6 2 0 4 , 5 6 1
A g e d1t o2y e a r s......... 1 5 . 0 0 1 1 8 , 8 1 6 1 7 , 8 2 2 1 0 0 , 9 9 4
A g e d2t o3y e a r s......... 3 0 . 0 0 7 , 7 8 4 2 , 3 3 5 5 , 4 4 9
A g e d3t o4y e a r s......... 8 0 . 0 0 3 , 8 5 9 3 , 0 8 7 7 7 2
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 4 , 3 3 4 4 , 3 3 4 –
T o t a l.................... 2 , 4 7 7 , 8 3 3 9 1 , 2 7 0 2 , 3 8 6 , 5 6 3
APPENDIX I ACCOUNTANTS ’ REPORT
I – 96


--- page 556 ---
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
T r a d er e c e i v a b l e s ........... 1 , 8 5 7 , 7 0 6 1 , 5 9 6 , 2 0 9 2 , 2 6 9 , 5 1 4 2 , 2 8 4 , 9 8 1
Bills receivables . . . ......... 7 1 , 3 8 4 8 4 , 4 6 7 1 0 8 , 1 8 6 9 1 , 6 4 6
I m p a i r m e n t ................ ( 7 9 , 4 9 7 ) ( 7 4 , 0 4 6 ) ( 9 0 , 6 5 4 ) ( 8 7 , 6 9 3 )
N e tc a r r y i n ga m o u n t ......... 1 , 8 4 9 , 5 9 3 1 , 6 0 6 , 6 3 0 2 , 2 8 7 , 0 4 6 2 , 2 8 8 , 9 3 4
The Company ’s trading terms with its customers a re mainly on credit. The credit
period is generally from one to six months. The Company seeks to maintain strict
control over its outstanding receivables and has a credit control process to minimise
credit risk. The Company does not hold any collateral or other credit enhancements
over its trade receivable balances. Trade receivables are non-interest-bearing.
The Company ’s bills receivable were all aged within six months and were not
past due.
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the bills
receivables with net carrying amounts of RMB8,509,000, RMB208,000, RMB236,000
and RMB5,785,000, respectively, were pledged to secure certain of the interest-bearing
bank borrowings of the Company (note 29).
As at 31 December 2022, 2023 and 2024 and 31 May 2025 certain of the trade
receivables with net carrying amounts of RMB312,319,000, RMB33,096,000,
RMB116,553,000 and RMB142,348,000, respectively, were pledged to secure certain
of the interest-bearing bank borrowings of the Company (note 29).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 97


--- page 557 ---
An ageing analysis of the Company ’s trade and bills receivables, based on the
revenues recognition date and net of loss allowance, as at the end of each of the
Relevant Periods is as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n6m o n t h s............ 1 , 5 3 7 , 7 5 6 1 , 3 5 2 , 4 3 2 1 , 9 7 3 , 8 6 2 1 , 9 7 9 , 8 9 5
7t o1 2m o n t h s............. 2 1 7 , 1 1 8 1 6 2 , 2 6 3 2 0 6 , 2 2 3 2 0 1 , 9 3 6
1t o2y e a r s ............... 8 4 , 5 9 3 8 3 , 9 4 3 1 0 0 , 3 6 6 1 0 0 , 9 8 8
2t o3y e a r s ............... 9 , 1 3 6 7 , 6 1 7 5 , 7 0 0 5 , 3 7 3
3t o4y e a r s ............... 9 9 0 3 7 5 8 9 5 7 4 2
T o t a l.................... 1 , 8 4 9 , 5 9 3 1 , 6 0 6 , 6 3 0 2 , 2 8 7 , 0 4 6 2 , 2 8 8 , 9 3 4
The movements in the loss allowance for impairment of trade and bills
receivables are as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/
p e r i o d .................. 5 7 , 8 0 7 7 9 , 4 9 7 7 4 , 0 4 6 9 0 , 6 5 4
Impairment losses, net . . . . . . . . 21,690 (5,451) 16,608 (2,961)
At the end of the year/period . . . 79,497 74,046 90,654 87,693
The Company apply the simplified approach in calculating ECLs for trade and
bills receivables. Trade and bills receivab les relating to customers with known
financial difficulties or sig nificant doubt on collection are assessed individually for
impairment allowance. The remaining tr ade and bills receivables are grouped and
collectively assessed for impairment allo wance. Under the collective approach, an
impairment analysis is performed at each reporting date using a provision matrix to
measure expected credit losses. The provision rates are based on the ageing analysis
for grouping of customers that have similar loss patterns. The calculation reflects the
probability-weighted outcome, the tim e value of money and reasonable and
supportable information that is available at the reporting date about past events,
current conditions and forecas ts of future economic conditions. Generally, trade and
bills receivables are written off according to management ’s approval.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 98


--- page 558 ---
Set out below is the information about the credit risk exposure on the Company ’s
trade and bills receivables using a provision matrix:
As at 31 December 2022
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 14,275 14,275 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 1,566,645 29,969 1,536,676
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 2 8 , 5 4 5 1 1 , 4 2 7 2 1 7 , 1 1 8
A g e d1t o2y e a r s......... 1 5 . 0 0 1 0 0 , 3 8 0 1 5 , 0 5 7 8 5 , 3 2 3
A g e d2t o3y e a r s......... 3 0 . 0 0 1 3 , 5 5 1 4 , 0 6 5 9 , 4 8 6
A g e d3t o4y e a r s......... 8 0 . 0 0 4 , 9 5 2 3 , 9 6 2 9 9 0
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 7 4 2 7 4 2 –
T o t a l.................... 1 , 9 2 9 , 0 9 0 7 9 , 4 9 7 1 , 8 4 9 , 5 9 3
As at 31 December 2023
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 90.25 19,025 17,170 1,855
Provision on a collective basis
Aged less than 6 months . . . . 2.00 1,376,593 26,016 1,350,577
A g e d7t o1 2m o n t h s ....... 5 . 0 0 1 7 0 , 8 0 3 8 , 5 4 0 1 6 2 , 2 6 3
A g e d1t o2y e a r s......... 1 5 . 0 0 9 8 , 7 5 6 1 4 , 8 1 3 8 3 , 9 4 3
A g e d2t o3y e a r s......... 3 0 . 0 0 1 0 , 8 8 2 3 , 2 6 5 7 , 6 1 7
A g e d3t o4y e a r s......... 8 0 . 0 0 1 , 8 7 3 1 , 4 9 8 3 7 5
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 2 , 7 4 4 2 , 7 4 4 –
T o t a l.................... 1 , 6 8 0 , 6 7 6 7 4 , 0 4 6 1 , 6 0 6 , 6 3 0
APPENDIX I ACCOUNTANTS ’ REPORT
I – 99


--- page 559 ---
As at 31 December 2024
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 15,483 15,483 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 2,012,360 38,496 1,973,864
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 1 7 , 0 7 7 1 0 , 8 5 4 2 0 6 , 2 2 3
A g e d1t o2y e a r s......... 1 5 . 0 0 1 1 8 , 0 7 7 1 7 , 7 1 2 1 0 0 , 3 6 5
A g e d2t o3y e a r s......... 3 0 . 0 0 8 , 1 4 2 2 , 4 4 3 5 , 6 9 9
A g e d3t o4y e a r s......... 8 0 . 0 0 4 , 4 7 5 3 , 5 8 0 8 9 5
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 2 , 0 8 6 2 , 0 8 6 –
T o t a l.................... 2 , 3 7 7 , 7 0 0 9 0 , 6 5 4 2 , 2 8 7 , 0 4 6
As at 31 May 2025
Expected
credit loss
rate (%)
Gross
carrying
amount
Expected
credit loss
Net
carrying
amount
RMB’000 RMB ’000 RMB ’000
Provision on an individual basis . 100.00 11,915 11,915 –
Provision on a collective basis
Aged less than 6 months . . . . 2.00 2,018,962 39,067 1,979,895
A g e d7t o1 2m o n t h s ....... 5 . 0 0 2 1 2 , 5 6 4 1 0 , 6 2 8 2 0 1 , 9 3 6
A g e d1t o2y e a r s......... 1 5 . 0 0 1 1 8 , 8 0 9 1 7 , 8 2 1 1 0 0 , 9 8 8
A g e d2t o3y e a r s......... 3 0 . 0 0 7 , 6 7 6 2 , 3 0 3 5 , 3 7 3
A g e d3t o4y e a r s......... 8 0 . 0 0 3 , 7 0 9 2 , 9 6 7 7 4 2
A g e do v e r4y e a r s ......... 1 0 0 . 0 0 2 , 9 9 2 2 , 9 9 2 –
T o t a l.................... 2 , 3 7 6 , 6 2 7 8 7 , 6 9 3 2 , 2 8 8 , 9 3 4
APPENDIX I ACCOUNTANTS ’ REPORT
I – 100


--- page 560 ---
21. CONTRACT ASSETS
The Group and the Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Contract assets arising from:
S a l eo fp r o d u c t s ............ 9 , 5 9 0 1 7 , 9 3 7 1 6 , 8 6 6 1 7 , 8 9 9
I m p a i r m e n t ................ ( 1 , 0 7 4 ) ( 2 , 5 0 7 ) ( 3 , 1 6 6 ) ( 3 , 8 8 6 )
N e tc a r r y i n ga m o u n t ......... 8 , 5 1 6 1 5 , 4 3 0 1 3 , 7 0 0 1 4 , 0 1 3
The expected timing of recovery or settle ment for contract assets at the end of
each of the Relevant Periods is as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
W i t h i no n ey e a r ............ 1 , 6 0 8 7 , 0 2 0 5 4 6 7 2 9
A f t e ro n ey e a r .............. 6 , 9 0 8 8 , 4 1 0 1 3 , 1 5 4 1 3 , 2 8 4
T o t a l.................... 8 , 5 1 6 1 5 , 4 3 0 1 3 , 7 0 0 1 4 , 0 1 3
The Group and the Company
The movements in the loss allowance for impa irment of contract assets are as follows:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/
p e r i o d .................. 4 6 4 1 , 0 7 4 2 , 5 0 7 3 , 1 6 6
Impairment losses, net . . . . . . . . 610 1,433 659 720
At the end of the year/period . . . 1,074 2,507 3,166 3,886
APPENDIX I ACCOUNTANTS ’ REPORT
I – 101


--- page 561 ---
An impairment analysis is performed at each reporting date using a provision
matrix to measure expected credit losses. The provision rates are based on those of the
trade receivables as the contract assets and the trade receivables are from the same
customer bases. The provision rates of contract assets are based on the ageing from the
invoice of trade receivables for groupings of various customer segments with similar
loss patterns. The calculation reflects the pr obability-weighted outcome, the time value
of money and reasonable and supportable information that is available at the reporting
date about past events, current conditions and forecasts of future economic conditions.
The expected credit losses on the Group ’s contract assets for the years ended 31
December 2022, 2023 and 2024 and the five months ended 31 May 2025 were
assessed to be minimal. Set out below is the information about the credit risk exposure
on the Group ’s contract assets using a provision matrix for the years ended 31
December 2022, 2023 and 2024 and the five months ended 31 May 2025:
As at 31 December
As at
31 May
2022 2023 2024 2025
Expected credit loss rate. . . . . . . 11.20% 13.98% 18.77% 21.71%
Gross carrying amount
(RMB ’0 0 0 ).............. 9 , 5 9 0 1 7 , 9 3 7 1 6 , 8 6 6 1 7 , 8 9 9
Expected credit losses (RMB ’000) 1,074 2,507 3,166 3,886
22. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS AND
DERIVATIVE FINANCIAL INSTRUMENTS
The Group and the Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Asset
Wealth management
p r o d u c t s........... (i) –– 86,000 –
Forward currency contracts –– 3,355 –
Liability
Derivative financial
i n s t r u m e n t s......... (ii) –– 842 489
APPENDIX I ACCOUNTANTS ’ REPORT
I – 102


--- page 562 ---
(i) The unlisted investments were wealth management products issued by banks in Chinese Mainland.
They were mandatorily classified as financial assets at fair value through profit or loss as their
contractual cash flows are not solely payments of principal and interest.
(ii) The derivative financial instru ments were non-deliverable commodity derivative contracts. Commodity
derivative contracts utilised by the Group are m ainly standardised lead futures contracts on the
Shanghai Futures Exchange ( ‘‘SHFE ’’).
23. DEBT INVESTMENTS AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Current
Bills receivables . . . ......... 6 , 9 0 9 1 5 , 6 5 5 3 , 0 7 3 2 , 2 2 5
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Current
Bills receivables . . . ......... 6 , 2 5 2 1 5 , 6 5 5 3 , 0 7 3 2 , 0 6 1
Certain of the Group ’s bills receivables are held within a business model with the
objective of both holding to collect contractual cash flows and selling, which are classified
as debt investments at fair value through other comprehensive income.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 103


--- page 563 ---
24. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Cash and bank balances . . 416,882 657,538 426,566 643,116
T i m ed e p o s i t s ......... 8 2 , 1 2 2 1 6 0 , 3 9 1 2 2 7 , 3 6 9 2 1 2 , 8 1 7
T o t a l............... 4 9 9 , 0 0 4 8 1 7 , 9 2 9 6 5 3 , 9 3 5 8 5 5 , 9 3 3
Less:
Restricted bank deposits:
Pledged for issuance of
b i l l s.............. (i) 41,762 50,402 388 309
Pledged for issuance of
l e t t e r so fg u a r a n t e e .... (ii) 103,376 128,096 27,245 22,167
Pledged for future
g u a r a n t e e .......... (iii) 1,480 –––
Pledged for litigation .... (iv) –– 3,700 3,700
Restricted time deposits:
Pledged for issuance of
b i l l s.............. (i) 61,263 117,888 91,121 81,128
Pledged for issuance of
l e t t e r so fg u a r a n t e e .... (ii) 20,859 42,503 136,247 131,689
R e s t r i c t e dc a s h : ........ 2 2 8 , 7 4 0 3 3 8 , 8 8 9 2 5 8 , 7 0 1 2 3 8 , 9 9 3
Current portion . . . . . . 228,740 303,497 235,134 214,592
Non-current portion . . . – 35,392 23,567 24,401
Cash and cash equivalents 270,264 479,040 395,234 616,940
D e n o m i n a t e di nU S D .... 9 2 , 2 6 3 4 9 , 4 1 6 3 0 6 , 6 1 2 4 9 0 , 2 7 3
Denominated in RMB . . . 401,799 763,648 341,421 351,613
D e n o m i n a t e di nE U R .... 4 , 3 5 3 4 , 3 5 8 5 , 7 5 2 1 2 , 8 3 6
D e n o m i n a t e di nP K R .... 5 8 9 5 0 7 ––
Denominated in MYR . . . –– 150 1,211
T o t a l............... 4 9 9 , 0 0 4 8 1 7 , 9 2 9 6 5 3 , 9 3 5 8 5 5 , 9 3 3
(i) As at 31 December 2022, 2023 and 2024 and 31 May 2025, the deposits of RMB103,025,000,
RMB168,290,000, RMB91,509,000 and RMB81,437,000 respectively, were pledged for issuance of
bills payables.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 104


--- page 564 ---
(ii) As at 31 December 2022, 2023 and 2024 and 31 May 2025, the deposits of RMB124,235,000,
RMB170,599,000, RMB163,492,000 and RMB153,856,000 respectively, were pledged to issue the
letter of guarantee in banks to provide guarantees in respect of purchase contracts signed with
suppliers.
(iii) As at 31 December 2022, restricted bank deposits of RMB1,480,000 were pledged for future
guarantee.
(iv) As at 31 December 2024 and 31 May 2025, restricted bank deposits of RMB3,700,000 and
RMB3,700,000 were pledged for litigation.
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Cash and bank balances . . 354,722 631,840 376,713 610,172
T i m ed e p o s i t s ......... 6 1 , 8 0 4 9 9 , 9 7 5 1 9 5 , 2 8 1 1 7 1 , 7 9 3
T o t a l............... 4 1 6 , 5 2 6 7 3 1 , 8 1 5 5 7 1 , 9 9 4 7 8 1 , 9 6 5
Less:
Restricted bank deposits:
Pledged for issuance of
b i l l s.............. (i) 32,830 49,991 – 94
Pledged for issuance of
l e t t e ro fg u a r a n t e e .... (ii) 99,830 126,468 27,210 22,167
Pledged for future
g u a r a n t e e .......... (iii) 1,480 –––
Restricted time deposits:
Pledged for issuance of
b i l l s.............. (i) 40,945 58,047 60,409 41,479
Pledged for issuance of
l e t t e r so fg u a r a n t e e .... (ii) 20,859 41,927 134,873 130,314
R e s t r i c t e dc a s h : ........ 1 9 5 , 9 4 4 2 7 6 , 4 3 3 2 2 2 , 4 9 2 1 9 4 , 0 5 4
Current portion . . . . . . 195,944 241,617 199,500 170,229
Non-current portion . . . – 34,816 22,992 23,825
Cash and cash equivalents 220,582 455,382 349,502 587,911
D e n o m i n a t e di nU S D .... 9 1 , 4 5 6 3 9 , 9 5 5 2 8 4 , 4 8 7 4 7 5 , 7 4 1
Denominated in RMB . . . 320,730 687,502 281,905 296,601
D e n o m i n a t e di nE U R .... 4 , 3 4 0 4 , 3 5 8 5 , 6 0 2 9 , 6 2 3
T o t a l............... 4 1 6 , 5 2 6 7 3 1 , 8 1 5 5 7 1 , 9 9 4 7 8 1 , 9 6 5
APPENDIX I ACCOUNTANTS ’ REPORT
I – 105


--- page 565 ---
(i) As at 31 December 2022, 2023 and 2024 and 31 May 2025, the deposits of RMB73,775,000,
RMB108,038,000, RMB60,409,000 and RMB41,573,000 respectively, were pledged for issuance of
bills payables.
(ii) As at 31 December 2022, 2023 and 2024 and 31 May 2025, the deposits of RMB120,689,000,
RMB168,395,000, RMB162,083,000 and RMB152,480,000,, respectively, were pledged to issue the
letters of guarantee in banks to provide guarantees in respect of purchase contracts signed with
suppliers.
(iii) As at 31 December 2022, restricted bank deposits of RMB1,480,000 were pledged for future
guarantee.
The RMB is not freely convertible into other currencies, however, under Mainland
China ’s Foreign Exchange Control Regulations an d Administration of Settlement, and Sale
and Payment of Foreign Exchange Regulati ons, the Group is permitted to exchange RMB
for other currencies through banks authorised to conduct foreign exchange business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short
term time deposits are made for varying per iods of between one day and three months,
depending on the immediate cash requirements of the Group, and earn interest at the
respective short term time deposit rates. The b ank balances and time deposits are deposited
with creditworthy banks with no recent history of default.
25. ASSETS OF A DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE
Pursuant to the shareholder resolution dated on 15 November 2023, Huifeng Juneng
was approved to dispose of its subsidiary, Huai ’an Huifeng Juneng, by transferring its entire
equity interest to a third party, and the disp osal plan is to be completed within one year. As
at 31 December 2023, final negotiations for the sale were in progress and the related assets
and liabilities were classified as held for sale on the Group ’s consolidated balance sheet. In
August 2024, Huifeng Juneng entered into an equ ity transfer agreement with an unaffiliated
third party and the equity transfer was completed as of September 2024.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 106


--- page 566 ---
The major classes of assets and liabilities of Huai ’an Huifeng Juneng classified as held
for sale as at 31 December 2023 are as follows:
Balance before
fair value
re-measurement
as at 31
December 2023
Fair value
re-measurement
As at
31 December
2023
RMB’000 RMB ’000 RMB ’000
Assets
P r o p e r t y ,p l a n ta n de q u i p m e n t ..... 2 0 , 2 4 8 ( 1 5 , 7 4 7 ) 4 , 5 0 1
R i g h t - o f - u s ea s s e t s ............ 1 , 0 0 0 – 1,000
T r a d er e c e i v a b l e s ............. 1 , 4 5 2 – 1,452
Prepayments, other receivables and
o t h e ra s s e t s................ 1 3 9 – 139
C a s ha n ds h o r t - t e r md e p o s i t s ...... 5 4 2 – 542
Assets classified as held for sale . . . 23,381 (15,747) 7,634
Liabilities
Other payables and accruals . . .... 1 0 – 10
T a xp a y a b l e................. 1 0 – 10
Lease liabilities . . . . . .......... 8 2 2 – 822
D e f e r r e dg o v e r n m e n tg r a n t s ...... 6 3 0 – 630
Liabilities directly associated with the
assets classified
a sh e l df o rs a l e ............. 1 , 4 7 2 – 1,472
Net assets directly associated with the
d i s p o s a lg r o u p .............. 2 1 , 9 0 9 ( 1 5 , 7 4 7 ) 6 , 1 6 2
And in accordance with IFRS 5, assets he ld for sale with a carrying amount of
RMB21,909,000 were written down to their fa ir value of RMB6,162,000, resulting in a loss
of RMB15,747,000, which was included in profit or loss for the year ended 31 December
2023.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 107


--- page 567 ---
26. TRADE AND BILLS PAYABLES
An ageing analysis of the trade and bills paya bles as at the end of each of the Relevant
Periods, based on the invoice date, is as follows:
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r.............. 7 0 1 , 8 7 6 8 3 7 , 1 7 2 9 7 3 , 9 7 9 1 , 2 2 5 , 6 3 7
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r.............. 4 5 9 , 3 4 2 4 8 6 , 9 0 9 6 6 7 , 2 7 6 7 3 1 , 8 6 7
The trade payables are non-interest-bearing and are normally settled on 30 to 90 day
terms.
27. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
S a l a r yp a y a b l e s ............. 1 1 0 , 5 7 1 1 2 8 , 4 3 9 1 2 6 , 1 6 5 1 0 9 , 1 1 5
Payable for purchase of property,
plant and equipment . . . . . . . . 99,026 105,902 223,088 138,471
D e p o s i tr e c e i v e d............ 3 7 , 2 9 7 5 0 , 3 8 6 5 2 , 6 8 5 6 2 , 5 6 0
O t h e rt a xp a y a b l e s ........... 3 2 , 5 9 1 1 4 , 1 7 3 2 8 , 4 9 7 4 9 , 7 2 9
Unexpired endorsement transfers . 44,166 50,874 77,127 75,647
D i v i d e n dp a y a b l e s ........... ––– 60,906
Other payables and accruals . . . . 87,710 63,540 51,116 28,964
T o t a l.................... 4 1 1 , 3 6 1 4 1 3 , 3 1 4 5 5 8 , 6 7 8 5 2 5 , 3 9 2
APPENDIX I ACCOUNTANTS ’ REPORT
I – 108


--- page 568 ---
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
S a l a r yp a y a b l e s ............. 8 8 , 3 5 5 9 7 , 9 5 7 9 0 , 9 0 5 7 4 , 8 3 8
Payable for purchase of property,
plant and equipment . . . . . . . . 19,942 36,397 38,399 25,785
D e p o s i tr e c e i v e d............ 1 8 , 0 7 7 2 9 , 1 4 2 3 1 , 4 3 6 3 6 , 3 7 3
O t h e rt a xp a y a b l e s ........... 1 8 , 5 8 6 9 , 4 4 3 2 2 , 7 7 0 4 0 , 8 3 2
Unexpired endorsement transfers . 47,958 50,874 77,127 46,008
D i v i d e n dp a y a b l e s ........... ––– 60,906
Other payables and accruals . . . . 66,520 51,274 25,203 20,364
T o t a l.................... 2 5 9 , 4 3 8 2 7 5 , 0 8 7 2 8 5 , 8 4 0 3 0 5 , 1 0 6
Other payables are unsecured and non-interest-bearing, repayable within 1 year. The
fair values of other payables at the end of each of the Relevant Periods approximated to
their corresponding carrying amounts.
28. CONTRACT LIABILITIES
Details of contract liabilities are as follows:
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Short-term advances received from
customers
S a l e so fg o o d s ............. 3 6 , 7 7 8 6 3 , 0 1 4 3 9 , 6 4 0 3 9 , 8 9 7
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Short-term advances received from
customers
S a l e so fg o o d s ............. 3 6 , 2 5 1 5 7 , 8 8 0 3 6 , 4 7 0 3 8 , 0 8 7
Contract liabilities include a dvances received to deliver ba ttery products. The changes
in contract liabilities during the Relevant Periods were mainly du e to the changes in
advances received from customers in re lation to the sale of battery products.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 569 ---
29. INTEREST-BEARING BANK AND OTHER BORROWINGS
The Group
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 31 May 2025
Notes
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Current
Bank loans – pledged
a n dg u a r a n t e e d .....
(a) 3.60-4.35 2023 43,052 2.80-4.00 2024 20,021 ––––––
Bank loans – pledged .
(b) 1.98-3.90 2023 398,690 2.80-4.68 2024 178,051 2.40-4.55 2025 108,348 2.40-4.28 2025 78,026
Bank loans – guaranteed
(c) 3.20-3.60 2023 232,758 2.80-2.90 2024 64,957 2.40-4.80 2025 67,598 2.29-4.80 2026 97,590
Bank loans – unsecured 2.39-3.60 2023 251,455 2.80 2024 107,555 2.30-2.54 2025 389,764 2.15-2.54 2025 510,950
Current portion of long
term bank
loans – pledged and
g u a r a n t e e d .......
(a) 4.00 2023 18,890 4.00 2024 18,884 3.15-3.50 2025 38,516 2.90-3.50 2025 52,576
Current portion of long
term bank loans –
p l e d g e d .........
(b) –––––– 2.60 2025 20,017 2.60 2025 10,006
Current portion of long
term bank loans –
g u a r a n t e e d .......
(c) ––– 3.00 2024 21,060 2.60-2.70 2025 49,090 2.55-2.70 2026 98,578
Total – c u r r e n t ...... 9 4 4 , 8 4 5 4 1 0 , 5 2 8 6 7 3 , 3 3 3 8 4 7 , 7 2 6
Non-current
Bank loans – pledged
a n dg u a r a n t e e d .....
(a) 4.00 2024-2026 51,200 3.50-4.00 2025-2029 228,425 2.40-4.80 2026-2029 195,404 2.90-3.50 2026-2029 259,270
Bank loans – pledged .
(b) ––– 3.00 2025 20,000 ––––
Bank loans – guaranteed
(c) ––– 3.00 2025 49,000 2.55 2026 60,000 –––
Total – non-current . . . 51,200 297,425 255,404 259,270
T o t a l............ 9 9 6 , 0 4 5 7 0 7 , 9 5 3 9 2 8 , 7 3 7 1 , 1 0 6 , 9 9 6
APPENDIX I ACCOUNTANTS ’ REPORT
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As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Analysed into:
Bank loans repayable:
Within one year or on demand . . . 944,845 410,528 673,333 847,726
I nt h es e c o n dy e a r ............ 1 8 , 6 0 0 1 1 9 , 7 0 2 1 0 9 , 8 0 9 6 6 , 0 8 8
In the third to fifth years, inclusive 32,600 139,200 145,595 193,182
B e y o n df i v ey e a r s............ – 38,523 ––
T o t a l..................... 9 9 6 , 0 4 5 7 0 7 , 9 5 3 9 2 8 , 7 3 7 1 , 1 0 6 , 9 9 6
(a) As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
Group ’s bank borrowings with the amounts of RMB113,142,000,
RMB267,330,000, RMB233,920,000 and RMB311,846,000, respectively, were
secured by:
(i) the pledge of certain of the Group ’s leasehold land with carrying amounts
of RMB8,502,000, RMB32,758,000, RMB24,097,000 and RMB23,888,000,
respectively;
(ii) the pledge of certain of the Group ’s property, plant and equipment with
carrying amounts of RMB47,821,000, RMB45,111,000, nil and
RMB305,015,000, respectively;
(iii) the pledge of certain of the Group ’s patent rights in 2022;
(iv) the guarantee from the Company.
(b) As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
Group ’s bank borrowings with amounts of RMB398,690,000, RMB198,051,000,
RMB128,365,000 and RMB88,032,000, respectively, were secured by:
(i) the pledge of certain of the Group ’s leasehold land with carrying amounts
of RMB106,774,000, RMB104,097,000, RMB72,790,000 and
RMB72,023,000, respectively;
(ii) the pledge of certain of the Group ’s property, plant and equipment with
carrying amounts of RMB129,933,000, RMB119,134,000,
RMB125,114,000 and RMB122,163,000, respectively;
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 571 ---
(iii) the pledge of certain of the Group ’s bills receivables with carrying amounts
of RMB8,509,000, RMB208,000, RMB236,000 and RMB5,785,000,
respectively;
(iv) the pledge of certain of the accounts receivable of the Group, with carrying
amounts of RMB312,319,000, RMB33,096,000, RMB116,553,000 and
RMB142,348,000, respectively.
(c) As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
Group ’s bank borrowings with amounts of RMB232,758,000, RMB135,017,000,
RMB176,688,000 and RMB196,168,000, respectively, were guaranteed by the
Company.
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The Company
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 31 May 2025
Notes
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Effective
interest
rate
(%) Maturity RMB ’000
Current
Bank loans – pledged .
(a) 1.98-3.80 2023 342,634 2.80-4.68 2024 156,026 2.40-4.55 2025 108,348 2.40-4.28 2025 78,026
Bank loans – guaranteed
(b) 3.20-3.30 2023 170,169 2.80-2.90 2024 64,957 2.40-4.80 2025 67,598 2.29-4.80 2026 97,590
Bank loans – unsecured 2.39-3.60 2023 224,209 3.00 2024 107,574 2.40-2.54 2025 380,589 2.15-2.54 2025 501,739
Current portion of long
term bank loans –
p l e d g e d .........
(a) –––––– 2.60 2025 20,017 2.60 2025 10,006
Current portion of long
term bank loans –
g u a r a n t e e d .......
(b) ––– 3.00 2024 21,060 2.60-2.70 2025 49,090 2.55-2.70 2026 98,578
Total – c u r r e n t ...... 7 3 7 , 0 1 2 3 4 9 , 6 1 7 6 2 5 , 6 4 2 7 8 5 , 9 3 9
Non-current
Bank loans – pledged .
(a) ––– 3.00 2025 20,000 ––––––
Bank loans – guaranteed
(b) ––– 3.00 2025 49,000 2.55 2026 60,000 –––
Total – non-current . . . – 69,000 60,000 –
T o t a l............ 7 3 7 , 0 1 2 4 1 8 , 6 1 7 6 8 5 , 6 4 2 7 8 5 , 9 3 9
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 573 ---
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Analysed into:
Bank loans repayable:
Within one year or on demand . . . 737,012 349,617 625,642 785,939
I nt h es e c o n dy e a r ............ – 69,000 60,000 –
T o t a l..................... 7 3 7 , 0 1 2 4 1 8 , 6 1 7 6 8 5 , 6 4 2 7 8 5 , 9 3 9
(a) As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
Company ’s bank borrowings with amounts of RMB342,634,000,
RMB176,026,000, RMB128,365,000 and RMB88,032,000 respectively, were
secured by:
(i) the pledge of certain of the Company ’s leasehold land with carrying
amounts of RMB76,476,000, RMB74,633,000, RMB72,790,000 and
RMB72,023,000, respectively;
(ii) the pledge of certain of the Company ’s property, plant and equipment with
carrying amounts of RMB117,248,000, RMB108,290,000,
RMB125,114,000 and RMB122,163,000, respectively;
(iii) the pledge of certain of the Company ’s bills receivables with carrying
amounts of RMB8,509,000, RMB208,000, RMB236,000 and
RMB5,785,000, respectively;
(iv) the pledge of certain of the accounts receivable of the Company, with
carrying amounts of RMB312,319,000, RMB33,096,000, RMB116,553,000
and RMB142,348,000, respectively.
(b) As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain of the
Company ’s bank borrowings with the amounts of RMB170,169,000,
RMB135,017,000, RMB176,688,000 and RMB196,168,000, respectively, were
guaranteed by Shuangdeng Front.
The financial liabilities t hat are part of the Group ’s supplier finance arrangements
included in interest-bearing bank and other b orrowings are normally settled on 240-360 days
following the due date of comparable trade payable. The range of payment due dates for
comparable trade payables is 30-90 days after invoice date.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 574 ---
The Group has established supplier finance arrangements that are offered to the related
parties in group or some of the Group ’s key suppliers in Mainland China with the banks.
The Group has the right to choose suppliers and i nitiate the financial arrangement. Suppliers
that participate in the supplier finance arrangements will receive payments at the original
due dates on invoices sent to the Group from the banks. For the banks to pay the invoices,
the goods must have been received or supplied and the invoices must have been approved
by the Group. The Group provides the security to the banks and the supplier finance
arrangements use the group ’s utility in the bank. The Group takes the interest. Upon the
maturity date of the debt, the Group must make unconditional payment to the banks and the
banks have the right to deduct the payment from the Group ’s bank account directly.
All financial liabilities that are part of the s upplier finance arrangements are included
in interest-bearing bank and other borrowi ngs in the statement of financial position and
within the current portion of unsecured bank loans.
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Carrying amount of financial
liabilities that are part of the
supplier finance arrangements
included in:
Interest-bearing bank and other
borrowings of which suppliers
have received payments. . . . . . . 47,402 10,000 332,753 453,903
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
Carrying amount of financial
liabilities that are part of the
supplier finance arrangements
included in:
Interest-bearing bank and other
borrowings of which suppliers
have received payments. . . . . . . 47,402 10,000 332,753 453,903
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 575 ---
For financial liabilities that are part of the s upplier finance arrang ements included in
interest-bearing bank and other borrowings, the related non-cash transaction is disclosed in
note 36 to the Historical Financial Information.
30. DEFERRED GOVERNMENT GRANTS
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/period 74,769 86,069 136,123 182,499
Addition. . . . . .............. 2 6 , 0 0 0 6 8 , 3 9 5 6 4 , 8 9 7 4 , 0 0 0
Liabilities included in held for sale
(note 25) ................. – (630) ––
Amortisation during the year/period (14,700) (17,711) (18,521) (8,785)
At the end of the year/period . . . . 86,069 136,123 182,499 177,714
C u r r e n tp o r t i o n.............. 1 2 , 8 1 7 1 7 , 6 3 3 2 0 , 8 7 8 2 0 , 9 9 2
N o n - c u r r e n tp o r t i o n ........... 7 3 , 2 5 2 1 1 8 , 4 9 0 1 6 1 , 6 2 1 1 5 6 , 7 2 2
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/period 50,459 47,651 64,255 57,534
Addition. . . . . .............. 8 , 0 0 0 2 8 , 2 6 5 3 , 8 9 5 –
Amortisation during the year/period (10,808) (11,661) (10,616) (4,493)
At the end of the year/period . . . . 47,651 64,255 57,534 53,041
C u r r e n tp o r t i o n.............. 8 , 9 2 6 1 0 , 6 3 7 1 0 , 7 9 7 1 0 , 6 5 0
N o n - c u r r e n tp o r t i o n ........... 3 8 , 7 2 5 5 3 , 6 1 8 4 6 , 7 3 7 4 2 , 3 9 1
As at 31 December 2023, deferred government grants with a carrying value of
RMB630,000 were reclassified to assets and lia bilities of disposal group classed as held for
sale in note 25 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 576 ---
31. PROVISIONS
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/period 28,758 36,604 39,863 38,852
Addition. . . . . .............. 3 0 , 7 1 9 3 6 , 5 1 6 3 8 , 4 3 6 1 7 , 3 2 4
Amount utilised during the year/
p e r i o d ................... ( 2 2 , 8 7 3 ) ( 3 3 , 2 5 7 ) ( 3 9 , 4 4 7 ) ( 1 4 , 3 8 3 )
At the end of the year/period . . . . 36,604 39,863 38,852 41,793
Portion classified as current
liabilities. . . .............. 7 , 3 0 0 7 , 7 9 4 7 , 1 5 8 7 , 8 9 3
N o n - c u r r e n tp o r t i o n ........... 2 9 , 3 0 4 3 2 , 0 6 9 3 1 , 6 9 4 3 3 , 9 0 0
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB’000 RMB ’000 RMB ’000 RMB ’000
At the beginning of the year/period 28,758 36,604 39,863 38,852
Addition. . . . . .............. 2 9 , 9 1 7 3 5 , 4 0 1 3 6 , 3 1 1 1 6 , 7 2 0
Amount utilised during the year/
p e r i o d ................... ( 2 2 , 0 7 1 ) ( 3 2 , 1 4 2 ) ( 3 7 , 3 2 2 ) ( 1 3 , 7 7 9 )
At the end of the year/period . . . . 36,604 39,863 38,852 41,793
Portion classified as current
liabilities. . . .............. 7 , 3 0 0 7 , 7 9 4 7 , 1 5 8 7 , 8 9 3
N o n - c u r r e n tp o r t i o n ........... 2 9 , 3 0 4 3 2 , 0 6 9 3 1 , 6 9 4 3 3 , 9 0 0
The Group provides warranties of 3 to 8 yea rs to its customers on the battery products.
The amount of the provision for the warranties is estimated based on the Group ’s recent
claims, past warranty data and the weight of all possible results and their related
probabilities. Any increase or decrease in provision will affect the profit or loss in future
years. The estimation basis is reviewed on an ongoing basis and revised where appropriate.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 577 ---
32. SHARE CAPITAL
Number of
ordinary shares Share capital
RMB’000
A sa t1J a n u a r y2 0 2 2 ............... 3 3 0 , 0 0 0 , 0 0 0 3 3 0 , 0 0 0
I s s u a n c eo fs h a r e s................. ( a ) 2 8 , 2 6 9 , 0 0 0 2 8 , 2 6 9
As at 31 December 2022 and 2023 and
2 0 2 4 ......................... 3 5 8 , 2 6 9 , 0 0 0 3 5 8 , 2 6 9
I s s u a n c eo fs h a r e s................. ––
A sa t3 1M a y2 0 2 5................ 3 5 8 , 2 6 9 , 0 0 0 3 5 8 , 2 6 9
The share capital of the Group and the Company as at the end of each of the Relevant
Periods was RMB358,269,000, RMB358,269,000 , RMB358,269,000 and RMB358,269,000,
respectively. The movements are as follows:
(a) In December 2022, the Company issued 28,269,000 shares in total with par value
of RMB1.00 each to Xiangyang Gaoqian Venture Capital Center (Limited
Partnership) （ ‘‘襄陽高謙創業投資中心（ 有限合夥 ）’’）, Zaoyang Changjiang
Venture Capital Fund Partnership (Limited Partnership) （‘‘棗陽長江創業投資基
金合夥企業（有限合夥）’’） and Xiamen Hengsheng Zizhu Equity Investment
Partnership (Limited Partnership) （‘‘廈門恒盛紫竹股權投資合夥企業（有限合
夥）’’）. The total proceeds of approximately RMB385,486,000 in December 2022
were received with approximately RMB28,269,000 and RMB357,217,000 was
c r e d i t e dt ot h eC o m p a n y’s share capital and capital reserves, respectively.
33. RESERVES
The amounts of the Group ’s reserves and the movements therein are presented in the
consolidated statement of changes in equity of the Historical Financial Information.
Capital reserve
The capital reserve mainly comprises the share premium of the Company and the
difference between the aggregate of the the n net assets of the non-controlling interests
acquired and the consideration paid by the Group.
Details of share premium of the Company are included in note 32 to the
Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 578 ---
Reserve funds
In accordance with the Company Law of t he PRC, certain subsidiaries of the
Group which are domestic enterprises are re quired to allocate 10% of their profit after
tax, as determined in accordance with the relevant PRC accounting standards, to their
respective statutory surplus reserves until the reserves reach 50% of their respective
registered capital. Subject to certain restrictions set out in the Company Law of the
PRC, part of the statutory surplus reserves may be converted to increase share capital,
provided that the remaining balance after the capitalisation is not less than 25% of the
registered capital.
Exchange fluctuation reserve
The exchange fluctuation reserve comprises all foreign exchange differences
arising from the translation of the Historic al Financial Information of operations with a
functional currency other than RMB.
The amounts of the Company ’s reserves and the movements therein are presented
as below:
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Retained
profits
Total
reserves
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
As at 1 January 2022 . . 63,475 19,216 93,497 518,017 694,205
Profit for the year . . . . –– – 238,071 238,071
I s s u eo fs h a r e s ...... 3 5 7 , 2 1 7 ––– 357,217
Share-based
compensation
r e s e r v e .......... – 10,589 –– 10,589
Appropriation to
statutory reserves . . . –– 24,238 (24,238) –
At 31 December 2022 . 420,692 29,805 117,735 731,850 1,300,082
Profit for the year . . . . –– – 376,831 376,831
Share-based
compensation
r e s e r v e .......... – 20,232 –– 20,232
D i v i d e n d .......... –– – (48,366) (48,366)
Appropriation to
statutory reserves . . . –– 38,817 (38,817) –
At 31 December 2023 . 420,692 50,037 156,552 1,021,498 1,648,779
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 579 ---
Capital
reserve
Share-based
compensation
reserve
Reserve
funds
Retained
profits
Total
reserves
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Profit for the year . . . . –– – 299,704 299,704
Share-based
compensation
r e s e r v e .......... – 22,539 –– 22,539
D i v i d e n d .......... –– – (73,803) (73,803)
Appropriation to
statutory reserves . . . –– 29,970 (29,970) –
At 31 December 2024 . 420,692 72,576 186,522 1,217,429 1,897,219
Profit for the period . . . –– – 122,830 122,830
Share-based
compensation
r e s e r v e .......... – 7,196 –– 7,196
D i v i d e n d .......... –– – (60,906) (60,906)
At 31 May 2025 . . . . . 420,692 79,772 186,522 1,279,353 1,966,339
34. SHARE INCENTIVE SCHEME
Restricted share awards
The Company operates share incentive scheme (the ‘‘Scheme ’’) for the purpose
of providing incentives and rewards to elig ible participants who contribute to the
success of the Group ’s operations. Eligible participants of the Scheme include the
Company ’s directors, supervisors, senior management and other key employees of the
Group who, in the opinion of the board of dir ectors, contribute directly to the overall
business performance and sustainable development of the Group. The Scheme became
effective on 30 June 2019.
On 30 June 2019, a total of 6,700,000 shares of the Company were awarded to
the directors of the Company and employees of the Group at a consideration of
RMB6,723,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB24,729,000, and the fair value is determined by an
external valuer using the Market Approach – Comparable Companies Multiple Method
taking into the terms and conditions upon which the awarded shares were granted. The
amounts of RMB2,209,000, RMB2,902,000, RMB1,209,000 and nil, respectively, in
respect of the Shares under the Scheme were recognised as an expense and included in
staff costs for the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 580 ---
On 25 September 2019, a total of 2,360,000 shares of the Company were
awarded to the directors of the Company and employees of the Group at a
consideration of RMB2,368,000. Each grant of share awards needs to meet service
requirements from the date of grant to the later of (1) five years since the grant date
and (2) upon successful listing of the Company. The total fair value of the shares
determined at the date of grant was equivalent to RMB8,711,000, and the fair value is
determined by an external valuer using the Market Approach – Comparable Companies
Multiple Method taking into the terms and c onditions upon which the awarded shares
were granted. The amounts of RMB1,204,000, RMB1,204,000, RMB903,000 and nil,
respectively, in respect of the Shares under the Scheme were recognised as an expense
and included in staff costs for the years ended 31 December 2022, 2023 and 2024 and
the five months ended 31 May 2025.
On 14 February 2020, a total of 7,605,000 shares of the Company were awarded
to the directors of the Company and employees of the Group at a consideration of
RMB7,631,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB28,069,000, and the fair value is determined by an
external valuer using the Market Approach – Comparable Companies Multiple Method
taking into account the terms and conditions upon which the awarded shares were
granted. The amounts of RMB2,451,000, RMB2,577,000, RMB1,990,000 and
RMB236,000, respectively, in respect of the Shares under the Scheme were recognised
as an expense and included in staff costs for the years ended 31 December 2022, 2023
and 2024 and the five months ended 31 May 2025.
On 7 December 2020, a total of 6,600,000 shares of the Company were awarded
to the directors of the Company and employees of the Group at a consideration of
RMB6,622,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB24,360,000, and the fair value is determined by an
external valuer using the Market Approach – Comparable Companies Multiple Method
taking into account the terms and conditions upon which the awarded shares were
granted. The amounts of RMB2,320,000, RMB2,770,000, RMB2,859,000 and
RMB1,191,000, respectively, in respect of the Shares under the Scheme were
recognised as an expense and included in staff costs for the years ended 31 December
2022, 2023 and 2024 and the five months ended 31 May 2025.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 121


--- page 581 ---
On 30 July 2021, a total of 3,000,000 shares of the Company were awarded to
the directors of the Company and employees of the Group at a consideration of
RMB3,010,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB11,073,000, the fair value is determined by an
external valuer using the Market Approach – Comparable Companies Multiple Method
taking into account the terms and conditions upon which the awarded shares were
granted. The amounts of RMB196,000, RMB196,000, RMB196,000 and RMB82,000,
respectively, in respect of the Shares under the Scheme were recognised as an expense
and included in staff costs for the year ended 31 December 2022, 2023 and 2024 and
the five months ended 31 May 2025.
On 15 July 2022, a total of 1,800,000 shares of the Company were awarded to
the directors of the Company and employees of the Group at a consideration of
RMB6,588,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB24,545,000, the fair value is determined by using
the backsolve method taking into account the terms and conditions upon which the
awarded shares were granted. The amounts of RMB1,795,000, RMB3,592,000,
RMB3,592,000 and RMB1,496,000, respectively, in respect of the Shares under the
Scheme were recognised as an expense and included in the staff cost for the year
ended 31 December 2022, 2023 and 2024 and the five months ended 31 May 2025.
On 5 December 2022, a total of 2,840,000 shares of the Company were awarded
to the directors of the Company and employees of the Group at a consideration of
RMB13,888,000. Each grant of share awards needs to meet service requirements from
t h ed a t eo fg r a n tt ot h el a t e ro f( 1 )f i v ey e a r ss i n c et h eg r a n td a t ea n d( 2 )u p o n
successful listing of the Company. The total fair value of the shares determined at the
date of grant was equivalent to RMB38,727,000, and the fair value is determined by
using the backsolve method taking into a ccount the terms and conditions upon which
the awarded shares were granted. The amounts of RMB414,000, RMB4,968,000,
RMB4,421,000 and RMB-225,000, respectively, in respect of the Shares under the
Scheme were recognised as an expense and included in the staff cost for the year
ended 31 December 2022, 2023 and 2024 and the five months ended 31 May 2025.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 122


--- page 582 ---
On 3 March 2023, a total of 1,210,000 shares of the Company were awarded to
the employees of the Group at a consideration of RMB5,917,000. Each grant of share
awards needs to meet service requirements from the date of grant to the later of (1)
five years since the grant date and (2) upon successful listing of the Company. The
total fair value of the shares determined at the date of grant was equivalent to
RMB16,500,000, and the fair value is dete rmined by using the backsolve method
taking into account the terms and conditions upon which the awarded shares were
granted. The amounts of RMB1,750,000, RMB2,100,000 and RMB875,000,
respectively, in respect of the Shares under the Scheme were recognised as an expense
and included in the staff cost for the year ended 31 December 2023 and 2024 and the
five months ended 31 May 2025.
On 1 November 2023, a total of 1,000,000 shares of the Company were awarded
to the employees of the Group at a consideration of RMB5,440,000. Each grant of
share awards needs to meet service requirements from the date of grant to the later of
(1) five years since the grant date and (2) upon successful listing of the Company. The
total fair value of the shares determined at the date of grant was equivalent to
RMB15,564,000, and the fair value is determined by using the Market Approach –
Comparable Companies Multip le Method taking into acco unt the terms and conditions
upon which the awarded shares were granted. The amounts of RMB273,000,
RMB2,089,000 and RMB844,000, respectively, in respect of the Shares under the
Scheme were recognised as an expense and included in the staff cost for the year
ended 31 December 2023 and 2024 and the five months ended 31 May 2025.
On 30 July 2024, a total of 4,100,000 shares of the Company were awarded to
the director of the Company at a consideration of RMB25,584,000. Each grant of share
awards needs to meet service requirements from the date of grant to the later of (1)
five years since the grant date and (2) upon successful listing of the Company. The
total fair value of the shares determined at the date of grant was equivalent to
RMB57,105,000, and the fair value is determined by using the Market Approach –
Comparable Companies Multip le Method taking into acco unt the terms and conditions
upon which the awarded shares were granted. The amount of RMB3,152,000 and
RMB2,627,000, in respect of the Shares under the Scheme was recognised as an
expense and included in the staff cost for the year ended 31 December 2024 and the
five months ended 31 May 2025.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 123


--- page 583 ---
On 22 November 2024, a total of 150,000 shares of the Company were awarded
to the employees of the Company at a consideration of RMB953,000. Each grant of
share awards needs to meet service requirements from the date of grant to the later of
(1) five years since the grant date and (2) upon successful listing of the Company. The
total fair value of the shares determined at the date of grant was equivalent to
RMB1,798,000, and the fair value is determined by using the Market Approach –
Comparable Companies Multip le Method taking into acco unt the terms and conditions
upon which the awarded shares were granted. The amount of RMB28,000 and
RMB70,000, in respect of the Shares under the Scheme was recognised as an expense
and included in the staff cost for the year ended 31 December 2024 and the five
months ended 31 May 2025.
There are no cash settlement alternatives. The Group does not have a past
practice of cash settlement for these shares. The Group accounts for the Scheme as an
equity-settled plan.
Any dividends declared in respect of the shares awarded during the lock-up
restricted period belong to the participants . However, the participants do not have any
voting right in respect of the shares awarde d during the lock-up restricted period.
The following shares were outstanding under the Scheme during the years ended
31 December 2022, 2023 and 2024 and the five months ended 31 May 2025:
Number
of shares
As at 1 January 2022 24,245,000
Granted during the year 4,640,000
Forfeited during the year (2,265,000)
As at 31 December 2022 and 1 January 2023 26,620,000
Granted during the year 2,210,000
Forfeited during the year (350,000)
As at 31 December 2023 and 1 January 2024 28,480,000
Granted during the year 4,250,000
Forfeited during the year (550,000)
As at 31 December 2024 and 1 January 2025 32,180,000
Forfeited during the period (500,000)
As at 31 May 2025 31,680,000
APPENDIX I ACCOUNTANTS ’ REPORT
I – 124


--- page 584 ---
The weighted average remaining contractual lives for the outstanding restricted
shares granted were 2.76, 1.97, 1.54 and 1.26 years as of the end of each of the
Relevant Periods, respectively.
35. DISPOSAL OF A SUBSIDIARY
2024
RMB’000
Net assets disposed of:
Current assets 7,577
Current liabilities (1,430)
Subtotal 6,147
Loss on disposal (147)
Total consideration 6,000
Satisfied by:
Cash 6,000
An analysis of the net inflow of cash and cash equivalents in respect of the disposal of
a subsidiary is as follows:
2024
RMB’000
Cash consideration 6,000
Cash and bank balances disposed of (360)
Net inflow of cash and cash equivalents in respect of the disposal
of a subsidiary 5,640
36. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025, the Group had non-cash a dditions to right-of-use assets and lease
liabilities of RMB5,598,000, RM B7,753,000, RMB14,481, 000 and RMB4,791,000,
respectively, in respect of lease arrangements for buildings.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 125


--- page 585 ---
During the years ended 31 December 2022, 2023 and 2024 and the five months
ended 31 May 2025, the Group reclassified trade payables of RMB35,402,000, nil,
RMB313,182,000 and RMB282,344,000, respectively, to interest-bearing bank and
other borrowings in respect of the supplier finance arrangements.
(b) Changes in liabilities arisi ng from financing activities
Year ended 31 December 2022
Bank loans Lease liabilities
RMB’000 RMB ’000
A t1J a n u a r y2 0 2 2 ................. 1 , 0 9 6 , 8 4 8 1 0 , 2 4 1
Changes from financing cash flows . . . . . (195,465) (6,293)
Interest capitalised
(note 7) ........... 3 7 5 –
Additions of lease liabilities .......... – 5,598
Disposal as a result of decrease the scope
o fl e a s e ....................... – (89)
Increase arising from supplier finance
a r r a n g e m e n t s ................... 3 5 , 4 0 2 –
F o r e i g ne x c h a n g em o v e m e n t .......... 1 0 , 0 4 8 –
Interest expense (note 7) ............ 4 8 , 8 3 7 5 3 5
A t3 1D e c e m b e r2 0 2 2 .............. 9 9 6 , 0 4 5 9 , 9 9 2
Year ended 31 December 2023
Bank loans Lease liabilities
RMB’000 RMB ’000
A t1J a n u a r y2 0 2 3 ................. 9 9 6 , 0 4 5 9 , 9 9 2
Changes from financing cash flows . . . . . (323,366) (5,761)
Interest capitalised (note 7) ........... 1 , 3 5 6 –
Additions of lease liabilities .......... – 7,753
Liabilities included in held for sale
(note 25) ...................... – (822)
Disposal as a result of decrease the scope
o fl e a s e ....................... – (1,164)
F o r e i g ne x c h a n g em o v e m e n t .......... 4 , 3 0 4 –
Interest expense (note 7) ............ 2 9 , 6 1 4 3 9 1
A t3 1D e c e m b e r2 0 2 3 .............. 7 0 7 , 9 5 3 1 0 , 3 8 9
APPENDIX I ACCOUNTANTS ’ REPORT
I – 126


--- page 586 ---
Year ended 31 December 2024
Bank loans Lease liabilities
RMB’000 RMB ’000
A t1J a n u a r y2 0 2 4 ................. 7 0 7 , 9 5 3 1 0 , 3 8 9
Changes from financing cash flows . . . . . (117,270) (9,113)
Interest capitalised (note 7) ........... 3 , 8 8 0 –
Additions of lease liabilities .......... – 14,481
Increase arising from supplier finance
a r r a n g e m e n t s ................... 3 1 3 , 1 8 2 –
F o r e i g ne x c h a n g em o v e m e n t .......... 1 , 6 8 1 3 2 6
Interest expense (note 7) ............ 1 9 , 3 1 1 5 3 1
A t3 1D e c e m b e r2 0 2 4 .............. 9 2 8 , 7 3 7 1 6 , 6 1 4
Five months ended 31 May 2025
Bank loans Lease liabilities
RMB’000 RMB ’000
A t1J a n u a r y2 0 2 5 ................. 9 2 8 , 7 3 7 1 6 , 6 1 4
Changes from financing cash flows . . . . . (115,888) (6,505)
Additions of lease liabilities .......... – 4,791
Disposal as a result of decrease the scope
o fl e a s e ....................... – (262)
Increase arising from supplier finance
a r r a n g e m e n t s ................... 2 8 2 , 3 4 4 –
F o r e i g ne x c h a n g em o v e m e n t .......... 3 4 2 3 7
Interest expense (note 7) ............ 1 1 , 7 6 9 2 3 3
A t3 1M a y2 0 2 5.................. 1 , 1 0 6 , 9 9 6 1 5 , 1 0 8
APPENDIX I ACCOUNTANTS ’ REPORT
I – 127


--- page 587 ---
(c) Total cash outflow for leases
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Within operating
activities. . . . . . . . . . . 3,957 4,511 5,817 2,540 2,524
Within financing
activities. . . . . . . . . . . 6,293 5,761 9,113 3,831 6,505
Total . . . . . . . . . . . . . . . 10,250 10,272 14,930 6,371 9,029
37. COMMITMENTS
The Group had the following contractual commitments at the end of each of the
Relevant Periods:
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Contracted, but not provided for:
Purchase of items of pr operty, plant and
e q u i p m e n t ....................... – 194,746 160,414 2,204
38. PLEDGE OF ASSETS
Details of the Group ’s restricted time deposits and ban k deposits pledged for issuance
of the Group ’s bills payables to suppliers, letters of guarantee and future guarantee are
included in note 24 to the Historical Financial Information.
Details of the Group ’s property, plant and equipment pledged for the Group ’sb a n k
borrowings are included in note 13 and note 29 to the Historical Financial Information.
Details of the Group ’s leasehold land pledged for the Group ’s bank borrowings are
included in note 14 and note 29 to the Historical Financial Information.
Details of the Group ’s bills receivables pledged for the Group ’s bank borrowings are
included in note 20 and note 29 to the Historical Financial Information.
Details of the Group ’s trade receivables pledged for the Group ’s bank borrowings are
included in note 20 and note 29 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 128


--- page 588 ---
Details of the Group ’s other receivables pledged for the Group ’s future guarantee is
included in note 17 to the Historical Financial Information.
39. RELATED PARTY TRANSACTIONS
(a) Name and relationship
Name of related party * Relationship with the Company
Dr. Yang Baofeng （楊寶峰）....... E x e c u t i v e D i r e c t o r a n d d e p u t y g e n e r a l m a n a g e r ,
core technical staff
Shuangdeng Cable Co., Ltd.
（雙登電纜股份有限公司）** ......
C o m p a n yc o n t r o l l e db yD r .Y a n gR u i
Jiangsu Fushanda New Energy
Technology Co., Ltd.
（江蘇福善達新能源科技
有限公司）** ................
C o m p a n yc o n t r o l l e db yD r .Y a n gR u i
Jiangsu Shuangdeng Group Limited
（江蘇雙登集團有限公司）.......
C o m p a n yc o n t r o l l e db yM r .Y a n gS h a n j i
Jiangsu Weili Energy Materials Co.,
Ltd. ( ‘‘江蘇維鋰新能源材料有限
公司’’)....................
C o m p a n yc o n t r o l l e db yM r .Y a n gS h a n j i’sn e p h e w
* The English names of these companies registered in the PRC represent the translated names of these
companies as no English names have been registered.
** Before August 2024, Shuangdeng Cable Co., Ltd. and Jiangsu Fushanda New Energy Technology Co., Ltd.
were controlled by Mr. Yang Shanji. Since August 2024, Shuangdeng Cable Co., Ltd. and Jiangsu Fushanda
New Energy Technology Co., Ltd. were controlled by Dr. Yang Rui.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 129


--- page 589 ---
(b) The Group had the following materi al related party transactions and
outstanding balances during the Rele vant Periods and the five months ended
31 May 2024:
The Group
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
Notes RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Sales of goods to:
Shuangdeng Tianpeng
Metallurgical Jiangsu
C o . ,L t d .........
(i) 16,796 13,917 33,500 14,459 13,490
Jiangsu Weili Energy
M a t e r i a l sC o . ,L t d .... –––– 299
T o t a l ............ 1 6 , 7 9 6 1 3 , 9 1 7 3 3 , 5 0 0 1 4 , 4 5 9 1 3 , 7 8 9
Purchases of products/
services from:
Jiangsu Fushanda New
Energy Technology
C o . ,L t d ......... (i) 15,495 16,496 20,243 8,446 12,695
Shuangdeng Cable Co.,
L t d ............. (i) 260 420 557 354 941
Jiangsu Weili Energy
M a t e r i a l sC o . ,L t d .... –––– 358
T o t a l .............. 1 5 , 7 5 5 1 6 , 9 1 6 2 0 , 8 0 0 8 , 8 0 0 1 3 , 9 9 4
Rental expenses to:
Jiangsu Shuangdeng
Group Limited . . . . . (ii) 5,132 4,833 5,085 2,361 2,689
APPENDIX I ACCOUNTANTS ’ REPORT
I – 130


--- page 590 ---
(c) Outstanding balances with related parties
The Group
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Trade related:
Due to related parties
Shuangdeng Cable Co., Ltd.. . . . . 1,311 438 674 465
Jiangsu Fushanda New Energy
T e c h n o l o g yC o . ,L t d . ........ 3 , 2 1 7 3 , 0 2 5 4 , 9 4 6 1 0 , 4 2 8
Jiangsu Shuangdeng Group Limited 206 206 ––
Shuangdeng Tianpeng Metallurgical
J i a n g s uC o . ,L t d . .......... 1 0 0 1 0 0 1 0 0 1 0 0
T o t a l ................... 4 , 8 3 4 3 , 7 6 9 5 , 7 2 0 1 0 , 9 9 3
Trade related:
Due from a related party
Jiangsu Weili Energy Materials
C o . ,L t d . ............. ––– 1,051
Non-trade related:
Due to related parties
D r .Y a n gB a o f e n g ........... – 2 ––
The Company
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Trade related:
Due from subsidiaries
Jiangsu Shuangdeng Front New
E n e r g yC o . ,L t d . .......... 2 8 , 3 1 3 –––
Beijing Shuangdeng Huifeng Juneng
T e c h n o l o g yC o . ,L t d . ........ –– 27,269 90,445
SHOTO ENERGY PTE. LTD. . . . – 4,032 23,673 20,275
SHOTO TECHNOLOGY
(MALAYSIA) SDN.BHD. . . . . . –– 1,901 7,126
T o t a l ................... 2 8 , 3 1 3 4 , 0 3 2 5 2 , 8 4 3 117,846
APPENDIX I ACCOUNTANTS ’ REPORT
I – 131


--- page 591 ---
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Trade related:
Due to related parties
Jiangsu Fushanda New Energy
T e c h n o l o g yC o . ,L t d . ........ 3 , 0 1 8 3 , 0 0 1 4 , 9 4 3 1 0 , 2 0 0
Shuangdeng Cable Co., Ltd.. . . . . 315 427 664 454
Jiangsu Shuangdeng Group Limited 206 206 ––
Shuangdeng Tianpeng Metallurgical
J i a n g s uC o . ,L t d . .......... 1 0 0 1 0 0 1 0 0 1 0 0
T o t a l ................... 3 , 6 3 9 3 , 7 3 4 5 , 7 0 7 1 0 , 7 5 4
Trade related:
Due to subsidiaries
Jiangsu Shuangdeng Front New
E n e r g yC o . ,L t d . .......... 3 4 , 4 6 8 1 1 7 , 9 1 7 9 3 , 1 4 0 168,515
Hubei Shuangdeng Runyoung New
E n e r g yC o . ,L t d . .......... 8 4 , 8 5 3 6 5 , 5 6 1 7 7 , 2 0 6 7 3 , 8 9 9
Hubei Shuangdeng Energy Storage
T e c h n o l o g yC o . ,L t d . ........ – 2,496 2,758 99,493
Beijing Shuangdeng Huifeng Juneng
T e c h n o l o g yC o . ,L t d . ........ – 681 520 2,821
T o t a l ................... 1 1 9 , 3 2 1 1 8 6 , 6 5 5 173,624 344,728
Non-trade related:
Due from subsidiaries
Beijing Shuangdeng Huifeng Juneng
T e c h n o l o g yC o . ,L t d . ........ 2 7 , 1 1 1 2 3 , 1 8 1 1 3 , 7 8 0 1 5 , 2 8 0
Anhui Shuangdeng New Energy
C o . ,L t d ................ 1 –––
Jiangsu Shuangdeng Front New
E n e r g yC o . ,L t d . .......... – 9 – 12
C h i n a s h o t oF r a n c eS A S ....... 4 8 6 –––
SHOTO SINGAPORE PTE. LTD. . – 1,009 15,401 19,704
T o t a l ................... 2 7 , 5 9 8 2 4 , 1 9 9 2 9 , 1 8 1 3 4 , 9 9 6
APPENDIX I ACCOUNTANTS ’ REPORT
I – 132


--- page 592 ---
As at 31 December
As at
31 May
2022 2023 2024 2025
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Non-trade related:
Due to related parties
D r .Y a n gB a o f e n g ........... – 2 ––
Non-trade related:
Due to subsidiaries
Jiangsu Shuangdeng Front New
E n e r g yC o . ,L t d . .......... 3 0 , 1 7 7 4 7 ––
(i) The prices are mutually agreed after taking the prevailing market prices into
consideration.
(ii) The Group has entered into lease agreements in respect of buildings from
Jiangsu Shuangdeng Group Limited. The rental fees under the lease were
RMB5,132,000, RMB4,833,000, RMB5,085,000 and RMB2,689,000 for the
years ended 31 December 2022, 2023 and 2024 and 31 May 2025,
respectively. The Group recognised right-of-use assets of RMB8,672,000,
RMB6,559,000, RMB2,129,000 and RMB 3,968,000, and lease liabilities of
RMB8,925,000, RMB7,144,000, RMB2,685,000 and RMB4,379,000 as at
31 December 2022, 2023 and 2024 and 31 May 2025, respectively. The
transactions were made according to the prices and terms agreed with the
related parties.
(iii) The amounts due from related par ties are unsecured, interest-free and
repayable on demand. The management of the Company considers there is
no significant credit risk for amounts due from related parties.
(iv) The amounts due to related parties are unsecured, interest-free and have no
fixed terms of repayment.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 133


--- page 593 ---
(d) Compensation of key management personnel of the Group:
Year ended 31 December
Five months ended
31 May
2022 2023 2024 2024 2025
(unaudited)
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Salaries, allowances
and benefits in
kind . . . . . . . . . . 5,366 5,800 5,472 2,081 2,062
Performance related
bonuses . . . . . . . 17,242 20,280 12,289 5,121 2,872
Share incentive plan
expense . . . . . . . 4,197 4,838 6,826 2,016 3,711
Total . . . . . . . . . . . 26,805 30,918 24,587 9,218 8,645
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 594 ---
40. TRANSFERS OF FINANCIAL ASSETS
Transferred financial assets that are not derecognised in their entirety
At 31 December 2022, 2023 and 2024 and 31 May 2025, the Group endorsed
certain bills receivables (the ‘‘Endorsed Bills ’’) with carrying amounts of
RMB44,166,000, RMB50,874,000, RMB77,127,000 and RMB75,647,000,
respectively, to certain of its suppliers in or der to settle the trade payables due to such
suppliers (the ‘‘Endorsement ’’). In the opinion of the directors, the Group has retained
the substantial risks and rewards, which include default risks relating to such Endorsed
Bills, and accordingly, it continued to r ecognise the full carrying amounts of the
Endorsed Bills and the associated trad e payables settled. Subsequent to the
Endorsement, the Group did not retain any rights on the use of the Endorsed Bills,
including the sale, transfer or pledge of the Endorsed Bills to any other third parties.
The aggregate carrying amounts of the t rade payables settled by the Endorsed Bills
during the year to which the suppliers have recourse were as RMB113,983,000,
RMB148,287,000, RMB169,948,000 and RMB59,685,000 at 31 December 2022, 2023
and 2024 and 31 May 2025, respectively.
At 31 December 2022, 2023 and 2024 and 31 May 2025, the Group discounted
certain bills receivables (the ‘‘Discounted Bills ’’) with carrying amounts of
RMB8,509,000, RMB208,000 and RMB236,000 and RMB5,785,000, respectively (the
‘‘Discounting ’’). In the opinion of the directors, the Group has retained the substantial
risks and rewards, which include default r isks relating to such Discounted Bills, and
accordingly, it continued to recognise the f ull carrying amounts of the Discounted Bills
and the associated banking borrowings. Subsequent to the Discounting, the Group did
not retain any rights on the use of the Discounted Bills, including the sale, transfer or
pledge of the Discounted Bills to any other third parties. The aggregate carrying
amounts of the Discounted Bills during th e year to which the banks have recourse
were RMB19,882,000 and RMB208,000, RMB32,523,000 and RMB24,404,000 as at
31 December 2022, 2023 and 2024 and 31 May 2025, respectively.
Transferred financial assets that are derecognised in their entirety
At 31 December 2022, 2023 and 2024 and 31 May 2025, the Group endorsed
certain bills receivables that were not du e accepted by banks in Mainland China to
certain of its suppliers in order to settle th e trade payables due to such suppliers with
carrying amounts in aggregate of RMB48,757,000, RMB98,588,000,
RMB224,773,000, RMB117, 397,000, respectively, and discounted certain bills
receivables that were not due accep ted by banks in Mainland China (the
‘‘Derecognised Bills ’’) with carrying amounts of RMB47,868,000, nil,
RMB32,354,000 and nil, resp ectively. The Derecognised Bills had a maturity of one
to six months at the end of each of the Relevant Periods. In accordance with the Law
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 595 ---
of Negotiable Instruments in the PRC, the holders of the Derecognised Bills may
exercise the right of recourse against any, several or all of the persons liable for the
Derecognised Bills, including the Group, di sregarding the order of precedence (the
‘‘Continuing Involvement ’’). In the opinion of the directors, the risk of the Group
being claimed by the holders of the Derecognised Bills is remote in the absence of a
default of the accepted banks. The Group has transferred substantially all risks and
rewards relating to the Derecognised Bills . Accordingly, it has derecognised the full
carrying amounts of the Derecognised Bills and the associated trade payables. The
maximum exposure to loss from the Group ’s Continuing Involvement in the
Derecognised Bills and the undis counted cash flows to repurchase these Derecognised
Bills is equal to their carrying amounts. In t he opinion of the directors, the fair values
of the Group ’s Continuing Involvement in the Derecognised Bills are not significant.
During the years ended 31 December 2022, 2023 and 2024 and 31 May 2025, the
Group has recognised losses of RMB1,054,000, nil, nil and nil, respectively, on the
date of transfer of the Derecognised Bills.
41. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments of the Group
as at the end of each of the Relevant Periods are as follows:
Financial assets
As at 31 December 2022
Financial
assets at
fair value
through
profit or
loss
Financial
assets at fair
value through
other
comprehensive
income
Financial
assets at
amortised
cost Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair value
through other comprehensive
i n c o m e ................ – 6,909 – 6,909
Trade and bills receivables . . . –– 1,862,211 1,862,211
Financial assets included in
prepayments, other
receivables and other assets. . –– 10,114 10,114
R e s t r i c t e dc a s h........... –– 228,740 228,740
Cash and cash equivalents . . . –– 270,264 270,264
T o t a l.................. – 6,909 2,371,329 2,378,238
APPENDIX I ACCOUNTANTS ’ REPORT
I – 136


--- page 596 ---
As at 31 December 2023
Financial
assets at
fair value
through
profit or
loss
Financial
assets at fair
value through
other
comprehensive
income
Financial
assets at
amortised
cost Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair value
through other comprehensive
i n c o m e ................ – 15,655 – 15,655
Trade and bills receivables . . . –– 1,609,318 1,609,318
Financial assets included in
prepayments, other
receivables
a n do t h e ra s s e t s .......... –– 8,180 8,180
R e s t r i c t e dc a s h........... –– 338,889 338,889
Cash and cash equivalents . . . –– 479,040 479,040
T o t a l.................. – 15,655 2,435,427 2,451,082
As at 31 December 2024
Financial
assets at
fair value
through
profit or
loss
Financial
assets at fair
value through
other
comprehensive
income
Financial
assets at
amortised
cost Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair value
through other comprehensive
i n c o m e............... – 3,073 – 3,073
Trade and bills receivables . . . –– 2,318,281 2,318,281
Financial assets included in
prepayments, other
receivables and other assets . –– 41,249 41,249
Financial assets at fair value
through profit or loss . . . . . 86,000 –– 86,000
Derivative financial
i n s t r u m e n t s............ 3 , 3 5 5 –– 3,355
R e s t r i c t e dc a s h........... –– 258,701 258,701
Cash and cash equivalents . . . –– 395,234 395,234
T o t a l.................. 8 9 , 3 5 5 3 , 0 7 3 3 , 0 1 3 , 4 6 5 3 , 1 0 5 , 8 9 3
APPENDIX I ACCOUNTANTS ’ REPORT
I – 137


--- page 597 ---
As at 31 May 2025
Financial
assets at
fair value
through
profit or
loss
Financial
assets at fair
value through
other
comprehensive
income
Financial
assets at
amortised
cost Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair value
through other comprehensive
i n c o m e............... – 2,225 – 2,225
Trade and bills receivables . . . –– 2,386,563 2,386,563
Financial assets included in
prepayments, other
receivables and other assets . –– 41,328 41,328
Due from a related party . . . . –– 338 338
R e s t r i c t e dc a s h........... –– 238,993 238,993
Cash and cash equivalents . . . –– 616,940 616,940
T o t a l.................. – 2,225 3,284,162 3,286,387
APPENDIX I ACCOUNTANTS ’ REPORT
I – 138


--- page 598 ---
Financial liabilities
As at 31 December 2022
Financial
liabilities at
amortised cost
RMB’000
D u et or e l a t e dp a r t i e s ................................ 4 , 8 3 4
Financial liabilities included in other payables and accruals. . . . . . 235,578
Trade and bills payables . . . . . . . . ...................... 7 0 1 , 8 7 6
Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . . . 996,045
Lease liabilities .................................... 9 , 9 9 2
T o t a l........................................... 1 , 9 4 8 , 3 2 5
As at 31 December 2023
Financial
liabilities at
amortised cost
RMB’000
D u et or e l a t e dp a r t i e s ................................ 3 , 7 7 1
Financial liabilities included in other payables and accruals. . . . . . 242,365
Trade and bills payables . . . . . . . . ...................... 8 3 7 , 1 7 2
Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . . . 707,953
Lease liabilities .................................... 1 0 , 3 8 9
T o t a l........................................... 1 , 8 0 1 , 6 5 0
APPENDIX I ACCOUNTANTS ’ REPORT
I – 139


--- page 599 ---
As at 31 December 2024
Financial
liabilities at
fair value
through profit
or loss
Financial
liabilities at
amortised cost
RMB’000 RMB ’000
D u et or e l a t e dp a r t i e s ................... – 5,720
Financial liabilities inc luded in other payables
a n da c c r u a l s ....................... – 229,966
Trade and bills payables . . . . . . . . ......... – 973,979
Interest-bearing bank an d other borrowings . . . . – 928,737
Lease liabilities ....................... – 16,614
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ............ 8 4 2 –
T o t a l.............................. 8 4 2 2 , 1 5 5 , 0 1 6
As at 31 May 2025
Financial
liabilities at
fair value
through profit
or loss
Financial
liabilities at
amortised cost
RMB’000 RMB ’000
D u et or e l a t e dp a r t i e s ................... – 10,993
Financial liabilities inc luded in other payables
a n da c c r u a l s ....................... – 366,548
Trade and bills payables . . . . . . . . ......... – 1,225,637
Interest-bearing bank an d other borrowings . . . . – 1,106,996
Lease liabilities ....................... – 15,108
D e r i v a t i v ef i n a n c i a li n s t r u m e n t s ............ 4 8 9 –
T o t a l.............................. 4 8 9 2 , 7 2 5 , 2 8 2
APPENDIX I ACCOUNTANTS ’ REPORT
I – 140


--- page 600 ---
42. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, time
deposits, financial assets included in prep ayments and other receivables, trade and bills
receivables, due from related pa rties, trade and bills payables, financial liabilities included
in other payables and accruals, due to related p arties and current portion of interest-bearing
bank borrowings approximate to their carrying amounts largely due to the short-term
maturities of these instruments.
The Group ’s finance department headed by the finance manager is responsible for
determining the policies and procedures for the fair value measurement of financial
instruments. At the end of each of the Relevant Periods, the finance department analyses the
movements in the values of financial instruments and determines the major inputs applied in
the valuation. The valuation is reviewed and approved by the chief financial officer.
The fair values of the financial assets an d liabilities are included at the amount at
which the instrument could be exchanged in a c urrent transaction b etween willing parties,
other than in a forced or liquidation sale. The following methods and assumptions were used
to estimate the fair values:
The fair values of the non-current portion of interest-bearing bank borrowings have
been calculated by discounting the expected future cash flows using rates currently available
for instruments with similar terms, credit ris k and remaining maturities. The changes in fair
value as a result of the Group ’s own non-performance risk for interest-bearing bank
borrowings as at the end of each of the Relevant Periods were assessed to be insignificant.
The Group invests in unlisted investments, which represent wealth management
products issued by banks in Mainland China. The Group has estimated the fair value of
these unlisted investments by using a discounted cash flow valuation model based on the
market interest rates of instruments with sim ilar terms and risks. The fair values have been
assessed to be approximate to their carrying amounts.
The discount for lack of marketability re presents the amounts of premiums and
discounts determined by the Group that market participants would take into account when
pricing the investments.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 141


--- page 601 ---
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the
Group ’s financial instruments.
Assets measured at fair value:
As at 31 December 2022
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income – 6,909 – 6,909
As at 31 December 2023
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income – 15,655 – 15,655
APPENDIX I ACCOUNTANTS ’ REPORT
I – 142


--- page 602 ---
As at 31 December 2024
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income . . . . – 3,073 – 3,073
Financial assets at fair value
through profit or loss . . . . . – 86,000 – 86,000
Derivative financial
i n s t r u m e n t s ............ – 3,355 – 3,355
T o t a l................. – 92,428 – 92,428
As at 31 May 2025
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Derivative financial
i n s t r u m e n t s ............ – 2,225 – 2,225
APPENDIX I ACCOUNTANTS ’ REPORT
I – 143


--- page 603 ---
Liabilities measured at fair value:
As at 31 December 2024
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Derivative financial
i n s t r u m e n t s ............ 8 4 2 –– 842
As at 31 May 2025
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000
Derivative financial
i n s t r u m e n t s ............ 4 8 9 –– 489
During the years ended 31 December 2022, 2023 and 2024 and the five months ended
31 May 2025, there were no transfers of fair value measurements between Level 1 and Level
2 and no transfers into or out of Level 3 for bot h financial assets and financial liabilities.
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group ’s principal financial instruments, oth er than derivatives, comprise cash and
cash equivalents and bank borrowings. The main purpose of these financial instruments is to
support the Group ’s operations. The Group has various other financial assets and liabilities
such as trade receivables and trade payables, which arise directly from its operations.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 144


--- page 604 ---
The main risks arising from the Group ’s financial instruments are interest rate risk,
foreign currency risk, credit risk and liquidity risk. The management of the Company and
the Financial Instruments Division is respon sible for the daily risk management by the
operation management through functional departments (e.g., the Company ’sC r e d i t
Management Department reviews the credit sales incurred by the Company on a case-by-
case basis). The Company ’s Internal Audit Department conducts daily supervision of the
implementation for the Company ’s risk management policies and procedures, and reports the
relevant findings in a timely manner to the Company ’s Audit Committee. The overall
objective of the Company ’s risk management is to establish risk management policies that
minimizes the risks associated with various types of financial instruments without unduly
affecting the Company ’s competitiveness and resilience.
Interest rate risk
The Group ’s exposure to the risk of changes in fair value relates primarily to the
Group ’s bank borrowings with a floating interest rate.
The following table demonstrates the se nsitivity to a reasonably possible change
in interest rates, with all other va riables held constant, of the Group ’s profit or loss
after tax through the impact on floating rate borrowings and the Group ’s equity.
Increase/
(decrease) in
basis points
(Decrease)/
increase in
profit/(loss)
after tax
(Decrease)/
increase in
equity
RMB’000 RMB ’000
2022
R M B ....................... 1 0 0 ( 1 , 5 4 0 ) ( 1 , 5 4 0 )
R M B ....................... ( 1 0 0 ) 1 , 5 4 0 1 , 5 4 0
2023
R M B ....................... 1 0 0 ( 9 4 4 ) ( 9 4 4 )
R M B ....................... ( 1 0 0 ) 9 4 4 9 4 4
2024
R M B ....................... 1 0 0 ( 1 , 0 4 4 ) ( 1 , 0 4 4 )
R M B ....................... ( 1 0 0 ) 1 , 0 4 4 1 , 0 4 4
Five months ended 31 May 2025
R M B ....................... 1 0 0 ( 7 7 1 ) ( 7 7 1 )
R M B ....................... ( 1 0 0 ) 7 7 1 7 7 1
APPENDIX I ACCOUNTANTS ’ REPORT
I – 145


--- page 605 ---
Foreign currency risk
Foreign currency risk is the risk of loss resulting from changes in foreign
currency exchange rates. fluctuations in exchange rates between RMB and other
currencies in which the Group conducts business may affect the Group ’s financial
condition and results of operations. The Gr oup seeks to limit its exposure to foreign
currency risk by minimising its net foreign currency position.
The following table demonstrates the sensitivity at the end of each of the
Relevant Periods to a reasonably possible change in USD and RMB exchange rates,
with all other variables held constant, of the Group ’s profit or loss before tax (due to
changes in the fair value of monetar y assets and liabilities) and the Group ’s equity.
(Decrease)/
increase in
foreign
exchange
rate
(Decrease)/
increase in
profit/(loss)
after tax
(Decrease)/
increase in
equity
%R M B ’000 RMB ’000
2022
If RMB strengthens against US$ . . . . (5) (15,502) (15,502)
If RMB weakens against US$ . . . . . . 5 15,502 15,502
2023
If RMB strengthens against US$ . . . . (5) (13,192) (13,192)
If RMB weakens against US$ . . . . . . 5 13,192 13,192
2024
If RMB strengthens against US$ . . . . (5) (21,367) (21,367)
If RMB weakens against US$ . . . . . . 5 21,367 21,367
Five months ended 31 May 2025
If RMB strengthens against US$ . . . . (5) (31,027) (31,027)
If RMB weakens against US$ . . . . . . 5 31,027 31,027
Credit risk
The Group trades only with recognised and c reditworthy third parties and there is
no requirement for colla teral. It is the Group ’s policy that all customers who wish to
trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an ongoing basis and the Group ’s exposure to
bad debts is not significant. Concentrations of credit risk are managed by customer/
counterparty and by industry sector.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 146


--- page 606 ---
Maximum exposure and year-end staging
The table below shows the credit quality and the maximum exposure to credit
risk based on the Group ’s credit policy, which is mainly based on reasonable and
supportable information that is available at the reporting date about past events,
current conditions and forecas ts of future economic conditio ns, and year-end staging
classification as at the end of each of the Relevant Periods. The amounts presented are
gross amounts for financial assets.
31 December 2022
12 months
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income . . 6,909 ––– 6,909
Trade and bills
receivables* . . . . . . . . . ––– 1,948,192 1,948,192
Contract assets* . . . . . . . ––– 9,590 9,590
Financial assets included in
prepayments, other
receivables and other
a s s e t s- N o r m a l * * ...... 1 3 , 6 0 5 ––– 13,605
R e s t r i c t e dc a s h........ 2 2 8 , 7 4 0 ––– 228,740
Cash and cash
equivalents . . . . . . . . . . 270,264 ––– 270,264
T o t a l............... 5 1 9 , 5 1 8 –– 1,957,782 2,477,300
APPENDIX I ACCOUNTANTS ’ REPORT
I – 147


--- page 607 ---
31 December 2023
12 months
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income . . 15,655 ––– 15,655
Trade and bills
receivables* . . . . . . . . . ––– 1,685,567 1,685,567
Contract assets* . . . . . . . ––– 17,937 17,937
Financial assets included in
prepayments, other
receivables and other
a s s e t s- N o r m a l * * ...... 1 1 , 8 5 9 ––– 11,859
R e s t r i c t e dc a s h........ 3 3 8 , 8 8 9 ––– 338,889
Cash and cash
equivalents . . . . . . . . . . 479,040 ––– 479,040
T o t a l............... 8 4 5 , 4 4 3 –– 1,703,504 2,548,947
31 December 2024
12 months
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income . . 3,073 ––– 3,073
Trade and bills
receivables* . . . . . . . . . ––– 2,411,394 2,411,394
Contract assets* . . . . . . . ––– 16,866 16,866
Financial assets included in
prepayments, other
receivables and other
a s s e t s- N o r m a l * * ...... 4 5 , 9 3 7 ––– 45,937
R e s t r i c t e dc a s h........ 2 5 8 , 7 0 1 ––– 258,701
Cash and cash
equivalents . . . . . . . . . . 395,234 ––– 395,234
T o t a l............... 7 0 2 , 9 4 5 –– 2,428,260 3,131,205
APPENDIX I ACCOUNTANTS ’ REPORT
I – 148


--- page 608 ---
31 May 2025
12 months
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Debt investments at fair
value through other
comprehensive income . . 2,225 ––– 2,225
Trade and bills receivables* ––– 2,477,833 2,477,833
Contract assets* . . . . . . . ––– 17,899 17,899
Financial assets included in
prepayments, other
receivables and other
a s s e t s- N o r m a l * * ...... 4 6 , 7 4 6 ––– 46,746
Due from a related party . 338 ––– 338
R e s t r i c t e dc a s h........ 2 3 8 , 9 9 3 ––– 238,993
Cash and cash equivalents 616,940 ––– 616,940
T o t a l............... 9 0 5 , 2 4 2 –– 2,495,732 3,400,974
* For trade and bills receivables and contract assets to which the Grou p applies the simplified approach
for impairment, information based on the provision matrix is disclosed in note 20 and note 21 to the
Historical Financial Information.
** The credit quality of the financial assets included i n prepayments, other rece ivables and other assets is
considered to be ‘‘normal ’’ when they are not past due and there is no information indicating that the
financial assets had a significant i ncrease in credit risk since initial r ecognition. Otherw ise, the credit
quality of the financial assets is considered to be ‘‘doubtful. ’’
Further quantitative data in respect of the Group ’s exposure to credit risk arising
from trade receivables and other receivables are respectively disclosed in notes 20 and
17 to the Historical Fi nancial Information.
At the end of the each of the Relevant Periods, the Group had certain
concentrations of credit risk as 56%, 45%, 42% and 35% of the Group ’s trade and bills
receivables were due from the Group ’s five largest customers, respectively.
Liquidity risk
The Group monitors its exposure to liquidity risk by regularly monitoring short-
term and long-term liquidity requirements, as well as compliance with borrowing
agreements to ensure that adequate cash rese rves and readily realisable liquidity are
maintained.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 149


--- page 609 ---
The liquidity of the Group is primarily dependent on its ability to maintain
adequate cash inflows from operations to me et its debt obligations as they fall due, and
its ability to obtain external financing to me et its committed future capital expenditure.
Due to the Group ’s supplier finance arrangements, t he relevant interest-bearing
bank and other borrowings are due to a single counterparty rather than individual
suppliers. This results in the Group being required to settle a significant amount with a
single counterparty, rather than less significant amounts with a number of suppliers.
However, the Group ’s payment terms for interest-bearing bank and other borrowings
covered by the arrangements are either identical to the payment terms for other
interest-bearing bank and other borrowings or extended by around 240-360 days.
Management does not consider the supplier finance arrangements to result in excessive
concentrations of liquidity risk given the payment terms are not significantly extended.
Details of the arrangements are disclosed in note 29 to the financial statements.
The maturity profile of the Group ’s financial liabilities as at the end of each of
the Relevant Periods, based on the contractual undiscounted payments, is as follows:
As at 31 December 2022
On
demand
Within 1
year
1t o5
years
Over 5
years Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
L e a s el i a b i l i t i e s ........ – 5,413 4,601 500 10,514
Interest-bearing bank and
o t h e rb o r r o w i n g s...... – 965,547 54,525 – 1,020,072
Trade and bills payables . . – 701,876 –– 701,876
Financial liabilities
included in other payables
and accruals . . . . . . . . . – 235,578 –– 235,578
Due to related parties . . . . – 4,834 –– 4,834
T o t a l............... – 1,913,248 59,126 500 1,972,874
APPENDIX I ACCOUNTANTS ’ REPORT
I – 150


--- page 610 ---
As at 31 December 2023
On
demand
Within 1
year
1t o5
years
Over 5
years Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
L e a s el i a b i l i t i e s ........ – 6,788 3,470 – 10,258
Interest-bearing bank and
other borrowings . . . . . – 426,395 279,828 39,510 745,733
Trade and bills payables . . – 837,172 –– 837,172
Financial liabilities
i n c l u d e di no t h e r
payables and accruals . . – 242,365 –– 242,365
Due to related parties . . . . 2 3,769 –– 3,771
Total . . . . . . . . . . . . . . . 2 1,516,489 283,298 39,510 1,839,299
As at 31 December 2024
On
demand
Within 1
year
1t o5
years
Over 5
years Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
L e a s el i a b i l i t i e s ........ – 8,344 8,821 – 17,165
Interest-bearing bank and
other borrowings . . . . . – 687,292 268,736 – 956,028
Trade and bills payables . . – 973,979 –– 973,979
Financial liabilities
i n c l u d e di no t h e r
payables and accruals . . – 229,966 –– 229,966
Due to related parties . . . . 280 5,440 –– 5,720
T o t a l............... 2 8 0 1 , 9 0 5 , 0 2 1 2 7 7 , 5 5 7 – 2,182,858
As at 31 May 2025
On
demand
Within 1
year
1t o5
years
Over 5
years Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
L e a s el i a b i l i t i e s ........ – 7,107 8,486 – 15,593
Interest-bearing bank and
other borrowings . . . . . – 856,226 276,814 – 1,133,040
Trade and bills payables . . – 1,225,637 –– 1,225,637
Financial liabilities
i n c l u d e di no t h e r
payables and accruals . . – 366,548 –– 366,548
Due to related parties . . . . 5,340 5,653 –– 10,993
Total . . . . . . . . . . . . . . . 5,340 2,461,171 285,300 – 2,751,811
APPENDIX I ACCOUNTANTS ’ REPORT
I – 151


--- page 611 ---
Capital management
The primary objectives of the Group ’s capital management are to safeguard the
Group ’s ability to continue as a going concern, so that it can continue to provide
returns to shareholders and benefits to other stakeholders, by pricing services
commensurately with the level of risk.
The Group manages its capital structure and makes adjustments to it in light of
changes in economic conditions and the risk ch aracteristics of the underlying assets.
To maintain or adjust the capital structure , the Group may adjust the dividend payment
to shareholders, return capital to shareholders or issue new shares. The Group is not
subject to any externally imposed capital requirements. No changes were made in the
objectives, policies or processes for managing capital during the Relevant Periods.
44. SUBSEQUENT EVENTS
There is no material subsequent event undertaken by the Group after 31 May 2025.
45. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any
of the companies now comprising the Group in respect of any period subsequent to 31 May
2025.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 152


--- page 612 ---
The following information does not form part of the Accountants ’ Report from Ernst &
Young, Certified Public Accountants, Hong Kong, the Company ’s reporting accountants, as set
out in Appendix I to this Prospectus, and is included herein for information purpose only. The
unaudited pro forma financial information should be read in conjunction with the section headed
‘‘Financial Information ’’ in this Prospectus and the Accountants ’ Report set out in Appendix I to
this Prospectus, respectively.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
have been prepared in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on the Stock Exchange of Hong Kong Limited and with reference to Accounting
Guideline 7 Preparation of Pro Forma Financial Informa tion for inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Pub lic Accountants for illustration purposes only,
and is set out here to illustrate the effects of the Global Offering on the consolidated net tangible
assets of the Group attributable to owners of the parent as at May 31, 2025 as if the Global
Offering had taken place on May 31, 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and becau se of its hypothetical nature, it may not give a
true picture of the consolidated net tangible assets of the Group attributable to owners of the
parent had the Global Offering been completed as at May 31, 2025 or as at any future dates.
The unaudited pro forma statement of adjusted consolidated net tangible assets is prepared
based on the consolidated net tangible assets of the Group attributable to owners of the parent as
at May 31, 2025 as set out in the Accountants ’ Report in Appendix I to this Prospectus and is
adjusted for the effects described below.
Consolidated
net tangible
assets of the
Group
attributable to
owners of the
parent as at
May 31, 2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated
net tangible
assets of the
Group as at
May 31, 2025
Unaudited pro forma adjusted
consolidated net tangible assets
per Share
as at May 31, 2025
RMB ’000 RMB ’000 RMB ’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
B a s e do na nO f f e rP r i c eo f
HK$14.51 per Share . . . ..... 2 , 452,684 707,892 3,160,576 7.58 8.34
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 1


--- page 613 ---
Notes:
1. The consolidated net tangible assets of the Group at tributable to owners of the parent as at May 31, 2025 was
extracted from the Accountants ’ Report set out in Appendix I to this Prosp ectus, which is based on the consolidated
net assets of our Group attributable to owners of the parent as at May 31, 2025 of RMB2,460,472,000 less
intangible assets of RMB7,788,000.
2. The estimated net proceeds from the Global Offering are based on actual offer prices of HK$14.51 per Share,
respectively, after deduction of underwriting fees and commissions and other related expenses payable by the
Company (excluding the listing expense that have been charged to profit or loss during the Track Record Period)
and does not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option.
The estimated net proceeds from the Global Offering are converted into Renminbi at an exchange rate of
RMB0.9094 to HK$1.00.
3. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per Share is
arrived at by dividing the unaudited pro forma adjusted net tangible assets by 416,826,000 shares, being the number
of shares in issue assuming that the Global Offering had been completed on May 31, 2025, without taking account
of the exercise of the Ov er-allotment Option.
4. For the purpose of this unaudited pro forma statement of adjusted net tangible assets, the balances stated in RMB
are converted into HK$ at the rate of RMB0.9094 to HK$1.00.
5. No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of the
Group to reflect any trading result or other transactions entered into subsequent to May 31, 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 2


--- page 614 ---
B. INDEPENDENT REPORTING ACCOUNTANTS ’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of SHUANGDENG GROUP Co., Ltd.
We have completed our assurance engagement to report on the compilation of
unaudited pro forma financial informa tion of SHUANGDENG GROUP Co., Ltd. (the
‘‘Company ’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group ’’)b y
the directors of the Company (the ‘‘Directors ’’) for illustrative purposes only. The unaudited
pro forma financial information consists of the pro forma consolidated net tangible assets as
at May 31, 2025 and related notes as set out on pages II-1 to II-2 of the prospectus dated
August 18, 2025 issued by the Company (the ‘‘Unaudited Pro Forma Financial
Information ’’). The applicable criteria on the basis of which the Directors have compiled
the Unaudited Pro Forma Financial Informa tion are described in Part A of Appendix II to
the listing documents.
The Unaudited Pro Forma Financial Informa tion has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group ’s
financial position as at May 31, 2025 as if the transaction had taken place at May 31, 2025.
As part of this process, in formation about the Group ’s financial position, has been extracted
by the Directors from the Group ’s financial statements for the period ended May 31, 2025,
on which an accountants ’ report has been published.
Directors ’ responsibility for the Unaudited P ro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules ’’) and with
reference to Accounting Guideline ( ‘‘AG’’)7
Preparation of Pro Forma Financial
Information for Inclusion in Investment Circulars issued by the Hong Kong Institute of
Certified Public Accountants (the ‘‘HKICPA ’’).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code
of Ethics for Professional Accountants issued by the HKICPA, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behavior.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 3


--- page 615 ---
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements which requires the firm to design, implement and operate a
system of quality management including polic ies or 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 Fin ancial Information and to report our opinion
to you. We do not accept any responsibility fo r any reports previously given by us on any
financial information used in the compila tion of the Unaudited Pro Forma Financial
I n f o r m a t i o nb e y o n dt h a to w e dt ot h o s et ow h o mt h o s er e p o r t sw e r ea d d r e s s e db yu sa tt h e
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 financia l 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 informatio n used in compiling the Unaudited Pro Forma
Financial Information.
The purpose of the Unaudited Pro Forma F inancial Information included in the
Prospectus is solely to illustrate the impact o f the global offering of shares of the Company
on unadjusted financial information of the Group as if the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide
any assurance that the actual outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Unaudited Pro Forma
Financial Information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess wh ether the applicable criteria used by the
Directors in the compilation of the Unaudited P ro Forma Financial Information provide a
reasonable basis for presenting the significant e ffects directly attributable to the transaction,
and to obtain sufficient appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 4


--- page 616 ---
 the Unaudited Pro Forma Financial Inform ation reflects the proper application of
those adjustments to the unadj usted 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 transaction in
respect of which the Unaudited Pro Forma Financial Information has been compiled, and
other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro
Forma Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on
the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
Certified Public Accountants
Hong Kong
18 August 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 5


--- page 617 ---
TAXATION OF SECURITY HOLDERS
The taxation of income and capital gains of holders of H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are residents or otherwise
subject to tax. The following summary of certain re levant taxation provisions is based on current
effective laws and practices, and no predictions are made about changes or adjustments to
relevant laws or policies, which does not constitu te legal or taxation advices accordingly. The
discussion has no intention to cover all possible t ax consequences resulting from the investment
in H Shares, nor does it take the specific circumst ances of any particular investor into account,
some of which may be subject to Special Regulations . Accordingly, prospective investors should
consult your own tax advisor regarding the tax consequences of an investment in H Shares. The
discussion is based upon laws and relevant in terpretations in effect as of the date of this
Prospectus, which is subject to change or adjustment and may have retrospective effect.
No issues on PRC or Hong Kong taxation other than income tax, capital appreciation and
profit tax, business tax/appreciation tax, stamp duty and estate duty were referred in the
discussion below. Prospective investors are urged to consult their financial advisors regarding the
PRC, Hong Kong and other tax consequences of owning and disposing of H Shares.
In the discussion of Hong Kong and PRC tax laws, it provides an overview of the relevant
legal implications only, which should not be assu med that the relevant tax authorities or courts in
the PRC or Hong Kong will accept or agree with the interpretations or contents as set out below.
THE PRC TAXATION
1. Taxation on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC （《中華人民共和國個人所得
稅法》）, which was most recently amended on August 31, 2018 and the Implementation
Provisions of the Individual Income Tax Law of the PRC （《中華人民共和國個人所得稅法
實施條例》）, which was most recently amended on December 18, 2018 (the ‘‘IIT Law ’’),
dividends distributed by PRC enterprises are subject to individual income tax levied at a flat
rate of 20%. For foreign individuals who are non-PRC residents, if they receive dividends
from a PRC enterprise, they are usually required to pay a 20% individual income tax unless
they are specifically exempted by the tax authorities of the State Council or shall pay at a
reduced rate as permitted under relevant tax treaties.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 1


--- page 618 ---
According to the Notice on Issues concerni ng the Implementation of Differential
Individual Income Tax Policies on Dividends and Bonuses of Listed Companies （《關於上
市公司股息紅利差別化個人所得稅政策有關問題的通知》） (Cai Shui [2015] No. 101)
issued by the MOF on September 7, 2015, where an individual acquires the stocks of a
listed company from public offering of the company or from the stock market, if the stock
holding period is more than one year, the dividend incomes shall be exempted from personal
income tax. Where an individual acquires the stocks of a listed company from public
offering of the company or from the stock market, if the stock holding period is one month
or less, the income from dividends shall be included into the taxable incomes in full
amount; if the stock holding period is more than one month and up to one year, the dividend
income shall be included into the taxable incomes at the reduced rate of 50% for the time
being. Individual income taxes on the aforesaid incomes shall be collected at the uniform
rate of 20%.
Pursuant to the Notice of the SAT on Issues Concerning Taxation and Administration
of Individual Income Tax After the Repeal of the Document （《國家稅務總局關於國稅
發[1993]045 號文件廢止後有關個人所得稅徵管問題的通知》） issued by the SAT on June
28, 2011, the overseas resident individual shareholders of a domestic non-foreign-invested
enterprise which issued stocks in Hong Kong are entitled to relevant preferential tax
treatments in accordance with the tax treatie s entered into by and between PRC and the
countries they came from as well as the taxa tion arrangement between the Mainland China
and Hong Kong (or Macau). The individual income tax shall be withheld at a preferential
tax rate of 10% generally for dividends paid and profits to overseas resident individual
shareholders by the domestic non-foreign-inve sted enterprise which issued stocks in Hong
Kong, and no application procedure is required. For individual shareholders receiving
dividends who are tax residents of countries that have entered into a tax treaty with the PRC
with tax rates lower than 10%, the withholding agents may apply for enjoying the lower
preferential tax rate in accordance with the procedures required and, upon approval by the
tax authorities, the surplus amount will be refu nded. For individual shareholders receiving
dividends who are tax residents of countries that have entered into a tax treaty with the PRC
that provides for tax rates higher than 10% but lower than 20%, the withholding agents are
required to withhold the individual income tax at the effective rates under the treaties for
dividends or bonuses paid, and no application procedure is required under such
circumstances. For individual shareholders receiving dividends who are tax residents of
countries without taxation treaties with the PRC or, the withholding agents are required to
withhold the individual income tax at a rate of 20% for dividends and bonuses paid.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 2


--- page 619 ---
Pursuant to the Arrangement between the Mainland of China and the Hong Kong
Special Administrative Region for the Avoidan ce of Double Taxation and the Prevention of
Fiscal Evasion Regarding Income Tax （《內地和香港特別行政區關於對所得避免雙重徵稅
和防止偷漏稅的安排》） signed on August 21, 2006, the PRC government may impose tax
on dividends paid to a Hong Kong resident (including natural persons and legal entities) by
a PRC enterprise, but such tax amount shall not exceed 10% of the gross amount of the
dividends payable. If a Hong Kong resident dir ectly holds 25% or more equity interest in a
PRC resident enterprise, such tax amount shall not exceed 5% of the total dividends payable
by PRC resident enterprise. The Fifth Protocol of the Arrangement between the Mainland of
China and the Hong Kong Special Administrative Region on the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion （《內地和香港特別行政區關於對所得避免雙
重徵稅和防止偷漏稅的安排》（第五議定書））signed on July 19, 2019 provides that such
preferential tax rates shall not apply to arrangement or transaction made for the primary
purpose of gaining such tax benefit. The implementation of the provisions of tax agreements
on dividends must comply with the Notice of t he State Administration of Taxation on the
Issues concerning the Application of the Dividend Clauses of Tax Agreements (Guo Shui
Han [2009] No. 81) 《國家稅務總局
關於執行稅收協議股息條款有關問題的通知》（國稅
函[2009]81 號）and relevant taxation laws and regulation in the PRC.
In accordance with the requirements of the Circular on Certain Issues Concerning the
Policies of Individual Income Tax （《關於個人所得稅若干政策問題的通知》）promulgated
by the Ministry of Finance and the State Administration of Taxation on May 13, 1994,
overseas individuals are, as an interim measure, exempted from the individual income tax
for dividends or bonuses received from foreign-invested enterprises.
Enterprise Investors
A c c o r d i n gt ot h eE n t e r p r i s eI n c o m eT a xL a wo ft h eP R Cw h i c hw a sp r o m u l g a t e db y
the National People ’s Congress on March 16, 2007 and was newly amended on December
29, 2018 and the Regulation on the Implementation of the Enterprise Income Tax Law of
the PRC which was promulgated by the State Council on December 6, 2007 that came into
effect on January 1, 2008 and was newly amended on April 23, 2019, enterprise investors
are subject to enterprise income tax at a rate of 25%. A non-resident enterprise that has no
establishment or premises within the PRC bu t has income from the PRC, and a non-resident
enterprise that has establishment or premises in the PRC but its income has no actual
connection to such establishment or pre mises in the PRC, shall be subject to PRC
withholding tax generally at the rate of 10% on its income sourced from the PRC (including
dividends derived from PRC resident enterprises issuing shares in Hong Kong). The
aforementioned income tax payable by non-resident enterprises shall be deducted at source,
with the payer being the withholding agent, and the income tax shall be withheld by the
withholding agent from the amount payable.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 3


--- page 620 ---
The Notice of the State Administratio n of Taxation on Matters Concerning
Withholding Enterprise Income Tax When China Resident Enterprises Distribute Dividends
to Foreign Non-resident Enterp rise Shareholders of H Shares （《國家稅務總局關於中國居民
企 業 向 境 外 H 股 非 居 民 企 業 股 東 派 發 股 息 代 扣 代 繳 企 業 所 得 稅 有 關 問 題 的 通 知 》）
promulgated and implemented by State Administration of Taxation on November 6, 2008
further clarified that resident enterprises i n the PRC distributing dividends to foreign non-
resident enterprise shareholders of H shares for 2008 and for the years onwards shall be
subject to the enterprise income tax withheld at a tax rate of 10%. The Response to
Questions on Enterprise Income Tax over Divid end of B-Shares and Other Shares Received
by Non-resident Enterprises （《關於非居民企業取得B股等股票股息徵收企業所得稅問題的
批復》）issued by State Administration of Taxation which came into effect on July 24, 2009
further provides that any PRC resident enterprise listed on stock exchanges outside the PRC
must withhold enterprise income tax at the rate of 10% from dividends distributed by them
for 2008 and for the years onwards to non-resi dent enterprises. The above tax rates are
subject to further changes based on the tax treaties or agreements (if applicable) signed
between the PRC and the relevant countries or regions.
According to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region on the Avoidance of D ouble Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income （《內地和香港特別行政區關於對所得避免雙重徵
稅和防止偷漏稅的安排》）, which was signed on August 21, 2006 and came into effect on
August 12, 2006, the Chinese government may levy taxes on the dividends paid by a
Chinese company to Hong Kong residents (incl uding natural persons and legal entities) in
an amount not exceeding 10% of the total dividends payable by the Chinese company. If a
Hong Kong resident directly holds 25% or more of the equity interest in a Chinese
company, then such tax shall not exceed 5% of the total dividends payable by the Chinese
company. The Fifth Protocol of the Arrangement between the Mainland of China and the
Hong Kong Special Administrative Region on the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion （《〈內地和香港特別行政區關於對所得避免雙重徵稅和防止
偷漏稅的安排〉第五議定書》）,which came into effect on December 6, 2019, adds a criteria
for the qualification of entitlement to enjoy t reaty benefits. Although there may be other
provisions under the Arrangement, the treaty benefits under the criteria shall not be granted
in the circumstance where relevant gains, afte r taking into account all relevant facts and
conditions, are reasonably deemed to be one of the main purposes for the arrangement or
transactions which will bring any direct or indirect benefits under this Arrangement, except
when the grant of benefits under such circumsta nce is consistent with relevant objective and
goal under the Arrangement. The application of the dividend clause of tax agreements is
subject to the requirements of PRC tax law and regulation, such as the Notice of the SAT on
the Issues Concerning the Application of the Dividend Clauses of Tax Agreements （
《國家稅
務總局關於執行稅收協議股息條款有關問題的通知》）.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 4


--- page 621 ---
Tax Treaties
Non-resident investors residing in jurisdi ctions which have entered into treaties or
adjustments for the avoidance of double t axation with the PRC might be entitled to a
reduction of the Chinese corporate income ta x imposed on the dividends received from PRC
resident companies. The PRC currently has entered into avoidance of double taxation
treaties or arrangements with a number of countries and regions including Hong Kong
Special Administrative Region, Macau Special Administrative Region, Australia, Canada,
France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United Kingdom, the
United States and etc. Non-PRC resident enter prises entitled to preferential tax rates in
accordance with the relevant taxation treatie s or arrangements are required to apply to the
relevant PRC tax authorities for a refund of the corporate income tax in excess of the agreed
tax rate, and the refund application is subject to approval by the relevant PRC tax
authorities.
2. Taxation on Share Transfer
VAT and Local Additional Tax
The Provisional Regulations on Value-added Tax of the People ’s Republic of China
（《中華人民共和國增值稅暫行條例》）, which was promulgated on December 13, 1993, and
amended on November 10, 2008, February 6, 2016 and last amended on November 19,
2017, and the Detailed Implementing Rules of the Provisional Regulations on Value-added
Tax of the People ’s Republic of China （《中華人民共和國增值稅暫行條例實施細則》）,
which was promulgated on December 25, 1993, and was amended on December 15, 2008
and October 28, 2011 set out that all taxpaye rs selling goods or providing processing,
repairing or replacement serv ices, sales of services, intangible assets and immovable assets
and importing goods in China shall pay value-added tax at the rates of 0%, 6%, 11% and
17% on all the goods sold and services provided, unless otherwise stipulated.
According to the Notice of Implementing the Pilot Program of Replacing Business Tax
with Value-Added Tax in an All-round Manner issued by the Ministry of Finance and the
State Administration of Taxation on March 23, 2016 and latest amended on April 1, 2019,
units and individuals engaged in sales and services in China shall pay value-added tax, and
‘‘engaging in sales and services in China ’’refers to the situation where the buyer or seller of
taxable services is located in China. The notice a lso stipulates that the transfer of financial
products (including the transfer of ownership of marketable securities) is subject to VAT tax
at a rate of 6% on taxable income (i.e., the bal ance after selling price minus buying price)
for general or overseas VAT payers. However, personal transfers of financial products are
exempt from value-added tax. This is also specified in Annex 3 of the Notice of
Implementing the Pilot Program of Replacing Business Tax with Value-Added Tax in an
All-round Manner issued by the Ministry of Finance and the State Administration of
Taxation (i.e., the Provisional Policies of Imp lementing the Pilot Program of Replacing
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 5


--- page 622 ---
Business Tax with Value-Added Tax) that became effective on January 1, 2009. According
to the laws and regulations, if the holder is a non-resident individual, the sale or disposal of
H shares is exempt from PRC value-added tax; if the holder is a non-resident enterprise and
the purchaser of H shares is an overseas individual or entity, the holder does not necessarily
have to pay PRC value-added tax, but if the purchaser of H shares is a domestic individual
or entity, the holder may be required to pay PRC value-added tax. However, in practice, it
remains uncertain whether non-PRC resident enterprises are required to pay PRC value-
added tax when disposing of H shares.
At the same time, VAT payers are also required to pay urban maintenance and
construction tax, education surta x and local education surcharge.
3. Income tax
Individual Investors
According to the IIT Law, gains on the trans fer of equity interests in the PRC resident
enterprises are subject to individual income tax at a rate of 20%. Pursuant to the Circular on
Declaring that Individual Income Tax Continues to be Exempted over Income of Individuals
from the Transfer of Shares （《關於個人轉讓股票所得繼續暫免徵收個人所得稅的通知》）
issued by the SAT on March 30, 1998, from January 1, 1997, income of individuals from
transfer of the shares of listed enterprises continues to be exempted from individual income
tax. The SAT has not expressly stated whether it will continue to exempt tax on income of
individuals from transfer of the shares of listed enterprises in the latest amended Individual
Income Tax Law.
According to the Announcement of the Ministry of Finance and the State
Administration of Taxation about the Catalogue of Preferential Individual Income Tax
Policies with Continued Effect promulgated and implemented by the Ministry of Finance
and the State Administration of Taxatio n on December 29, 2018, the Circular of the
Declaring that Individual Income Tax Continues to Be Exempted over Income of Individuals
from Transfer of Shares will remain effective.
In addition, the Circular on Issues Relating t o Collection of Individual Income Tax on
Income Derived from the Transfer of Restricted Shares of Listed Companies by Individuals
（《關於個人轉讓上市公司限售股所得徵 收個人所得稅有關問題的通知》）(Caishui [2009]
No. 167), which was jointly issued by the Minis try of Finance, the State Administration of
Taxation and the CSRC and came into effect on December 31, 2009, stipulates that income
from transfer of shares of listed companies fro m the public offering and transfer market of
listed companies on the Shanghai Stock Exchange and the Shenzhen Stock Exchange will
continue to be exempted from individual income tax, except for the relevant restricted shares
as defined in the Supplementary Circular o n Issues Relating to Collection of Individual
Income Tax on Income Derived from the Transfer of Restricted Shares of Listed Companies
by Individuals （《關於個人轉讓上市公
司限售股所得徵收個人所得稅有關問題的補充通
APPENDIX III TAXATION AND FOREIGN EXCHANGE
III – 6


--- page 623 ---
知》）(Caishui [2010] No. 70), which was jointly issued by these authorities and came into
effect on November 10, 2010. As of the Latest Practicable Date, the aforesaid provision did
not specify whether or not individual income tax would be levied on the income derived by
non-PRC resident individuals from the transfer of shares of PRC resident enterprises listed
on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law and its im plementation provisions, a non-resident
enterprise is generally subject to a 10% corporate income tax on PRC-sourced income,
including gains derived from the disposal of equity interests in a PRC resident enterprise, if
it does not have an establishment or place in the PRC or has an establishment or premises in
the PRC but the PRC-sourced income is not conn ected with such establishment or premise.
Such income tax for non-resident enterprises is deducted at source, where the payer of the
income is required to withhold the income tax from the amount to be paid to the non-
resident enterprise when such payment is made or due. The withholding tax may be reduced
pursuant to special arrangements or relevant agreements signed between the PRC and the
jurisdictions where the non-resident enterprises are located.
4. Stamp Duty
Pursuant to the Stamp Duty Law of the PRC （《中華人民共和國印花稅法》）,w h i c hw a s
promulgated by the SCNPC on June 10, 2021 and came into effect on July 1, 2022, PRC stamp
duty is applicable to the entities and individual s that conclude taxable vouchers or conduct
securities trading within the territory of the P RC, and the entities and individuals outside the
territory of the PRC that conclude taxable vouchers that are used inside China. Therefore, the
requirements of the stamp duty imposed on the tr ansfer of shares of PRC listed companies shall
not apply to the acquisition and disposal of H S hares by non-PRC investors outside of the PRC.
5. Estate Duty
Currently, no estate duty has been levied in the PRC under the PRC laws.
HONG KONG TAXATION
Under the current practice of the Inland Revenues Department of Hong Kong, no tax is
payable in Hong Kong in respect of dividends paid by the Company.
1. Capital Gains and Profit Tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of the H Shares by persons carrying on a trade, profession
or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such
trade, profession or business will be subject to Hong Kong profits tax, which is currently imposed
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 624 ---
at the maximum rate of 16.5% on corporations and at the maximum rate of 15% on
unincorporated businesses. Cer tain categories of taxpayers (for example, financial institutions,
insurance companies and securities dealers) are likely to be regarded as deriving trading gains
rather than capital gains unless these taxpayers can prove that the investment securities are held
for long-term investment purposes.
Trading gains from sales of the H Shares effected on the Hong Kong Stock Exchange will
be considered to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax
would thus arise in respect of trading gains from sales of H Shares effected on the Hong Kong
Stock Exchange realized by persons carrying on a business of trading or dealing in securities in
Hong Kong.
2. Stamp Duty
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of
the consideration for or the market value of the H Shares, will be payable by the purchaser on
every purchase and by the seller on every sale of any Hong Kong securities, including H Shares
(in other words, a total of 0.2% is currently paya ble on a typical sale and purchase transaction
involving H Shares). In addition, a fixed stam p duty of HK$5.00 is currently payable on any
instrument of transfer of H Shares. Where one of the parties is a resident outside Hong Kong and
does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument
of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or before the
due date, a penalty of up to 10 times the duty payable may be imposed.
3. Estate Duty
The Revenue (Abolition of Estate Duty) Ordi nance 2005 came into effect on February 11,
2006 in Hong Kong, pursuant to which no Hong Kong estate duty is payable for an application of
a grant of representation in respect of holders of H Shares whose deaths occur on or after
February 11, 2006.
PRINCIPAL TAXATION OF OUR COMPANY IN THE PRC
Please refer to the section headed ‘‘Regulatory Overview ’’in this prospectus.
FOREIGN EXCHANGE
The lawful currency of the PRC is Renminbi, which is currently subject to foreign exchange
control and cannot be freely converted into foreign currency. The State Administration of Foreign
Exchange (the ‘‘SAFE ’’) under the People ’s Bank of China (the ‘‘PBOC ’’) is responsible for
administering all matters relating to foreign ex change, including the enforcement of foreign
exchange control regulations.
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--- page 625 ---
The Regulations on Foreign Exchange Control of the PRC （《中華人民共和國外匯管理條
例》）(the ‘‘Foreign Exchange Control Regulations ’’), which was issued by the State Council on
January 29, 1996, implemented on April 1, 1996 and latest amended on 5 August, 2008, classifies
all international payments and transfers into current items and capital items. Current items are
subject to the reasonable examination of the veracity of transaction documents and the
consistency of the transaction documents and the foreign exchange receipts and payments by
financial institutions engaging i n conversion and sale of foreign c urrencies and supervision and
inspection by the foreign exchange control authorities. For capital items, overseas organizations
and overseas individuals making direct investments in China shall, upon approval by the relevant
authorities in charge, process registration formalities with the foreign exchange control
authorities. Foreign exchange income received over seas can be repatriated or deposited overseas,
and foreign exchange and foreign exchange settlement funds under the capital account are
required to be used only for purposes as appro ved by the competent authorities and foreign
exchange administrative authorities. In the event th at international revenue s and expenditure occur
or may occur a material misbalance, or the national economy encounters or may encounter a
severe crisis, the State may adopt necessary safeguard and control measures on international
revenues and expenditure.
The Regulations for the Administration of Settlement, Sale and Payment of Foreign
Exchange（《結匯、售匯及付匯管理規定》）, which was issued by the PBOC on June 20, 1996
and implemented on July 1, 1996, abolished all other restrictions on convertibility of foreign
exchange under current account items, while reta ining the existing restrictions on foreign
exchange transactions under capital account items.
According to the Announcement on Improving the Reform of the Renminbi Exchange Rate
Formation Mechanism （《關於完善人民幣匯率形成機制改革的公告》）, which was issued by the
PBOC and implemented on July 21, 2005, the PRC ha s started to implement a managed floating
exchange rate system in which the exchange rate would be determined based on market supply
and demand and adjusted with reference to a basket of currencies since July 21, 2005. Therefore,
the Renminbi exchange rate was no longer pegged to the U.S. dollar. PBOC would publish the
closing price of the exchange rate of the Renminbi against trading currencies such as the U.S.
dollar in the interbank foreign exchange market after the closing of the market on each working
day, as the central parity of the currency against Renminbi transactions on the following working
day.
According to relevant PRC laws, PRC enterprise s (including foreign-invested enterprises)
which need foreign exchange for transactions relating to current account items may, without the
approval of foreign exchange admin istrative authorities, effect pa yment for their foreign exchange
accounts at the designated foreign exchange banks with the support of valid receipts and proof.
Foreign-invested enterprises which need foreign exchange for the distribution of profits to their
shareholders and PRC enterprises which, in accordance with regulations, are required to pay
dividends to their shareholders in foreign exchange (such as the Company) may, on the strength
of resolutions of the board of directors or the shareholders ’ meeting approving the distribution of
profits, effect payment from their foreign exchange accounts or convert and pay dividends at the
designated foreign exchange banks.
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--- page 626 ---
According to the Decisions on Matters incl uding Canceling and Adjusting a Batch of
Administrative Approval Items （《國務院關於取消和調整一批行政審批項目等事項的決定》）
which was promulgated by the State Council on October 23, 2014, it decided to cancel the
approval requirement of the SAFE and its bran ches for the remittance and settlement of the
proceeds raised from the overseas listing of the foreign shares into RMB domestic accounts.
According to the Notice of the SAFE on Issues Concerning the Foreign Exchange
Administration of Overseas Listing （《關於境外上市外匯管理有關問題的通知》） which was
issued by the SAFE and implemented on December 26, 2014, a domestic company shall, within
15 business days from the date of the end of its ov erseas listing issuance, register the overseas
listing with the local branch office of SAFE at th e place of its establishment; 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 this
document and other disclosure documents. Domestic companies (excluding banking financial
institutions) must present overseas listing business r egistration certificates, initial public offerings
(or additional issuances), and repurchase businesses to open special foreign exchange accounts in
local banks, and handle fund exchange and transfer for related businesses.
According to the Notice of the State Administration of Foreign Exchange on Further
Simplifying and Improving Policies for the Foreign Exchange Administration of Direct
Investment （《國家外匯管理局關於進一步簡化和改進直接投資外匯管理
政策的通知》）,w h i c h
was issued by the SAFE on February 13, 2015 and came into effect on June 1, 2015 and was
amended on December 30, 2019, the confirmation of foreign exchange registration under domestic
direct investment and the confirmation of foreign exchange registration under overseas direct
investment shall be directly examined and handled by banks. SAFE and its branch offices shall
indirectly regulate the foreign exchange regi stration of direct investment via the banks.
According to the Notice of the State Administration of Foreign Exchange of the PRC on
Revolutionizing and Regulating Capital A ccount Settlement Management Policies （《國家外匯管
理局關於改革和規範資本項目結匯管理政策的通知》）which was promulgated by the SAFE and
implemented on June 9, 2016, foreign currency earnings in capital account that relevant policies
of willingness exchange settleme nt have been clearly implemented on (including the recalling of
raised capital by overseas listing) may underta ke foreign exchange settlement in the banks
according to actual business needs of the domes tic institutions. The tentative percentage of
foreign exchange settlement for foreign curre ncy earnings in capital account of domestic
institutions is 100%, subject to adjust of the SAF E in due time in accordance with international
revenues and expenditure situations.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 627 ---
On January 26, 2017, the SAFE issued the Notice of the State Administration of Foreign
Exchange on Further Promoting the Reform of Foreign Exchange Administration and Improving
the Examination of Authenticity and Compliance （《關於進一步推進外匯管理改革完善真實合規
性審核的通知》） to further expand the scope of settleme nt for domestic foreign exchange loans,
allow settlement for domestic foreign exchange loans with export background under goods
trading, allow repatriation of funds under domestic guaranteed foreign loans for domestic
utilization, allow settlement for domestic fore ign exchange accounts of foreign institutions
operating in the Free Trade Pilot Zones, and adopt the model of full-coverage RMB and foreign
currency overseas lending manage ment, where a domestic institution engages in overseas lending,
the sum of its outstanding overseas lending in RM B and outstanding overseas lending in foreign
currencies shall not exceed 30% of its owner ’s equity in the audited financial statements of the
preceding year.
On October 23, 2019, the SAFE promulgated the N otice on Further Facilitating Cross-Board
Trade and Investment （《關於進一步促進跨境貿易投資便利化的通知》）. The notice cancels
restrictions on domestic equity investments made with capital funds by non-investing foreign-
funded enterprises. In addition, restrictions on the use of funds for foreign exchange settlement of
domestic accounts for the realization of assets have been removed and restrictions on the use and
foreign exchange settlement of foreign investo rs security deposits have been relaxed. Eligible
enterprises in the pilot area are also allowed t o use revenues under capital accounts, such as
capital funds, foreign debt offe ring proceeds and remitted forei gn listing proceeds for domestic
payments without providing materials to the bank in advance for authenticity verification on an
item by item basis, while the use of funds should be true, in compliance with applicable rules and
conforming to the current administrative regulations for use of revenues from capital accounts.
According to the Circular on Optimizing Administration of Foreign Exchange to Support the
Development of Foreign-related Business （《國家外匯管理局關於
優化外匯管理支持涉外業務發
展的通知》） issued by SAFE on April 10, 2020 which came into effect on the same date, the
reform of facilitating the payments of incomes u nder the capital accounts shall be promoted
nationwide. Under the prerequisite of ensuring true and compliant use of funds and compliance
with the prevailing administrative provisions on u se of income under the capital account, eligible
enterprises are allowed to make domestic payments by using their capital funds, foreign credits
and the income under capital accounts of overseas listing, without prior provision of the
evidentiary materials concerning authe nticity to the bank for each transaction.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 628 ---
1. THE PRC LEGAL SYSTEM
The PRC legal system is based on the PRC Constitution （《中華人民共和國憲法》）(the
‘‘Constitution ’’) and is made up of written laws, administrative regulations, local regulations,
separate regulations, autonomous regulations, rules and regulations of state departments, rules and
regulations of local governments, laws of special adm inistrative regions and international treaties
of which the PRC government is the signatory and other regulatory documents. Court judgments
do not constitute legally binding precedents, alt hough they are used for the purposes of judicial
reference and guidance.
According to the Constitution and the Leg islation Law of the PRC (2023 Revision) （《中華人
民共和國立法法（2023 年修訂）》）(the ‘‘Legislation Law ’’), the National People ’s Congress (the
‘‘NPC’’) and the Standing Committee of the NPC are em powered to exercise the legislative power
of the State in accordance with the Constituti on. The NPC has the power to formulate and amend
basic laws governing civil and criminal matters, State organs, and other matters. The Standing
Committee of the NPC is empowered to formulate a nd amend the laws other than those required
to be enacted by the NPC, and to supplement and amend parts of the laws enacted by the NPC
during the adjournment of the NPC, provided that such supplements and amendments are not in
conflict with the basic principles of such laws. The Standing Committee of the NPC can be
authorized by the NPC to formulate such relevant laws.
The State Council is the highest organ of s tate administration and has the power to
formulate administrative regulatio ns based on the Constitution and laws.
The people ’s congresses of the provinces, autonomou s regions and municipalities and their
standing committees may formulate local regulations based on the specific circumstances and
actual needs of their respective administrative a reas, provided that such local regulations do not
contravene any provision of the Constitution, law s or administrative regulations. The people ’s
congresses of cities divided into districts and thei r respective standing committees may formulate
local regulations on aspects such as urban and rural construction and management, ecological
conservation, historical and cultural protecti on, and grassroots governance based on the specific
circumstances and actual needs of such cities, provided that such local regulations do not
contravene any provision of the Constitution, laws, administrative regulations and local
regulations of their respective provinces or autonomous regions. Such local regulations will
become enforceable after being reported to and approved by the standing committees of the
people ’s congresses of the relevant provinces or autonomous regions. People ’sc o n g r e s s e so f
national autonomous areas have the power to enact autonomous regulations and separate
regulations in light of the political, economic and c ultural characteristics of the ethnic groups in
the areas concerned. Autonomous regulations and s eparate regulations of autonomous regions will
become enforceable after being reported to and a pproved by the standing committees of the NPC.
Autonomous regulations and separate regulations of autonomous prefectures and autonomous
counties will become enforceable after being re ported to and approved by the standing committees
of the people ’s congresses of the provinces, autono mous regions and municipalities.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 629 ---
The ministries and commissions of the State C ouncil, PBOC, the National Audit Office and
the subordinate institutions with administrative functions directly under the State Council and
institutions prescribed by law may formulate rule s and regulations within the permissions of their
respective departments based on the laws and the ad ministrative regulations, decisions and orders
of the State Council. Provisions of departmental rules should be the matters related to the
enforcement of the laws and administrative regul ations, and the decisions and orders of the State
Council. The people ’s governments of the provinces, auto nomous regions, municipalities and
cities or autonomous prefectures divided into districts may formulate rules and regulations based
on the laws, administrative regulations and local regulations of such provinces, autonomous
regions and municipalities.
The Constitution has the highest legal effect. N o laws, administrative regulations, local
regulations, autonomous regulations, separa te rules nor regulations shall contravene the
Constitution. Laws have a higher leg al effect than administrative regulations, local regulations,
rules and regulations. Administra tive regulations have a higher leg al effect than local regulations,
and rules and regulations. Local regulations have a higher legal effect than the rules and
regulations of local government of the same or lower tier. The rules and regulations enacted by
the people ’s government of provinces, autonomous regions have a higher legal effect than the
rules and regulations enacted by the people ’s government of the cities divided into districts or
autonomous prefecture within the administrative region of the province or autonomous region.
The NPC has the power to change or revoke any inappropriate laws enacted by the Standing
Committee, and to revoke any autonomous regulations or separate regulations approved by the
Standing Committee that violate the provision s of the Constitution or the Legislation Law. The
Standing Committee of the NPC has the power to revoke any administrative regulations that
conflict with the Constitution and laws, the power t o revoke any local regulations that conflict
with the Constitution, laws or administrative re gulations, and the power to revoke the regulations
of any province, autonomous region, or municipality directly under the Central Government.
Autonomy regulations or local regulations approved by the Standing Committee of the NPC that
violate the provisions of the Constitution and the Legislation Law. The State Council has the
power to change or revoke any inappropriate departmental regulations and local government
regulations. The people ’s congresses of provinces, autonomous regions or municipalities directly
under the Central Government have the power to change or revoke any inappropriate local
regulations enacted or approved by their re spective standing committees. The people ’s
governments of provinces and autonomous regions have the right to change or revoke any
inappropriate regulations formulated by the people ’s governments at lower levels.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 630 ---
According to the Constitution and the Legisla tion Law, the power of legal interpretation
belongs to the Standing Committee of the NPC. According to the Resolution of the Standing
Committee of the National People ’s Congress on Strengthening Legal Interpretation implemented
on June 10, 1981, all issues concerning the specific application of laws and decrees in court trials
shall be interpreted by the Supreme People ’s Court. All issues related t o the specific application
of laws and decrees in the procuratorial work of the procuratorate shall be interpreted by the
Supreme People ’s Procuratorate. If there are principled d ifferences in the interpretations of the
Supreme People ’s Court and the Supreme People ’s Procuratorate, they shall be submitted to the
Standing Committee of the NPC for explanation or d ecision. Other relevant legal and statutory
issues other than the above shall be interpreted by the State Council and the competent
departments. The State Council and its ministries and commissions also have the right to interpret
the administrative regulations and departmental r ules promulgated by them. At the local level, the
power to interpret local laws rests with the local legislative and administrative agencies that
promulgate the relevant laws.
2. THE PRC JUDICIAL SYSTEM
Under the Constitution and the Law of Organization of the People ’sC o u r to ft h eP R C（《中
華人民共和國人民法院組織法》）amended by the Standing Committee of the NPC on October 26,
2018 and came into effect on January 1, 2019, the PRC judicial system comprises the Supreme
People ’s Court, the local people ’s courts at all levels, and milita ry courts and oth er specialized
people ’s courts.
The local people ’s courts at all levels are composed of the basic people ’s courts, the
intermediate people ’s courts and the higher people ’s courts. The basic people ’sc o u r t sm a ys e tu p
civil, criminal, and economic tribunals and certain people ’s tribunals based on the status of the
region, population and cases. The trial courts of the intermediate people ’s courts are similar to
those of the basic people ’s court, and other specialized trial courts may be set up when necessary.
The Supreme People ’s Court shall be the highest judicial organ of the state. The Supreme People ’s
Court shall supervise the administration of justice by the local people ’s courts at all levels and by
the special people ’s courts. The Supreme People ’s Procuratorate has the power to supervise the
judgements and rulings of the people ’s courts at all levels that have entered into force of law. The
higher people ’s courts have the power to supervise the judgements and rulings of the people ’s
courts at lower levels that have entered into force of law.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 631 ---
T h eC i v i lP r o c e d u r eL a wo ft h eP R C （《中華人民共和國民事訴訟 法》）(the ‘‘Civil
Procedure Law ’’), last amended on September 1, 2023 and came into effect on January 1, 2024,
prescribes the conditions for i nstituting a civil action, the jurisdiction of the people ’s court, the
procedures for conducting a civil action, and the procedures for enforcement of a civil judgment
or ruling. All parties to a civil action conduc ted within the PRC must abide by the PRC Civil
Procedure Law. A civil case is generally heard by the court located in the defendant ’sp l a c eo f
domicile. The court of jurisdiction in respect of a civil action may also be chosen by explicit
agreement among the parties to a contract, provided that the people ’s court having jurisdiction
should be located at places directly connected with the disputes, such as the defendant ’s place of
domicile, the place where the contract is executed or signed, the plaintiff ’s place of domicile, or
the place where the object of the action is located. Meanwhile, such choice shall not in any
circumstances contravene the regulations of differential jurisdiction and exclusive jurisdiction.
Judgments or rulings of the second instance at the people ’s courts are final. A party may appeal
against the judgment or ruling of the first instance of a local people ’s courts. The people ’s
procuratorate may present a protest to the people ’s courts at the next higher level in accordance
with the procedures stipulated by the laws. In the absence of any appeal by the parties and any
protest by the people ’s procuratorate within the stipulated period, the judgments or rulings of the
people ’s courts are final. Judgments or rulings of the second instance of the intermediate people ’s
courts, the higher people ’s courts and the Supreme People ’s Court and those of the first instance
of the Supreme People ’s Court are final. However, if the Supreme People ’s Court finds any
definite errors in a legally effective final judg ment, ruling or paper of mediation of the people ’s
court at all levels or the people ’s courts at the next higher level find any definite errors in a
legally effective final judgment, ruling or paper of mediation of the people ’s court at a lower
level, the Supreme People ’s Court or such people ’s courts shall have the power to bring the case
to trial or to direct the people ’s courts at lower levels to conduct a retrial. If the chief judge of a
people ’s court at any level finds any definite errors in a l egally effective final judgment, ruling or
paper of mediation of such court, and consider that the case should be retried, the case shall be
submitted to the judicial committee of the people ’s court at the same level for discussion and
decision.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 632 ---
A foreign individual, a person without nationality, a foreign enterprise or organization is
given the same litigation rights and obligations as a citizen, a legal person or other organizations
of the PRC when initiating actions or defendin g against litigations at the PRC court. Should a
foreign court limit the litigation rights of PRC c itizens or enterprises, the PRC court may apply
the same limitations to the litigation rights of the citizens or enterprises of such foreign country.
A foreign individual, a person without nationality, a foreign enterprise or organization must
engage a PRC lawyer in case he or it needs to e ngage a lawyer for the purpose of initiating
actions or defending against litigations at the PRC court. In accordance with the international
treaties to which the People ’s Republic of China is a signatory or participant, or according to the
principle of reciprocity, a people ’s court and a foreign court may request each other to serve
documents, conduct investigation and collect ev idence and conduct other litigation activities on
its behalf. All parties to a civil action shall perfo rm the legally effective judgments and rulings. If
any party to a civil action refuses to abide by a judgment or ruling made by a people ’s court or an
award made by a PRC arbitration tribunal, the other party may apply to the people ’s court for the
enforcement of the same within two years (or it ma y also apply for postponement of enforcement
or revocation).
Where a party requests for enforcement of an effective judgment or ruling made by a
people ’s court, but the opposite party or his property is not within the territory of the People ’s
Republic of China, the party may directly appl y to the foreign court with jurisdiction for
recognition and enforcement of the judgment or ruling, or the people ’s court may, in accordance
with the provisions of international treaties t o which the PRC is a signatory or in which the PRC
is a participant or according to the princip le of reciprocity, re quest for recognition and
enforcement by the foreign court. Judgments or rulings that violate the basic legal principles of
PRC laws, national sovereignty or security, or not be in social and public interest would not be
recognized or enforced.
3. ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARDS
The Arbitration Law of the PRC （《中華人民共和國仲裁法》）(the ‘‘PRC Arbitration Law ’’)
was enacted by the Standing Committee of the NP C on August 31, 1994, which became effective
on September 1, 1995 and was amended on August 27, 2009 and September 1, 2017. The PRC
Arbitration Law is applicable to, among other matters, economic disputes involving foreign
parties where all parties have entered into a writte n agreement to resolve disputes by arbitration
before an arbitration committee constituted in acc ordance with the PRC Arbitration Law. Pursuant
to the PRC Arbitration Law, an arbitration committ ee may, before the promu lgation of arbitration
regulations by the PRC Arbitration Association, formulate interim arbitration provisions in
accordance with the PRC Arbitration Law and t he PRC Civil Procedure Law. Where the parties
involved have agreed to settle disputes by means of arbitration, a people ’s court will refuse to
handle a legal proceeding initiated by one of the parties at such people ’s court, unless the
arbitration agreement has lapsed.
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--- page 633 ---
Under the PRC Arbitration Law and PRC Civil Procedure Law, an arbitral award shall be
final and binding on the parties involved in the ar bitration. If one party fails to comply with the
arbitral award, the other party to the award may apply to a people ’s court for its enforcement.
However, if the people ’s court, after forming a collegial tribunal, finds that there is any
procedural irregularity (including but not limited to irregularity in the composition of the
arbitration tribunal or the arbitration procedure v iolates the statutory procedure, the making of an
award on matters beyond the scope of the arbitra tion agreement or outside the jurisdiction of the
arbitration commission), the people ’s court may refuse to enforce an arbitral award made by an
arbitration commission.
Any party seeking to enforce an award of a fo reign affairs arbitration organ of the PRC
against a party who or whose property is not located within the PRC may directly apply to a
foreign court with jurisdiction over the releva nt matters for recognition a nd enforcement of the
award. Likewise, an arbitral award made by a foreign arbitral body may be recognized and
enforced by a PRC court in accordance with the principle of reciprocity or any international
treaties concluded or acceded to by the PRC.
The PRC acceded to the Convention on the R ecognition and Enforcement of Foreign
Arbitral Awards (the ‘‘New York Convention ’’) passed on June 10, 1958 pursuant to a resolution
passed by the Standing Committee of the NPC on D ecember 2, 1986. The New York Convention
provides that all arbitral awards made in a sta te which is a party to the New York Convention
shall be recognized and enforced by other parties thereto subject to their rights to recognize or
refuse such enforcement under certain circum stances, including where the recognition or
enforcement of the award is against the pub lic policy of that state. At the time of the PRC ’s
accession to the New York Convention, the Stand ing Committee of the NPC declared that (i) the
PRC will only apply the New York Convention t o the recognition and enforcement of arbitral
awards made in the territories of other parties bas ed on the principle of reciprocity; and (ii) the
New York Convention will only apply to disputes deemed under PRC laws to be arising from
contractual or non-contractual mercantile legal relations.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 634 ---
An arrangement for mutual enforcement of arbitral awards between Hong Kong and the
Supreme People ’s Court of China was reached. The Supreme People ’s Court of China adopted the
Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the
Hong Kong Special Administrative Region （《關於內地與香港特別行政區相互執行仲裁裁決的安
排》）on June 18, 1999, which came into effect on February 1, 2000. The arrangement reflects the
spirit of the New York Convention. Under the arrangement, awards made by the Mainland arbitral
bodies in accordance with the PRC Arbitration Law may be enforced in Hong Kong, and the
awards made by the Hong Kong arbitral bodies in a ccordance with the Arbitration Ordinance of
the Hong Kong Special Administrative Region may also be enforced in the Mainland of China. If
the Mainland courts deem the enforcement of awards made by the Hong Kong arbitral bodies in
the Mainland to be against public interests o f the Mainland, or if the Hong Kong SAR courts
deem the enforcement of such arbitration award s to be against the public policies in the Hong
Kong SAR, such awards may not be enforced. On November 26, 2020, the Supreme People ’s
Court of China promulgated the Supplemental Arrangement of the Supreme People ’s Court for the
Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special
Administrative Region (the ‘‘Supplemental Arrangement ’’). Pursuant to the Supplemental
Arrangement, before or after accepting an application for enforcement of an arbitral award, the
court concerned may, upon application and in accordance with the law of the place where the
arbitral award is to be enforced, take measures of preservation or enforcement.
4. JUDICIAL JUDGMENT AND ITS ENFORCEMENT
A c c o r d i n gt ot h e‘‘Arrangement between the Supreme People ’s Court and the Courts of the
Hong Kong Special Administrative Region Concerning Reciprocal Recognition and Enforcement
of Judgments in Civil and Commercial Matters （《最高人民法院關於內地與香港特別行政區法院
相互認可和執行民商事案件判
決的安排》）’’ promulgated by the Supreme People ’s Court on
January 25, 2024 and implemented on January 29, 2024, the arrangement may be applied to the
reciprocal recognition and enforcement of judgmen ts in civil and commercial matters entered into
force by the courts of the Mainland and the Hong Kong Special Administrative Region, as well as
to the reciprocal recognition and enforcement of judgments in civil claims in criminal cases.
Applications for the recognition and enforcem ent of judgments under the arrangement shall be
made: (1) in the Mainland, to the intermediate people ’s court at the place of domicile of the
applicant, or the place of domicile of the respondent, or the place of location of the applicant ’s
property; and (2) in the Hong Kong Special Administrative Region, to the High Court. The
applicant shall file the app lication with one of the People ’s Courts that meets the requirements of
the first part of the preceding paragraph. If the application is filed with more than two People ’s
Courts having jurisdiction, the People ’s Court which files the application first shall have
jurisdiction.
Accordingly, a party may apply to the People ’s Court of the PRC or the High Court of the
Hong Kong Special Administrative Region for the recognition and enforcement of a final
judgment delivered in the PRC or in Hong Kong tha t satisfies certain conditions set out above.
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5. THE PRC SECURITIES LAWS, REGULATIONS
The PRC has promulgated a series of regulations that relate to the issue and trading of
shares and disclosure of information. In October 1992, the State Council established the Securities
Committee and the CSRC. The Secur ities Committee is responsible for coordinating the drafting
of securities regulations, formu lating securities-related policie s, planning the development of
securities markets, directing, coordinating and supe rvising all securities-related institutions in the
PRC, and administering the CSRC. The CSRC is t he regulatory arm of the Securities Committee
and is responsible for the drafting of regulat ory provisions governing securities markets,
supervising securities companies, regulating public offerings of securities by PRC companies in
the PRC or overseas, regulating the trading of sec urities, compiling securities-related statistics,
and undertaking relevant research and analysis. In April 1998, the State Council consolidated the
Securities Committee and the C SRC and reformed the CSRC.
The Provisional Regulations Concerning the Issue and Trading of Shares （《股票發行與交易
管理暫行條例》）govern the application and approval procedures for public offerings of equity
securities, trading of equity securities, the acqui sition of listed companies, deposit, clearing and
transfer of listed equity securities, the disclos ure of information, investigation, penalties and
dispute resolutions with respect to listed companies.
On December 25, 1995, the State Council promu lgated the Special Regulations of the State
Council Concerning Domestic Listed Foreign Shares of Joint Stock Limited Companies （《國務院
關於股份有限公司境內上市外資股的特別規定》）. These regulations principally govern the issue,
subscription, trading and declaration of dividends and other distributions of domestic listed
foreign shares, and disclosure of information of joint stock limited companies having domestic
listed foreign shares.
The PRC Securities Law （《中華人民共和國證券法》）(the ‘‘Securities Law ’’)w a s
implemented on July 1, 1999 and was revised as of August 28, 2004, October 27, 2005, June 29,
2013, August 31, 2014 and Decem ber 28, 2019, respectively. The Securities Law was amended
on December 28, 2019 and came into effect on Marc h 1, 2020. The Securities Law is divided into
14 chapters and 226 articles, regulating, among other things, the issuance and trading of
securities, acquisition of listed companies, and the obligations and responsibilities of stock
exchanges, securities companies and the State Council ’s securities supervisory and regulatory
authorities.
The Securities Law comprehensively regul ates activities in the PRC securities market.
Article 224 of the Securities Law stipulates that domestic companies shall satisfy the relevant
requirements of the State Council before they can list their shares overseas. Currently, the
issuance and trading of securities (including shar es) issued overseas are principally governed by
rules and regulations promulgated by the State Council and the CSRC.
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6. THE COMPANY LAW OF THE PRC, TRIAL ADMINISTRATIVE MEASURES OF
OVERSEAS SECURITIES OFFERING AND GUIDELINES
The Company Law of the PRC （《中華人民共和國公司法》）(the ‘‘PRC Company Law ’’)
was adopted by the Standing Committee of the NPC at its Fifth Session on December 29, 1993
and came into effect on July 1, 1994. It was subsequently revised on December 25, 1999, August
28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023,
respectively. The latest revision of the PRC Company Law was implemented on July 1, 2024.
On February 17, 2023, the CSRC promulgat ed the Trial Administrative Measures of
Overseas Securities Offering and Listing by Domestic Companies （《境內企業境外發行證券和上
市管理試行辦法》）(the ‘‘Trial Measures of Overseas Securities Offering ’’) and five relevant
guidelines, which came into effect on March 31, 2023. The Trial Measures of Overseas Securities
Offering are applicable to the issuance and listing of securities by domestic enterprises.
The Guidelines on the Articles of Asso ciation of Listed Companies (the ‘‘Guidelines ’’)
issued by the CSRC on December 16, 1997, which were last revised on December 15, 2023, and
became effective on the same date, provide guidance on the formulation of a company ’s articles
of association. Accordingly, the requirements set out in the Guidelines have been incorporated
into the Company ’s articles of association, a summary of which is set out in the section headed
‘‘Appendix — Summary of Articles of Association ’’in this document.
Set out below is a summary of the major provisions of the PRC Company Law, the Trial
Measures of Overseas Securities Offering and the Guidelines.
General
A joint stock limited company is an enterprise legal person incorporated in the PRC under
the PRC Company Law, which has independent legal person property and the right to enjoy such
legal person property, and whose registered cap ital is divided into shares of equal nominal value.
The liability of the shareholders of a company i s limited to the number of shares held by each
shareholder and the company is liable to its credito rs to the extent of the total value of its assets.
A joint stock limited company shall conduct its business in compliance with laws and
administrative regulations. A joint stock lim ited company may invest in other limited liability
companies and joint stock limite d companies, and the liability of the joint stock limited company
to such investee companies is limited to the amount invested. Unless otherwise provided by law, a
joint stock limited company may not, as an investo r, bear joint and several liability for the debts
of the investee companies.
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Incorporation
A joint stock limited company may be establis hed by promotion or public subscription. A
joint stock limited company shall have a minimum of one person but no more than 200 people as
its promoters, over half of which must have a d omicile within the territory of the People ’s
Republic of China. The registered capital of a joint stock limited company shall be the total
number of issued shares registered with the company ’s registration authority.
In the case of a joint stock limited company esta blished by promotion, the promoters shall
subscribe for the full number of shares to be issued upon the establishment of the company as
provided for in the articles of association. Wher e a company limited by shares is established by
public subscription, the shares subscribed by the p romoters shall not be less than 35% of the total
number of shares to be issued at the time of the es tablishment of the company as stipulated in the
articles of association; provided, however, that if there are any other provisions in the laws and
administrative regulations, they shall apply according to the provisions thereof.
The promoters shall, before the incorporation of the company, pay the full amount of the
shares for which they have subscribed. If a promoter fails to pay for the shares he has subscribed
for, or if the actual value of the non-monetary property used as a capital contribution is
significantly less than the amount of the shares su bscribed for, the other promoters are jointly and
severally liable to the extent of the sho rtfall in the capital contribution.
Where the shares issued remain undersubscribed by the time of incorporation of the
company, or where the promoter fails to convene an inauguration meeting within 30 days of the
subscription monies for the shares issued bein g fully paid up, the subscribers may demand that
the promoters refund the subscription monies so paid together with the interest at bank rates of a
deposit for the same period. After the promoters and subscribers have paid the share capital or
delivered the non-monetary capital contribution, their share capital shall not be withdrawn except
in the case where the shares are not fully subscribed as scheduled, or where the promoters fail to
convene an inauguration meeting as scheduled, or w here the inauguration meeting resolves not to
establish the company.
The board of directors shall authorize its re presentatives to apply to the registrar of
companies for registration of the establishm ent of the company within thirty days after the
conclusion of the inauguration meeting.
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Share Capital
The shareholders may make a capital contribution in currencies, or in kind, intellectual
property rights, land use rights, equity interests, creditor ’s rights and other non-monetary assets
which can be appraised with monetary value and transferred lawfully; provided, however, that
such assets are not prohibited from being cont ributed as capital as stipulated by laws and
administrative regulations. Non -monetary assets used as capital con tribution shall be appraised
and verified and shall not be over- or under-appraised. If laws and administrative regulations have
provisions on valuation and valuatio n, those provisions shall prevail.
The issuance of shares shall be conducted in a fair and equitable manner. Each share of the
same class shall carry equal rights. Shares issu ed at the same time and within the same class must
be issued on the same conditions and at the same price. The same price per share shall be paid by
any share subscriber.
According to the Trial Measures of Oversea s Securities Offering, a domestic enterprise
making an initial public offering or listing overs eas shall file the application for listing with
CSRC within three working days after submitting the listing application documents overseas.
Domestic enterprises that issue and list their shares overseas may raise funds and pay dividends in
foreign currencies or Renminbi.
Increase in Share Capital
Pursuant to the PRC Company Law, when a company issues new shares, the shareholders
shall make resolutions on the following matters: the class and amount of the new shares, the issue
price of the new shares, the commencement and end dates for the issue of the new shares and the
class and amount of the new shares proposed to be issued to existing shareholders. If shares
without par value are issued, the proceeds from the issuance of the new shares is to be included
in the registered capital.
After the shares issued by the company have been paid up, a public announcement must be
made accordingly.
Reduction of Share Capital
When a company needs to reduce its registered capital, the company shall prepare a balance
sheet and an inventory of assets, the company shal l notify its creditors within 10 days and publish
an announcement in newspapers or the National Enterprise Credit Information Publicity System
within 30 days. The creditors of the company ar e entitled to require the company to repay its
debts or provide guarantees for such debts within 30 days from receipt of the notification or
within 45 days from the date of the announcement if he/she/it has not received any notification.
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Repurchase of Shares
Pursuant to the PRC Company Law, a company may not repurchase its own shares other
than for the following purposes: (i) reducing i ts registered capital; (ii) merging with other
companies which hold its shares; (iii) granting shares for the purpose of implementing an
employee share scheme or share incentive plan; (iv) repurchasing of the company ’s shares from
shareholders who vote against a resolution regarding a merger or split with other companies at a
shareholders ’ general meeting; (v) utilizing the shares to convert convertible corporate bonds
issued by a listed company; and (vi) where it is necessary for the listed company to safeguard the
value of the company and the interests of its shareholders.
The acquisition by a company of its own share s under scenarios (i) and (ii) above shall be
approved by way of a resolution of a shareholders ’ general meeting; acqui sition by a company of
its own shares under scenarios (iii), (v) and (vi ) above may be approved by way of a resolution at
a board meeting with two-third or more of the directors present in accordance with the provisions
of the company ’s articles of association or the au thorization of the shareholders ’ general meeting.
Upon the acquisition by a company of its own sha res under scenario (i), such shares shall be
deregistered within 10 days from the date of the acquisition; such shares shall be transferred or
canceled within six months under the scenarios (ii) or (iv); the total shares held by the company
after the share repurchase under the scenarios ( iii), (v) or (vi) shall not exceed 10% of the total
shares issued by the company and such shares sha ll be transferred or canceled within three years.
A listed company that undertakes a share repurch ase shall fulfill its information disclosure
obligations in accordance with the provisions of s ecurities laws. If the sha re repurchase is carried
out under scenarios (iii), (v) or (vi), such shares s hould be publicly traded on a centralized basis.
The Company shall not accept the shares of the Company as the subject of pledge.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant rules and
regulations. A shareholder should effect a transfer of his/her shares on a stock exchange
established in accordance with laws or by any other means as required by the State Council.
Transfer of registered shares by shareholders must be made by endorsement on the back of the
share certificates or in any other manner stipulat ed by laws and administrative regulations.
Following the transfer, the company shall enter th e names and addresses of the transferees into its
share register. A transfer of bearer shares shall become effective upon the delivery of the
certificates to the transferee by the shareholder.
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No changes of registration in the share register shall be effected during a period of 20 days
prior to convening a shareholders ’ general meeting or 5 days prior to the record date for the
purpose of determining entitlements to dividend d istributions. However , where the law provides
otherwise for the registration of changes in the r egister of shareholders of a listed company, such
provisions shall apply.
Pursuant to the PRC Company Law, shares issued prior to the public offering of the shares
may not be transferred within one year from the date on which the shares of a join stock limited
company are listed on the stock exchange. Directors, supervisors and the senior management of a
company shall declare to the company their shareholdings in it and changes in such
shareholdings. During their terms of office, they may transfer no more than 25% of the total
number of shares they hold in the company each year. They shall not transfer the shares they hold
within one year from the date of the company ’s listing on a stock exchange, nor within six
months after they leave their positions in the company. The articles of association may set out
other restrictive provisions in respect of the t r a n s f e ro fs h a r e si nt h ec o m p a n yh e l db yi t s
directors, supervisors and the senior management.
Shareholders
Under the PRC Company Law and the Guidelines, holders of ordinary shares of a joint
stock limited company are enti tled to the following rights:
(1) to receive dividends and other distributions in respect of the number of shares held;
(2) to attend or appoint a proxy to attend shareholders ’ general meetings and exercise
voting rights in respect of the number of shares held;
(3) to supervise, make recommendations or inquire about the company ’s operations;
(4) to transfer, donate or pledge their shares in accordance with applicable laws,
regulations and the company ’s articles of association;
(5) to inspect the articles of association, shar e register, counterfoil of company debentures,
minutes of shareholders ’ general meetings, board resolutions, resolutions of the
supervisory board and financial and accounting reports;
(6) to participate in distribution of residua l properties of the company in proportion to
their shareholdings upon the termination or liquidation of the company;
(7) to request the company to acquire the shares of any shareholder who dissent on a
resolution regarding a merger or division at the shareholders ’ meeting; and
(8) any other shareholders ’ rights provided for in laws, administrative regulations and the
company ’s articles of association.
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The obligations of shareholders include the obligation to abide by the company ’s articles of
association, to pay the subscription monies in respect of the shares subscribed for, to be liable for
the company ’s debts and liabilities to the extent of the amount of subscription monies agreed to
be paid in respect of the shares taken up by them, to not abuse shareholders ’ rights to harm the
interests of the company or other shareholders of the company, to not abuse the company ’s
independent status and limited liability as a leg al person to harm the interests of the company ’s
creditors, and any other shareholder obliga tion specified in the articles of association.
Shareholders ’ General Meetings
The general meeting is the organ of authority of the company, which exercises its powers in
accordance with the PRC Company Law. The shareholders ’ general meeting may exercise its
powers:
(1) to elect and dismiss the directors and su pervisors not being representative(s) of
employees and to decide on the matters relating to the remuneration of directors and
supervisors;
(2) to review and approve the reports of the board of directors;
(3) to review and approve the reports of the supervisory board;
(4) to review and approve the company ’s profit distribution proposals and loss recovery
proposals;
(5) to decide on any increase or reduction of the company ’s registered capital;
(6) to decide on the issue of corporate bonds;
(7) to decide on merger, division, dissolution and liquidation of the company or change of
its corporate form;
(8) to amend the company ’s articles of association; and
(9) to exercise any other authority stipulated in the articles of association.
Pursuant to the PRC Company Law, a shareholders ’ general meeting is required to be held
once every year. An extraordinary general meeting is required to be held within two months upon
the occurrence of any of the following:
(1) the number of directors is less than the number required by law or less than two-thirds
of the number specified in the articles of association;
(2) the total outstanding losses of the company amounted to one-third of the company ’s
total paid-in share capital;
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(3) shareholders individually or in aggregate holding 10% or more of the company ’s
shares request to convene an extraordinary general meeting;
(4) the board deems necessary;
(5) the supervisory board so proposes; or
(6) any other circumstances as provided for in the articles of association.
A shareholders ’ general meeting shall be convened by the board of directors and presided
over by the chairman of the board of directors. In the event that the chairman is incapable of
performing or is not performing his/her duties, the meeting shall be presided over by the vice
chairman. In the event that the vice chairman is incapable of performing or is not performing his/
her duties, a director recommended by half or more of the directors shall preside over the
meeting. Where the board of directors is incapable of performing or is not performing its duties,
the supervisory board shall convene and preside over the shareholders ’ general meeting in a
timely manner. If the supervisory board fails to convene and preside over the shareholders ’
general meeting, shareholders individually or in aggregate holding 10% or more of the company ’s
shares for 90 days or more consecutively may unilaterally convene and preside over the
shareholders ’ general meeting.
In accordance with the PRC Company Law, a notice of the general meeting stating the date
and venue of the meeting and the matters to be co nsidered at the meeting shall be given to all
shareholders 20 days prior to the meeting. A notice of an extraordinary general meeting shall be
given to all shareholders 15 days prior to the meeting. For the issuance of bearer share
certificates, the time and venue of and matters to be considered at the meeting shall be announced
30 days prior to the meeting. A single shareholder who holds, or several shareholders who jointly
hold, more than 1% of the shares of the company may submit an interim proposal in writing to
the board of directors within 10 days before the general meeting. The board of directors shall
notify other shareholders within two days upon receipt of the proposal and submit the interim
proposal to the shareholders ’ general meeting for deliberation, except in the case where the
interim proposal violate the laws, admi nistrative regulations or the company ’s articles of
association, or falls beyond the scope of the shareholders ’ general meeting. A company that
publicly issues shares shall make the notificatio n specified in the preceding two paragraphs in the
form of an announcement.
Pursuant to the PRC Company Law, shareholders present at a shareholders ’ general meeting
have one vote for each share they hold, except for class shareholders. Shares of the Company
held by the Company do not carry voting rights.
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An accumulative voting system may be adopted f or the election of directors and supervisors
at the shareholders ’ general meeting pursuant to the provisions of the articles of association or a
resolution of the shareholders ’ general meeting. Under the accumulative voting system, each share
shall be entitled to the number of votes equivalent to the number of directors or supervisors to be
elected at the general meeting, and shareholders may consolidate their votes for one or more
directors or supervisors when casting a vote.
Pursuant to the PRC Company Law, resolutions of the shareholders ’ general meeting must
be passed by more than half of the voting rights hel d by shareholders present at the meeting, with
the exception of resolutions relating to merger, di vision or dissolution of the company, increase or
reduction of registered share capital, change of corporate form or amendments to the articles of
association, in each case of which must be passed by more than two-thirds of the voting rights
held by the shareholders present at the meeting. Where the PRC Company Law and the articles of
association provide that the transfer or acqui sition of significant assets or the provision of
external guarantees by the company and such other matters must be approved by way of
resolution of the general meeting, the board of directors shall convene a shareholders ’ general
meeting promptly, at which the share holders shall vote on such matters.
Minutes shall be prepared in respect of matters considered at the general meeting and the
chairperson and directors attending the meeting shall endorse such minutes by signature. The
minutes shall be kept together with the shareholders ’ attendance register and the proxy forms.
Board of Directors
Under the PRC Company Law, a joint stock limited company is required to establish a
board of directors. A joint stock limited compa ny may, in accordance with the provisions of its
articles of association, establish an audit co mmittee comprising directors on the board of
directors, which shall exercise the powers and f unctions of the supervisory committee as provided
for in the Company Law, and shall not have a supervisory board or supervisors. The audit
committee shall consist of three or more members, and a majority of the members shall not hold
positions other than director in the company, and shall not have any relationship with the
company that may affect their independent and objective judgement. Employee representatives of
the company ’s board of directors may be members of the Audit Committee.
The term of office of directors shall be prescribed by the company ’s articles of association,
and each term of office shall not exceed three years. A director may be re-elected upon expiry of
his/her term of office. If a director is not re-elected in time upon expiration of his/her term of
office, or if a director resigns during his/her te rm of office and as a result the number of members
of the board of directors is less than a quorum, the original director shall continue to perform his/
her duties as a director in accordance with the provisions of the laws, administrative regulations,
and the company ’s articles of association until a duly re-el ected director assumes his/her duties as
a director of the company.
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Under the PRC Company Law, the board of directors may exercise its powers:
(1) to convene shareholders ’ general meetings and report on its work to the shareholders ’
general meetings;
(2) to implement the resolutions passed by the shareholders at the shareholders ’ general
meetings;
(3) to decide on the company ’s operational plans and investment proposals;
(4) to formulate the company ’s profit distribution proposals and loss recovery proposals;
(5) to formulate proposals for the increase or reduction of the company ’s registered capital
and the issue of corporate bonds;
(6) to formulate proposals for the merger, d ivision or dissolution of the company or
change of corporate form;
(7) to decide on the setup of the company ’s internal management organs;
(8) to appoint or dismiss the company ’s managers and decide on his/her remuneration and,
based on the manager ’s recommendation, to appoint or dismiss any deputy manager
and financial officer of the company and to decide on their remunerations;
(9) to formulate the company ’s basic management system; and
(10) to exercise any other authority stip ulated in the articles of association.
Meetings of the board of directors shall be convened at least twice each year. Notices of
meeting shall be given to all directors and supervisors 10 days before the meeting. An
extraordinary board meeting may be proposed to be convened by shareholders representing one-
tenth or more of the voting rights, one-third or more of the directors or the supervisory board.
The chairman of the board of directors shall convene and preside over a meeting of the board of
directors within ten days from the receipt of such proposal. The board of directors may otherwise
determine the means and the period of notice for convening an extraordinary board meeting.
Meetings of the board of directors shall be held only if more than half of the directors are present.
Resolutions of the board of directors shall be passed by more than half of all directors. Each
director shall have one vote for a resolution to b e approved by the board. Directors shall attend
board meetings in person. If a director is unable to attend for any reason, he/she may appoint
another director to attend the meeting on his/her behalf by a written power of attorney specifying
the scope of authorization.
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The directors shall be liable for the resolutions of the board. If a resolution of the board of
directors violates the laws, administrative regul ations or the articles of association or resolutions
of the shareholders ’ general meeting, and as a result of wh ich the company sustains serious
losses, the directors participating in the re solution are liable to compensate the company.
However, if it can be proved that a director expressly objected to the resolution when the
resolution was voted on, and that such objection w as recorded in the minutes of the meeting, such
director shall be relieved from that liability.
Under the PRC Company Law, the following person may not serve as a director in a
company: (1) a person who is unable or has limite d ability to undertake any civil liabilities; (2) a
person who has been convicted of an offense of corruption, bribery, embezzlement,
misappropriation of property or destruction of the socialist economic order, or who has been
deprived of his political rights due to his crimes, in each case where less than five years have
elapsed since the date of completion of the sent ence, or where less than two years have lapsed
from the date of the completion of the probationary period if having been given probation; (3) a
person who has been a former director, factory manager or manager of a company or an enterprise
that has entered into insolvent liquidation and who was personally liable for the insolvency of
such company or enterprise, where less than three years have elapsed since the date of the
completion of the bankruptcy and liquidation of the company or enterprise; (4) a person who has
been a legal representative of a company or an enterprise that has had its business license revoked
due to violations of the law or has been order ed to close down by law and the person was
personally liable, where less than three years ha ve elapsed since the date of such revocation or
closure; and (5) a person who has been classified by a people ’s court as a dishonest judgement
debtor as a result of failing to settle a large amou nt of overdue debts. If a company violates the
provisions of the preceding paragraph in electing or appointing a director, the election or
appointment shall be invalid. If any of the circumstances listed in the preceding paragraph occurs
during a director ’s term of office, the Company shall terminate his or her duties.
Under the PRC Company Law, the board shall appoint a chairman and may appoint a vice
chairman.
The chairman and the vice chairman shall be elected with approval of more than half of all
the directors. The chairman shall convene and preside over board meetings and review the
implementation of board resolutions. The vice ch airman shall assist the chairman to perform his/
her duties. Where the chairman is incapable of perfo rming, or is not performing his/her duties, the
duties shall be performed by the vice chairma n. Where the vice chairman is incapable of
performing, or is not performing his/her duties, a director jointly elected by more than half of the
directors shall perform his/her duties.
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Supervisory Board
Under the PRC Company Law, a joint stock limited company may, in accordance with the
provisions of its articles of association, estab lish an audit committee under the board of directors
comprising directors to exercise the powers and functions of the supervisory board, in place of a
supervisory board or supervisors. Otherwise, a joint stock limited company shall have a
supervisory board composed of not less than three members. The supervisory board shall consist
of representatives of the shareholders and an app ropriate proportion of representatives of the
company ’s staff, among which the proportion of representatives of the company ’s staff shall not
be less than one-third, and the actual proportion sha ll be determined in the articles of association.
Representatives of the company ’s staff at the supervisory board shall be democratically elected by
the company ’s staff at the staff representative assembly , general staff meeting or other manners of
democratic election.
Each term of office of a supervisor is three years and he/she may serve consecutive terms if
re-elected. A supervisor shall continue to perform his/her duties as a supervisor in accordance
with the laws, administrative re gulations and the articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of his/
her term of office or if the resignation of superv isor results in the number of supervisors being
less than the quorum.
Directors and senior management members shall not act concurrently as supervisors.
The supervisory board shall appoint a chairman and may appoint a vice chairman. The
chairman and the vice chairman of the supervisory board shall be elected by more than half of all
the supervisors. Where the chairman of the supervisory board is incapable of performing, or is not
performing his/her duties, the duties shall be performed by the vice chairman of the supervisory
board. Where the vice chairman of the supervisory board is incapable of performing, or is not
performing his/her duties, a supervisor jointly el ected by more than half of the supervisors shall
convene and preside over the supervisory board meetings.
Each term of office of a supervisor is three years and he/she may serve consecutive terms if
re-elected. A supervisor shall continue to perform his/her duties as a supervisor in accordance
with the laws, administrative re gulations and the articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of his/
her term of office or if the resignation of superv isor results in the number of supervisors being
less than the quorum.
The supervisory board of the company shall be convened at least once every six months.
Under the PRC Company Law, a resolution of the supervisory board shall be passed by more than
half of all supervisors.
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The supervisory board may exercise its powers:
(1) to review the company ’s financial affairs;
(2) to supervise the directors and senior man agement in their performance of their duties
and to propose the removal of directors and senior management who have violated
laws, administrative regulations, the ar ticles of association or resolutions of the
shareholders ’ general meetings;
(3) when the acts of a director or a senior management personnel are detrimental to the
company ’s interests, to require the director and senior management to correct those
acts;
(4) to propose the convening of extraordinary shareholders ’ general meetings;
(5) to submit proposals to the shareholders ’ general meetings;
(6) to bring legal actions against directors and senior management personnel pursuant to
the relevant provisions of the PRC Company Law;
(7) to request directors and senior management to submit reports regarding the
performance of their duties; and
(8) to exercise any other authority stipulated in the articles of association.
Supervisors may be present at board meetings and make inquiries or proposals in respect of
the resolutions of the board. The supervisory board may investigate any irregularities identified in
the operation of the company and, when necessary, may engage an accounting firm to assist its
work at the cost of the company.
Manager and Senior Management
According to the PRC Company Law, senior management refers to managers, deputy
managers, financial officers, secretaries to the board of a company and other personnel as
stipulated in the articles of association.
A company shall have a manager who shall be appointed or removed by the board of
directors. The manager, who reports to the board of directors, may exercise his/her powers in
accordance with the provisions of the articles o f association or as authorized by the board of
directors. Supervisors may be present at board meetings.
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--- page 648 ---
Duties of Directors, Supervisors and Senior Management
Under the PRC Company Law, directors, supervisors and senior management personnel are
obliged to be faithful and diligent towards the c ompany, and should take measures to avoid any
conflict between their own interests and the interests of the company, and should not make use of
their powers to obtain improper benefits. Directors, supervisors and senior management have a
duty of diligence to the company and should exerci se reasonable care in performing their duties in
the best interests of the company, as would normally be expected of a manager.
Directors, supervisors and senior management personnel are prohibited from:
(1) misappropriating company property or funds;
(2) depositing company funds into accounts un der their own names or the names of other
individuals;
(3) using their position to accept bribe or other illegal income;
(4) accepting for their own benefit commissions from a third party for transactions
conducted with the company;
(5) unauthorized divulgence of confidential information of the company;
(6) other acts in violation of their duty of loyalty to the company.
Directors, supervisors and senior management, who directly or indirectly enter into contracts
or transactions with the company, shall report to the board of directors or the shareholders ’
meeting on matters relating to such contracts or t ransactions, and have such matters resolved by
the board of directors or the shareholders ’ meeting in accordance with the provisions of the
articles of association.
Directors, supervisors and senior manage ment shall not use their position to procure
business opportunities for themse lves or others that should have o therwise been available to the
company, except for one of the following circumstances:
(1) having reported the matter to the board of directors or shareholders ’ meeting, and
having such matter resolved by the board of directors or the shareholders ’ meeting in
accordance with the provisions of the articles of association;
(2) where the business oppor tunity cannot be utilized by the c ompany in accordance with
the laws, administrative regulations or th e articles of association of the company.
Income derived by directors, supervisors and senior management from violations of the
Company Law shall belong to the company.
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--- page 649 ---
If the presence of the directors, supervisors and senior managers is requested by the
shareholders ’ meeting, the directors, supervisors and senior managers shall attend the
shareholders ’ meeting and address inquiries from shareholders.
Where a director, supervisor or senior management personnel violates the laws,
administrative regulations or the provisions of the articles of association in the performance of
his/her duties resulting in any loss to the compa ny, shareholder(s) holding individually or in
aggregate more than 1% of the company ’s shares consecutively for more than 180 days may
request in writing that the supervisory board institute litigation at the people ’s court. Where a
supervisor violates the laws, administrative regulations or the provisions of the articles of
association in the performances of his/her d uties resulting in any loss to the company, the
aforementioned shareholder(s) m ay request in writing that the board of directors institute litigation
at the people ’s court on his/their behalf. If the supervisory board or the board of directors refuses
to institute litigation after receiving such wr itten request from the sha reholder(s), or fails to
institute litigation within 30 days of the date of r eceiving the request, or in case of emergency
where failure to institute litigation immediatel y will result in irrecoverable damage to the
company ’s interests, the aforementioned shareholder(s ) shall have the power to institute litigation
directly at the people ’s court in his/their own name for the company ’s benefit. For other parties
who infringe the lawful interests of the company resulting in loss to the company, such
shareholder(s) may institute litigation at the people ’s court in accordance with the procedure
described above. Where a director, supervisor or senior management of a wholly-owned
subsidiary of the company violates the laws, administrative regulations or the provisions of the
articles of association resulting in any loss to the c ompany, or in infringement of the lawful rights
and interests of such subsidiary, shareholder(s) holding individually or in aggregate more than 1%
of the company ’s shares consecutively for more than 180 days may request in writing that the
supervisory board and board of directors of t he subsidiary institute litigation at the people ’sc o u r t ,
or institute litigation directly at the people ’s court in his/their own name.
Where a director, supervisor or senior management personnel violates the laws,
administrative regulations or the provisions of th e articles of association resulting in any loss to
the shareholders, the shareholders may institute litigation at the people ’sc o u r t .
Finance and Accounting
Under the PRC Company Law, the company shall establish its own financial and accounting
systems in accordance with the laws, administrative regulations and the regulations of the
Ministry of Finance of the State Council. The Company shall prepare a financial report at the end
of each financial year, which shall be audited by a public accounting firm in accordance with the
law. The financial and accounting reports shall be prepared in accordance with the laws,
administrative regulations and the regulations of the Ministry of Finance of the State Council.
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--- page 650 ---
A company is required to make available at the company for inspection by shareholders its
financial report 20 days before its shareholders ’ annual general meeting. A joint stock limited
company of which the shares are publicly is sued must publish its financial report.
When distributing each year ’s profits after taxation, the company shall set aside 10% of its
profits after taxation for the company ’s statutory common reserve f und until the fund has reached
more than 50% of the PRC company ’s registered capital.
When the company ’s statutory common reserve fund is not sufficient to make up for the
company ’s losses for the previous years, the current year ’s profits shall first be used to make good
the losses before any allocation is set aside for the statutory common reserve fund as stipulated
above.
After the company has made allocations to the statutory common reserve fund from its
profits after taxation, it may, upon passing a resolution at a shareholders ’ general meeting, make
further allocations from its profits after taxa tion to the discretionary common reserve fund.
After the company has made good its losses and made allocations to its discretionary
common reserve fund, a limited liability company s hall distribute its profits in proportion to the
paid-in capital of the shareholders, unless all shareholders agree not to distribute profits in
proportion to their capital contributions. A joint s tock limited company shall distribute its profits
in proportion to the number of shares held by the shareholders, unless otherwise provided for in
the articles of association of the company.
The company shall not be entitled to any distribution of profits in respect of its own shares
held by it.
The premium received by the company from the issuance of shares at an issue price in
excess of the nominal value of the shares, proceeds from the issuance of no-par shares not
included in the registered capital, and other items as required by the Ministry of Finance of the
State Council to be treated as the capital reserve fund shall be accounted for as the company ’s
capital reserve fund. The common reserve fund shall be used to make up for the company ’s
losses, expand the company ’s business operation, or be transferred into the company ’s registered
capital.
When a company ’s common reserve fund is used to make up for its losses, it should first be
used as a discretionary capital reserve fund and a st atutory capital reserve fund; if it is still unable
to make up for the losses, it may be used as a capital reserve in accordance with the regulations.
Upon the transfer of the statutory common reserve fund into capital, the balance of the fund shall
not be less than 25% of the registered capital of the company before such transfer.
The company shall have no accounting books other than the statutory books. The company ’s
assets shall not be deposited in any account opened under the name of an individual.
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--- page 651 ---
Appointment and Dismissal of Accounting Firm
Pursuant to the PRC Company Law, the engagement or dismissal of an accounting firm
responsible for the company ’s auditing shall be determined by a shareholders ’ general meeting or
the board of directors in accordance with the ar ticles of association. The accounting firm should
be allowed to make representations when the general meeting, the board of directors or the
supervisory board conducts a vote on the dismissal of the accounting firm. The company should
provide true and complete accounting evidence, accounting books, financial and accounting
reports and other accounting information to the engaged accounting firm without any refusal or
withholding or falsification of data.
Profit Distribution
According to the PRC Company Law, a company shall not distribute profits before losses
are covered and the statutory common reserve fund is provided.
Amendments to the Articles of Association
Pursuant to PRC Company Law, the resolution of a shareholders ’ general meeting regarding
any amendment to a company ’s articles of association require s affirmative votes by more than
two-thirds of the votes held by shareholders attending the meeting. Any amendment to the
company ’s articles of association must be made in accordance with the procedures set out in the
company ’s articles of association. If it involves the r egistration of a company, the change must be
registered with the registration authority.
Dissolution and Liquidation
Under the PRC Company Law, a company shall be dissolved for any of the following
reasons: (i) the term of its operation set out in th e articles of association has expired or other
events of dissolution specified in the articles of association have occurred; (ii) the shareholders
have resolved at a shareholders ’ general meeting to dissolve the company; (iii) the company shall
be dissolved by reason of its merger or divisio n; (iv) the business license of the company is
revoked or the company is ordered to close down or to be dissolved in accordance with the laws;
or (v) the company is dissolved by the people ’s court in response to the request of shareholders
holding shares that represent more than 10% of the voting rights of all shareholders of the
company, on the grounds that the operation and management of the company has suffered serious
difficulties that cannot be reso lved through other means, rend ering ongoing existence of the
company a cause for significant losses to the shareholders ’ interests. In the event that a company
is dissolved on the aforesaid reasons, the compa ny shall make public the reasons for dissolution
through the National Enterprise Credit Inf ormation Publicity System within ten days.
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--- page 652 ---
In the event of scenarios (i) and (ii) set out in the preceding paragraph and has not yet
distributed its property to its shareholders, the company may carry on its existence by amending
its articles of association or by r esolution of the shareholders ’ meeting. The amendment to the
articles of association or the resolution of the shareholders ’ meeting in accordance with the
provisions described above shall require the approval of more than two-thirds of voting rights of
shareholders attending a shareholders ’ meeting.
Where the company is dissolved under the circu mstances set forth in items (i), (ii), (iv) or
(v) above, it should establish a liquidation committee wherein the directors are the liquidation
obligors within 15 days of the date on which the dissolution matter occurs.
The liquidation committee shall be composed of directors or any other person determined by
a shareholders ’ general meeting. If liquidation obligors fai l to fulfil their liquidation obligations in
a timely manner causing losses to the compan y or its creditors, they shall be liable to pay
compensation. If a liquidation committee is not established within the stipulated period, the
company ’s creditors can apply to the people ’s court for setting up a liquidation committee with
designated relevant personnel to conduct the liquidation. The people ’s court should accept such
application and form a liquidation committe e to conduct liquidation in a timely manner.
The liquidation committee may exercise following powers during the liquidation:
(1) to sort out the company ’s assets and to prepare a balance sheet and an inventory of
assets;
( 2 ) t on o t i f yt h ec o m p a n y’s creditors or publish announcements;
(3) to deal with any outstanding business related to the liquidation;
( 4 ) t op a ya n yo v e r d u et a xt o g e t h e rw i t ha n ytax arising during the liquidation process;
(5) to settle the company ’s claims and liabilities;
(6) to handle the company ’s remaining assets after its debts have been paid off; and
(7) to represent the company in any civil procedures.
The liquidation committee shall notify the company ’s creditors within 10 days of its
establishment and publish an announcement in newspapers or the National Enterprise Credit
Information Publicity System within 60 days. A creditor shall lodge his claim with the liquidation
committee within 30 days of receipt of the notif ication or within 45 days of the date of the
announcement if he has not received any notificatio n. A creditor shall report all matters relevant
to his claimed creditor ’s rights and furnish relevant evide nce. The liquidation committee shall
register such creditor ’s rights. The liquidation committee shall not make any settlement to
creditors during the period of the claim.
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--- page 653 ---
Upon disposal of the company ’s property and preparation of the required balance sheet and
inventory of assets, the liquidation committee s hall draw up a liquidation plan and submit this
plan to a shareholders ’ general meeting or a people ’s court for endorsement. The remaining part
of the company ’s assets, after payment of liquidation expenses, employee wages, social insurance
expenses and statutory compensation, outstanding taxes and the company ’s debts, shall be
distributed to shareholders in proportion to shares held by them. The company shall continue to
exist during the liquidation per iod, although it cannot conduct o perating activities that are not
related to the liquidation. The company ’s property shall not be distributed to shareholders before
repayments are made in accordance with the requirements described above.
Upon liquidation of the company ’s property and preparation of the required balance sheet
and inventory of assets, if the liquidation committee becomes aware that the company does not
have sufficient assets to meet its liabilities, it must apply to a people ’s court for a declaration of
bankruptcy in accordance with the laws. Following such declaration by the people ’s court, the
liquidation committee shall hand over the administ ration of the liquidation to the official receiver
appointed by the people ’s court.
Upon completion of the liquidation, the liqui dation committee shall prepare a liquidation
report and submit it to the shareholders ’ general meeting or the people ’s court for verification,
and to the company registration authority fo r the cancellation of company registration.
In addition, liquidation of a company decla red bankrupt according to laws shall be
processed in accordance with the laws on corporate bankruptcy.
Merger and Division
Under the PRC Company Law, a company may merge by way of absorption or by
establishing a new merging entity. If a company adopts the merger by absorption, the absorbed
company shall be dissolved; if a company merges by forming a new company, the merging parties
shall be dissolved.
A merger agreement shall be signed by merging companies and the involved companies
shall prepare respective balance sheets and inve ntory of assets. The comp anies shall within 10
days of the date of passing the resolution approv ing the merger notify their respective creditors
and publicly announce the merger in newspapers or the National Enterprise Credit Information
Publicity System within 30 days. A creditor may , within 30 days from the date of reception of the
notification, or within 45 days from the date of the announcement if he has not received such
notification, request the company to settle any outstanding debts or provide corresponding
guarantees. In case of a merger, the credits and debts of the merging parties shall be assumed by
the surviving or the new company.
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--- page 654 ---
In case of a division, the company ’s assets shall be divided and a balance sheet and an
inventory of assets shall be prepared. The company should notify all its creditors within 10 days
of the date of passing such resolution and publicly announce the division in newspapers or the
National Enterprise Credit Information Publicity System within 30 days.
Changes in the registration as a result of the mer ger or division shall be registered with the
relevant administration authority for industry and commerce.
In case of dissolution of a company, the company shall apply for cancella tion of registration
in accordance with the law; in case of establishment of a new company, the company shall be
registered for establishment in accordance with the law.
Overseas Listing
According to the Trial Measures of Overseas Secu rities Offering, a domestic enterprise shall
report its application for overseas issuance and listing to the CSRC for record within three
working days after submitting the application d ocuments for overseas issuance and listing. The
remittance and cross-border flow of funds relate d to overseas issuance and listing of domestic
enterprises shall comply with national regulatio ns on cross-border investment and financing,
foreign exchange management and cross-border RMB management.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS
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--- page 655 ---
This appendix contains a summary of the mai n provisions of the Articles of Association
approved on July 19, 2024, which will take effe ct on the date of Listing of H shares on the Stock
Exchange. This main purpose of this appendix is to provide potential investors with an overview
of the Articles of Association, and therefore may n ot contain all the information that is important
for potential investors.
General Provisions
The Company is a joint stock limited lia bility company in perpetual existence.
The Articles of Association shall become a l egally binding document regulating the
Company ’s organization and activities, as well as the rights and obligations between the Company
and each shareholder and between the shareholders, and are binding on the Company and its
shareholders, directors, supervisors and senior management.
Shares and Transfer of Shares
Shares of the Company shall be issued in a fair and equal manner and shares of the same
class shall carry the same rights.
Each of the shares of the same class shall be issued under the same conditions and at the
same price in each issuance, and the same price shall be paid for each of the shares subscribed for
by any entity and individual.
The Company does not have a class of shares.
Shares of the Company held by promoters shall not be transferred for a period of one year
after the Company ’s establishment. Shares issued prior to the Company ’s public offering of shares
shall not be transferred for a period of one year from the date of listing and trading of the
Company ’s shares on the stock exchange.
The directors, supervisors and senior management 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 25% of the total number of shares held by them in the Company each year during their
term of office; their shares in the Company shall not be transferred within one year from the date
of listing and trading of the Company ’s shares. The shares of the Company held by the
abovementioned persons shall not be transferred within six months after their departure from
office.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 1


--- page 656 ---
Increase, Reduction and Repurchase of Shares
Based on its operating and development needs, the Company may, pursuant to the laws and
regulations and resolutions made at shareholders ’ general meetings, increase its capital in the
following ways:
(I) public offering of shares;
(II) private placement of shares;
(III) distribution of dividends to existing shareholders;
(IV) conversion of funds in the capital reserve to share capital;
(V) other means prescribed by laws and administrative regulations and approved by the
China Securities Regulatory Commission and the securities regulatory authorities of
t h ep l a c e sw h e r et h eC o m p a n y’s shares are listed.
The Company may reduce its registered capital. The Company shall reduce its registered
capital pursuant to the Company Law, other relevant provisions and procedures specified in the
Articles of Association.
The Company may, in accordance with the pro visions set out in the laws, administrative
regulations, departmental rules, the Listing Rules of the Hong Kong Stock Exchange and the
Articles of Association, repurchase its shares under the following circumstances:
(I) reduction of the registered capital of the Company;
(II) merger with another company holding shares of the Company;
(III) use of shares for employee stock o wnership plans or equity incentives;
(IV) request to the Company to acquire the shares from shareholders who vote against any
resolution adopted at the shareholders ’ general meeting on the merger or division of
the Company;
(V) use of shares for conversion of corporate bonds convertible into shares issued by the
Company;
(VI) necessity for maintaining company value and protecting shareholders ’ equity;
(VII) any other circumstances stipulated in the l aws, administrative regulations, securities
regulatory rules of the place where the Company ’s shares are listed.
The Company shall not trade its shares except in the aforesaid circumstances.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
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--- page 657 ---
Shareholders
The rights of the Company ’s shareholders are as follows:
(I) to receive distribution of dividends an d other forms of benefits according to the
number of shares held;
(II) to legally require, convene, preside over, pa rticipate in or appoint a shareholder proxy
to participate in the shareholders ’ general meeting and exercise corresponding rights to
vote;
(III) to supervise the Company ’s operations, put forward proposals or raise enquiries;
(IV) to transfer, give as gift or pledge the shares held in accordance with the laws,
administrative regulations, securities regulatory rules of the place where the
Company ’s shares are listed and the Articles of Association;
(V) to inspect the Articles of Association, register of shareholders, corporate bond stubs,
minutes of general meetings, resolutions of meetings of the Board, resolutions of
meetings of the Supervisory Committe e and financial accounting reports;
(VI) in the event of the termination or liquidation of the Company, to participate in the
distribution of the remaining assets of the Company in proportion to the number of
shares held;
(VII) with respect to shareholders who voted against any resolution adopted at the
shareholders ’ general meeting on the merger or demerger of the Company, entitled to
demand the Company to acquire the shares held by them;
(VIII) any other rights stipulated in the laws, admini strative regulations, departmental rules,
securities regulatory rules of the place where the Company ’ss h a r e sa r el i s t e do rt h e
Articles of Association.
The shareholders of the Company shall have the following obligations:
(I) to comply with laws, administrative reg ulations and the Articles of Association;
(II) to pay subscription monies according to the number of shares subscribed and the
method of subscription;
(III) not to withdraw shares unless required by the laws and regulations;
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
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--- page 658 ---
(IV) not to abuse their shareholders ’ rights to harm the interests of the Company or other
shareholders; and not to abuse the independent legal person status of the Company and
the limited liability of shareholders to harm the interests of any creditor of the
Company;
Shareholders of the Company who abuse their shareholders ’ rights and thereby cause
loss to the Company or other shareholders shall be liable for indemnity according to
the law. Where shareholders of the Company abuse the Company ’s position as an
independent legal person an d the limited liability of shareholders for the purposes of
evading repayment of debts, thereby materia lly impairing the interests of the creditors
of the Company, such shareholders shall be jointly and severally liable for the debts
owed by the Company.
(V) any other obligations imposed by laws, admin istrative regulations, securities regulatory
rules of the place where the Company ’s shares are listed and the Articles of
Association.
Shareholders ’ General Meeting
General Provisions
The shareholders ’ general meeting is the organ of authority of the Company and shall
exercise the following functions and powers in accordance with the laws:
(I) to decide on the Company ’s operational policies and investment plans;
(II) to elect and remove directors and superv isors not represented by employees and to
decide on matters relating to the remune ration of directors and supervisors;
(III) to consider and approve reports of the Board;
(IV) to consider and approve reports of the Supervisory Committee;
(V) to consider and approve the Company ’s proposals for annual financial budget and final
accounts;
(VI) to consider and approve the Company ’s profit distribution plans and loss recovery
plans;
(VII) to decide on any increase or reduction of the Company ’s registered capital;
(VIII) to decide on the issue of corporate bonds;
(IX) to decide on issues such as merger, divis ion, dissolution, liquidation and change of
form of the Company;
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
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--- page 659 ---
(X) to amend the Articles of Association;
(XI) to decide on the engagement and dismissal of the accounting firm of the Company;
(XII) to consider and approve the guarantees as provided for in Article 45;
(XIII) to consider the purchase, disposal of substantial assets or external investment of the
Company with an amount exceeding 30% (including 30%) of the latest audited total
assets of the Company within one year;
(XIV) to consider and approve the changes in the use of proceeds;
(XV) to consider equity incentive plans and employee stock ownership plans;
(XVI) to consider other matters which are requ ired to be determined at the shareholders ’
general meeting as required by laws, administ rative regulations, departmental rules,
securities regulatory rules of the place where the Company ’ss h a r e sa r el i s t e do rt h e
Articles of Association.
Shareholders ’ general meetings include annual general meetings and extraordinary general
meetings. The Company shall hold annual general meetings and extraordinary general meetings as
required by laws, administrative regulations, dep artmental rules, securities regulatory rules of the
place where the Company ’s shares are listed and the Articles of Association to ensure that
shareholders can exercise their rights in accordance with the law. Annual general meetings shall
be held by the Company once every year and within six months from the close of the preceding
fiscal year.
The Company shall convene an extraordinary general meeting within 2 months upon the
occurrence of the following events:
(I) the number of directors is less than the number as stipulated in Company Law or less
than two-thirds of the number as specified in the Articles of Association;
(II) the unrecovered losses of the Company amo unt to one-third of the total amount of its
paid-up share capital;
(III) requested by the shareholder(s) individua lly or collectively holding 10% or more of the
shares of the Company;
(IV) whenever the Board considers it necessary;
(V) when the Supervisory Committe e proposes to hold such a meeting;
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
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--- page 660 ---
(VI) any other circumstances as stipulated in the laws, administrative regulations,
departmental rules, securities regulat ory rules of the place where the Company ’s
shares are listed or the Articles of Association.
Convening of Shareholders ’ General Meetings
The independent non-executive directors shall have the right to propose to the Board to
convene an extraordinary general meeting. In response to a proposal by an independent non-
executive director to convene an extraordinary general meeting, the Board shall, in accordance
with the provisions of laws, administrative re gulations and the Articles of Association, give a
written response as to whether or not it agrees to c onvene an extraordinary general meeting within
10 days upon receipt of such proposal.
The Supervisory Committee shall have the r ight to propose to the Board to convene an
extraordinary general meeting. Such proposal shall be made to the Board in writing. The Board
shall give a written response as to whether or no t it agrees to convene s uch an extraordinary
general meeting within 10 days upon receipt of the proposal in accordance with the requirements
of the laws, administrative regula tions and the Articles of Association.
Shareholder(s) individually or collectively holding more than 10% of the shares of the
Company shall have the right to request the Board to convene an extraordinary general meeting.
Such request shall be made to the Board in writin g. The Board shall give a written response as to
whether or not it agrees to convene such an extraordinary general meeting within 10 days upon
receipt of the request in accordance with the requi rements of the laws, administrative regulations
and the Articles of Association.
If the Supervisory Committee or sharehold ers decide(s) to convene the shareholders ’ general
meeting by itself/themselves, it/they shall issue a written notice to the Board. Prior to the
resolutions of the shareholders ’ general meeting are made in accordance with the law, the shares
held by the convening shareholder(s) shall not be less than 10% of the shares of the Company.
Proposals and Notices of Shareholders ’ General Meetings
The Board, the Supervisory Committee, and shareholder(s) individually or jointly holding
more than 1% of the Company ’s shares shall have the right to make a proposal to the Company at
a shareholders ’ general meeting of the Company.
The shareholder(s) individually or join tly holding more than 1% of the Company ’ss h a r e s
may make provisional proposals in writing to the convener of a shareholders ’ general meeting 10
days prior to the meeting. The convener shall issue a supplementary notice of the shareholders ’
general meeting and announce the contents of such provisional proposals to the shareholders
within two days after receipt thereof.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
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--- page 661 ---
Except as provided by the preceding paragraph, the convener of a shareholders ’ general
meeting shall not amend the proposals already specified in the notice of the shareholders ’ general
meeting or add new proposals subsequent to the issue of the notice of the shareholders ’ general
meeting.
Proposals which are not specified in the notice of the shareholders ’ general meeting or
which do not comply with the Articles of Assoc iation shall not be voted on and resolved at the
shareholders ’ general meeting.
The convener shall notify shareholders by announcement 20 days prior to the date of the
annual general meeting (excluding the date of which the meeting is convened) and 15 days prior
to the date of the extraordinary general mee ting (excluding the date of which the meeting is
convened).
Holding of Shareholders ’ General Meetings
All shareholders of the ordinary shares registered on the register of shareholders on the
equity registration date or their proxies s hall be entitled to attend the shareholders ’ general
meeting and speak and exercise their and voting rights in accordance with the relevant laws,
regulations and the Articles of Association.
Any shareholder shall be entitled to attend th e meeting in person, or appoint a proxy to
attend, speak and vote on his/her behalf.
The shareholders ’ general meeting shall be presided over by the chairman of the Board.
Where the chairman cannot or fails to perform his/he r duties, half of the directors or more shall
jointly recommend one director to preside over the meeting.
A shareholders ’ general meeting convened by the Supervisory Committee itself 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/her du ties, one supervisor shall be elected jointly by
half or more of the supervisors to preside over the meeting.
The shareholders ’ general meeting convened by shareholder(s) itself/themselves shall be
presided over by a representative elected by the convener.
When a shareholders ’ general meeting is held and the presider violates the Rules of
Procedure in a way that makes it difficult for the shareholders ’ general meeting to continue, a
person may be elected at the shareholders ’ general meeting to act as the presider of the meeting
so as to carry on with the meeting, subject to the a pproval of more than one half of the attending
shareholders with voting rights.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 7


--- page 662 ---
The convener shall ensure that the shareholders ’ general meeting does not end until a final
resolution is made. In case the shareholders ’ general meeting is suspended or the shareholders ’
general meeting is prevented from passing a resolution due to force majeure or other special
reasons, necessary measures shall be taken to reconvene the meeting as soon as possible or to
directly terminate the meeting, and timely make announcements and reports in accordance with
laws, regulations or securities regulat ory rules of the place where the Company ’s shares are listed.
Voting and Resolutions at Shareholders ’ General Meetings
The resolutions of shareholders ’ general meetings shall be divid ed into ordinary resolutions
and special resolutions.
An ordinary resolution shall be adopted by more than one half of the votes held by the
shareholders (including proxies of shareholders) attending the shareholders ’ general meeting.
The following matters shall be approved by the shareholders ’ general meeting through
ordinary resolutions:
(I) work reports of the Board and the Supervisory Committee;
(II) profit distribution plans and loss recovery plans drafted by the Board;
(III) appointment or dismissal of the members of the Board and the Supervisory Committee
not represented by employees, their remunerations and the method of payment thereof;
(IV) the Company ’s annual budgets and final accounts;
(V) annual report of the Company;
(VI) other matters other than those approved by special resolution as stipulated in the laws,
administrative regulations or the Articles of Association.
A special resolution shall be adopted by more than two-thirds of the votes held by the
shareholders (including proxies of shareholders) attending the shareholders ’ general meeting.
The following matters shall be approved b y special resolution at the shareholders ’ general
meeting:
(I) the increase or decrease of the registered capital of the Company;
(II) division, merger, dissolution and liquidation of the Company or the change of form of
the Company;
(III) amendment of the Articles of Association;
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 8


--- page 663 ---
(IV) substantial assets acquired, disposed of or invested externally by the Company for an
amount exceeding 30% of the latest audited total assets of the Company within one
year;
(V) equity incentive plans;
(VI) other matters as required by the laws, adminis trative regulations, securities regulatory
rules of the place where the Company ’s shares are listed and the Articles of
Association, and confirmed by an ordinary resolution at a shareholders ’ general
meeting that it may have a material impact on the Company and accordingly shall be
approved by special resolutions.
Shareholders (including proxies thereof) who vote shall exercise their voting rights in
accordance with the number of voting shares represented by them, and each share carries the right
to one vote.
The Company has no voting right for the shares it holds, and such part of shares shall be
excluded from the total number of voting shares represented by the shareholders attending the
shareholders ’ general meeting.
In compliance with the provisions of applicable laws, regulations, sec urities regulatory rules
of the place where the Company ’s shares are listed, the Board, independent non-executive
directors and shareholders who meet the relevant requirements can openly gather voting rights
from shareholders. Voting rights shall be gathered with sufficient disclosure of information, such
as preference of vote, to shareholders from whom voting rights are gathered. Compensation or
compensation in disguise for the voting rights g athered is prohibited. Except for statutory
conditions, the Company shall not set a minimum sh areholding limit for gathering voting rights.
If any shareholder is required to abstain from v oting on a resolution or is restricted to voting
only in favour of or against a resolution under the Listing Rules of the Hong Kong Stock
Exchange, the votes cast by that shareholder or his proxy in violation of such requirements or
restrictions shall not be counted.
Shareholders attending the shareholders ’ general meeting shall present one of the following
views on the proposals submitted for voting: for, agai nst or abstention. The securities registration
and clearing organization shall be the nominal holder of shares under the Mainland China and
Hong Kong Stock Connect scheme, except where declaration is made in accordance with the
actual holder ’si n t e n t .
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 9


--- page 664 ---
The resolutions of the shareholders ’ general meeting shall be announced in a prompt manner
according to laws, regulations or securities regulatory rules of the place where the Company ’s
shares are listed, and the announcement shall state the number of shareholders and proxies
attending the meeting, the total number of voting shares held by them and the proportion of these
shares to the total number of voting shares of the Company, the form of voting, the voting result
of each proposal and the detailed content of each resolution passed.
Directors
Directors shall be elected or replaced at the shareholders ’ general meetings each for a term
of three years. A director may seek re-election upon expiry of the said term. If not otherwise
required by laws, any director (including the managing director or other executive directors) may
be removed by an ordinary resolution at a shareholders ’ general meeting before the expiry of his/
her term of office; however, the claim for compensation made by the director under any contract
shall not be affected by the removal.
The term of office of a director shall commence from the date on which the said director
assumes office to the expiry of the current term of the Board. If the term of office of a director
expires but re-election is not made in a timely ma nner, the said director shall continue to perform
the duties as director pursuant to the laws, administrative regulations, departmental rules and the
Articles of Association until the elected director assumes his/her office.
Without the violation the regulatory rules of the place where the Company ’ss h a r e sa r e
listed, director appointed by the Board to fill a casual vacancy or add the quota of directors of the
Board shall only serve from the date of appointment until the first annual general meeting of the
Company after his/her appointmen t and is eligible for re-election.
A director may serve concurrently as general manager or other senior management member,
provided that the aggregate number of the directors who serve concurrently as general manager or
other senior management members shall not exceed one half of the total number of directors of
the Company.
The Board of the Company does not have any director who is represented by employee.
A director may resign before expiry of his/her term of office. The resigning director shall
submit a written resignation to the Board. The B oard will disclose relevant information to
shareholders within two days.
In the event that the resignation of any director results in the number of members of the
Board of the Company being less than the statutory minimum requirement, the said director shall
continue to perform duties as director pursua nt to the laws, administrative regulations,
departmental rules and the Articles of Associa tion until the elected director assumes his/her
office.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 10


--- page 665 ---
Save for the circumstances in the preceding paragraph, the resignation of a director shall
become effective upon submission of his/her resignation to the Board.
If resignation of a director takes effect or if his/her term of office expires, the said director
shall go through all handover formalities with th e Board. His/her obligations of honesty to the
Company and shareholders thereof shall remain effective within one year upon the end of his/her
term of office.
The director ’s confidentiality obligation in respect of trade secrets of the Company survives
the termination of his/her term of office until su ch secrets become publicly known. Duration of
other obligations of honesty shall be determined following the principle of fairness, depending on
the length of time between the incident and the l eave, and the circumstances and conditions under
which the relationship with the Company ended.
Directors ‘ qualification shares: the articles of asso ciation do not provide for directors ’
qualification shares.
Board
The Board shall consist of 7 directors, with 3 independent non-executive directors and one
chairman. At all times, the Board shall have more than one-third independent non-executive
directors, and the total number of independent non-executive directors shall not be less than three.
At least one independent non-executive director shall have appropriate professional qualifications
in line with regulatory requirements or be equip ped with appropriate accounting or relevant
financial management expertise.
The Board shall consist of one chairman which shall be elected by a majority of all
directors.
The Board exercises the following powers:
(I) to convene the shareholders ’ general meeting and report on work to the shareholders ’
general meeting;
(II) to implement the resolutions of the shareholders ’ general meeting;
(III) to determine the business and investment plans of the Company;
(IV) to devise the annual financial budget and closing account plans of the Company;
(V) to devise the profit distribution plans and loss recovery plans of the Company;
(VI) to formulate the plans for increasing or decreasing the Company ’s registered capital,
the issuance of bonds or other securities, as well as the listing of the Company;
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 11


--- page 666 ---
(VII) to formulate plans for major acquisitions of the Company, the buy-back of shares of
the Company, or merger, division, dissolution and change of the form of the Company;
(VIII) to determine such matters as the Company ’s external investment, acquisition or sale of
assets, asset pledge, external guarantee, entrusting wealth management, connected
transaction within the scope authorized by the shareholders ’ general meeting;
(IX) to decide on the setup of the Company ’s internal management organization;
(X) to appoint or dismiss the Company ’s general manager and the secretary of the Board;
based on the nomination of the general manager, to appoint or dismiss senior
management members of the Company such as deputy general manager and finance
manager and determine their remunerations and rewards and punishments;
(XI) to set the basic management systems of the Company;
(XII) to make the modification plan to the Articles of Association;
(XIII) to manage the disclosure of company information;
(XIV) to propose the appointment or replacement of the accounting firm that performs audits
for the Company at the shareholders ’ general meeting;
(XV) to attend to the work report of the Company ’s general manager and review the work of
the general manager;
(XVI) assume the ultimate responsibility for money l aundering risk management and perform
the following duties: establish the goal of building a money laundering risk
management culture; review money laundering risk management strategies; approve
money laundering risk management policies and procedures; authorize senior
management to take the lead in money launder ing risk management; regularly review
anti-money laundering work reports and promptly understand major money laundering
risk events and remediation; and perform other relevant duties as required by relevant
laws, administrative regulations, departm ental rules and other normative documents;
(XVII) other powers and duties authorized by the laws, administrative regulations,
departmental rules, securities regulat ory rules of the place where the Company ’s
shares are listed or the Articles of Association.
Matters beyond the scope of authority of the shareholders ’ general meeting shall be
submitted to the shareholders ’ general meeting for deliberation.
Board meetings shall be held at least four times a year (about once a quarter) and shall be
convened by the chairman of the Board with writte n notice to all directors and supervisors 14
days prior to the meeting.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 12


--- page 667 ---
Shareholders representing more than one-tenth of the voting rights, more than one-third of
the directors or the supervisory committee may propose to convene an interim Board meeting.
The chairman shall convene and preside over a Board meeting within 10 days from the receipt of
the proposal.
Notices of interim Board meeting convened by the Board shall be sent by hand, mail, fax or
email. The notification time limit is at least 3 da ys before holding the meeting. The obligation to
notify in advance may be waived with the consent of all directors. If a director has attended the
meeting and has not raised any objection that the meeting notice has not been received before
attending the meeting or while attending the mee ting, the meeting notice s hall be deemed to have
been issued to him/her.
The Board meeting shall be attended by more than one half of the directors. Resolutions
made by the Board shall be approved by a majority of all directors. When the Board considers the
external guarantee, the resolution shall also be approved by at least two- thirds of the directors
present at the Board meeting.
Voting on the resolutions of the Board shall be conducted on a one-person-one-vote basis.
The voting procedure for Board resolutions is on-site voting.
To ensure that Directors can fully express their opinions, interim Board meetings may be
held in other ways and signed by the participating directors.
A director who is related/connected to an enter prise involved in a matter resolved at a board
meeting shall not exercise his/her voting rights on t hat resolution, nor shall he/she exercise his/her
voting rights on behalf of other directors. The B oard meeting shall be held with the attendance of
a majority of the unaffiliated/connected director s, and the resolutions made at the Board meeting
shall be passed by a majority of the unaffiliated dir ectors. If the number of unaffiliated/connected
directors attending the Board meeting is less t han three, the matter shall be submitted to the
shareholders ’ meeting for consideration.
Borrowing Authority
The Articles of Association do not contain any specific provision regarding the exercise of
borrowing authority by the Directors.
Senior Management
The Company shall consist of one general manager who is appointed or dismissed by the
Board. The general manager, deputy general manager, financial controller and secretary of the
Board are the senior management personnel of the Company.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 13


--- page 668 ---
General Manager
Each term of office of the general manager is three years and is renewable upon re-election.
The general manager is responsible to the Board and exercises the following powers:
(I) to be in charge of the production and operational management of the Company,
organize the enforcement of resolutions of the Board and report to the Board on work;
(II) to organize the implementation of the annu al operation plans an d investment schemes
of the Company;
(III) to formulate the structure scheme of the internal management department of the
Company;
(IV) to formulate the fundamental management policies of the Company;
(V) to formulate the specific management rules of the Company;
(VI) to propose to the Board of Directors the appointment or dismissal of senior
management such as the Company ’s deputy general manager and finance controller;
(VII) to decide on the appointment or dismissal of responsible management personnel except
those whose appointment or dismissal shall be determined by the Board of Directors;
(VIII) other functions and powers authorized by the Articles of Association and the Board.
The general manager shall attend the B oard meetings without voting rights.
Secretary of the Board
The Company shall have a secretary of the Board who shall be nominated by the chairman
and appointed or dismissed by the Board. Before the expiration of the term of the secretary of the
Board, the Company shall have sufficient reasons for dismissing the secretary of the Board and
shall not dismiss him/her without reason. The secretary of the Board is responsible for the
preparation and document storage for the Company ’s shareholders ’ general meetings and Board
meetings, as well as the management of the Company ’s shareholder information and handling
information disclosure matters.
Supervisory Committee
The Company shall have a Supervisory Co mmittee comprised of 3 supervisors.
The supervisory committee shall have one chairman which is elected by at least a majority
of its members by voting.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 14


--- page 669 ---
Meetings of the Supervisory Committee sha ll be convened and p resided over by the
chairman of the Supervisory Committee; if the ch airman of the Supervisory Committee is unable
or fails to perform his/her duties, a supervisor who has been elected by more than one half of the
supervisors shall convene and preside over the meeting of the Supervisory Committee.
The Supervisory Committee shall comprise sh areholder representatives and employee
representatives, in which its proportion shall not be less than one-third.
The shareholder representatives in the Sup ervisory Committee shall be elected by the
shareholders ’ general meeting; the employee representa tive shall be elected democratically by the
employees of the Company at the employee representatives ’ meeting.
The Supervisory Committee shall exercise the following powers:
(I) to examine the regular reports of the Company prepared by the Board of Directors and
produce written opinions thereon;
(II) to examine the financial operations of the Company;
(III) to supervise the performance of duties t o the Company by the directors and senior
management, and propose dismissal of any director or senior management member
who violates the laws, administrative reg ulations, the Articles of Association or
resolutions of shareholders ’ general meeting;
(IV) to require directors and senior management members to make corrections if their
conduct has damaged the interests of the Company;
(V) to propose the convening of an extraordinary general meeting, and to convene and
preside over the shareholders ’ general meeting when the Bo ard of Directors fails to
perform such duties as specified in the Company Law;
(VI) to submit proposals to the shareholders ’ general meeting;
(VII) to institute legal proceedings against the directors and senior management members
according to the Company Law;
(VIII) in the event that the Supervisory Committe e discovers any unusual operation of the
Company, it may conduct an investigation and, when necessary, may engage
professionals, such as accounting firms and law firms, to assist in its work; any
expenses incurred thereby shall be borne by the Company;
(IX) to exercise other functions and powers as specified in the laws, administrative
regulations, departmental rules, securi ties regulatory authorities where the Company ’s
shares are listed and the Articles of Association.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 15


--- page 670 ---
Financial and Accounting System
In distributing the after-tax profit of the current year, the Company shall withdraw 10% of
the profit as its statutory reserve fund. When the aggregate amount of the statutory reserve fund
of the Company is more than 50% of its registered capital, further appropriations are not required.
Where the statutory reserve fund of the Company is insufficient to make up for the losses of
the previous year, the profits of the current year shall be used to make up for such losses before
making allocation to its statutory reserve fund in accordance with the preceding paragraph.
After withdrawing statutory reserve fund from after-tax profit, the Company may, subject to
a resolution of the shareholders ’ general meeting, withdraw discretionary reserve fund from after-
tax profit.
After making up for the losses and making allo cations to the reserve funds, any remaining
after-tax profit shall be distributed by the Com pany to the shareholders in proportion to their
respective shareholdings unless otherwise specified in the Articles of Association.
If the shareholders ’ general meeting has, in violation of the provisions of the preceding
paragraph, distributed profits to shareholders before the Company has made up for its losses and
made allocations to its statutory reserve fund, the shareholders shall return to the Company the
profit distributed in violation of the provisions.
The Company ’s shares held by the Company are not e ntitled to any profit distribution.
The reserve fund of the Company can be used for making up for losses of the Company,
expanding the Company ’s production and operation or increasing the registered capital of the
Company.
To make up for the Company ’s loss from the reserve fund, di scretionary reserve fund and
statutory reserve fund shall be used first; if it still cannot be made up, the capital reserve fund can
be used in accordance with regulations.
Where the statutory reserve fund is converted into capital, the balance of the reserve fund
shall not fall below 25% of the Company ’s registered capital prior to such conversion.
The policy of profit allocation of the Company shall be:
(I) Profit distribution principles: The Com pany adopts consistent and stable profit
distribution policy, which should emphasize on investors ’ reasonable investment return
and take into account the immediate and long-term interests of shareholders to ensure
the Company ’s sustainable development.
(II) Means of profit distribution: The Company may distribute profits in the form of cash,
shares and by the combination of cash and share or otherwise as permitted by the law
and regulations.
APPENDIX V SUMMARY OF ARTICLE OF ASSOCIATION
V – 16


--- page 671 ---
FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of our Company
Our Company was established as a joint stock company with limited liability in the PRC on
December 28, 2011. As of the Latest Practicable Date, the registered share capital of our
Company was RMB358,269,000.
Our Company has established a place of business in Hong Kong at Room 504, 5/F, Cheong
Tai Commercial Building, 60-66 Wing Lok Street , Sheung Wan, Hong Kong and has registered as
a non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance on August
23, 2024. Mr. Tam Ka Lung, the joint company secretary of our Company, has been appointed as
our authorized representative for the acceptance of service of process in Hong Kong whose
correspondence address is the same as our place of business in Hong Kong.
2. Changes in Share Capital of our Company
There has been no alteration in our share capita l within two years immediately preceding the
date of this prospectus.
3. Changes in the Share Capital of our Subsidiaries
Shoto Technology (Malaysia) Sdn Bhd
On February 7, 2024, Shoto Technology (Malaysia) Sdn Bhd was incorporated in
Malaysia as private company limited by sh ares with the authorized share capital of
RM2,500,000 divided into 2,500,000 shares of RM1.00 each.
Save as disclosed above, there has been no alteration in share capital of our
subsidiaries within two years immediatel y preceding the date of this prospectus.
4. Resolutions of the Shareholders
Pursuant to a general meeting of our Shareholders held on July 19, 2024, the following
resolutions, among others, were passed by our Shareholders:
(a) the issue by our Company of H Shares of nominal value of RMB1.00 each and that
such H Shares be listed on the Hong Kong Stock Exchange;
(b) that the number of H Shares to be issued shall not be more than 25% of the total
issued share capital of our Company as enlarged by the Global Offering, and the grant
to the underwriters (or their re presentatives) of the Over-allotment Option of not more
than 15% of the number of H Shares issued pursuant to the Global Offering;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 1


--- page 672 ---
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effective on the Listing Date, and the authorization to
the Board to amend the Articles of Associati on in accordance with the requirements of
the relevant laws and regulations and the Listing Rules; and
(d) authorization of our Board to handle all relevant matters relating to, among other
things, the issue and listing of the H Shares.
FURTHER INFORMATION ABOUT T HE BUSINESS OF OUR COMPANY
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) the cornerstone investment agreement dated August 14, 2025 entered into among the
Company, Sanshui Venture Capital Co., Limited （三水創業投資有限公司）(‘‘Sanshui
VC’’), Taizhou Sanshui Investment Development Co., Ltd. （泰州三水投資開發有限公
司）, China International Capital Corporation Hong Kong Securities Limited （中國國際
金融香港證券有限公司）, Huatai Financial Holdings (Hong Kong) Limited （華泰金融
控股(香港)有限公司）and CCB International Capital Limited （建銀國際金融有限公
司）, pursuant to which Sanshui VC agreed to subscribe for such number of H Shares
at the Offer Price in an aggregate investm ent amount of RMB220 million (exclusive of
the brokerage, AFRC transaction levy, SFC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares); and
(b) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we have r egistered the followi ng trademarks, which
we consider to be material to our business:
No. Trademark Class Owner
Place of
registration Registration no. Expiry date
1( A )
 9 Our Company Hong Kong 306538861 April 25, 2034
(B)
2( A )
 9 Our Company Hong Kong 306538870 April 25, 2034
(B)
3( A )
 9 Our Company Hong Kong 306538889 April 25, 2034
(B)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 2


--- page 673 ---
No. Trademark Class Owner
Place of
registration Registration no. Expiry date
4( A )
 9 Our Company Hong Kong 306538898 April 25, 2034
(B)
5( A )
 9 Our Company Hong Kong 306538906 April 25, 2034
(B)
6( A )
 9 Our Company Hong Kong 306538915 April 25, 2034
(B)
7
 9 Our Company PRC 5097936 December 27, 2028
8
 9 Our Company PRC 21853796 December 27, 2027
9
 9 Our Company PRC 4901524 September 6, 2028
10
 9 Our Company PRC 49723315 May 6, 2031
11
 9 Our Company PRC 49738158 July 6, 2031
12
 9 Our Company PRC 49722722 July 6, 2031
13 (A)
 9 Our Company Hong Kong 306538861 April 25, 2034
(B)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 3


--- page 674 ---
No. Trademark Class Owner
Place of
registration Registration no. Expiry date
14 (A) 9 Our Company Hong Kong 306538870 April 25, 2034
(B)
15 (A)
 9 Our Company Hong Kong 306538889 April 25, 2034
(B)
16 (A)
 9 Our Company Hong Kong 306538898 April 25, 2034
(B)
17 (a)
 9 Our Company Hong Kong 306538906 April 25, 2034
(B)
18 (A)
 9 Our Company Hong Kong 306538915 April 25, 2034
(B)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 4


--- page 675 ---
Patents
As of the Latest Practicable Date, we have registered the following patents which we
consider to be material to our business:
No Patent description Owner Patent number
Place of
registration
1 A special vehicle lithium-ion battery
electrical control system and its mode
of operation （一種特種車鋰電池電氣
控制系統及其工作模式）
our Company 2019109380973 PRC
2 A thermal design method for box-type
energy storage system （一種箱式儲能
系統熱設計方法）
our Company,
Huifeng Juneng
2020108159172 PRC
3 Temperature control method and device
for decentralized container air-cooled
energy storage system （應用於分布式
集裝箱風冷儲能系統的溫度控制方法
及裝置）
our Company,
Huifeng Juneng
2023108717967 PRC
4 A system and method for alarming the
failure of monomer battery in an
energy storage power station （儲能電
站單體電池故障預警系統及方法）
Huifeng Juneng 2022116300138 PRC
5 A lithium-ion battery performance
improvement method （一種鋰離子電
池性能提升方法）
our Company, Front 2020115975762 PRC
6 A process for preparing acid-free
colloidal accumulators （一種免倒酸膠
體蓄電池製備工藝）
our Company,
Hubei Runyoung
2021100239008 PRC
7 An energy management device and
method for energy storage system
applied to power unstable loads （一種
應用於功率不穩定負載的儲能系統能
量管理裝置及方法）
our Company,
Huifeng Juneng
2022111409026 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 5


--- page 676 ---
No Patent description Owner Patent number
Place of
registration
8 A method and device for economic
evaluation of energy storage system
configurations for photovoltaic power
plants（一種光伏電站儲能系統配置的
經濟性評估方法及裝置）
our Company,
Huifeng Juneng
202211250007X PRC
9 A method of forming a PVC spacer
colloidal storage battery （一種PVC隔
板膠體蓄電池的化成方法）
Hubei Runyoung 2022103495617 PRC
10 A manufacturing method of lead-acid
energy storage battery electrode plate
（一種鉛酸蓄電池極板的製作方法）
our Company 2022105260550 PRC
11 A method of forming lead-acid energy
storage battery for power system （一
種電力系統用鉛酸蓄電池內化成方
法）
our Company 2021106137154 PRC
12 An overvoltage detection and energy
absorption device （一種過
壓檢測與能
量吸收裝置）
our Company 2021114114614 PRC
13 A semi-solid state battery with stable
interface perform ance and its method
of production （一種具有穩定介面性能
的半固態電池及其製作方法）
our Company, Front 2021115300206 PRC
14 A high temperature resistant lithium-ion
battery（一種耐高溫鋰離子電池）
Front, our Company 2021100495254 PRC
15 A preparation method of solid state
lithium-ion battery electrodes （一種固
態鋰離子電池極片的製備方法）
our Company, Front 2021115489222 PRC
16 A preparation method of ultrafine
lithium-iron phosphate anode material
（一種超細磷酸鐵鋰正極材料的製備方
法）
Front 2021115522288 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 6


--- page 677 ---
No Patent description Owner Patent number
Place of
registration
17 A charging and discharging control
method of lead-carbon storage battery
for power frequency regulation （功率
調頻用鉛碳貯能電池充放電控制方
法）
our Company 2019109166325 PRC
18 A method of controlling, evaluating, and
repairing thermal failure of lead-acid
energy storage battery （鉛酸蓄電池熱
失控控制、評價與修復方法）
our Company 2019109406564 PRC
19 A method to improve the service life of
lead-carbon bat tery anode ring （一種
提高鉛碳電池正極迴圈使用壽命的方
法）
our Company 2019112766940 PRC
20 A kind of colloidal storage battery
positive plate grid alloy and its
corrosion test method （一種膠體蓄電
池正極板柵合金及其腐蝕測試方法）
Hubei Runyoung,
our Company
2021102170257 PRC
21 A fast curing and drying method for
laminated electrode plates （一種疊片
式極板快速固化乾燥方法）
our Company 2020111623887 PRC
22 A pre-charging method of lithium-ion
battery pack for electric bicycles （一
種電動自行車用鋰離子電池組預充方
法）
our Company, Front 2020110753436 PRC
23 An activated carbon microporous
protection method （一種活性炭微孔保
護方法）
our Company 2019108850740 PRC
24 A hybrid power supply method for 5G
base stations （用於5G基站的混合供電
方法）
Huifeng Juneng 201911372216X PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 7


--- page 678 ---
No Patent description Owner Patent number
Place of
registration
25 Energy control system and control
method for hybrid power supply
system for communication base
station（用於通信基站混合供電系統
的能量控制系統及控制方法）
Huifeng Juneng 2020102108730 PRC
26 Battery rack with lifting function and its
lifting method （帶提升功能的電池架
及其提升方法）
Huifeng Juneng 2018109874413 PRC
27 Grid-connected energy storage control
system and control method （儲能並網
控制系統及控制方法）
Huifeng Juneng 2020102108764 PRC
28 Demand Response Control System and
Control Method for Grid Load Storage
（網荷儲需求響應控制系統及控制方
法）
Huifeng Juneng 2020102109381 PRC
29 Control system and control method for
island wind and light diesel storage
microgrids（用於海島風
光柴儲微電網
的控制系統及控制方法）
Huifeng Juneng 2020102108603 PRC
30 Activation method for lead-acid energy
storage battery with insufficient
capacity（用於容量不足的鉛酸蓄電池
活化方法）
our Company 2018109860849 PRC
31 Polyethylene oxide solution injection
process for all-solid-state lithium
battery（用於全固態鋰電池的聚氧化
乙烯溶液注裝工藝）
our Company,
Tongji University,
Front
2018109866239 PRC
32 Development and testing of microgrid
energy management algorithm and
development and testing system （微電
網能量管理演算法的開發與測試方法
及開發與測試系統）
Huifeng Juneng 2019108349808 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 8


--- page 679 ---
No Patent description Owner Patent number
Place of
registration
33 Thermal management system for energy
storage containers in alpine areas （高
寒地區儲能集裝箱熱管理系統）
Huifeng Juneng 201811567634X PRC
34 Battery storage container environmental
control system （電池儲能集裝箱環境
控制系統）
Huifeng Juneng 2018115676354 PRC
35 A modified cyclic phosphoronitrile flame
retardant additive and preparation
method for lithium battery electrolyte
（一種鋰電池電解液用改性環狀磷腈阻
燃添加劑及製備方法）
our Company 2020100945891 PRC
36 An overcharge prevention safety
electrolyte for lithium battery （一種用
於鋰電池的防過充安全電解液）
our Company 2020100945660 PRC
37 A lithium-ion battery electrode
processing method （一種鋰離子電池
極片加工方法）
our Company 2019109551106 PRC
38 A constant power recirculation mode for
lead-acid energy storage battery （儲能
用鉛酸蓄電池恒功率迴圈模式）
our Company 2017113657867 PRC
39 Lead-carbon colloid battery polar plate
lead paste and its preparation methods
（鉛碳膠體電池極板鉛膏及其製備方
法）
Hubei Runyoung 2016106286675 PRC
40 Evaluation method of abusive over-
discharge performance of lead-acid
energy storage battery and capacity
restoration method （鉛酸蓄電池濫用
過放電性能評價方法及容量恢復方
法）
our Company 2018107952795 PRC
41 A mould release agent for casting plate
and its preparation method （一種鑄板
脫模劑及其製備方法）
Hubei Runyoung 2017103615868 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 9


--- page 680 ---
No Patent description Owner Patent number
Place of
registration
42 Battery rack for energy storage
containers（儲能集裝箱用電池架）
Huifeng Juneng 2018109885210 PRC
43 Method for retarding the corrosion rate
of lead-acid energy storage battery
anode grids （延緩鉛酸蓄電池正極板
柵腐蝕速率的方法）
our Company 2017106519097 PRC
44 Connection method for energy storage
battery in container （集裝箱儲能電池
的連線方法）
Huifeng Juneng,
our Company
2016110054897 PRC
45 Lead-carbon colloidal battery colloidal
electrolyte formula and its preparation
method（鉛碳膠體電池膠體電解質配
方及其製備方法）
Hubei Runyoung 2016106287165 PRC
46 Method of compounding electrode
grating for lead-acid energy storage
battery grating （鉛酸蓄電池板柵的極
耳複合成型方法）
our Company 2016112331235 PRC
47 Undercharge loop formulation for
matching lead carbon battery in
energy storage scenarios （適用於儲能
場景匹配鉛炭電池的欠充迴圈制式）
our Company 2016110055688 PRC
48 Multi-stage recircu lation activation
process for lead-acid energy storage
battery for energy sto rage applications
（貯能用鉛酸蓄電池多階段迴圈化成活
化工藝）
our Company 2016110056089 PRC
49 Accelerated test method for sealing
performance of lead-acid energy
storage battery terminals （鉛酸蓄電池
端子密封性能加速測試方法）
Hubei Runyoung 2016106301779 PRC
50 Fuel cell rechargeable gas supply
conveying system （燃料電池可充裝式
供氣匯流系統）
our Company 2016108093234 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 10


--- page 681 ---
No Patent description Owner Patent number
Place of
registration
51 Proton exchange membrane fuel cell
modular cartridge integration system
（質子交換膜燃料電池模組化插箱集成
系統）
our Company 2016103063834 PRC
52 Lead-acid energy storage battery internal
double buffer heat seal structure （鉛酸
蓄電池內置雙緩衝熱封結構）
our Company 201610809322X PRC
53 Lead-acid energy storage battery busbar
soldering methods （鉛酸蓄電池匯流排
焊接方法）
Hubei Runyoung 2016106286694 PRC
54 Connection method of conductive carbon
f e l ta n dl e a de l e c t r o d e s（導電碳氈與
鉛質極耳的連接方法）
our Company 2016112332295 PRC
55 Preparation method of positive activator
for lead-carbon battery for energy
storage purposes （貯能用鉛碳電池正
極活化物質的製備方法）
our Company 2016103072509 PRC
56 Lead-carbon coil battery for automotive
start-stop applications （汽車起停用鉛
碳捲繞蓄電池）
our Company 2016103070429 PRC
57 A high specific energy lead-acid battery
production method （一種高比能量鉛
酸電池製作方法）
our Company 2015106309723 PRC
58 Three-dimensional adjustable
rechargeable pile co il inspection stand
（三維可調式充電樁線圈檢測台基架）
Huifeng Juneng,
our Company
2016101746282 PRC
59 Lead-acid energy storage battery
negative plate production method （鉛
酸蓄電池負極板製作方法）
our Company 2015105888220 PRC
60 Pneumatic lead pumping device for lead-
acid energy storage battery production
（鉛酸蓄電池製作用氣動泵鉛裝置）
our Company 2016100956762 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 11


--- page 682 ---
No Patent description Owner Patent number
Place of
registration
61 Preparation method of ultra capacitive
graphene for lead-carbon battery （用
於鉛炭電池的超電容石墨烯的製備方
法）
our Company 2014102692929 PRC
62 Lead-acid energy storage battery for
micro-hybrid automotive start-stop
system（微混汽車起停系統用鉛酸蓄
電池）
our Company 2014106671387 PRC
63 Lead-acid energy storage battery y
lifting handle （鉛酸蓄電池托起提手）
our Company 2014102023883 PRC
64 Long life depleted liquid lead-acid
energy storage battery production
method（長壽命貧液式鉛酸蓄電池製
作方法）
our Company 2014102121477 PRC
65 Humidification and anode exhaust gas
treatment device for proton exchange
membrane fuel cells （質子交換膜燃料
電池增濕及陽極尾氣處理裝置）
our Company 2013107021911 PRC
66 Portable proton exchangeable membrane
fuel cell power system （便擕式質子交
換膜燃料電池電源系統）
our Company 2013105290059 PRC
67 A method of forming a gel battery （一種
膠體電池配組方法）
our Company 2013102619312 PRC
68 A fuel cell backup power system for
telecommunication application （一種
基於通信用燃料電池備用電源系統）
Huifeng Juneng 2012105381937 PRC
69 Humidification device for proton
exchange membrane fuel cell （質子交
換膜燃料電池的增濕裝置）
Huifeng Juneng 2012104706575 PRC
70 Electrolyte dosing device （電解液定量注
液裝置）
our Company 2012103957877 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 12


--- page 683 ---
Domain Names
As of the Latest Practicable Date, we have registered the following domain names
which we consider to be material to our business:
No. Owner Domain name Registration date Expiry date
1 Our Company shuangdeng.com.cn March 21, 2000 March 21, 2030
2 Our Company chinashoto.com January 28, 2005 January 28, 2027
3 Our Company shotomall.com March 2, 2017 March 2, 2028
4 Our Company chinashoto.cn January 28, 2005 January 28, 2027
5 Huifeng Juneng shotosolar.c om February 10, 2014 February 10, 2030
Save as disclosed above, as of the Latest Pra cticable Date, there was no other trade or
service mark, patent, intellectual or industrial property right which was material in relation to our
business.
FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS AND
SUBSTANTIAL SHAREHOLDERS
1. Disclosure of Interests
Immediately following completion of the Global Offering (assuming that all the Over-
allotment Option is not exercised and no options are granted or exercised under the Employee
Incentive Schemes), so far as our Directors are aware, none of our Directors, Supervisors and
chief executive has any interest or short positions in our Shares, underlying Shares or debentures
of our Company or any associated corporations (within the meaning of Part XV of the SFO)
which will have to be notified to our Company a nd the Hong Kong Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are
taken or deemed to have under such provisions of the SFO), or which will be required, pursuant
to section 352 of the SFO, to be entered in the r egister referred to therein, or which will be
required to be notified to our Company and th e Hong Kong Stock Exchange pursuant to the
Model Code for Securities Transactions by Direct ors of Listed Issuers contained in the Listing
Rules.
2. Substantial Shareholders
For the information on the persons who will, immediately following the completion of the
Global Offering, have interests or short positions in our Shares or underlying Shares which would
be required to be disclosed to our Company and the Hong Kong Stock Exchange under the
provisions of Divisions 2 and 3 of Part XV of the SFO, see ‘‘Substantial Shareholders ’’ in this
prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 13


--- page 684 ---
3. Service Contracts
Each of our Directors and Supervisors has entered into a service contract with our Company.
The principal particulars of these service contracts comprise (a) a term of three years commencing
from the date of appointment; and (b) termination p rovisions in accordance with their respective
terms. Our Directors may be re-a ppointed subject to Shareholders ’ approval.
Save as disclosed above, none of our Directors and Supervisors has or is proposed to have
entered into any service contract with any member of our Group (excluding contracts expiring or
determinable by any member of our Group within one year without payment of compensation
other than statutory compensation).
4. Remuneration of Directors and Supervisors
Save as disclosed in the section headed ‘‘Directors, Supervisors and Senior Management ’’in
this prospectus and note 8 to the Accountants ’ Report for the years ended December 31, 2022,
2023 and 2024 and five months ended May 31, 2025, none of our Directors or Supervisors
received other remunerations of benefits in kind from us.
5. Employee Incentive Schemes
The following is a summary of the princip al terms of the Employee Incentive Schemes
approved and adopted by our Shareholders ’ meeting in June 2019 and in December 2022,
respectively and as amend from time to time (collectively, the ‘‘Schemes ’’). The terms of the
Schemes are not subject to the provisions of Chap ter 17 of the Listing Rules as the Schemes does
not involve the grant of options by our Company after the Listing. Given the underlying Shares
under the Employee Incentive Schemes had already been issued, there will not be any dilution
effect to the issued Shares upon the vesting of the awards under the Employee Incentive Schemes.
As of the Latest Practicable Date, the Company had established three Employee Incentive
Platforms, namely Taizhou Heying and Taizho u Hexin. Each of Taizhou Heying and Taizhou
Hexin holds 19,000,000 Shares and 13,600,000 Shares directly, respectively. For the details of the
Employee Incentive Platforms, please see ‘‘History, Development and Corporate Structure –
Employee Incentive Schemes ’’in this prospectus.
Objectives
The purpose of the Schemes is to build an incentive mechanism for the employees of
our Company, raising the competitiveness o f our Company in the labour market. The
Schemes also serve the purpose of attractin g, stabilizing and recruiting future senior
management and professionals.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 14


--- page 685 ---
Eligibility
Pursuant to the scheme documents (the ‘‘Scheme Documents ’’) and the award offers
(the ‘‘Award Offers ’’), participants of the Schemes include our Directors, Group ’sc o r e
employees, senior management members and employees who had great contribution to the
development of our Company. The Scheme D ocuments provided that the following
employees may not be selected as participants to the Schemes (as applicable):
 Employees have terminated the employment relationship with the Group prior to
expiration of service period (60 months from the respective grant date);
 Employees who have convicted of crime;
 Employees who have misconducted or commit damage to our Company ’s interest;
 Employees who have misappropriated, stole and revealed our Company ’s
technology and secrets or made investment in competitors; and
 Employees who are otherwise not eligible according to the discretionary decision
by the Board.
G r a n to fA w a r d s
The general partner of each of Taizhou Heying and Taizhou Hexin is Taizhou
Hechuang, the general partner of which is Taizhou Hanfu (wholly owned by Mr. Yang).
Thus, in effect, all management powers and voting rights of the Employee Incentive
Platforms reside with Taizhou H echuang, indirectly, Mr. Yang.
All selected participants do not have any voting rights in our Company. The selected
participants will be granted awards in the form of economic interest in the Employee
Incentive Platforms conditional upon certain conditions as specified in Scheme Documents
and the Award Offers and upon completion of payment with respective amount of exercise
price, such selected particip ants will become a limited partner of Taizhou Heying or Taizhou
Hexin.
Having comprehensively considered vario us factors such as position, number of years
employed at our Company, salary and contribution to our Company, the Board determines
the identities of the participants (the ‘‘Participants ’’), the amount of awards and
subscription price of the awards. The Particip ants then sign an equity incentive agreement
with the Company (if any), contribute the corr esponding subscription price to the relevant
Employee Incentive Platforms as capital contr ibutions, and sign a partnership agreement
with the other partners of the relevant Employee Incentive Platforms.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 15


--- page 686 ---
Administration of the Schemes
Pursuant to the Schemes, Shareholders are responsible for approving the
implementation, alteration and termination o f the Schemes. Our Board is responsible for
daily management of the Schemes, including, se lection of Participants, number of awards to
be granted, exercise price, and the exec ution and interpretation of the Schemes.
Disposals
Pursuant to the terms of the Scheme Documents, unless otherwise required by the
CSRC or the Stock Exchange, the selected par ticipants shall be subject to a lock-up period
of 36 months.
After the Company is listed and the lock- up period of the awards expires with more
than two third partnership interest of the Empl oyee Incentive Platfor ms mutually agreed, the
Employee Incentive Platforms will reduce its equity interests in our Company. The
Participants may request to reduce their share holdings according to the relative shareholding
ratio, and the consideration (after deduction o f costs, transaction fees and taxes) from such
sales of equity interest in our Company will be distributed to the Participants.
6. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors, Supervisors or any of the parties listed in the paragraph headed
‘‘ — Other Information — 5. Qualifications of Experts ’’in this Appendix is:
(i) interested in our promotion, or in an y assets which have been, within two years
immediately preceding the date of this prospectus, acquired or disposed of by or
leased to us, or are proposed to be acquired or disposed of by or leased to any
member of our Company; or
(ii) materially interested in any contract o r arrangement subsisting at the date of this
prospectus which is significant in relation to our business;
(b) save in connection with the Hong Kong Unde rwriting Agreement and the International
Underwriting Agreement, none of the par ties listed in the paragraph headed ‘‘ — Other
Information — 5. Qualification of Experts ’’in this Appendix:
(i) is interested legally or beneficially in any shares in any member of our Group; Or
(ii) has any right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for any securities in any member of our Group;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 16


--- page 687 ---
(c) none of our Directors or Supervisors is a director or employee of a company that has
an interest in the share capital of our Comp any which, once the H Shares are listed on
the Hong Kong Stock Exchange, would have to be disclosed pursuant to Divisions 2
and 3 of Part XV of the SFO; and
(d) so far as is known to our Directors, none of our Directors or Supervisors or their
respective close associates (as defined un der the Listing Rules) or Shareholders who
owns more than 5% of the issued shares of our Company has any interests in the five
largest customers or the five largest suppliers of our Group.
OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to impose
on our Company or any of our subsidiaries under the laws of the PRC.
2. Litigation
As of the Latest Practicable Date, no membe r of our Group was involved in any litigation,
arbitration or claim of material importance, and, so far as we are aware, no litigation, arbitration
or claim of material importance is pending or threatened against any member of our Group, which
would have a material adverse effect on our financi al condition or results of operations, taken as a
whole.
3. Joint Sponsors
The Joint Sponsors has made an application on behalf of our Company to the Hong Kong
Stock Exchange for the listing of, and permission to deal in, our H Shares.
The each of the Joint Sponsors satisfies the inde pendence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules. Each of the Joint Sponsors will receive a fee of
US$350,000 for acting as the sponsor for the Global Offering.
4. Preliminary expenses
As of the Latest Practicable Date, our Comp any has not incurred material preliminary
expenses.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 17


--- page 688 ---
5. Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance) who have given opinions and/or advice
in this prospectus are as follows:
Name Qualifications
China International Capital
Corporation Hong Kong
Securities Limited
Licensed 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) of regulated
activities as defined under the SFO
Huatai Financial Holdings (Hong
Kong) Limited
Licensed corporation under the SFO to conduct type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 3 (leveraged foreign exchange trading), type 4
(advising on securities), typ e 6 (advising on corporate
finance), type 7 (providing automated trading services) and
type 9 (asset management) regulated activities
CCB International Capital Limited Licensed t o conduct Type 1 (dealing in securities), Type 4
(advising on securities) and Type 6 (advising on corporate
finance) of regulated activities as defined under the SFO
Ernst & Young Certified Public Accounta nts and Registered Public Interest
Entity Auditor
JC Master Law Offices Company ’s PRC legal advisor
Hogan Lovells Company ’s International Sanctions Legal Advisor
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Industry consultant
6. Consents
Each of the experts as referred to in the paragraph headed ‘‘ — Other Information — 5.
Qualifications of Experts ’’ in this Appendix has given and h as not withdrawn its respective
written consents to the issue of this prospectus with the inclusion of certificates, letters, opinions
or reports and the references to its name included herein in the form and context in which it
respectively included.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 18


--- page 689 ---
7. Taxation of Holders of H Shares
(1) Hong Kong
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The
current rate charged on each of the purchaser and seller is 0.1% of the consideration or, if
higher, the fair value of the H Shares being sold or transferred. For details, see ‘‘Appendix
IV — Summary of Principal Legal and Regulatory Provisions ’’in this prospectus.
(2) Consultation with professional advisors
Potential investors in the Global Offering are urged to consult their professional tax
advisors if they are in any doubt as to the taxation implications of subscribing for,
purchasing, holding or disposing of or dealing i n our H Shares (or exercising rights attached
to them). None of our Company, our Directors, the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, or any other person or party involved in the Global
Offering accept responsibility for any tax eff ects on, or liabilities of, any person, resulting
from the subscription, purchase, holding or disposal of, dealing in or the exercise of any
r i g h t si nr e l a t i o nt oo u rHS h a r e s .
8. No Material Adverse Change
Our Directors confirm that, as of the date of this prospectus, there has been no material
adverse change in the financial or trading po sition of our Company since December 31, 2024.
9. Promoters
Save as disclosed in this prospectus, with in the two years preceding the date of this
prospectus, no cash, securities or other benefit has been paid, allotted or given or is proposed to
be paid, allotted or given to any promoter in con nection with the Global O ffering and the related
transactions described in this prospectus.
10. Restrictions on Repurchase
For details, see Appendices IV and V to this prospectus.
11. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 19


--- page 690 ---
12. Bilingual Prospectus
The English and Chinese language version so ft h i sp r o s p e c t u sa re being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter
32L of the Laws of Hong Kong).
13. Miscellaneous
Save as otherwise disclosed in this prospectus:
(a) within the two years preced ing the date of this prospectus, (i) our Company has not
issued nor agreed to issue any share or loan capital fully or partly paid either for cash
or for a consideration other than cash; and ( ii) no commission, discount, brokerage or
other special term has been granted in connection with the issue or sale of any shares
of our Company;
(b) no Share or loan capital of our Compan y, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) our Company has not issued nor agreed to issue any founder shares, management
shares or deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) there is no arrangement under which future dividends are waived or agreed to be
waived;
(f) 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;
(g) our Company is not presently listed on any stock exchange or traded on any trading
system; and
(h) our Company is a joint stock limited company and is subject to the PRC Company
Law.
14. Resignation of Directors and Supervisors during the Track Record Period
M r .Y a n ga n dM r .Z h o uP i n g（周平）resigned as Directors and Mr. Huang Xiaomin （黃曉
敏）and Mr. Wang Zhaobin （王兆斌）resigned as Supervisors during the Track Record Period for
the following reasons:
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 20


--- page 691 ---
(a) Mr. Yang
Mr. Yang, aged 71, was appointed as a Director in December 2011. He voluntarily
resigned in May 2021 due to his willing to transition to his retirement life. Mr. Yang has
confirmed that he has no disputes with the Group.
(b) Mr. Zhou Ping
Mr. Zhou Ping, aged 52, was appointed as a Director in December 2011. He
voluntarily resigned in January 2022 due to the need to devote more time for his other
commitments and family. Mr. Zhou Ping has confirmed that he has no disputes with the
Group.
(c) Mr. Huang Xiaomin and Mr. Wang Zhaobin
Each of Mr. Huang Xiaomin, aged 42, and Mr. Wang Zhaobin, aged 61, was appointed
as a Supervisor in April 2018 and June 2020, respectively. Mr. Huang Xiaomin resigned in
May 2021 due to the Expiration of the service term and Mr. Wang Zhaobin resigned in
April 2023 due to his willing to transition to his retirement life. Each of Mr. Huang Xiaomin
and Mr. Wang Zhaobin has confirmed that he has no disputes with the Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
VI – 21


--- page 692 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this pro spectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(i) a copy of each of the material contracts referred to in the paragraph headed ‘‘Appendix
VI — Statutory and General Information — Further Information about the Business of
our Company — 1. Summary of Material Contracts ’’in this prospectus; and
(ii) the written consents referred to in the paragraph headed ‘‘Appendix VI — Statutory
and General Information — Other information — 6. Consents ’’in this prospectus.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be av ailable on display on the website of our
Company at www.shuangdeng.com.cn and on the website of the Stock Exchange at
www.hkexnews.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 prepared by Ernst & Young, the text of which is set out in
Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Group for the years ended
December 31, 2022, 2023 and 2024 and five months ended May 31, 2025;
(d) the report prepared by Ernst & Young on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
prospectus;
(e) the industry report issued by Frost & Sullivan referred to in the section headed
‘‘Industry Overview ’’in this prospectus;
(f) the PRC legal opinion issued by JC Master Law Offices, our PRC Legal Advisor, in
respect of, among other things, the general matters and property interests of our Group
under the PRC laws;
(g) the legal memorandum issued by Hogan Lovells, our International Sanctions Legal
Advisor, in respect of, among other things, t he risk of exposure and potential penalties
under the International Sanctions laws and regulations;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
VII – 1


--- page 693 ---
(h) the material contracts referred to in the paragraph headed ‘‘Appendix VI — Statutory
and General Information — Further Information about the Business of our Company
— 1. Summary of Material Contracts ’’in this prospectus;
(i) the service contracts referred to in the paragraph headed ‘‘Appendix VI — Statutory
and General Information — Further Information about Our Directors, Supervisors and
Substantial Shareholders — 3. Service Contracts ’’in this prospectus;
(j) the written consents referred to in the paragraph headed ‘‘Appendix VI — Statutory
and General Information — Other Information — 6. Consents ’’in this prospectus; and
(k) the PRC Company Law and Overseas Listing Trial Measures together with unofficial
English translations thereof.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
VII – 2


--- page 694 ---
Joint Sponsors, Sponsor - Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
SHUANGDENG GROUP CO., L TD.
雙登集團股份有限公司
A joint stock company incorporated in the People’s Republic of China with limited liability
Stock Code: 06960
Glob/a.altl Offer/i.roundn/g.alt
