--- page 1 ---
Stock Code : 9611
GLOBAL OFFERING
(A joint stock company incorporated in the People’s Republic of China with limited liability)
上海龍旗科技股份有限公司
Shanghai Longcheer T echnology Co., Ltd.
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers


--- page 2 ---
If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
Shanghai Longcheer Technology Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares in the
Global Offering
: 52,259,100 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 5,226,000 H Shares (subject to reallocation)
Number of International Offer Shares : 47,033,100 H Shares (including no more than
5,225,000 Employee Reserved Shares,
subject to reallocation and the Over-
allotment Option)
Maximum Offer Price : HK$31.00 per H 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%
(payable in full on application in Hong
Kong dollars and subject to refund)
Nominal Value : RMB1.00 per H Share
Stock Code : 9611
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
prospectus, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arisi ng from or in reliance upon the whole or any part
of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Appendix VII — Documents Delivered to the Registrar of Companies and Av ailable on Display” to 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) O rdinance (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 t his prospectus or any other document
referred to above.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and us on the Pr ice Determination Date. The Price
Determination Date is expected to be on or before Tuesday, January 20, 2026 and, in any event, not later than Tuesday, January 20, 2026. The Offer Price w ill be no more than HK$31.00 unless
otherwise announced. Applicants for Hong Kong Offer Shares are required to pay, on application, the maximum Offer Price of HK$31.00 for each Hong Kong Offer Share together with brokerage
of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565%, subject to refund if the Offer P rice as finally determined is less than
HK$31.00. If, for any reason, the Overall Coordinators (for themselves and on behalf of the Underwriters) and us are unable to reach an agreement on the Offer Price, the Global Offering will not
proceed and will lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where considered appropriate and with our consent, reduce the numbe r of Hong Kong Offer Shares and/or the
maximum Offer Price 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 a case, notices of the
reduction in the number of Hong Kong Offer Shares and/or the maximum Offer Price will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at
www.longcheer.com as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodgi ng applications under
the Hong Kong Public Offering. For more details, see the sections headed “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares ” in this prospectus.
Prior to making an investment decision, prospective investors should carefully consider all of the information set out in this prospectus, includin g but not limited to the risk factors set out in the
section headed “Risk Factors” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applicants for the subscrip tion for, the Hong Kong Offer
Shares, are subject to termination by the Overall Coordinators (for itself and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date.
For details, see “Underwriting — Hong Kong Underwriting Arrangements — Hong Kong Public Offering — Grounds for Termination.”
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold, pledged or transferred within
the United States, except in transactions exempt from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act an d applicable U.S. state securities laws. The Offer
Shares are being offered and sold (i) in the United States solely to QIBs as defined in Rule 144A under the U.S. Securities Act pursuant to Rule 144A or ano ther available exemption from registration
requirements under the U.S. Securities Act, and (ii) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Sec urities Act. No public offering of the Offer Shares
will be made in the United States.
IMPORTANT
January 14, 2026


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus in relation to
the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at www.longcheer.com . Y ou may download and print from
these website addresses if you want a printed copy of this prospectus.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
If you are an intermediary, broker or agent, please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses stated above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in
this prospectus for further details on the procedures through which you can apply for the
Hong Kong Offer Shares electronically.
Y our application through the White Form eIPO service or the HKSCC EIPO
channel must be made for a minimum of 100 Hong Kong Offer Shares and in multiples
of that number of Hong Kong Offer Shares as set out in the table below. No application
for any other number of Hong Kong Offer Shares will be considered and such an
application is liable to be rejected.
IMPORTANT
–i i–


--- page 4 ---
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. Y ou
must pay the respective amount payable on application in full upon application for Hong
Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian
may require you to pre-fund your application in such amount as determined by the broker
or custodian, based on the applicable laws and regulations in Hong Kong. Y ou are
responsible for complying with any such pre-funding requirement imposed by your
broker or custodian with respect to the Hong Kong Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 3,131.26 2,000 62,625.26 30,000 939,379.06 400,000 12,525,054.00
200 6,262.53 3,000 93,937.90 40,000 1,252,505.40 500,000 15,656,317.50
300 9,393.79 4,000 125,250.55 50,000 1,565,631.76 600,000 18,787,581.00
400 12,525.05 5,000 156,563.18 60,000 1,878,758.10 700,000 21,918,844.50
500 15,656.32 6,000 187,875.81 70,000 2,191,884.46 800,000 25,050,108.00
600 18,787.58 7,000 219,188.45 80,000 2,505,010.80 900,000 28,181,371.50
700 21,918.85 8,000 250,501.08 90,000 2,818,137.16 1,000,000 31,312,635.00
800 25,050.11 9,000 281,813.71 100,000 3,131,263.50 1,500,000 46,968,952.50
900 28,181.37 10,000 313,126.36 200,000 6,262,527.00 2,000,000 62,625,270.00
1,000 31,312.64 20,000 626,252.70 300,000 9,393,790.50 2,613,000
(1) 81,819,915.25
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading
fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy,
collected by the Stock Exchange on behalf of the SFC; and in the case of the AFRC transaction levy,
collected by the Stock Exchange on behalf of the AFRC).
IMPORTANT
– iii –


--- page 5 ---
If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published on the websites
of the Stock Exchange at www.hkexnews.hk and our Company at www.longcheer.com .
Date (1)
Hong Kong Public Offering commences .............................. .9:00 a.m. on
Wednesday, January 14, 2026
Latest time to complete electronic applications
under the White Form eIPO service through
the designated website at www.eipo.com.hk (2) ....................... 1 1:30 a.m. on
Monday, January 19, 2026
Application lists open (3) .......................................... 1 1:45 a.m. on
Monday, January 19, 2026
Latest time for (a) completing payment of
White Form eIPO applications by effecting
internet banking transfer(s) or PPS payment
transfer(s) and (b) applying through the
HKSCC EIPO channel
(4) ..................................... .12:00 noon on
Monday, January 19, 2026
If you are instructing your broker or custodian who is a HKSCC Participant will submit
electronic application instructions on your behalf through HKSCC’s FINI system in
accordance with your instruction, you are advised to contact your broker or custodian for the
earliest and latest time for giving such instructions as this may vary by broker or custodian .
Application lists close (3) ........................................ .12:00 noon on
Monday, January 19, 2026
Expected Price Determination Date (5) .............. o no r before 12:00 noon on Tuesday,
January 20, 2026
Announcement of the Offer Price, the level of
applications in the Hong Kong Public Offering;
the level of indications of interest in the
International Offering; and the basis of allocation
of the Hong Kong Offer Shares to be published
on our website at www.longcheer.com
(6) and
the website of the Stock Exchange at
www.hkexnews.hk no later than .................................. 1 1:00 p.m. on
Wednesday, January 21, 2026
EXPECTED TIMETABLE
–i v–


--- page 6 ---
The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be made available through a variety of
channels, including:
 in the announcement to be posted on
our website and the website of the
Stock Exchange at www.longcheer.com
(6)
and www.hkexnews.hk , respectively .............. n o later than 11:00 p.m. on
Wednesday, January 21, 2026
 on the designated results of allocation
at www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function from ............... 1 1:00 p.m. on Wednesday,
January 21, 2026 to 12:00 midnight on
Tuesday, January 27, 2026
 from the allocation results telephone
enquiry line by calling +852 2862 8555
between 9:00 a.m. and 6:00 p.m. on ............. .Thursday, January 22, 2026,
Friday, January 23, 2026,
Monday, January 26, 2026 and
Tuesday, January 27, 2026
For those applying through HKSCC EIPO channel,
you may also check with your broker or custodian from ............... .6:00 p.m. on
Tuesday, January 20, 2026
H Share certificates in respect of wholly or
partially successful applications to be dispatched
or deposited into CCASS on or before
(7)(9) .............. W ednesday, January 21, 2026
White Form e-Refund payment instructions/refund
cheques in respect of wholly or partially successful
applications if the final Offer Price is less than
the maximum Offer Price per Offer Share initially
paid on application (if applicable) or wholly or
partially unsuccessful applications to be
dispatched on or before
(8)(9) .......................... Thursday, January 22, 2026
Dealings in the H Shares on the Hong Kong
Stock Exchange expected to commence at 9:00 a.m. on ..... Thursday, January 22, 2026
EXPECTED TIMETABLE
–v–


--- page 7 ---
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated. Details of the
structure of the Global Offering, including conditions of the Hong Kong Public Offering, are set forth in the
section headed “Structure of the Global Offering” in this prospectus.
(2) Y ou will not be permitted to submit your application 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 before 11:30 a.m., you will be permitted
to continue the application process (by completing payment of application monies) until 12:00 noon on the last
day for making applications, when the application lists close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, or a “black” rainstorm warning and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Monday, January
19, 2026, the application lists will not open or close on that day. See “How to Apply for Hong Kong Offer
Shares — E. Severe Weather Arrangements” for details.
(4) Applicants who apply for the Hong Kong Offer Shares through HKSCC EIPO channel by instructing your
broker/custodian who is HKSCC participant to give electronic application instructions to HKSCC via FINI
should refer to “How to Apply for Hong Kong Offer Shares — A. Application for Hong Kong Offer Shares
— 2. Application Channels” in this prospectus.
(5) The Price Determination Date is expected to be on or before Tuesday, January 20, 2026 and, in any event, not
later than 12:00 noon on Tuesday, January 20, 2026. If, for any reason, we do not agree with the Overall
Coordinators (for themselves and on behalf of the Underwriters) on the pricing of the Offer Shares by 12:00
noon on Tuesday, January 20, 2026, the Global Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) The H Share certificates will only become valid evidence of title provided that the Global Offering has become
unconditional in all respects and neither of the Hong Kong Underwriting Agreement nor the International
Underwriting Agreement is terminated in accordance with its respective terms prior to 8:00 a.m. on the Listing
Date. The Listing Date is expected to be on or about Thursday, January 22, 2026. Investors who trade the H
Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior
to the H Share certificates becoming valid evidence of title do so entirely at their own risk.
(8) White Form e-Refund payment instructions/refund checks will be issued in respect of wholly or partially
unsuccessful applications.
(9) Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should see
“How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates and Refund of
Application Monies” for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of
White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through multiple bank accounts may have refund monies (if any)
dispatched to the address as specified in their application instructions in the form of refund checks in favor
of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own
risk.
Further information is set out in the section headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies.”
The above expected timetable is a summary only. For details of the structure of the
Global Offering, including its conditions, and the procedures for applications for Hong
Kong Offer Shares, please see the sections headed “Structure of the Global Offering” and
“How to Apply for Hong Kong Offer Shares” in this prospectus, respectively.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, our Company will publish an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE
–v i–


--- page 8 ---
IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the Hong Kong Offer Shares
offered by this prospectus pursuant to the Hong Kong Public Offering. This prospectus
may not be used for the purpose of, and does not constitute, an offer or a solicitation
of an offer to subscribe for or buy, any security in any other jurisdiction or in any other
circumstances. No action has been taken to permit a public offering of the Hong Kong
Offer Shares or the distribution of this prospectus in any jurisdiction other than Hong
Kong. The distribution of this prospectus and the offering and sale of the Hong Kong
Offer Shares in other jurisdictions are subject to restrictions and may not be made
except as permitted under the applicable securities laws of such jurisdictions pursuant
to registration with or authorization by the relevant securities regulatory authorities or
an exemption therefrom.
Y ou should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representation not made in this
prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners and the Joint Lead Managers, any of the
Underwriters, any of our or their respective directors, officers, employees, agents or
representatives of any of them, or any other person or party involved in the Global
Offering.
EXPECTED TIMETABLE ............................................ i v
CONTENTS ....................................................... v i i
SUMMARY ....................................................... 1
DEFINITIONS ..................................................... 2 3
GLOSSARY OF TECHNICAL TERMS ................................. 3 8
FORW ARD-LOOKING STATEMENTS ................................. 4 3
RISK FACTORS ................................................... 4 5
W AIVERS AND EXEMPTIONS ....................................... 8 3
CONTENTS
– vii –


--- page 9 ---
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL
OFFERING ...................................................... 9 8
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 1 0 3
CORPORATE INFORMATION ....................................... 1 1 4
INDUSTRY OVERVIEW ............................................. 1 1 6
REGULATORY OVERVIEW ......................................... 1 3 6
HISTORY AND CORPORATE STRUCTURE ............................ 1 7 0
BUSINESS ........................................................ 1 8 1
DIRECTORS AND SENIOR MANAGEMENT ............................ 2 7 9
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS .......... 2 9 3
CONNECTED TRANSACTIONS ...................................... 2 9 9
SUBSTANTIAL SHAREHOLDERS ..................................... 3 0 0
SHARE CAPITAL .................................................. 3 0 2
FINANCIAL INFORMATION ......................................... 3 0 6
CORNERSTONE INVESTORS ........................................ 3 7 2
FUTURE PLANS AND USE OF PROCEEDS ............................. 3 7 9
UNDERWRITING .................................................. 3 8 4
STRUCTURE OF THE GLOBAL OFFERING ............................ 3 9 7
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 4 1 0
APPENDIX I — ACCOUNTANTS’ REPORT ........................ I - 1
APPENDIX IA — PROFIT ESTIMATE FOR YEAR ENDED
DECEMBER 31, 2025 ........................... IA-1
APPENDIX II — UNAUDITED PRO FORMA FINANCIAL
INFORMATION ................................ II-1
APPENDIX III — TAXATION AND FOREIGN EXCHANGE ............. III-1
APPENDIX IV — SUMMARY OF PRINCIPAL LA WS AND REGULATORY
PROVISIONS .................................. I V - 1
CONTENTS
– viii –


--- page 10 ---
APPENDIX V — SUMMARY OF THE ARTICLES OF ASSOCIATION .... V - 1
APPENDIX VI — STATUTORY AND GENERAL INFORMATION ........ VI-1
APPENDIX VII — DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY ....... VII-1
CONTENTS
–i x–


--- page 11 ---
This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. Y ou should read this prospectus in its entirety before you decide to
invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in the section headed “Risk Factors” in this
prospectus. Y ou should read that section carefully before you decide to invest in the
Offer Shares.
OVERVIEW
We are a leading global provider of smart devices and services, offering solutions —
including product research, design, manufacturing, and support — for renowned smart device
brands and leading technology companies worldwide. According to Frost & Sullivan, we are
the world’s second largest consumer electronics ODM company by consumer electronics ODM
shipments in 2024, with the market share of 22.4%, and the world’s largest smartphone ODM
company by smartphone ODM shipments in 2024, with the market share of 32.6%. We
primarily compete in the global consumer electronics ODM market, which is a subset of the
global smart devices ODM market, and in turn, a subset of the global smart device
manufacturing industry.
Founded in 2004, we have consistently upheld our core values of “customer centric,
inspiring dedication, and long-term driven.” Over the past two decades, we have developed
industry-leading capabilities across smart devices and formed a solution matrix, including
prototype design, hardware innovation, system-level software platform development, lean
production, supply chain integration, and quality control. Leveraging this sophisticated value
chain expertise, we have built a diverse product portfolio that includes smartphones, AI PCs,
automotive electronics, tablets, smart watches/bands, and smart eyewear. We have also
established an extensive core customer base, including leading brands such as Xiaomi,
Samsung Electronics, Lenovo, Honor, OPPO, and vivo. Such achievements are supported by
our R&D and engineering team of around 5,200 professionals, who possess profound
experience in product development across multiple platforms and operating systems.
Furthermore, our global footprint and product customization capabilities enable us to deliver
solutions worldwide. In 2024, we successfully listed on the main board of the Shanghai Stock
Exchange (stock code: 603341).
Our Products and Solution
We have built the industry’s most expansive and integrated smart devices ecosystem
across most popular platforms, such as Android and Windows. In response to emerging
customer demands, market opportunities, and technology innovations in the AI era, our product
portfolio encompasses a “ 1+2+X ” framework. At the core is our “1” — smartphones, which
form the bedrock of our business. “2” represents our key growth drivers — personal computing
and automotive electronics. And “X” encompasses a diverse array of emerging consumer
electronics, including tablets, wearables, TWS earphones, and smart eyewear, completing our
comprehensive product portfolio.
SUMMARY
–1–


--- page 12 ---
Smart
Mobility Smart
Home Smart
Health
Smart
Life
Extended
Reality
Smart
OfficeX
2
1
Automotive
Electronics
Personal
Computing
Smartphone
Automotive
 Smartphone Business: Smartphones are the primary driver of our operations and
financial performance. In 2024, revenue from our smartphone products reached
RMB36,132.7 million, accounting for approximately 77.9% of our total annual
revenue. That same year, our ODM shipments for smartphones reached 172.9
million units, ranking us the world’s largest smartphone ODM company by
smartphone ODM shipments in 2024, according to Frost & Sullivan. While
solidifying our strong position in the 4G smartphone market, we have also
proactively invested in R&D for 5G products. This strategic deployment has enabled
us to successfully secure large-scale 5G model orders from leading global brands.
Additionally, we are at the forefront of pioneering AI-powered, high-performance
smartphone innovations. We have demonstrated a keen ability to accurately
anticipate evolving market demands and respond effectively through technological
innovations. Furthermore, we have strategically expanded into emerging regions and
continuously optimized our customer base to ensure the ongoing success of our
smartphone business.
 Tablet Business: We generated revenue from our tablet business of RMB3,696.3
million in 2024, accounting for approximately 8.0% of our total annual revenue.
That same year, our ODM shipments for tablets reached 12.3 million units. We have
continued to grow our customer base by attracting more leading companies in China,
and we have successfully become a major ODM supplier for three top-tier domestic
tablet brands. Our tablet products include both affordable entry-level models and
premium flagship devices, which enable us to meet the diverse demands of
mass-market consumers, enterprise professionals, and educational institutions. As a
result, we have cemented our position as one of the global top three tablet ODM
companies by tablet ODM shipments in 2024, according to Frost & Sullivan.
SUMMARY
–2–


--- page 13 ---
 AIoT Business: Our AIoT business experienced rapid growth in 2024, with revenue
reaching RMB5,573.1 million, accounting for approximately 12.0% of our total
annual revenue. This represented a revenue growth of 122.0% compared to 2023. In
2024, our ODM shipments for AIoT devices reached 33.9 million units. We have
risen to the forefront of the global smart wearables ODM market, with leading
shipments for smart watches/bands.
 Emerging Businesses : In addition, we have made strategic investments in AI PCs
and automotive electronics. In AI PCs, we successfully launched our first Qualcomm
Snapdragon-based laptop products in the third quarter of 2024, supporting the
expansion of AI applications in commercial and consumer domains. In automotive
electronics, we have established partnerships with multiple OEMs and Tier-1
customers and secured over ten design wins, and are actively positioning ourselves
in the overseas automotive electronics market.
In addition to hardware delivery, we offer standalone professional services, mainly
including R&D and technical services and EMS, that allow us to further leverage our R&D,
design, and manufacturing capabilities.
Expanded Global Footprint and Integrated Delivery Capabilities
Our R&D efforts are anchored by our five major centers in Shanghai, Shenzhen, Huizhou,
Nanchang, and Hefei. We have recently expanded this network with new R&D centers in Xi’an
and Suzhou. Across this expansive R&D ecosystem, our team of around 5,200 professionals as
of September 30, 2025 brings deep expertise in developing solutions for Qualcomm and other
leading platforms. They also possess strong software development capabilities spanning most
popular platforms, such as Android and Windows.
On the manufacturing side, we operate modern manufacturing centers in Huizhou and
Nanchang. We have further established overseas manufacturing centers in Vietnam and India.
This manufacturing network across Asia enables us to seamlessly fulfill worldwide customer
needs.
To support our global customer base, we have set up branch offices in the United States,
South Korea, Japan, Hong Kong and Singapore. Leveraging our end-to-end, comprehensive
service capabilities — spanning product definition, design, and mass-production — and our
excellence in quality and cost control, we empower customers to rapidly bring innovative
products to market. This integrated approach has allowed us to cultivate multiple well-received
models with shipments exceeding 10 million units since their initial launch.
SUMMARY
–3–


--- page 14 ---
US
Branch Office
South Korea
Branch Office
Japan
Branch Office
Hong Kong
Branch Office
Singapore
Branch Office
Xi’an
R&D Center
Nanchang
Manufacturing &
R&D Center
Hefei
R&D Center
Huizhou
Manufacturing &
R&D Center
Shanghai
Global Headquarters
&
R&D Center
India
Manufacturing
Center
Vietnam
Manufacturing
Center
Shenzhen
R&D Center
Suzhou
R&D Center
Shanghai
Global Headquarters
R&D Centers
Shanghai, Shenzhen, Huizhou,
Nanchang, Hefei, Xi’an, SuzhouManufacturing Centers
Huizhou, Nanchang, India, Vietnam
Branch Offices
US, Japan, South Korea,
Hong Kong S.A.R, Singapore
OUR BUSINESS MODEL
We operate a highly integrated and flexible business model that features full-stack ODM
solutions. Our business model is designed to create long-term value by embedding ourselves
deeply in the product lifecycle of our customers — from concept and design to production and
delivery. We leverage our accumulated R&D capabilities, modernized manufacturing
infrastructure, and global supply chain network to deliver customized, high-quality products
and services at scale.
At the heart of our business model is our comprehensive ODM offering, through which
we provide integrated solutions that cover product hardware design, module customization,
system-level software platform development, radiofrequency and antenna tuning, system-level
testing and certification, supply chain management and component selection, as well as
scalable manufacturing operations.
Our ODM business is primarily driven by complete device sales, which represent the core
of our business model and the main source of our revenue. Under this arrangement, we deliver
fully assembled smart devices to our customers, who rely on us to manage the entire product
lifecycle. We are responsible for sourcing all or part of the electronic components and
materials, overseeing production and quality control, and ensuring on-time delivery. Through
entrusting us with such full-stack ODM services, our customers are able to reduce operational
complexity and time-to-market, while leveraging our scale and technical expertise. Through
organizing our ODM business primarily around complete device sales, we demonstrate our
strength in delivering end-to-end manufacturing excellence and long-term value to our
partners.
In limited cases, as requested by customers by typically considering different regional
trade policies for components and finished products, we also support customers through
component and semi-finished product sales. In these cases, we provide product design and
SUMMARY
–4–


--- page 15 ---
deliver customized components, modules, and semi-finished assemblies, while third-party
EMS providers arranged by customers then handle final integration. While this model offers
flexibility for specific regulatory or logistical needs, it remains a supplementary solution
offered by us.
We also provide customers with independent product development services, including
hardware and software design, system architecture, prototyping and validation. In addition, to
enhance the utilization and efficiency of our manufacturing facilities, particularly in our
Huizhou and Nanchang manufacturing centers, we also undertake EMS engagements with
select brand customers.
OUR PRODUCTS
We offer a broad and evolving portfolio of smart devices and solutions across multiple
product categories, including smartphones, tablets, AIoT devices, AI PCs and automotive
electronics. Each product line is designed with technical expertise to meet the dynamic needs
of global smart device brands and to serve a wide range of usage scenarios in the smart device
ecosystem.
Smartphones
Smartphones are our core product category and the foundation of our integrated product
strategy. We provide full-stack ODM services to a wide range of leading global brands,
including Xiaomi, Samsung Electronics, Lenovo, Honor, OPPO, vivo, as well as major telecom
operators. Over the years, we have successfully delivered several best-selling models in the
global market and the Chinese market, such as the Redmi 9, Redmi Note 10, and Samsung
Galaxy A05s, with cumulative shipments of each exceeding tens of millions of units.
Tablets
Our tablet business has developed into a comprehensive product line that serves a wide
range of application scenarios as well as diverse requirements for form factors and
performance. We are a trusted ODM partner to leading global brands, such as Lenovo and
Xiaomi. As of the Latest Practicable Date, we had established ourselves as the principal ODM
partner for tablet devices to three top-tier brand customers.
AIoT Devices
Our AIoT product portfolio encompasses a broad range of intelligent and connected
devices, including smart watches/bands, smart eyewear and TWS earphones. We have
established a leadership position in the smart wearable segment, providing high-performance
smart watches/bands to leading global brands, such as Xiaomi, Samsung Electronics, OPPO,
and Honor. In addition, smart eyewear represents a strategic area of innovation and product
differentiation among our AIoT product portfolio. We have launched multiple generations of
smart eyewear, each integrating cutting-edge features.
SUMMARY
–5–


--- page 16 ---
Emerging Business Areas
As part of our long-term growth strategy, we are actively expanding into strategically
important emerging categories, particularly AI PCs and automotive electronics. These
segments leverage our established expertise in smart devices design and manufacturing, while
creating new opportunities for technological innovation and business growth.
OUR STRENGTHS
We believe that the following competitive strengths contribute to our success and set us
apart from our competitors: (i) established market position and comprehensive capabilities in
the growing global smart device ODM market; (ii) strategic foresight driving industry
development through long-term partnerships with blue-chip customers and a diversified
product portfolio; (iii) comprehensive capabilities driven by a longstanding focus on R&D and
innovation; (iv) full-stack solutions leveraging our comprehensive product portfolio and
industry chain optimization; (v) scalable delivery based on our global footprint, localized
deployment, flexible and efficient supply chain and smart manufacturing; and (vi) visionary
founders and seasoned executive team with profound industry insights. For more details, see
“Business — Our Strengths.”
OUR STRATEGIES
We aim to further grow our business by pursuing the following strategies: (i) continuing
to expand the “ 1+2+X ” product portfolio and penetrate high potential segments; (ii)
expanding product categories for and deepening collaborations with our customers; (iii)
strengthening R&D and product innovation with AI as the core innovation engine; (iv)
integrating our domestic and international operations to drive unparalleled synergies; and (v)
strategic investments and acquisitions to expand the breadth of our business. For more details,
see “Business — Our Strategies.”
R&D AND TECHNOLOGY
We view research and development as a core driver of our long-term competitiveness,
scalability, and product innovation. Our R&D strategy is built on a commitment to continuous
investment, systematic capability-building, and forward-looking technological exploration. We
have established a comprehensive R&D system that integrates advanced infrastructure,
disciplined processes and close collaboration with ecosystem partners to support the
development of differentiated products across smartphones, AI PCs, automotive electronics
and other smart device categories. Reflecting our strong innovation focus, we incurred research
and development expenses of RMB1,507.8 million, RMB1,687.8 million, RMB2,080.2 million
and RMB1,951.1 million in 2022, 2023 and 2024 and the nine months ended September 30,
2025, respectively. As of September 30, 2025, we employed approximately 5,200 R&D
personnel, accounting for 29.1% of our total employees and underscoring our commitment to
deepening our technological capabilities as we scale into new product categories and global
markets.
SUMMARY
–6–


--- page 17 ---
We are a technology-driven company with deep expertise in smart hardware innovation.
Our core strengths are rooted in sustained investment in foundational technologies, including
wireless communication, audio, display, optics, imaging, materials, and simulation. In line with
global AI trends, we are actively deploying AI technologies across R&D and digital operations,
exploring the use of AI agents to improve R&D efficiency, enhance product intelligence, and
elevate user experience. In parallel, we are accelerating digital transformation across all major
aspects of our operations, including R&D, manufacturing, supply chain, and quality
management. Through the deployment of proprietary systems, we enhance operational
transparency, drive process optimization, and achieve better cost control at scale.
MANUFACTURING
We operate a flexible and efficient manufacturing system that combines self-owned
manufacturing facilities with strategic outsourcing arrangements to support the diversified and
large-scale manufacturing needs of our customers. Over the years, we have established a
comprehensive manufacturing footprint in both Chinese mainland and overseas markets,
enabling us to enhance production capacity, improve cost efficiency, and respond swiftly to
dynamic customer demands. Our manufacturing capabilities are supported by advanced
production processes, intelligent automation, and rigorous quality control systems, ensuring
the consistent delivery of high-quality smart devices across categories such as smartphones,
tablets, and AIoT devices. For more details, see “Business — Manufacturing.”
CUSTOMERS AND SUPPLIERS
Our customers primarily consist of leading global smart device brands and top-tier
technology companies, many of which maintain stringent supplier qualification standards.
During the Track Record Period, the aggregate revenue generated from the largest five
customers in each year/period amounted to RMB25,697.1 million, RMB21,650.3 million,
RMB38,131.2 million and RMB24,881.0 million in 2022, 2023 and 2024 and the nine months
ended September 30, 2025, respectively, representing approximately 87.6%, 79.6%, 82.2% and
79.4% of our total revenue in the respective year/period. The revenue generated from our
largest customer in 2022, 2023 and 2024 and the nine months ended September 30, 2025
amounted to RMB13,357.1 million, RMB11,519.9 million, RMB17,261.7 million and
RMB8,953.6 million, respectively, representing approximately 45.5%, 42.4%, 37.2% and
28.6% of our total revenue in the respective year/period.
Our suppliers primarily include providers for raw materials, equipment, production
consumables, and packaging materials, as well as outsourced manufacturing service providers
and external R&D and testing partners. During the Track Record Period, purchases from the
largest five suppliers in each year/period amounted to RMB6,340.4 million, RMB4,209.8
million, RMB13,996.8 million and RMB9,828.4 million in 2022, 2023 and 2024 and the nine
months ended September 30, 2025, respectively, which accounted for approximately 24.5%,
16.5%, 32.2% and 33.9% of our total purchases in the respective year/period. Our purchases
from our largest supplier in each year/period during the Track Record Period amounted to
RMB2,025.3 million, RMB948.1 million, RMB5,020.0 million and RMB3,718.1 million in
2022, 2023 and 2024 and the nine months ended September 30, 2025, respectively, which
accounted for approximately 7.8%, 3.7%, 11.6% and 12.8% of our total purchases in the
respective year/period.
SUMMARY
–7–


--- page 18 ---
During the Track Record Period, certain of our five largest customers in each year were
also our suppliers, and certain of our five largest suppliers in each year were also our
customers. For details, see “Business — Overlap between Customers and Suppliers.”
Relationship with Our Largest Customer
Customer A, representing Xiaomi Group, was our largest customer in each year/period
during the Track Record Period. As of the Latest Practicable Date, Xiaomi Group held 4.94%
equity interest of our Company. Our revenue generated from our sales to Xiaomi Group was
RMB13,357.1 million, RMB11,519.9 million, RMB17,261.7 million and RMB8,953.6 million
in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively, representing
45.5%, 42.4%, 37.2% and 28.6% of our total revenue for the corresponding year/period,
respectively. During the Track Record Period, Xiaomi Group was also our supplier and
provided procurement services and the purchase amounts from Xiaomi Group accounted for
0.4% of our total purchase amount during the Track Record Period. Our business relationships
with Xiaomi Group primarily include (i) sales of smart devices, (ii) factoring arrangement, and
(iii) procurement services.
Notwithstanding our business relationships with Xiaomi Group during the Track Record
Period, our Directors are of the view that we will be able to control the risk of reliance, and
our significant sales to Xiaomi Group would not adversely affect our business operation, our
financial performance and would not impact on our suitability for Listing due to (i)
complementary industry positions and mutual benefit, (ii) win-win collaborations and
co-growth trajectory, (iii) robust internal compliance and transparency, (iv) diversifying
customer base leveraging our past successful experience, (v) expanding product categories. In
addition, our Directors believe that our relationship with Xiaomi Group will continue to be
mutually complementary to a large extent, and it is unlikely that there would be any materially
adverse changes to, or termination of, such relationship in the foreseeable future. For details,
see “Business — Relationship with Our Largest Customer.”
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our financial information
during the Track Record Period, extracted from the Accountants’ Report as set out in Appendix
I to this prospectus. The summary financial data set forth below should be read together with,
and is qualified in its entirety by reference to, our financial statements in this prospectus,
including the related notes. Our consolidated financial information was prepared in accordance
with the IFRS Accounting Standards.
SUMMARY
–8–


--- page 19 ---
Summary of Consolidated Statements of Profit or Loss
The following table sets forth a summary of our consolidated statements of profit or loss
for the years indicated. Our historical results presented below are not necessarily indicative of
the results that may be expected for any future period.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118(26,978,031) (91.9) (24,594,908) (90.5) (43,676,093) (94.2) (32,887,922) (94.2) (28,725,221) (91.7)
Gross profit /H1118/H1118/H1118/H1118/H1118/H11182,365,121 8.1 2,590,156 9.5 2,706,379 5.8 2,032,938 5.8 2,606,382 8.3
Other income and gains /H1118 251,084 0.9 309,652 1.1 578,647 1.2 441,375 1.3 536,020 1.7
Sales and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,880) (0.2) (79,922) (0.3) (89,840) (0.2) (58,865) (0.2) (69,151) (0.2)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(392,774) (1.3) (437,328) (1.6) (506,081) (1.1) (361,794) (1.0) (506,135) (1.6)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,507,834) (5.1) (1,687,762) (6.2) (2,080,172) (4.5) (1,472,924) (4.2) (1,951,106) (6.2)
Reversal of impairment
losses/(impairment
losses) on financial
assets, net /H1118/H1118/H1118/H1118/H1118/H11182,700 0.0 (842) (0.0) (1,343) (0.0) 125 0.0 (560) (0.0)
Other expenses /H1118/H1118/H1118/H1118/H1118(58,739) (0.2) (46,132) (0.2) (56,103) (0.1) (84,489) (0.2) (29,154) (0.1)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118(37,948) (0.1) (39,896) (0.1) (67,525) (0.1) (56,280) (0.2) (43,022) (0.1)
Share of profits of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H111823,588 0.1 43,154 0.2 30,042 0.1 15,976 0.0 6,614 0.0
Profit before tax /H1118/H1118/H1118/H1118588,318 2.0 651,080 2.4 514,004 1.1 456,062 1.3 549,888 1.8
Income tax expense /H1118/H1118/H1118(26,805) (0.1) (48,369) (0.2) (20,654) (0.0) (30,634) (0.1) (35,404) (0.1)
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118561,513 1.9 602,711 2.2 493,350 1.1 425,428 1.2 514,484 1.6
Attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118/H1118/H1118561,301 1.9 605,316 2.2 501,132 1.1 430,855 1.2 507,275 1.6
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118212 0.0 (2,605) (0.0) (7,782) (0.0) (5,427) (0.0) 7,209 (0.0)
SUMMARY
–9–


--- page 20 ---
Non-IFRS Measures
To supplement our consolidated financial statements which are presented in accordance
with IFRS, we also use certain non-IFRS measures, namely, adjusted net profit (non-IFRS
measure) and adjusted EBITDA (non-IFRS measure), as additional financial metrics. These
non-IFRS measures are not required by or presented in accordance with IFRS. We believe that
these non-IFRS measures facilitate comparisons of our operating performance by eliminating
potential impacts of certain items listed below. We also believe that such non-IFRS measures
present useful information in understanding and evaluating our consolidated results of
operations in the same manner as they help our management. However, our presentation of
such non-IFRS measures may not be comparable to similarly titled measures presented by other
companies. The use of these non-IFRS measures has limitations as an analytical tool, and you
should not consider it in isolation from, or as substitute for analysis of, our results of operations
or financial condition as reported under IFRS.
We define adjusted net profit (non-IFRS measure) as profit for the year adding back
share-based payments and listing expenses. Share-based payments are non-cash in nature and
do not result in cash outflows. We define adjusted EBITDA (non-IFRS measure) as adjusted net
profit (non-IFRS measure) adding back income tax expenses, finance costs, and depreciation
and amortization, and less interest income under other income and gains.
The following table reconciles adjusted net profit (non-IFRS measure) and adjusted
EBITDA (non-IFRS measure) to our profit for the year/period, presented in accordance with
IFRS, for the years/periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(unaudited)
Reconciliation of profit for the
year/period to adjusted net
profit (non-IFRS measure) and
adjusted EBITDA (non-IFRS
measure)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H1118561,513 602,711 493,350 425,428 514,484
Add:
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,239 69,629 71,634 56,294 88,593
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 7 7 9
Adjusted net profit
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118619,752 672,340 564,984 481,722 603,856
Add:
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,805 48,369 20,654 30,634 35,404
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,948 39,896 67,525 56,280 43,022
Depreciation and amortization /H1118/H1118/H1118/H1118321,397 369,625 446,413 342,694 382,375
Less:
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,502 139,912 160,361 105,311 96,866
Adjusted EBITDA
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118903,400 990,318 939,215 806,019 967,791
SUMMARY
–1 0–


--- page 21 ---
Revenue
Revenue by Product Type
During the Track Record Period, we primarily generated revenue from full-stack ODM
solutions and value-added professional services related to our smart devices, including the
manufacturing and sales of smartphones, AIoT devices, tablets and other smart devices. The
following table sets forth the breakdown of our revenue by product type, both in absolute
amounts and as percentages of total revenue, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H111824,265,640 82.7 21,821,620 80.3 36,132,747 77.9 27,885,130 79.9 21,704,132 69.3
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H11181,887,127 6.5 2,510,561 9.2 5,573,138 12.0 3,837,130 11.0 5,603,482 17.9
– Smart wearables /H1118/H1118/H11181,413,365 4.8 1,798,583 6.6 3,643,370 7.9 2,576,022 7.4 2,861,052 9.1
– Smart eyewear /H1118/H1118/H1118/H111832,167 0.1 387,988 1.4 1,387,622 3.0 865,448 2.5 1,974,528 6.3
– AI PCs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 3,171 0.0 1,938 0.0 196,393 0.6
– Automotive
electronics /H1118/H1118/H1118/H1118/H1118/H1118– – 704 0.0 20,716 0.0 15,284 0.0 95,633 0.3
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118441,595 1.6 323,286 1.2 518,259 1.1 378,438 1.1 475,876 1.6
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,798,156 9.5 2,509,102 9.2 3,696,313 8.0 2,542,749 7.3 2,990,404 9.5
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,229 1.3 343,781 1.3 980,274 2.1 655,851 1.8 1,033,585 3.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas,
such as AI PCs and automotive electronics.
(2) Primarily including smart speakers, smart learning devices, smart desk lamps and various accessory
products.
(3) Primarily including sales of raw materials and scrap components, and provision of factoring
arrangement. For details on the factoring arrangement, see “Business — Sales and Marketing —
Relationship with Our Largest Customer.”
Our revenue decreased by 7.4% from RMB29,343.2 million in 2022 to RMB27,185.1
million in 2023, and increased by 70.6% from RMB27,185.1 million in 2023 to RMB46,382.5
million in 2024. Our revenue decreased by 10.3% from RMB34,920.9 million in the nine
months ended September 30, 2024 to RMB31,331.6 million in the nine months ended
September 30, 2025. The fluctuations of our revenue during the Track Record Period were
primarily due to fluctuations in our ODM shipments, which was in turn affected by
end-consumer demands for smart devices.
SUMMARY
–1 1–


--- page 22 ---
The following table sets forth the breakdown of the shipment and average selling price
by product type, for the years/periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
Smartphones /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125.5 187.1 125.3 168.8 172.9 204.1 127.8 211.8 117.3 181.2
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.9 226.4 14.1 162.4 33.9 155.2 22.6 161.5 29.0 184.4
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.3 438.4 7.4 330.6 12.3 285.5 9.0 269.8 9.1 321.1
Note:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas,
such as AI PCs and automotive electronics.
Revenue by Geographical Location
The following table sets forth a breakdown of our revenue by geographical location,
corresponding to the registered address of our customers, in absolute amounts and as
percentages of our total revenue, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Chinese Mainland /H1118/H1118/H1118/H111822,279,637 75.9 23,392,783 86.1 31,406,597 67.7 23,041,794 66.0 19,065,646 60.9
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,063,515 24.1 3,792,281 13.9 14,975,875 32.3 11,879,066 34.0 12,265,957 39.1
Asia (excluding
Chinese
mainland)
(1) /H1118/H1118/H1118/H11185,859,813 20.0 3,068,369 11.3 14,367,107 31.1 11,390,158 32.7 11,414,180 36.4
South America /H1118/H1118/H1118/H1118818,524 2.8 306,243 1.1 518,530 1.1 434,196 1.2 218,490 0.7
North America /H1118/H1118/H1118/H1118259,332 0.9 326,006 1.2 66,491 0.1 49,897 0.1 545,280 1.7
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,828 0.4 86,452 0.3 20,920 0.0 2,527 0.0 79,337 0.3
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,211 0.0 2,827 0.0 2,288 0.0 8,670 0.0
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H11181 8 0 . 0 –– –– –– ––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Note:
(1) Primarily including South Korea and India.
SUMMARY
–1 2–


--- page 23 ---
Gross Profit and Gross Profit Margin
The following table sets forth the breakdown of our gross profit and gross profit margin
by product type for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H11181,719,442 7.1 1,800,425 8.3 1,686,729 4.7 1,318,345 4.7 1,650,870 7.6
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H1118397,569 21.1 518,613 20.7 614,768 11.0 433,769 11.3 618,094 11.0
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,407 7.3 239,252 9.5 309,339 8.4 209,458 8.2 195,091 6.5
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,703 10.9 31,866 9.3 95,543 9.7 71,366 10.9 142,327 13.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,365,121 8.1 2,590,156 9.5 2,706,379 5.8 2,032,938 5.8 2,606,382 8.3
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas,
such as AI PCs and automotive electronics.
(2) Primarily including sales of raw materials and scrap components, and provision of factoring
arrangement. For details on the factoring arrangement, see “Business — Sales and Marketing —
Relationship with Our Largest Customer.”
Our gross profit increased by 9.5% from RMB2,365.1 million in 2022 to RMB2,590.2
million in 2023, and further increased by 4.5% from RMB2,590.2 million in 2023 to
RMB2,706.4 million in 2024. Our gross profit increased by 28.2% from RMB2,032.9 million
in the nine months ended September 30, 2024 to RMB2,606.4 million in the nine months ended
September 30, 2025.
Our overall gross profit margin grew from 8.1% in 2022 to 9.5% in 2023, mainly due to
a reduction in the average procurement price of our raw materials as a result of cyclical market
fluctuations. Our overall gross profit margin decreased from 9.5% in 2023 to 5.8% in 2024,
mainly due to (i) an increase in the average procurement price of our raw materials as a result
of cyclical market fluctuations, and (ii) our strategic market expansion initiatives in 2024
designed to strengthen our competitive positioning. Our overall gross profit margin increased
from 5.8% in the nine months ended September 30, 2024 to 8.3% in the nine months ended
September 30, 2025, primarily due to (i) our focus on higher-quality growth during this period
by actively improving project quality and strategically foregoing certain low-margin projects,
and (ii) the stabilization of raw material prices in the market, which ended the upward trend
seen in 2024.
SUMMARY
–1 3–


--- page 24 ---
Profit for the Y ear/Period
Our profit for the year increased by 7.3% from RMB561.5 million in 2022 to RMB602.7
million in 2023, primarily due to the increase in our gross profit, partially offset by the
increases in our sales and marketing expenses, administrative expenses and research and
development expenses pursuant to our business expansion and increased research and
development activities. Our profit for the year decreased by 18.1% from RMB602.7 million in
2023 to RMB493.4 million in 2024, primarily due to the increase in research and development
expenses attributable to the growth in the number of research and development personnel and
the increased research and development activities, partially offset by the increase in our gross
profit. Our profit for the period increased by 20.9% from RMB425.4 million in the nine months
ended September 30, 2024 to RMB514.5 million in the nine months ended September 30, 2025,
primarily due to the increase in our gross profit, partially offset by the increases in our sales
and marketing expenses, administrative expenses and research and development expenses
pursuant to our business expansion and increased research and development activities. For
details, see “Financial Information — Period to Period Comparison of Results of Operations.”
Summary of Consolidated Statements of Financial Position
The following table sets forth a summary of our consolidated statements of financial
position as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,283,913 15,985,780 22,160,739 22,569,820
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11183,246,562 3,853,119 4,184,875 4,737,023
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,530,475 19,838,899 26,345,614 27,306,843
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,632,395 14,990,459 19,724,450 20,647,539
Non-current liabilities /H1118/H1118/H1118/H1118741,996 1,023,043 1,028,034 919,474
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,374,391 16,013,502 20,752,484 21,567,013
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118651,518 995,321 2,436,289 1,922,281
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156,084 3,825,397 5,593,130 5,739,830
Our net assets increased from RMB3,156.1 million as of December 31, 2022 to
RMB3,825.4 million as of December 31, 2023, primarily attributable to our profit for the year
in 2023 of RMB602.7 million.
Our net assets increased from RMB3,825.4 million as of December 31, 2023 to
RMB5,593.1 million as of December 31, 2024, primarily attributable to the issue of shares of
RMB1,560.0 million and our profit for the year in 2024 of RMB493.4 million, partially offset
by dividends declared of RMB232.5 million and share issue expenses of RMB119.3 million.
SUMMARY
–1 4–


--- page 25 ---
Our net assets increased from RMB5,593.1 million as of December 31, 2024 to
RMB5,739.8 million as of September 30, 2025, primarily attributable to our profit for the nine
months ended September 30, 2025 of RMB514.5 million, the increase of share-based payments
of RMB90.9 million and the increase of share of other capital reserves of associates of
RMB84.6 million, partially offset by shares repurchased under a share award scheme of
RMB299.9 million and dividends declared of RMB228.8 million.
Our net current assets increased from RMB651.5 million as of December 31, 2022 to
RMB995.3 million as of December 31, 2023, primarily attributable to (i) an increase in trade
and bills receivables of RMB3,470.2 million, and (ii) an increase in cash and cash equivalents
of RMB1,127.9 million; partially offset by an increase in trade and bills payables of
RMB4,068.9 million as a result of an increase in our procurement of raw materials.
Our net current assets increased from RMB995.3 million as of December 31, 2023 to
RMB2,436.3 million as of December 31, 2024, primarily attributable to (i) an increase in trade
and bills receivables of RMB2,724.1 million, which was in line with the increase in our
revenue, (ii) an increase in investment measured at FVTPL of RMB1,384.9 million, which
represented our equity investments in listed companies and investments in wealth management
products, and (iii) an increase in cash and cash equivalents of RMB1,054.6 million; partially
offset by (i) an increase in trade and bills payables of RMB3,656.8 million as a result of an
increase in our procurement of raw materials, and (ii) an increase in interest-bearing bank
borrowings of RMB1,053.8 million.
Our net current assets decreased from RMB2,436.3 million as of December 31, 2024 to
RMB1,922.3 million as of September 30, 2025, primarily attributable to (i) an increase in
interest-bearing bank borrowings of RMB1,227.8 million, (ii) a decrease in pledged deposits
of RMB776.4 million, and (iii) a decrease in trade and bills receivables of RMB517.0 million;
partially offset by (i) an increase in cash and cash equivalents of RMB1,388.8 million, and (ii)
a decrease in trade and bills payables of RMB630.3 million.
For details of the fluctuation in key items of our consolidated statements of financial
position and net current assets during the Track Record Period, see “Financial Information —
Discussion of Certain Key Items of Consolidated Statements of Financial Position.”
SUMMARY
–1 5–


--- page 26 ---
Summary of Consolidated Statements of Cash Flow
The following table sets forth a summary of our consolidated cash flow statements for the
years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Net cash from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,470,989 1,466,228 1,026,493 919,587 915,761
Net cash from/(used in)
investing activities /H1118/H11181,064,622 (698,067) (2,066,719) (1,427,145) (289,868)
Net cash (used in)/from
financing activities /H1118/H1118(547,549) 367,144 2,105,518 1,614,991 781,536
Net increase in cash and
cash equivalents /H1118/H1118/H1118/H11181,988,062 1,135,305 1,065,292 1,107,433 1,407,429
Cash and cash
equivalents at
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,289,908 3,278,958 4,406,907 4,406,907 5,461,528
Effect of foreign
exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118988 (7,356) (10,671) (82,835) (18,586)
Cash and cash
equivalents at the
end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H11183,278,958 4,406,907 5,461,528 5,431,505 6,850,371
SUMMARY
–1 6–


--- page 27 ---
KEY FINANCIAL RATIOS
The following table set forth our key financial ratios as of the dates or for the years/period
indicated.
As of/For the year ended December 31,
As of/
For the
nine months
ended
September 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H11188.1% 9.5% 5.8% 8.3%
Return on equity
(ROE) (2)(6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.4% 17.3% 10.5% 12.1%
Return on assets
(ROA) (3)(6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.8% 3.5% 2.1% 2.6%
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.1 1.1 1.1 1.1
Quick ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.0 1.0 1.0 1.0
Notes:
(1) Gross profit margin is calculated as gross profit divided by revenue for the respective year/period.
(2) The return on equity (ROE) is calculated as profit for the year/period divided by average of the opening
and closing balances of total equity for the respective year/period.
(3) The return on assets (ROA) is calculated as profit for the year/period divided by average of the opening
and closing balances of total assets for the respective year/period.
(4) The current ratio is calculated as current assets divided by current liabilities as of the relevant date.
(5) The quick ratio is calculated as current assets minus inventories, divided by current liabilities as of the
relevant date.
(6) The return on equity and return on assets for the nine months ended September 30, 2025 are calculated
on an annualized basis. Accordingly, the annualized return on equity and return on assets may not be
indicative of those for the full year ended December 31, 2025. Investors are cautioned not to place any
undue reliance on such data.
RISK FACTORS
Our operations and the Global Offering involve certain risks and uncertainties, some of
which are beyond our control and may affect your decision to invest in us and/or the value of
your investment. See ‘‘Risk Factors’’ for details of our risk factors. Some of the major risks we
face include: (i) our historical financial and operating results may not be indicative of our
future performance; (ii) we derived a substantial portion of revenue from certain major
customers during the Track Record Period and the loss of, or a significant reduction in, revenue
from such customers could materially and adversely affect our results of operations; (iii) the
global smart device ODM industry is highly competitive and concentrated among a few major
SUMMARY
–1 7–


--- page 28 ---
players. If we cannot compete effectively, our market share and profitability could be adversely
affected; (iv) our and our customers’ smart devices may have a relatively short product life
cycle and are subject to rapidly evolving customer demands and consumer preferences; (v) we
generally do not have long-term purchase commitments from most of our customers, which
may subject us to uncertainty and revenue volatility from period to period; (vi) we may not be
able to manage the pricing of our products as a result of any decrease in our bargaining power
or changes in market conditions; (vii) our success depends on a stable and adequate supply of
raw materials which are subject to price volatility and other risks; (viii) any disruption of our
current manufacturing centers or failure to successfully execute our capacity expansion and
equipment upgrade plans or failure to effectively utilize our production facilities may have a
material adverse effect on our business, financial condition and results of operations; and (ix)
any quality issues associated with our products may expose us to potential liabilities, subject
us to risks relating to warranty claims, result in lost customers and sales, product recalls and
increased compliance costs, which could adversely affect our results of operations and
financial condition.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that (i) the Global
Offering has been completed and 52,259,100 H Shares are issue pursuant to the Global
Offering, (ii) the Over-allotment Option is not exercised, and (iii) 521,360,707 Shares are in
issue and outstanding following the completion of the Global Offering.
Based on
the maximum
Offer Price of
HK$31.00 per
H Share
Market capitalization of our H Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$1,620.0
million
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$25,813.8
million
Unaudited pro forma adjusted consolidated net tangible assets per
Share (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$15.00
Notes:
(1) The total market capitalization of our Company is calculated based on (i) 469,101,607 A Shares in issue
and outstanding (without taking into account the 1,229,937 treasury Shares) as of the Latest Practicable
Date with an average closing price of RMB46.49 (approximately HK$51.57) per A Share for the five
business days immediately preceding the Latest Practicable Date, and (ii) the expected market
capitalization of our H Shares immediately following completion of the Global Offering.
(2) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the
adjustments referred to in the section headed “Unaudited Pro Forma Financial Information” in Appendix
II to this prospectus and is calculated based on 522,590,644 Shares in issue immediately following
completion of the Global Offering without taking into account any Shares which may be issued upon
the exercise of the Over-allotment Option.
SUMMARY
–1 8–


--- page 29 ---
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,520.7 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, and based on the maximum Offer Price
of HK$31.00 per Share, assuming the Over-allotment Option is not exercised. We currently
intend to apply these net proceeds for the following purposes: (i) approximately 40%, or
HK$608.3 million, will be used to expand our overall production capacity both domestically
and internationally, thereby enhancing our self-production capabilities; (ii) approximately
20%, or HK$304.1 million, will be used to support our ongoing research and development
efforts, particularly to strengthen our independent R&D and innovation capabilities in key
areas; (iii) approximately 10%, or HK$152.1 million, will be used to improve our domestic and
international marketing and customer expansion efforts; (iv) approximately 20%, or HK$304.1
million, will be used to support our global strategic investments or acquisitions; and (v)
approximately 10%, or HK$152.1 million, will be used for working capital and other general
corporate purposes.
See the section headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus for further
information relating to our future plans and use of proceeds from the Global Offering.
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
Our Directors estimate, on the bases set out in Appendix IA to this prospectus, and in the
absence of unforeseen circumstances, the estimated consolidated profit attributable to equity
shareholders of our Company for the year ended December 31, 2025 as follows:
Estimated consolidated profit attributable to equity
shareholders of our Company for the year ended
December 31, 2025
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Not less than RMB570 million
Note:
(1) The basis on which the above estimate has been prepared is set out in Appendix IA to this prospectus.
SUMMARY
–1 9–


--- page 30 ---
DIVIDENDS
During the Track Record Period, we declared cash dividends to our Shareholders as
follows.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Dividends for ordinary
shareholders of our Company
recognized as distribution
during the year/period:
Interim dividend /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293,014 – – – –
Final dividend /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,039 – 232,548 232,548 228,798
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118455,053 – 232,548 232,548 228,798
As of the Latest Practicable Date, we had paid these dividends in full.
On November 25, 2022, our general shareholders meeting passed resolutions regarding
the shareholder dividend plan for the three years following our listing on the main board of the
Shanghai Stock Exchange (the “ 2022 Shareholder Dividend Plan ”). This plan stipulates that
the total cash dividends to be distributed over this period shall be no less than 30% of the
average annual distributable profit achieved, provided that the conditions for cash dividends
are met. In addition, we will review and reaffirm our shareholder dividend plan at least every
three years, taking into account our operational performance, investment strategies and
long-term development goals.
After the completion of the Global Offering, we may distribute dividends in the form of
cash or by other means permitted by our dividend policy as included in our Articles of
Association. A decision to declare or to pay dividends in the future and the amount of dividends
will be at the discretion of our Shareholders’ meeting and will depend on a number of factors,
including our results of operations, cash flows, financial condition, payments by our
subsidiaries of cash dividends to us, business prospects, statutory, regulatory restrictions on our
declaration and payment of dividends and other factors that our Board may consider important.
Any declaration and payment as well as the amount of dividends will be subject to our
constitutional documents and the relevant laws. Our Shareholders may approve any declaration
of dividends. Save for the distribution standard set out in the 2022 Shareholder Dividend Plan,
we had not specified any dividend payout ratio as of the Latest Practicable Date.
SUMMARY
–2 0–


--- page 31 ---
According to applicable PRC laws and our Articles of Association, we will pay dividends
out of our profit after tax only after we have made the following allocations: recovery of the
losses incurred in the previous year; allocations to the statutory reserve equivalent to 10% of
our profit after tax; allocations to a discretionary common reserve of certain percentage of our
profit after tax that are approved by a Shareholders’ meeting.
LISTING EXPENSES
Listing expenses to be borne by us are estimated to be approximately HK$100.1 million
(based on the maximum Offer Price of HK$31.00 per Share), representing approximately 6.2%
of the estimated gross proceeds from the Global Offering assuming no Shares are issued
pursuant to the Over-allotment Option. The listing expenses consist of (i) underwriting-related
expenses, including underwriting commission, of approximately HK$52.0 million, and (ii)
non-underwriting-related expenses of approximately HK$48.1 million, comprising (a) fees and
expenses of our legal advisors and reporting accountants of approximately HK$25.5 million,
and (b) other fees and expenses of approximately HK$22.6 million. During the Track Record
Period, we incurred listing expenses of RMB20.6 million, of which (i) RMB0.8 million was
charged to the consolidated statements of profit or loss, and (ii) RMB19.8 million was directly
attributable to the issue of our H Shares to the public and is expected to be deducted from
equity upon the Listing. Subsequent to the Track Record Period, approximately HK$4.7 million
is expected to be charged to our consolidated statements of profit or loss, and approximately
HK$72.6 million is expected to be accounted for as a deduction from equity upon the Listing.
We do not believe any of the above fees or expenses are material or are unusually high for our
Group. The listing expenses above are the latest practicable estimate for reference only, and the
actual amount may differ from this estimate.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Du, Mr. Ge, Shanghai Xinhe, Kunshan Longcheer,
Chengmai Qihe and Kunshan Qiyun, by virtue of the acting-in-concert arrangement, were
collectively entitled to exercise or control the exercise of the voting rights attaching to
approximately 38.69% of our total issued Shares (excluding the Non-voting Shares).
Immediately following completion of the Global Offering (assuming the Over-allotment
Option is not exercised), Mr. Du, Mr. Ge, Shanghai Xinhe, Kunshan Longcheer, Chengmai
Qihe and Kunshan Qiyun, by virtue of the acting-in-concert arrangement, will be collectively
entitled to exercise or control the exercise of the voting rights attaching to approximately
34.76% of our total issued Shares (excluding the Non-voting Shares). Therefore, Mr. Du, Mr.
Ge, Shanghai Xinhe, Kunshan Longcheer, Chengmai Qihe and Kunshan Qiyun are and will
continue to be our Controlling Shareholders upon the Listing. For further details, see
“Relationship with Our Controlling Shareholders.”
SUMMARY
–2 1–


--- page 32 ---
LISTING ON THE SHANGHAI STOCK EXCHANGE
On March 1, 2024, our Company completed the A-Share Listing and our A Shares
commenced trading on the Shanghai Stock Exchange (stock code: 603341). Our Directors
confirm that, since the listing of the Shanghai Stock Exchange and up to the Latest Practicable
Date, we had no instances of material non-compliance with the rules of the Shanghai Stock
Exchange and other applicable securities laws and regulations of the PRC in any material
respects, and, to the best knowledge of our Directors having made all reasonable enquiries,
there was no material matter that should be brought to the investors’ attention in relation to our
compliance record on the Shanghai Stock Exchange.
For details, see “History and Corporate Structure — Listing on the Shanghai Stock
Exchange and Reasons for the Listing of the Stock Exchange.”
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this prospectus, there had been no material
adverse change in our business, financial condition and results of operations since September
30, 2025, which is the end date of the years reported on in the Accountants’ Report as set out
in Appendix I to this prospectus, and there is no event since September 30, 2025 which would
materially affect the information in the Accountants’ Report as set out in Appendix I to this
prospectus.
IMPACT OF COVID-19 PANDEMIC
During the Track Record Period and up to the Latest Practicable Date, the COVID-19
pandemic did not cause any disruption to our production facilities and supply chain. However,
due to the macroeconomic and general industry challenges posed by the pandemic, our revenue
from sales of smartphones decreased from 2022 to 2023. Despite this reduction, our business
operations and financial condition remained stable during the Track Record Period and were
not materially and adversely impacted by the COVID-19 pandemic.
SUMMARY
–2 2–


--- page 33 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain technical terms are
explained in the section headed “Glossary of Technical Terms” in this prospectus.
“A Share(s)” ordinary shares issued by our Company, with a nominal
value of RMB1.00 each, which are listed on the Shanghai
Stock Exchange and traded in Renminbi
“A-Share Listing” public offering and listing of A Shares of our Company
on the Shanghai Stock Exchange under the stock code
603341 on March 1, 2024
“Accountants’ Report” the accountants’ report of our Company for the Track
Record Period, as set out in Appendix I to this prospectus
“affiliate” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“Articles of Association” or
“Articles”
the articles of association of our Company adopted on
June 9, 2025 which will become effective upon the
Listing Date and as amended from time to time, a
summary of which is set out in Appendix V to this
prospectus
“Audit Committee” the audit committee of the Board
“Board” or “Board of Directors” the board of Directors of our Company
“Business Day” or “business
day”
any day (other than a Saturday, Sunday or public holiday
in Hong Kong and any day on which tropical cyclone
warning no. 8 or above or a black rainstorm warning
signal is hoisted in Hong Kong) on which banks in Hong
Kong are generally open for normal banking business
“CAGR” compound annual growth rate
DEFINITIONS
–2 3–


--- page 34 ---
“Capital Market Intermediary(ies)”
or “CMI(s)”
has the meaning given to it in the Listing Rules and,
unless the context requires otherwise, refers to the capital
market intermediaries named in “Directors and Parties
Involved in the Global Offering” in this prospectus
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“Chengmai Qihe” Chengmai Qihe Enterprise Management Partnership
(Limited Partnership) ( ᆋᒕ࿩ͫΆุ၍ଣΥྫΆุ(ࠢ
Υྫ)), one of our Controlling Shareholders and a limited
partnership organized in the PRC on December 25, 2014,
the general partner of which is Mr. Du
“China” or “the PRC” the People’s Republic of China, but for the purpose of
this prospectus and for geographical reference only and
except where the context requires otherwise, references
in this prospectus to “China” and the “PRC” do not apply
to Hong Kong, the Macau Special Administrative Region
and Taiwan of the PRC
“ChiNext” ChiNext Board of the Shenzhen Stock Exchange
“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
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company” or “our Company” Shanghai Longcheer Technology Co., Ltd. (߅
ʮ̡) (formerly known as Longcheer
Technology (Shanghai) Limited (Ҧ(ɪऎ)ʮ
̡)), was established under the laws of the PRC with
limited liability on October 27, 2004, the A Shares of
which are listed on the Shanghai Stock Exchange (stock
code: 603341), and if the context requires, includes its
predecessors
“Company Law” or “PRC
Company Law”
the Company Law of the PRC ( ʕശɛ͏΍ձ਷ʮ̡
), as amended, supplemented or otherwise modified
from time to time
DEFINITIONS
–2 4–


--- page 35 ---
“Compliance Advisor” Guotai Junan Capital Limited
“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Mr. Du,
Mr. Ge, Shanghai Xinhe, Kunshan Longcheer, Chengmai
Qihe and Kunshan Qiyun. See the section headed
“Relationship with Our Controlling Shareholders” in this
prospectus
“CSDC” China Securities Depository and Clearing Co., Ltd. ( ʕ਷
ப΂ʮ̡)
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ), a regulatory body responsible for the
supervision and regulation of the PRC national securities
markets
“Director(s)” the director(s) of our Company
“EIT” enterprise income tax
“EIT Law” the Enterprise Income Tax Law of the PRC ( ʕശɛ͏
), as amended, supplemented or
otherwise modified from time to time
“Eligible Employee(s)” employees of the Group selected by the Company, who
are also willing to participate in the Employee
Preferential Offering and satisfy the following criteria:
(a) remain to be an employee of the Group as of the date
of this prospectus; (b) are not a core connected person of
the Company; (c) are not any person whose acquisition of
securities will be financed directly or indirectly by the
Company or a core connected person; (d) are not any
person who is accustomed to take instructions from the
Company or a core connected person in relation to the
acquisition, disposal, voting or other disposition of
securities of the Company registered in his/her name or
otherwise held by him/her; (e) are outside the U.S. and
not a U.S. person (as defined in Rule 902 of Regulation
S); and (f) will only participate in the Global Offering
through the subscription of the Employee Reserved
Shares under the Employee Preferential Offering and will
not subscribe for the Company’s H Shares in the Global
Offering through any other channels
DEFINITIONS
–2 5–


--- page 36 ---
“Employee Preferential Offering” the preferential offering of the Employee Reserved
Shares to the Eligible Employees for subscription at the
Offer Price on a preferential basis, as further described in
“Structure of the Global Offering” in this prospectus
“Employee Reserved Shares” no more than 5,225,000 International Offer Shares being
offered to Eligible Employees pursuant to the Employee
Preferential Offering
“Employee Stock Ownership
Scheme”
an A-Share employee stock ownership scheme approved
by the Shareholders and adopted on May 26, 2025, the
principal terms of which are set out in “Appendix VI —
Statutory and General Information — C. Employee
Incentive Schemes — 2. Employee Stock Ownership
Scheme” to this prospectus
“EU” European Union
“Existing Shareholder Employee
Participants”
Eligible Employees (or their close associates) who hold
less than 1% of the total number of A Shares in issue of
the Company prior to completion of the Global Offering
“Extreme Conditions” extreme conditions caused by a super typhoon as
announced by the government of Hong Kong
“FINI” Fast Interface for New Issuance, an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all new listings
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a
global market research and consulting company, and an
Independent Third Party
“F&S Report” the report prepared by Frost & Sullivan
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational
Procedures
“Global Offering” the Hong Kong Public Offering and the International
Offering
DEFINITIONS
–2 6–


--- page 37 ---
“Group,” “our Group,” “we,”
“us” or “our”
our Company and all of our subsidiaries or, where the
context so requires, in respect of the period before our
Company became the holding company of its present
subsidiaries, the businesses operated by such subsidiaries
or their predecessors (as the case may be)
“H Share(s)” overseas listed foreign 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 HK dollars, and for
which an application has been made for listing and
permission to trade on the Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“Haikou Longcheer” Haikou Longcheer Technology Investment Co., Ltd. ( ऎ
ʮ̡), a limited liability company
established in the PRC on October 20, 2025 and a
wholly-owned subsidiary of our Company
“Hefei Longcheer Smart
Technology”
Hefei Longcheer Smart Technology Co., Ltd. (Ꮂ࿩
ʮ̡), a limited liability company
established in the PRC on November 22, 2021 and a
wholly-owned subsidiary of our Company
“HK Longcheer” Longcheer Telecommunication (H.K.) Limited, a
company incorporated in Hong Kong with limited
liability on April 21, 2004 and a wholly-owned subsidiary
of our Company
“HKSCC ” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO ” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your designated
HKSCC Participant’s stock account through causing
HKSCC Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf
DEFINITIONS
–2 7–


--- page 38 ---
“HKSCC Nominees ” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures ”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as 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
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong dollars,” “HK
dollars” or “HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong Offer Shares” the 5,226,000 H Shares initially being offered for
subscription in the Hong Kong Public Offering (subject
to reallocation as described in “Structure of the Global
Offering” in this prospectus)
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong, on the terms and subject to
the conditions described in this prospectus as further
described in “Structure of the Global Offering” in this
prospectus
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in “Underwriting” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement relating to the Hong Kong
Public Offering and entered into by our Company, the
Joint Sponsors, the Overall Coordinators and the Hong
Kong Underwriters on Tuesday, January 13, 2026, as
further described in “Information about this Prospectus
and the Global Offering — Underwriting and Information
on the Global Offering” in this prospectus
DEFINITIONS
–2 8–


--- page 39 ---
“Huizhou Longcheer” Longcheer Electronics (Huizhou) Co., Ltd. ( Ꮂ࿩ཥɿ(౉
ψ)ʮ̡), a limited liability company established in
the PRC on November 26, 2009 and a wholly-owned
subsidiary of our Company
“IFRS” International Financial Reporting Standards, which
include standards, amendments and interpretations
promulgated by the International Accounting Standards
Board and the International Accounting Standards and
interpretation issued by the International Accounting
Standards Committee
“Independent Third Party(ies)” person(s) or company(ies) who/which, to the best of our
Directors’ knowledge, information and belief, having
made all reasonable enquiries, are not our connected
persons
“INR” Indian rupee, the official currency of India
“International Offer Shares” the 47,033,100 H Shares being initially offered for
subscription under the International Offering
“International Offering” the offer of the International Offer Shares by the
International Underwriters outside the United States in
offshore transactions in accordance with Regulation S,
and in the United States solely to QIBs in reliance on
Rule 144A or any other available exemption from the
registration requirements under the U.S. Securities Act,
as further described in “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 international trade and investment
related activities, including those adopted administered
and enforced by the U.S. Government, the UK, the EU
and its member states, UN or Government of Australia
“International Sanctions Legal
Advisors”
Hogan Lovells, our legal advisors as to U.S. regulatory
laws and International Sanctions laws in connection with
the Listing
“International Underwriters” the underwriters of the International Offering
DEFINITIONS
–2 9–


--- page 40 ---
“International Underwriting
Agreement”
the international underwriting agreement, expected to be
entered into on or about the Price Determination Date,
relating to the International Offering, by our Company,
the Joint Sponsors, the Overall Coordinators and the
International Underwriters, as further described in
“Underwriting — International Offering — International
Underwriting Agreement” in this prospectus
“Joint Bookrunners,”
“Joint Global Coordinators,”
“Joint Lead Managers”
the joint bookrunners, the joint global coordinators, and
the joint lead managers as named in the section headed
“Directors and Parties Involved in the Global Offering”
in this prospectus
“Joint Sponsors” has the meaning given to it in the Listing Rules and,
unless the context requires otherwise, refers to the joint
sponsors named in “Directors and Parties Involved in the
Global Offering” in this prospectus
“Kunshan Longcheer” Kunshan Longcheer Investment Management Center
(Limited Partnership) (ʆᎲ࿩ҳ༟၍ଣʕː (Υ
ྫ)), one of our Controlling Shareholders and a limited
partnership organized in the PRC on December 25, 2014,
the general partner of which is Shanghai Xinhe
“Kunshan Qiyun” Kunshan Qiyun Investment Management Center (Limited
Partnership) (ʆ࿩ථҳ༟၍ଣʕː(Υྫ)), one of
our Controlling Shareholders and a limited partnership
organized in the PRC on December 2, 2014, the general
partner of which is Mr. Ge
“Latest Practicable Date” January 5, 2026, being the latest practicable date for the
purpose of ascertaining certain information in this
prospectus prior to its publication
“Listing” the listing of our H Shares on the Stock Exchange
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date expected to be on or about Thursday, January 22,
2026, on which dealings in our H Shares first commence
on the Stock Exchange
DEFINITIONS
–3 0–


--- page 41 ---
“Listing Guide” or “Guide for
New Listing Applicants”
the Guide for New Listing Applicants as published by the
Stock Exchange in December 2023 and amended from
time to time
“Listing Rules” or “Hong Kong
Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Main Board” the stock exchange (excluding the option market)
operated by the Stock Exchange, which is independent
from and operated in parallel with the GEM of the Stock
Exchange
“Miaobo Software” Miaobo Software Co., Ltd. (ʮ
̡), a limited liability company established in the PRC on
January 16, 2014, and a wholly-owned subsidiary of our
Company
“MIIT” the Ministry of Industry and Information Technology of
the PRC (ʷ௅)
“MOF” or “Ministry of
Finance”
the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” or “Ministry of
Commerce”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅) (formerly known as the Ministry of Foreign
Trade and Economic Cooperation of the PRC ( ʕശɛ͏
௅))
“Mr. Du” Mr. DU Junhong (ߎࠏour founder, the chairman of
our Board, an executive Director and one of our
Controlling Shareholders
“Mr. Ge” Mr. Ge Zhengang (ၤ), an executive Director, our
general manager and one of our Controlling Shareholders
“Nanchang Longcheer” Nanchang Longcheer Information Technology Co., Ltd.
(ʮ̡), a limited liability
company established in the PRC on July 17, 2017, and a
wholly-owned subsidiary of our Company
DEFINITIONS
–3 1–


--- page 42 ---
“Nanchang Longcheer Smart
Technology”
Nanchang Longcheer Smart Technology Co., Ltd. (׹ی
ʮ̡), a limited liability company
established in the PRC on July 27, 2022, and a wholly-
owned subsidiary of our Company
“NDRC” the National Development and Reform Commission ( ʕ
ึ)
“Nomination Committee” the nomination committee of the Board
“Non-voting Share(s)” including the 1,229,937 A Shares repurchased and held in
our Company’s stock repurchase account in treasury, and
the 6,270,000 A Shares repurchased and held in the
designated securities account of our Employee Stock
Ownership Scheme
“Northbound Trading Link” the trading arrangement under Shanghai-Hong Kong
Stock Connect that allows investors in Hong Kong and
overseas to trade eligible shares listed on the Shanghai
Stock Exchange, subject to rules and regulations of the
relevant regulatory authorities and the stock exchanges
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
“Offer Price” the final offer price per Offer Share (exclusive of
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%) at which Hong
Kong Offer Shares are to be subscribed for pursuant to
the Hong Kong Public Offering and International Offer
Shares are to be offered pursuant to the International
Offering, to be determined in the manner further
described in “Information about this prospectus and the
Global Offering — Underwriting and Information on the
Global Offering” in this prospectus
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, being the Shares of the Company
“Overall Coordinators” has the meaning given to it in the Listing Rules and,
unless the context requires otherwise, refers to the overall
coordinators named in “Directors and Parties Involved in
the Global Offering” in this prospectus
DEFINITIONS
–3 2–


--- page 43 ---
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the
International Underwriters) pursuant to the International
Underwriting Agreement, pursuant to which our
Company may be required to allot and issue up to an
aggregate of 7,838,800 additional H Shares at the Offer
Price to, among other things, cover over-allocations in
the International Offering, if any, further details of which
are described in the section headed “Structure of the
Global Offering” in this prospectus
“Overseas Listing Trial
Measures”
Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆ
) released by the
CSRC on February 17, 2023 and took effect on March 31,
2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC GAAP” generally accepted accounting principles in the PRC
“PRC Legal Advisors” Beijing DeHeng Law Offices, the legal advisors to our
Company as to the laws of the PRC
“PRC Securities Law” the Securities Law of the People’s Republic of China
(), as amended, supplemented
or otherwise modified from time to time
“Price Determination Agreement” the agreement to be entered into between our Company
and the Overall Coordinators (for themselves and on
behalf of the Underwriters) on or about the Price
Determination Date to record and fix the Offer Price
“Price Determination Date” the date on which the Offer Price is to be determined,
namely on or before Tuesday, January 20, 2026 and, in
any event, not later than 12:00 noon on Tuesday, January
20, 2026 unless otherwise determined between the
Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
DEFINITIONS
–3 3–


--- page 44 ---
“QIB(s)” a qualified institutional buyer within the meaning of Rule
144A
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Assessment
Committee”
the remuneration and assessment committee of the Board
“Restricted Share Scheme” the restricted A-Share Scheme approved by the
Shareholders and adopted on May 26, 2025, the principal
terms of which are set out in “Appendix VI — Statutory
and General Information — C. Employee Incentive
Schemes — 1. Restricted Share Scheme” to this
prospectus
“Restricted Share(s)” the restricted A-Shares to be granted and issued as
incentives to certain participants under the Restricted
Share Scheme
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Rule 144A” Rule 144A under the U.S. Securities Act
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAMR” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SA T” the State Administration of Taxation of the PRC ( ʕശɛ
೼ਕᐼ҅)
“Securities and Futures
Ordinance” or “SFO”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“SFC” the Securities and Futures Commission of Hong Kong
“Shanghai-Hong Kong Stock
Connect”
a securities trading and clearing links program developed
by the Hong Kong Stock Exchange, Shanghai Stock
Exchange, HKSCC and China Securities Depository and
Clearing Corporation Limited for mutual market access
between Hong Kong and Shanghai
DEFINITIONS
–3 4–


--- page 45 ---
“Shanghai Haocheng” Shanghai Haocheng Information Technology Co., Ltd.
(ʮ̡), a limited liability company
established in the PRC on October 13, 2009, and a
wholly-owned subsidiary of our Company
“Shanghai Longcheer Smart
Technology”
Shanghai Longcheer Smart Technology Co., Ltd. ( ɪऎᎲ
ʮ̡), a limited liability company
established in the PRC on October 19, 2021, and a
wholly-owned subsidiary of our Company
“Shanghai Stock Exchange” the Shanghai Stock Exchange (ה׸)
Shanghai Xinhe” Shanghai Xinhe Enterprise Management Co., Ltd. ( ɪऎ
ʮ̡), one of our Controlling
Shareholders and a limited liability company
incorporated in the PRC on June 7, 2018, which is owned
as to 51% by Mr. Du and as to 49% by Mr. Ge
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, comprising A Shares
and upon Listing, H Shares
“Shareholder(s)” holder(s) of our Share(s)
“Southbound Trading Link” the trading arrangement under Shanghai-Hong Kong
Stock Connect that allows eligible mainland Chinese
investors to trade eligible shares listed on Hong Kong
Stock Exchange, subject to rules and regulations of the
relevant regulatory authorities and the stock exchanges
“Sponsor-Overall Coordinators” has the meaning given to it in the Listing Rules and,
unless the context requires otherwise, refers to the
sponsor-overall coordinators named in “Directors and
Parties Involved in the Global Offering” in this
prospectus
“Stabilization Manager” Citigroup Global Markets Asia Limited
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Stock Exchange” or “Hong
Kong Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
DEFINITIONS
–3 5–


--- page 46 ---
“Strategy and ESG Committee” the strategy and ESG committee of the Board
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“Takeovers Code” the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Tianjin Jinmi” Tianjin Jinmi Investment Partnership (Limited
Partnership) (Ϸҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on July 16,
2014, and one of our Shareholders
“Track Record Period” the financial years ended December 31, 2022, 2023, 2024
and the nine months ended September 30, 2025
“Underwriters” the Hong Kong Underwriters and the International
Underwriters, as named in the Hong Kong Underwriting
Agreement and International Underwriting Agreement
respectively
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States,” “USA” or
“U.S.”
the United States of America, its territories and
possessions, any State of the United States, and the
District of Columbia
“U.S. dollars,” “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. Securities Act” the United States Securities Act of 1933, as amended and
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“V A T” value added tax
“Vietnam Longcheer” Longcheer Meiko Electronics Vietnam Co., Ltd., a
company incorporated in Vietnam with limited liability
on May 20, 2020, and a subsidiary of our Company
DEFINITIONS
–3 6–


--- page 47 ---
“White Form eIPO ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name by submitting applications
online through the designated website of White Form
eIPO Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“Xiaomi Group” Xiaomi Corporation ( ʃϷණྠ), a company controlled
through weighted voting rights and incorporated in the
Cayman Islands with limited liability, with its shares
listed on the Stock Exchange (stock code: 1810), as well
as its affiliates
“%” per cent
For the purpose of this prospectus, references to “provinces” of China include provinces,
municipalities under direct administration of the central government and provincial-level
autonomous regions.
In this prospectus the terms “associate(s),” “close associate(s),” “connected person(s),”
“core connected person(s),” “connected transaction(s),” “substantial shareholder(s)” and
“treasury share(s)” shall have the meanings given to such terms in the Listing Rules, unless the
context otherwise requires.
Certain amounts and percentage figures have been subject to rounding adjustments;
accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of
the figures preceding them.
For ease of reference, the names of PRC laws and regulations, governmental authorities,
institutions, nature persons or other entities (including certain of our subsidiaries) have been
included in this prospectus in both the Chinese and English languages and in the event of any
inconsistency, the Chinese versions shall prevail. English translations of company names and
other terms from the Chinese language are provided for identification purposes only.
DEFINITIONS
–3 7–


--- page 48 ---
This glossary of technical terms contains definitions of certain terms used in this
prospectus in connection with our Company and our business. The terms and their
meanings may not always correspond to standard industry meaning or usage of these
terms, and may not be directly comparable to similarly titled terms adopted by other
companies operating in the same industries as our Company.
“4G” the fourth-generation mobile communication standard,
also known as the fourth-generation mobile
communication technology
“5G” the fifth-generation mobile communication standard, also
known as the fifth-generation mobile communication
technology
“AI” artificial intelligence, simulation of human intelligence
by machine
“AIoT” Artificial Intelligence of Things, the combination of AI
technologies with the IoT infrastructure to achieve more
efficient IoT operations, improve human-machine
interactions and enhance data management and analytics
“AI PC(s)” personal computer(s) equipped with AI technologies
“AOI” automated optical inspection, an automated visual quality
control process in electronics manufacturing that uses
cameras and image processing to check PCBs for defects
after component placement and soldering
“AR” augmented reality
“BI” business intelligence
“BOM” bill of materials
“Buy & Sell model” a collaboration model between us and certain of our
customers. We procure certain materials and components
from the customers for our production, primarily due to
considerations such as material quality and timely supply
“CAGR” compound annual growth rate
GLOSSARY OF TECHNICAL TERMS
–3 8–


--- page 49 ---
“chipset” a group of integrated circuits on a computer mainboard
that manages data flow between the processor, memory,
storage, and peripherals
“CIT” customer interface test, a final pre-delivery validation
process that verifies if a product’s hardware/software
interfaces meet client-specific requirements for
functionality, usability, and compatibility
“ECU” electronic control unit, an embedded system or micro-
controller-based device that controls one or more
electrical systems or subsystems
“design for manufacturability” an engineering approach that optimizes product designs
to simplify manufacturing, reduce costs, and improve
quality by proactively addressing production constraints
during the design phase
“EMS” electronic manufacturing services
“ESG” Environmental, Social and Governance
“FPM” financial performance management
“IC” integrated circuit, a miniature electronic device that
combines multiple electronic components onto a single
semiconductor chip
“Internet of Things” or “IoT” Internet of Things, which describes the network of
devices that are embedded with sensors, software and
other technologies for the purpose of connecting and
exchanging data with other devices and systems over the
Internet or other communications networks
“IPD” integrated product development, a comprehensive
product and R&D management framework, characterized
by examining product and R&D management
philosophies and structures from the perspective of
product investment and development
“LCM” liquid crystal module, a fully integrated display assembly
that combines a liquid crystal panel, backlight unit, driver
circuits, and structural components into a functional unit
ready for installation in devices
GLOSSARY OF TECHNICAL TERMS
–3 9–


--- page 50 ---
“mainboard” the main PCB in a product which holds the electronic
components
“manufacturing center(s)” hub(s) for our manufacturing activities, including the
centers in Huizhou, Nanchang, Vietnam, and India (in
collaboration with a third-party EMS partner)
“MCU” microcontroller unit, a compact integrated circuit that
controls electronic devices
“MES” manufacturing execution system
“MMI” man-machine interface, the hardware and software
components that enable interaction between humans and
electronic devices
“MR” mixed reality
“MRP” material requirement planning
“NG” no good, a quality control term marking defective
products, components, or processes that fail to meet
standards
“OA” on-the-spot audit
“OS” operating system
“ODM” original design manufacturing
“OEM” original equipment manufacturing
“PC” personal computer
“RAUD” reliability, availability, usability, and durability
“R&D” research and development
“RF” radio frequency
“RTOS” real-time operating system
GLOSSARY OF TECHNICAL TERMS
–4 0–


--- page 51 ---
“PCB” printed circuit board, a flat plate or base of insulating
material containing a pattern of conducting materials,
which becomes an electronic circuit when components
are soldered to it
“PCBA” printed circuit board assembly, the fully assembled
electronic circuit
“PLM” product lifetime management
“QA” quality assurance
“QMS” quality management system
“SA” standalone, a network architecture that operates
independently without relying on existing infrastructure
“shipment” in the context of the ODM shipment of our products,
including complete units, semi-knocked down and
completely knocked down
“SiP” System-in-Package, an advanced semiconductor
packaging technology that integrates multiple electronic
components, such as processors, memory, sensors, and
passive elements, into a single compact module. These
components are connected internally, allowing the SiP to
perform as a complete functional system while saving
space and improving performance in electronic devices.
“smart eyewear” smart eyewear encompasses products such as AI glasses
and smart head-mounted display devices capable of
delivering augmented reality (AR), extended reality
(ER), virtual reality (VR), and mixed reality (MR)
experiences
“SMT” surface mount technology, a method in which the
electrical components are mounted directly onto the
surface of a printed circuit board
“SoC” system on chip, an integrated circuit that consolidates
multiple core components of an electronic system onto a
single chip
GLOSSARY OF TECHNICAL TERMS
–4 1–


--- page 52 ---
“S&OP” sales and operations planning, an integrated business
management process
“SPI” solder paste inspection, a quality control process in SMT
manufacturing that uses special devices to check solder
paste deposits on PCBs before component placement
“SRM” supplier relationship management
“TWS” true wireless stereo, a wireless audio technology that
enables the transmission of stereo sound signals via
Bluetooth without the need for any physical cables
“VMI” vendor managed inventory
“WMS” warehouse management system
“XR” extended reality
GLOSSARY OF TECHNICAL TERMS
–4 2–


--- page 53 ---
We have included in this prospectus forward-looking statements. Statements that
are not historical facts, including statements about our intentions, beliefs, expectations
or predictions for the future, are forward-looking statements.
This prospectus contains certain forward-looking statements and information relating to
us and our subsidiaries that are based on the beliefs of our management as well as assumptions
made by and information currently available to our management. When used in this prospectus,
the words “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “going forward,”
“intend,” “may,” “might,” “ought to,” “plan,” “potential,” “predict,” “project,” “seek,”
“should,” “will,” “would” and the negative of these words and other similar expressions, as
they relate to us or our management, are intended to identify forward-looking statements. Such
statements reflect the current views of our management with respect to future events,
operations, liquidity and capital resources, some of which may not materialize or may change.
These statements are subject to certain risks, uncertainties and assumptions, including the
other risk factors as described in this prospectus. Y ou are strongly cautioned that reliance on
any forward-looking statements involves known and unknown risks and uncertainties. The
risks and uncertainties facing our Company which could affect the accuracy of forward-looking
statements include, but are not limited to, the following:
 our mission, goals and strategies;
 our future business development, financial conditions and results of operations;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 our expectations regarding demand for and market acceptance of our products and
services;
 our expectations regarding our relationships with customers, business partners,
suppliers and other partners;
 changes in the macro environment, regional and global economy, as well as industry
trends related to our operations;
 our ability to adequately protect our reputation and brand image, as well as our
intellectual property rights;
 our ability to obtain adequate capital resources to fund future development plans;
 our ability to control costs, as well as to achieve and maintain operational efficiency;
FORW ARD-LOOKING STATEMENTS
–4 3–


--- page 54 ---
 our ability to attract and retain qualified personnel;
 competition in the industries and markets in which we operate or into which we
intend to expand;
 our proposed use of proceeds;
 rapid developments in technology and our ability to successfully keep up with
technological advancement;
 changes in currency exchange rates;
 relevant government policies and regulations relating to industries which we operate
in;
 certain statements in this prospectus with respect to trends in prices, operations,
margins, overall market trends, and risk management;
 change of volatility in interest rates, equity prices, volumes, operations, margins,
risk management and overall market trends; and
 other statements in this prospectus that are not historical facts.
Subject to the requirements of applicable laws, rules and regulations, we do not have any
and undertake no obligation to update or otherwise revise the forward-looking statements in
this prospectus, whether as a result of new information, future events or otherwise. As a result
of these and other risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this prospectus might not occur in the way we expect or at all.
Accordingly, the forward-looking statements are not a guarantee of future performance and you
should not place undue reliance on any forward-looking information. Moreover, the inclusion
of forward-looking statements should not be regarded as representations by us that our plans
and objectives will be achieved or realized. All forward-looking statements in this prospectus
are qualified by reference to the cautionary statements in this section.
In this prospectus, statements of or references to our intentions or those of the Directors
are made as of the date of this prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
–4 4–


--- page 55 ---
Y ou should carefully consider all of the information in this prospectus, including
the following risk factors before making any investment decision in relation to the H
Shares. Our business, financial condition or results of operations could be materially
and adversely affected by any of these risks. The market price of the H Shares could
fall significantly due to any of these risks, and you may lose all or part of your
investment. The information given is subject to the cautionary statements in the section
headed “Forward-Looking Statements.”
RISKS RELATING TO OUR INDUSTRY AND BUSINESS
Our historical financial and operating results may not be indicative of our future
performance.
During the Track Record Period, we experienced fluctuations in our revenue and profits.
Our revenue decreased by 7.4% from RMB29,343.2 million in 2022 to RMB27,185.1 million
in 2023 and increased by 70.6% to RMB46,382.5 million in 2024, and our revenue decreased
from RMB34,920.9 million in the nine months ended September 30, 2024 to RMB31,331.6
million in the nine months ended September 30, 2025, primarily due to fluctuations in our
ODM shipments, which was in turn affected by end-consumer demands for smart devices. Our
profit for the year increased from RMB561.5 million in 2022 to RMB602.7 million in 2023,
primarily due to the increase in our gross profit, partially offset by the increases in our sales
and marketing expenses, administrative expenses and research and development expenses
pursuant to our business expansion and increased research and development activities. Our
profit for the year decreased to RMB493.4 million in 2024, primarily due to the increase in
research and development expenses attributable to the growth in the number of research and
development personnel and the increased research and development activities, partially offset
by the increase in our gross profit. Our profit for the period increased from RMB425.4 million
in the nine months ended September 30, 2024 to RMB514.5 million in the nine months ended
September 30, 2025, primarily due to the increase in our gross profit, partially offset by the
increases in our sales and marketing expenses, administrative expenses and research and
development expenses pursuant to our business expansion and increased research and
development activities. For details, see “Financial Information — Period to Period Comparison
of Results of Operations.” Our past performance is not necessarily indicative of future results.
Our financial and results of operations may not meet the expectations of public market analysts
or investors. The effects of changing regulatory, economic, public health, environmental,
competitive conditions and many other factors cannot be fully predicted and may have a
material adverse effect on our business, financial condition, results of operations and
prospects. As we continue our business expansion, we cannot assure you that we will achieve
the expected results or maintain the same levels of revenue growth and profitability as we have
achieved historically. We believe that period-to-period comparisons of our results of operations
during the Track Record Period may not be indicative of our future performance and you
should not rely on them to predict the future performance of our results of operations.
RISK FACTORS
–4 5–


--- page 56 ---
We derived a substantial portion of revenue from certain major customers during the
Track Record Period and the loss of, or a significant reduction in, revenue from such
customers could materially and adversely affect our results of operations.
During the Track Record Period, we generated a substantial portion of revenue from a
limited number of customers. For the years ended December 31, 2022, 2023 and 2024 and the
nine months ended September 30, 2025, revenue generated from our five largest customers in
each year/period accounted for 87.6%, 79.6%, 82.2% and 79.4% of our total revenue in each
year/period, respectively, and revenue generated from our largest customer in each year/period
accounted for 45.5%, 42.4%, 37.2% and 28.6% of our total revenue in each year/period,
respectively. Our current concentration on a few major customers exposes us to the risks of
substantial losses if such major customers significantly reduce orders to us, or stop engaging
in businesses with us at all. For example, our major customers may develop in-house product
development and manufacturing capabilities instead of adopting ODM services. For instance,
one of our major customers is reported to be launching its own factory to manufacture some
of its smartphone products. Specifically, any of the following events, among others, may cause
material fluctuations or declines in our revenue and have a material and adverse effect on our
business, financial condition and results of operations: (i) the reduction, delay or cancellation
of purchase orders from one or more of our major customers; (ii) the reduction in the
purchase price of our products; (iii) the rejection of products manufactured by us for one
or more of our major customers due to manufacturing defects or other reasons; (iv) the loss of
one or more of our major customers and our failure to identify and obtain additional or
replacement customers that can replace the lost sales volume at satisfactory pricing or other
terms; or (v) the failure or inability of any of our major customers to make timely payment for
our products.
We anticipate that our concentration on a limited number of customers will continue for
the foreseeable future. We cannot assure you that our customer relationships will continue to
develop or if these customers will continue to generate significant revenue for us in the future.
Any failure to maintain our existing customer relationships or to expand our customer base will
materially and adversely affect our results of operations and financial condition.
The global smart device ODM industry is highly competitive and concentrated among a
few major players. If we cannot compete effectively, our market share and profitability
could be adversely affected.
We are a leading global provider of smart devices and services and we operate a highly
integrated and flexible business model that combines full-stack ODM solutions with R&D
services. The global smart device ODM industry is highly competitive that include intense
price competition, frequent introduction of new products, frequent consumer demands for
product replacement or upgrade, rapid adoption of product advancements and diverse
preferences of consumers. In addition, the global smart device ODM industry is also
concentrated with a few major players accounting for a substantial portion of market shares.
We compete principally in terms of our product design, development and manufacturing
capabilities, scale of manufacturing capacity, product quality and ability to deliver products in
RISK FACTORS
–4 6–


--- page 57 ---
compliance with domestic and international standards. This requires a combination of various
elements, including, without limitation, accurate analysis and prediction of market trends,
timely collection of consumer feedback, strong research and development capability and
flexible and cost-effective product production.
We expect competition to intensify in the future as technology and market develop, and
existing competitors introduce new and more competitive products alongside their existing
products. Current competitors and new entrants may seek to develop new offerings,
technologies or capabilities that could render many of our products obsolete or less
competitive. We face escalating competitive challenges as brand owners increasingly demand
enhanced technical capabilities, faster time-to-market, and more innovative solutions from
their ODM suppliers. Should we fail to maintain our technological edge through continued
R&D investment and talent acquisition, brand owners may accelerate their transition toward
in-house product development and manufacturing capabilities. This industry-wide trend toward
vertical integration among major brands represents a structural risk that could reduce the
addressable market for ODM services in our product categories. In addition, our competitors
may attract our current and potential customers to favor their products and therefore reduce our
ODM shipments. The occurrence of any of these circumstances may hinder our growth and our
ability to compete and reduce our market share and profitability, and in turn materially and
adversely affect our business, results of operations, financial condition and prospects.
Our and our customers’ smart devices may have a relatively short product life cycle and
are subject to rapidly evolving customer demands and consumer preferences.
Many of our and our customers’ products have relatively short product life cycles due to
frequent new product launches by our customers, rapidly changing technologies and evolving
industry standards. To compete effectively in the global smart device ODM industry, we are
required to satisfy the rapidly evolving customer demands and consumer preferences, which
requires our constant research and development in new products and product technologies.
Developing new products and product technologies are a complex process requiring high levels
of innovation and skilled research and development personnel, as well as the accurate
anticipation of technological and market trends. We cannot assure you that we will be able to
identify and develop new products and product technologies successfully, if at all, or on a
timely basis. In addition, introducing new products or entering in new markets carries inherent
market risks, including uncertainties regarding marketing and consumer preferences. Failure to
anticipate and respond to these preferences can have adverse effects on our sales performance
and profitability. For details, see “— We may not be able to successfully execute our growth
strategies and manage the associated challenges in new and evolving business areas.”
The expansion and profitability of our business depend on the level of consumer demand
and spending on smart devices, which could be affected by factors beyond our control.
The success of our business depends, to a significant extent, on consumer demand and
spending in the smart device market where we sell our products to our customers. Numerous
external factors beyond our control can influence the level of consumer demand and spending
RISK FACTORS
–4 7–


--- page 58 ---
on smart devices. These factors include general economic conditions, inflationary pressures,
consumer disposable income, recession concerns, unemployment rates, geopolitical tensions,
disease outbreaks, availability of consumer credit, interest rates, sales tax rates, and consumer
perceptions of personal well-being and security. Reduced consumer confidence and spending
cutbacks can lead to a decrease in demand for smart devices, which could in turn affect the
demands for our customers’ products. If sales of our customers’ products decline or if their
products do not achieve market acceptance as expected, our business and results of operations
could be adversely affected.
The smart device market has historically been cyclical and has experienced downturns
with declines in average selling prices that have adversely affected, and may in the future
materially adversely affect, our business, results of operations and financial condition.
According to Frost & Sullivan, the cyclical nature of smart device market and declines in
average selling price are propelled by technological change, product iteration period, and
market policies. Industry cycles are typically characterized by breakthrough technologies like
AI that ignite periods of exponential growth, followed by phases of market maturation and
potential decline in price of existing technologies. On average, the replacement cycle for
consumer electronics ranges from three to five years, influencing the product iteration period
and market demand. Additionally, global policy frameworks, such as trade-in incentives in the
Chinese market, play a pivotal role in affecting product replacement cycles and prices of smart
device. For the first time in the recent four years, the global average selling price for
smartphone saw a decline in 2024, dropping by 3.1%. In particular, in recent years, the global
economy has faced significant challenges, including disruptions across industries and supply
chains, inflationary pressures in many countries and ongoing volatility in global markets. Any
extended global economic downturn could lead to decreased discretionary spending in the
smart device market, causing consumers to reduce their purchases. As a result, we may have
difficulty maintaining or expanding our revenue or customer base, which could have a material
and adverse effect on our business, results of operations, and financial condition.
Changes in industry standards and technical requirements relevant to our products and
markets could adversely affect out results of operation and business prospects.
Our products are primarily smart devices that must comply with various
industry standards and technical requirements issued by regulatory bodies or industry
participants. For example, the Radio Regulation of the People’ s Republic of China (ʕശɛ
͏΍ձ਷ೌᇞཥ၍ଣૢԷ) promulgated by the State Council and the Central Military
Commission, the Regulation on the Safety and Protection of Radioisotopes and Radiation
Devices (ᇞༀໄτΌձԣᚐૢԷ) promulgated by the State Council,
the Measures for the Administration of Safety Licensing for Radioisotopes and Radiation
Devices () promulgated by the former
Ministry of Environmental Protection. Industry standards and technical requirements in our
market are evolving and may change significantly over time. In addition, large industry-leading
RISK FACTORS
–4 8–


--- page 59 ---
smart device brands play a significant role in developing standards and technical requirements.
Our customers also may design certain specifications and other technical requirements specific
to their products. These technical requirements may change as customers introduce new or
enhanced products.
Our ability to compete in the future will depend on our ability to identify and comply with
evolving industry standards and technical requirements. The emergence of new industry
standards and technical requirements could render our products incompatible with products
developed by other competitors or make it difficult for our products to meet the requirements
of certain of our customers. As a result, we could be required to invest significant time and
effort and to incur significant expense to redesign our products to ensure compliance with
relevant standards and requirements. If our products are not in adherence to prevailing industry
standards and technical requirement, our business, results of operations and prospects may be
adversely affected.
We generally do not have long-term purchase commitments from most of our customers,
which may subject us to uncertainty and revenue volatility from period to period.
We generally do not have long-term purchase commitments from our customers. We
cannot assure you that order volumes and selling prices will be consistent with our historical
record nor our expectation. Cancellations, reductions or postponements of purchase orders by
a major customer or by a group of customers could adversely affect our business, financial
condition and results of operations. The absence of long-term purchase commitments with
pre-determined prices may also mean our selling prices are subject to fluctuations.
In addition, we make significant decisions, including determining the levels of orders that
we will seek and accept, production schedules, raw material procurement commitments,
personnel needs and other resource requirements, based on our estimates of customer
requirements. The nature of our customers’ commitments and the possibility of rapid changes
in consumer demands for their products restrict our ability to accurately estimate future
customer requirements. Occasionally, customers may require rapid increases in product
delivery, which can strain our resources. We may not be able to increase our production volume
or even manufacturing capacity at any given time to meet our customers’ demands. On the
other hand, a reduction in customer demand may negatively impact our financial condition,
result of operations and prospect.
We may not be able to manage the pricing of our products as a result of any decrease in
our bargaining power or changes in market conditions.
We price our products based on a framework where the product cost, development
expenses, and reasonable margin do not exceed the total cost, expenses, and margin that would
be incurred by the customer through in-house development. In practice, we also take into
account the prevailing competitive landscape when setting specific product pricing, allowing
us to remain flexible and responsive to market dynamics. Our ability to set favorable prices at
our desired margins and to accurately estimate costs, among other factors, has a significant
RISK FACTORS
–4 9–


--- page 60 ---
impact on our profitability. We cannot assure you that we will be able to maintain our pricing
or bargaining power or that our gross profit margin will not be affected by market conditions
or other factors. In the event that we are faced with higher pricing pressure due to intensified
competition from other manufacturers, continued decrease in prices to our customers in the end
market or any other reasons, or if we otherwise lose bargaining power due to weaker demand
for our products, we may need to reduce the prices and lower the margins of our products.
Moreover, we may not be able to accurately estimate our costs or pass on all or part of any
increase in our costs of production, in particular the costs of raw materials, components and
parts, to our customers. As a result, our results of operations and profitability could be
materially and adversely affected.
We may not be able to successfully execute our growth strategies and manage the
associated challenges in new and evolving business areas.
As part of our long-term growth strategy, we are actively expanding into strategically
emerging categories, particularly AI PCs and automotive electronics. The production of
different products requires different technical and production capabilities, especially in the
case of automotive electronics, which must comply with stringent automotive standards and
specialized manufacturing processes. For example, manufacturing automotive electronics
products necessitates automotive-grade production lines that ensure safety, reliability and
performance. We have a limited experience and track record in developing and manufacturing
these new products compared to our established smartphones and other products, which may
not provide a meaningful basis on which to evaluate our business. In addition, we expect our
growing operations to place a strain on our management, personnel, systems and resources. If
we are unable to manage our business growth with respect to these new products, we may not
be able to take advantage of market opportunities, execute our growth strategies or respond to
competitive pressure. To successfully execute our growth strategies and manage our growth,
we believe we must effectively:
 expand and upgrade our product design and development capabilities;
 hire, train, integrate and manage additional qualified senior management, engineers,
sales and marketing personnel and information technology personnel;
 implement additional, and improve existing, administrative and operations systems,
procedures and controls;
 manage our business relationships with customers and suppliers; and
 manage our financial condition and allocate resources to address future demand for
different products.
RISK FACTORS
–5 0–


--- page 61 ---
We cannot assure you that such efforts will reach our expected success. We cannot assure
you that we will be able to effectively manage our growth, that our current infrastructure,
systems, procedures and controls or any new measures to enhance them will be adequate and
successful to support our expanding operations or that our strategies and new business
initiatives will be executed successfully.
As we enter new markets, we will also encounter new competitors who may manufacture
and offer products comparable to ours with better quality or on a more cost-efficient basis. If
we are unable to manage our growth or compete in the markets for our new products
effectively, our business, financial condition and results of operations could be adversely
affected.
Our success depends on a stable and adequate supply of raw materials which are subject
to price volatility and other risks.
The raw materials we procured primarily consisted of electronic components, functional
modules, structural parts and packaging materials. For the year ended December 31, 2022,
2023 and 2024 and the nine months ended September 30, 2025, our direct material costs
amounted to RMB23,691.7 million, RMB21,720.3 million, RMB38,538.3 million and
RMB24,998.8 million, representing 80.7%, 79.9%, 83.1% and 79.8% of our revenue for the
respective years. Our production volume and production costs depend on our ability to source
quality raw materials at competitive prices. If we are unable to obtain raw materials in the
quantities, of a quality or at a price that we require, our production volume, quality of products
and profitability may be adversely affected.
Raw materials used in our production are subject to price volatility caused by external
conditions, such as market supply and demand, commodity price fluctuations, currency
fluctuations, fluctuations in transportation costs, changes in governmental policies and natural
disasters. China’s producer price index has seen intermittent declines in recent years,
particularly between 2022 and 2023, primarily due to reduced electronic component shortages
and a slowdown in consumer electronics demand. However, as the consumer electronics
industry recovered in 2024, the price index began stabilizing and trending upward. For details,
see “Industry Overview — Overview of Global Consumer Electronics ODM Industry — Raw
Material of Global Consumer Electronics ODM Industry.” During the Track Record Period, our
procurement costs of raw materials generally mirrored the cyclical fluctuations of raw material
costs in the global consumer electronics ODM industry. For details, see “Financial Information
— Description of Selected Components of Consolidated Statements of Profit or Loss — Gross
Profit and Gross Profit Margin.” There is no assurance that our raw material cost will not
increase significantly in the future. Our ability to pass increased raw material costs along to our
customers may be limited by competitive pressure. We cannot assure you that we will be able
to raise the prices of our products sufficiently to cover increased costs resulting from increases
in the cost of our raw materials or overcome the interruption of sufficient supply of qualified
raw materials for our products. As a result, any significant price increase of our raw materials
may have an adverse effect on our profitability and results of operations.
RISK FACTORS
–5 1–


--- page 62 ---
If our current suppliers decide to terminate business relationships with us or if the raw
materials supplied by our current suppliers fail to meet our standard, or if our current supplies
of raw materials are interrupted for any reason, qualified suppliers may not be readily available
and we may not be able to easily switch to other suppliers in a timely manner, which may
materially and adversely affect our business and financial results.
Some of raw materials used in our production are provided by our customers on
consignment basis, primarily including SoCs. Under this model, SoCs are procured directly by
our customers and then provided to us at no consideration for use in production, and
accordingly are not recorded as our purchases. If our customers experienced significantly
procurement shortage due to factors such as market supply and demand, commodity price
fluctuations, currency fluctuations, fluctuations in transportation costs, changes in
governmental policies and natural disasters, they may be forced to curtail their own production
and shipments, which in turn could lead them to reduce, delay, or cancel their demand for our
products and services. Historically, some of our customers were reported to be adversely
impacted by global semiconductor shortage in 2022 and storage shortage in 2025. For details,
see “Financial Information — Description of Selected Components of Consolidated Statements
of Profit or Loss — Gross Profit and Gross Profit Margin.”
Any disruption of our current manufacturing centers or failure to successfully execute
our capacity expansion and equipment upgrade plans or failure to effectively utilize our
production facilities may have a material adverse effect on our business, financial
condition and results of operations.
As of September 30, 2025, we had four manufacturing centers in China, Vietnam and
India. If we experience any unanticipated situation that forces us to shut down our
manufacturing centers, our production will be severely disrupted, which may in turn materially
and adversely affect our business and results of operations. Catastrophic events could also
destroy any inventory located in our manufacturing centers. The occurrence of any catastrophic
event could result in the temporary or long-term closure of our manufacturing centers, severely
disrupt our business operations and materially and adversely affect our results of operations
and financial condition. See also “— Risks Relating to Our Operations — Our business
operations are susceptible to disruptions from force majeure events, including natural disasters,
outbreaks of contagious diseases, and other extraordinary events, which could materially and
adversely affect our business and results of operations, and such losses may not be fully
covered by insurance.”
To scale up our manufacturing capacity, we may expand our manufacturing facilities and
upgrade equipment from time to time. Expansion of facilities and upgrading of equipment
requires significant capital investment upfront, and it may take considerable time before such
facilities or equipment achieve their expected capacity or breakeven point. Failure to
successfully execute our capacity expansion and equipment upgrade plans or failure to
effectively utilize our manufacturing facilities in time or at all may adversely affect our
business, financial condition and results of operation.
RISK FACTORS
–5 2–


--- page 63 ---
In addition, we are further expanding our manufacturing footprint globally, which may
expose us to additional operational, logistical, environmental and regulatory risks associated
with managing overseas production. We may incur additional costs in managing our overseas
production and may incur additional costs in relation to operating manufacturing facilities
globally.
Any quality issues associated with our products may expose us to potential liabilities,
subject us to risks relating to warranty claims, result in lost customers and sales, product
recalls and increased compliance costs, which could adversely affect our results of
operations and financial condition.
Our success depends on consistently delivering quality and reliable products. If the
quality of any of our products deteriorates or fail to meet customers’ expectations, we may face
customer complaints, return requests, or order cancellations. Any defects in our products could
also expose us to potential liabilities, such as warranty claims, or claims for damages.
We may need to incur significant costs to address quality issues, including those related
to product recalls. In the event of defective products, we could be compelled to recall our
products and become subject to product liability claims, which may cause financial and
reputational damage. Even if we ultimately prevail in defending against such claims, we may
still incur substantial costs. Any quality issues of our product would have a negative impact on
our sales, adversely affecting our results of operations and financial condition. In addition, we
are subject to law and regulations governing the quality of our products and we may incur
additional costs if such law and regulations become more stringent.
We are subject to risks associated with outsourced production, including risks inherent in
managing manufacturing process and timelines.
During the Track Record Period, we engaged qualified third-party manufacturers to
perform certain processing tasks, which primarily involved SMT processing and final assembly
and packaging. In 2022, 2023 and 2024 and the nine months ended September 30, 2025, our
outsourced processing costs amounted to RMB811.8 million, RMB362.5 million, RMB649.7
million and RMB310.0 million, respectively. We are subject to risks associated with outsourced
production, including risks inherent in managing manufacturing process and timelines. There
is no assurance that we will be able to monitor the performance of these third-party
manufacturers as directly and efficiently as with our own staff. Our ability to complete orders
could be impaired if we are unable to make procurement from third-party manufacturers at
reasonable costs or at all. If a third-party manufacturer fails to provide materials or services as
required, we may need to source substitutes on a delayed basis or at a higher replacement cost
than anticipated, which may have an adverse impact on our profitability.
RISK FACTORS
–5 3–


--- page 64 ---
We are exposed to quality risks related to the products manufactured by these third-party
manufacturers. We have in place quality control measures, such as quality checks, regular
assessment and quality inspection upon receiving of finished products from our contract
manufacturers, however, we cannot guarantee complete oversight over the manufacturing
process or the procurement of raw materials. This lack of control presents potential risks to our
business. The quality control system of third-party manufacturers may not be adequate and
could have deficiencies that we are unaware of, which may lead to hidden defects in the
products that are difficult to detect upon receipt. Any failure in maintaining product quality
could subject us to product liability claims and adversely affect our reputation, business
prospects and results of operations. Even if we are able to identify any hidden defects, the
process of returning and re-supplying a new batch of products can be time-consuming, leading
to delays in delivery and potential claims of contractual liabilities from our customers. In the
event of disputes regarding the quality of products supplied by these third-party manufacturers,
we may need to resort to legal recourses, which can be both time-consuming and costly.
Product defects could also tarnish our brand’s reputation, negatively impacting our sales
performance and financial results. Such circumstances could have a material and adverse effect
on our reputation, business prospects and results of operations.
Moreover, we may be affected by fluctuations in the production costs of these third-party
manufacturers. The production costs of these third-party manufacturers may rise if the price of
key raw materials, which in turn may affect our costs.
RISKS RELATING TO FINANCIAL, ACCOUNTING AND TAX MATTERS
We may need additional capital, and financing may not be available on terms acceptable
to us, or at all.
We primarily relied on cash generated from our business operations, net proceeds from
our offering of A shares and bank borrowings to fund our current operations during the Track
Record Period. We may require additional cash resources due to changed business conditions
or other future developments, including any expansion into new business or geographic
markets, marketing initiatives or investments we may decide to pursue. If our business does not
generate sufficient cash flow from operations to fund these activities and sufficient funds are
not otherwise available from our current or future credit facility, we may need to obtain
additional equity or debt financing. If such financing is not available to us on satisfactory terms
or in a timely manner, our ability to operate and expand our business or to respond to
competitive pressures could be harmed. Moreover, if we raise additional capital by issuing
equity securities or securities convertible into equity securities, the ownership of our existing
Shareholders may be diluted. The holders of new securities may also have rights, preferences
or privileges which are senior to those of existing holders of ordinary shares. In addition, any
indebtedness we incur may subject us to covenants that restrict our operations and our ability
to effectuate certain corporate decisions for our business and will require interest and principal
payments that could create additional cash demands and financial risk for us.
RISK FACTORS
–5 4–


--- page 65 ---
Our gross profit margin is subject to fluctuations due to factors such as pricing pressure,
fluctuations in raw material and other costs, changes in revenue mix and market position.
In 2022, 2023 and 2024 and the nine months ended September 30, 2025, our gross profit
margin was 8.1%, 9.5%, 5.8% and 8.3%, respectively. The fluctuations in gross profit margins
during the Track Record Period were primarily due to changes in product mix, pricing pressure
and fluctuations in raw materials costs. For details, see “Financial Information — Period to
Period Comparison of Results of Operations.” Our historical and future gross profit margin
many continue to be affected by these factors.
In addition, changes in our revenue mix may also affect our financial performance,
particularly our profitability. Our gross profit margins could vary across products, projects and
customers, as we generally deliver different products based on the demands of specific
customers, which have different cost structures and selling prices. As such, changes in volume,
projects, cost structures and development cycles of products that we offer could impact our
overall profitability. Our gross profit margin also depends on our market position, the
competitive landscape and relative bargaining power in the subsector that we operate in. We
cannot assure you that we will be able to maintain our gross profit margin at levels similar to
those achieved during the Track Record Period, in particular as we consider the evolvement of
revenue mix, customer base and raw material costs.
Fluctuations in exchange rates may result in foreign currency exchange losses and may
have a material adverse effect on your investment.
A substantial portion of our revenues and cost of sales is denominated in RMB. However,
as we also operate a part of our business in certain geographic markets outside of Chinese
mainland, we are subject to risks associated with foreign currency exchange fluctuations. We
recorded foreign exchange losses under other expenses of nil, RMB7.4 million, RMB10.7
million and RMB18.8 million in 2022, 2023, 2024, and the nine months ended September 30,
2025.
Changes in the value of foreign currencies could affect the results of our overseas
operations. Certain of our income from overseas sales is denominated in foreign currencies
such as USD and INR. It is difficult to predict how external factors may impact the exchange
rate of RMB to USD and INR, or other foreign currencies in the future. Further appreciation
of RMB against foreign currencies may affect our overseas operations. Conversely, if we
decide to convert our RMB into Hong Kong dollars for the purpose of making payments for
dividends on our H Shares or for other business purposes, any depreciation of RMB against the
Hong Kong dollar would have a negative effect on the value of, and any dividends payable on,
our H Shares.
In managing the foreign exchange risks, we used foreign currency forward contracts as
hedging instruments. Our foreign currency forward contracts recorded as assets amounted to
RMB0.7 million and nil as of December 31, 2024 and September 30, 2025, respectively. Our
derivative financial instruments recorded as liabilities amounted to RMB3.0 million, RMB23.1
RISK FACTORS
–5 5–


--- page 66 ---
million, RMB27.6 million and RMB47.1 million, respectively, as of December 31, 2022, 2023
and 2024 and September 30, 2025. We recorded effective portion of losses in fair value of
hedging instruments arising during the year under other comprehensive income of RMB3.0
million, RMB20.1 million and RMB3.8 million in 2022, 2023 and 2024, respectively, and
recorded effective portion of gains in fair value of hedging instruments arising during the
period of RMB21.8 million and RMB0.7 million in the nine months ended September 30, 2024
and 2025, respectively. Our adoption of and decisions related to hedging instruments depend
on the nature of the transaction and financial market conditions after conducting a detailed
assessment. However, the availability and effectiveness of these hedging measures may be
limited, and we may not be able to adequately cover our exposure or at all.
Failure to maintain optimal inventory levels could increase our inventory holding costs or
cause us to lose sales.
We continuously improve our product pipelines and launch new products that respond to
evolving customer preferences, which require us to manage our inventory effectively. Our
inventory primarily includes raw materials, outsourced processing materials, work-in-progress
and finished goods. As of December 31, 2022, 2023 and 2024 and September 30, 2025, our
inventories amounted to RMB1,144.4 million, RMB1,714.8 million, RMB1,881.6 million and
RMB2,235.0 million, respectively, and we recorded provision for impairment loss on
inventories of RMB111.5 million, RMB77.5 million, RMB83.6 million and RMB86.3 million,
respectively. Our inventory turnover days were 19.9 days, 20.9 days, 14.8 days and 19.3 days
in 2022, 2023 and 2024 and the nine months ended September 30, 2025, respectively.
We base our purchase decisions and inventory management primarily on our
understanding of our industry and forecast of market demand for our products. However, our
forecast for demand may not accurately reflect the actual market demand. Significant and
unpredictable shifts in market demand can affect the accuracy of our market demand forecast
and the effectiveness of our procurement and inventory management practice, and we may not
be able to timely mitigate the resulting inventory pressure or at all. Moreover, it can also prove
challenging to accurately forecast the market demand for our products and determine the
optimal inventory levels. Factors such as new product launches, rapid changes in product
cycles and pricing, product defects, promotions, changes in consumer spending patterns, and
changes in consumer preferences with respect to our products can all affect market demand,
leading to unpredictable purchasing behaviors and quantities that may deviate from our
expectations.
If we fail to manage our inventory effectively, we may face inventory obsolescence,
resulting in decline in inventory values and inventory write-downs or write-offs. Moreover,
excessive inventory levels may tie up substantial capital resources, preventing us from using
that capital for other important purposes. If we underestimate customer demand, we may
experience inventory shortages, which may result in missed sales, additional costs to secure the
necessary production, delivery delays, reduced customer loyalty, and lost revenue. Any of the
above may materially and adversely affect our business, results of operations, and financial
condition.
RISK FACTORS
–5 6–


--- page 67 ---
We are subject to credit risk in collecting trade and bills receivables due from the
customers.
During the Track Record Period, a majority of our trade and bills receivables were
outstanding for less than one year. We generally grant our customers a credit period of between
60 to 90 days. Our trade receivables turnover days were 58.4 days, 96.2 days, 80.1 days and
97.6 days in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
As of December 31, 2022, 2023 and 2024 and September 30, 2025, our trade and bills
receivables amounted to RMB5,538.2 million, RMB9,008.4 million, RMB11,732.5 million and
RMB11,215.5 million, respectively. There is no assurance that all such amounts will be settled
on time or at all, and we are subject to credit risk in collecting the trade and bills receivables
due from the customers. Our performance, liquidity and profitability will be adversely affected
if significant amounts due to us are not settled on time. The bankruptcy or deterioration of the
credit condition of any of our major customers could also materially and adversely affect our
business.
Our level of indebtedness may adversely affect our ability to raise additional capital to
fund our operations, expose us to interest rate risk and prevent us from meeting our
obligations under our indebtedness.
During the Track Record Period, we, to a certain extent, used bank borrowings to finance
our capital expenditures and business operations. We expect that we may continue to do so in
the future and our liquidity risk may increase. As of December 31, 2022, 2023 and 2024 and
September 30, 2025, our interest-bearing bank borrowings amounted to approximately
RMB986.0 million, RMB1,465.2 million, RMB2,501.4 million and RMB3,638.9 million,
respectively.
We cannot assure you that we will not have a substantial level of bank and other
borrowings in the future. The high level of bank and other borrowings and gearing ratio may
(i) make it more difficult for us to satisfy our obligations under our indebtedness, exposing us
to the risk of default, which, in turn, would negatively affect our ability to operate as a going
concern, (ii) require us to allocate a higher portion of our cash flow from operations to fund
repayments of principal and interest on our borrowings, thus reducing the availability of our
cash flow for other purposes (such as working capital, capital expenditure and other corporate
purposes); (iii) increase our vulnerability to adverse economic or industry conditions; (iv) limit
our flexibility in planning for, or reacting to, changes in our business or in the industry in
which we operate; (v) potentially restrict us from pursuing potential strategic business
opportunities; (vi) limit our ability to borrow additional funds; (vii) increase our exposure to
interest rate fluctuations; (viii) increase our exposure to unpredictable adverse events, such as
not having enough cash to cover potential product liability and/or expenses for upgrading
technologies or equipment requirement for our production; and (ix) decrease our ODM
shipments or our rate of expansion, since our operation budget will be limited as a result of the
repayment of our indebtedness.
RISK FACTORS
–5 7–


--- page 68 ---
As a result of the covenants and restrictions, we are limited in how we conduct our
business, and we may be unable to raise additional debt or equity financing to compete
effectively or to take advantage of new business opportunities. A breach of any of the
restrictive covenants could result in a default with respect to the related indebtedness. If a
default occurs, the relevant lenders could demand immediate payment. This, in turn, could
cause cross-default or payment acceleration of our other debts. In the event that some or all of
our debts are accelerated and becomes immediately due and payable, we may not have the
funds to repay, or the ability to refinance, such debt.
We are exposed to changes in the fair value of our investments measured at FVTPL.
Fluctuations in their values would affect our results of operations and financial condition.
As of December 31, 2022, 2023 and 2024 and September 30, 2025, we recorded
investments measured at FVTPL of RMB269.2 million, RMB318.5 million, RMB1,627.6
million and RMB1,516.8 million, respectively. The non-current portion of investments
measured at FVTPL, which represents our equity investments in unlisted companies, amounted
to RMB269.2 million, RMB318.5 million, RMB242.7 million and RMB348.1 million in 2022,
2023 and 2024 and the nine months ended September 30, 2025, respectively. The current
portion of our investments measured at FVTPL amounted to nil, nil, RMB1,384.9 million and
RMB1,168.7 million as of December 31, 2022, 2023 and 2024 and September 30, 2025,
respectively, primarily reflecting our equity investments in listed companies and investments
in wealth management products. Fair values of investments measured at FVPL are determined
based on quoted prices in active markets, other market-observable inputs, or unobservable
inputs using valuation techniques. For details, see note 23 to the Accountant’s Report included
in Appendix I to this prospectus.
For investments measured at FVTPL, factors beyond our control can significantly
influence and cause adverse changes to the market-observable inputs that we use and thereby
affect the fair value of such investments. These factors include, but are not limited to, general
economic condition, changes in market interest rates, stability of the capital markets, shifts in
our creditworthiness and other market-driven variables. Any of these factors, as well as others,
could cause the fair values to fluctuate or our estimates to vary from actual results, which could
materially and adversely affect our results of operation and financial condition. Additionally,
judgment and estimation are required in establishing the relevant valuation techniques where
market-observable data for certain financial assets are not readily available, which inherently
involves a certain degree of uncertainty. Changes in assumptions relating to our valuation could
result in material adjustments to the fair value of such investments, which may, in turn, have
a material adverse effect on our financial position and results of operations.
RISK FACTORS
–5 8–


--- page 69 ---
Government grant we have enjoyed may change or discontinue, which may adversely
affect our financial condition and results of operation.
In 2022, 2023 and 2024 and the nine months ended September 30, 2025, we recorded
government grants of RMB138.7 million, RMB135.4 million, RMB179.3 million and
RMB216.0 million, respectively. Please see “Financial Information — Description of Selected
Components of Consolidated Statements of Profit or Loss — Other Income and Gains” for
details. The government grants we enjoyed were based on relevant government regulations and
our actual operating conditions, including (i) grants related to income, representing subsidies
received from the local governments in connection with our operating activities and other
subsidies; and (ii) government grants related to assets, representing subsidies received for the
purchase and construction of assets. If relevant policies change in the future, there is no
assurance that we would continue to enjoy these government grants at the historical levels, or
at all. In some cases, we may be required to satisfy certain conditions or contractual obligations
before receiving government grants. However, there can be no assurance that we will be able
to fully satisfy these conditions or perform such obligations, and it is possible that
governmental authorities may discontinue such grants or require partial or full repayment of
the government grants we previously received. Any change, suspension or discontinuation of
these government grants to us could adversely affect our financial condition, results of
operations and cash flows.
We could be subject to changes in our tax rates, the adoption of new tax legislation or
exposure to additional tax liabilities. Any reduction or discontinuation of preferential tax
treatments could adversely affect our results of operations and financial condition.
The EIT Law imposes a tax rate of 25% on business enterprises. Our Company and some
of our subsidiaries are entitled to preferential tax treatment. For example, our Company and
several of our subsidiaries in Chinese mainland have been qualified as High and New
Technology enterprises and enjoyed a preferential income tax rate of 15% during the Track
Record Period. In 2022, 2023 and 2024 and the nine months ended September 30, 2025, we
recorded income tax expense of RMB26.8 million, RMB48.4 million, RMB20.7 million and
RMB35.4 million, respectively. Accordingly, they were entitled to a preferential income tax
rates during the Track Record Period. For details, see “Financial Information — Description of
Selected Components of Consolidated Statements of Profit or Loss — Income Tax Expense.”
To the extent there are any changes in the laws and regulations governing preferential tax
treatment or increases in our effective tax rate due to any other reasons, our tax liability would
increase correspondingly. In addition, the Chinese government may amend or restate
regulations on income, withholding, value-added, and other taxes. Non-compliance with the
tax laws and regulations in Chinese mainland may also result in penalties or fines imposed by
relevant tax authorities. Adjustments or changes to tax laws and regulations in Chinese
mainland and tax penalties or fines could affect our businesses, financial condition and results
of operations.
RISK FACTORS
–5 9–


--- page 70 ---
We also operate in countries and regions overseas and are subject to various taxes. Due
to the fact that the tax environment can be different in different jurisdictions and that the
regulations regarding various taxes, including but not limited to corporate income tax, are
complex, our overseas operations may expose us to risks associated with the overseas tax
policy changes. Due to economic and political conditions, tax rates in various jurisdictions may
be subject to significant change. Our effective tax rates could be affected by changes in the mix
of earnings in countries with differing statutory tax rates, changes in the valuation of deferred
tax assets and liabilities, or changes in tax laws or their interpretation. Dealing with such
regulatory complexities and changes may require us to invest more managerial and financial
resources, which in turn could affect our results of operations.
We are also subject to the examination of our tax returns and other tax matters by local
and overseas tax authorities and governmental authorities. We regularly assess the likelihood
of an adverse outcome resulting from these examinations to determine the adequacy of our
provision for taxes. There can be no assurance as to the outcome of these examinations. If our
effective tax rates were to increase, or if the ultimate determination of our taxes payable is for
an amount in excess of amounts previously accrued, our financial condition, results of
operations and cash flows could be adversely affected.
We may continue to incur share-based payment expenses in the future, which could
adversely affect our financial performance and dilute your shareholding.
We have adopted several employee incentive schemes for the purpose of providing
incentives and rewards to eligible participants who contribute to the success of our operations.
Our employees (including our Directors) receive remuneration in the form of share-based
payments, whereby employees render services in exchange for equity instruments. In 2022,
2023 and 2024 and the nine months ended September 30, 2025, we incurred share-based
payment expenses of RMB58.2 million, RMB69.6 million, RMB71.6 million and RMB88.6
million, respectively.
We believe share-based awards as part of an overall compensation package are important
to attracting and retaining key personnel and employees, and we plan to continue to grant
share-based payment compensation to employees in the future. As a result, our share-based
payment expenses may increase, which may have an adverse effect on our results of operations
and financial condition and dilute your shareholding.
RISKS RELATING TO OUR OPERATIONS
Our success depends largely on the continued service of our senior management and key
technical personnel and our ability to recruit, train or retain qualified personnel or
sufficient workforce while controlling our labor costs.
Much of our future success depends on the continued contributions of our senior
management and other key employees, many of whom are difficult to replace. The loss of the
services of any of our executive officers, our senior management team and other highly skilled
RISK FACTORS
–6 0–


--- page 71 ---
employees could harm our business. Competition for qualified talent is intense. Our future
success depends on our ability to attract a large number of qualified employees and retain
existing key employees. If we are unable to do so, our business and growth may be materially
and adversely affected.
We intend to hire additional qualified employees to support our business operations and
planned expansion. Our future success depends, to a significant extent, on our ability to recruit,
train or retain qualified personnel, particularly technical, marketing and other operational
personnel with experience in the relevant industry. Our experienced mid-level managers are
instrumental in implementing our business strategies, executing our business plans and
supporting our business operations and growth. The effective operation of our managerial and
operating systems also depends on the hard work and quality performance of our management
and employees.
Our industry is characterized by high demand and intense competition for talent and
labor, while qualified individuals in the relevant industries are in short supply and competition
for workers is intense. We can provide no assurance that we will be able to attract or retain
qualified staff or other highly skilled employees that we will need to achieve our strategic
objectives. In addition, competition for qualified individuals or workers may require us to pay
higher wages, which could result in higher labor costs. Moreover, our ability to train and
integrate new employees into our operations may also be limited and may not meet the demand
for our business growth in a timely fashion, or at all, and rapid expansion may impair our
ability to maintain our corporate culture.
Our expansion into international markets may be adversely affected by legal, regulatory,
political and economic risks.
As part of our global expansion strategy, we have established manufacturing centers in
Vietnam and India and have formed partnerships with customers in both domestic and overseas
markets. While these initiatives enhance our operational resilience and customer reach, our
international operations are subject to various legal, regulatory, political and economic risks
beyond our control.
These risks include, among others, changes in local laws and regulations (such as labor,
tax, customs, environmental and foreign investment laws), unexpected changes in trade
policies or tariffs, import and export restrictions, foreign exchange control policies, and
challenges in protecting intellectual property rights in foreign jurisdictions. In particular, rising
geopolitical tensions could lead to increased trade barriers, sanctions, or other restrictions that
may adversely impact our ability to operate or expand in certain markets. For details, see
“Regulatory Overview — Sanction Laws and Regulations.” We are closely monitoring
potential changes in international trade policy and assessing the potential impact of such trade
policy changes on our business operations and financial performance. For example, recently,
the U.S. proposed to impose multiple rounds of tariffs on a wide range of goods imported from
multiple countries, including China, and China responded with retaliatory tariffs. Since
February 2025, both countries raised reciprocal tariffs on each other’s imported goods to 125%.
RISK FACTORS
–6 1–


--- page 72 ---
However, on May 12, 2025, both the U.S. and China modified these tariff measures: the U.S.
removed the 125% tariff and temporarily reduced tariffs on Chinese goods to 10% by
suspending a 24% duty for 90 days. The PRC government announced the same tariff
adjustments, removing the 125% retaliatory tariff and cutting tariffs on U.S. goods from 34%
to 10% for the same period. These policies have adversely affected the global economy and
financial markets, our business operations in certain countries could be materially and
adversely affected by the change of such international trade regulations, including duties,
tariffs and antidumping penalties. In addition, as relevant policies are rapidly evolving, it may
be difficult to evaluate their potential future impacts.
Furthermore, we may experience difficulties in engaging and retaining a skilled
workforce, managing third-party suppliers, or adapting to different business cultures and
regulatory frameworks in our overseas operations. Any disruption or delay in our international
operations, or any failure to comply with applicable laws and regulations, could result in
penalties, increased compliance costs, reputational harm, or even the suspension of our
business activities in the affected jurisdictions.
Our future partnerships and/or acquisitions may prove to be difficult to integrate and
manage or may not be successful. Failure to address such risk may have a material
adverse effect on our financial condition and results of operations.
In the future, as a strategic approach to further enhance our market presence, we may
enter into partnerships or make acquisition to complement our existing business. As of the
Latest Practicable Date, we had not identified any specific target for such acquisition.
This strategy entails potential risks that could have a material adverse effect on our
business, financial condition, results of operations and prospects, including:
 unidentified or unanticipated liabilities or risks in the businesses which we may
acquire;
 inability to successfully integrate the products, services and personnel of the
businesses which we may acquire into our operations or to realize any synergies
from the acquisitions;
 inability to retain employees and customer base of the businesses acquired; and
 diversion of management attention and other resources.
In addition, we may not be able to identify attractive acquisition opportunities, or make
acquisitions on attractive terms or obtain financing necessary to complete and support such
acquisitions. We cannot assure you that any of such acquisitions will result in long-term
benefits to us or that we will be able to effectively manage the integration and growth of our
operations. Failure to address such risks may have a material adverse effect on our financial
condition and results of operations.
RISK FACTORS
–6 2–


--- page 73 ---
Our business may suffer as a result of adverse outcomes of current or future litigation and
regulatory actions, including with respect to anti-competitive practices.
We, our Directors and our management may from time to time be subject to claims,
disputes, lawsuits and other legal and administrative proceedings. Legal proceedings and
administrative actions, may seek to recover large indeterminate amounts or to limit our
operations, and the possibility that they may arise, and their magnitude may remain unknown
for substantial periods of time. In particular, legal proceedings, including regulatory actions,
may result from product defects, antitrust scrutiny of market practices for anti-competitive
conduct, as well as disputes related to customer payments and product quality, both in Chinese
mainland and in other jurisdictions. For example, as we expand our operations globally,
antitrust or competition regulatory authorities in certain jurisdictions may find our cooperation
with other entities, or our conduct of business with other entities in a coordinated way, is not
compliant with certain antitrust or competition laws and regulations. Consequently, we may be
subject to certain antitrust investigations, lawsuits or regulatory proceedings, and may be
subject to fines, civil liability or criminal liability. Further, the nature of our business and
operations is such that we are subject to product liability claims relating to personal injury or
property damage. Third parties who are subject to such injury or damage may bring claims or
legal proceedings against us. Certain product liability claims may be the result of defects from
component and parts purchased from our suppliers. Such claims, including the damages being
sought, whether or not they have any basis, may be substantial and could extend beyond the
direct losses suffered by our counterparties. A substantial legal liability or adverse regulatory
outcome and the substantial cost of defending litigation or regulatory proceedings may have an
adverse effect on our business, results of operations, financial condition, cash flows and
reputation. Further, such lawsuits, regulatory proceedings and investigations could also divert
significant resources from our normal operations.
We may not be able to adequately protect our intellectual property rights or trade secrets
and may have intellectual property disputes, which may result in loss of market share to
our competitors and affect our business and results of operations.
Our success depends on our ability to protect the intellectual property rights of our and
our customers’ intellectual property rights. We cannot assure you that our customers’ designs,
trademarks, patents and other intellectual property rights that we have access to during the
manufacturing process will not be misappropriated. While our suppliers and employees are
subject to contractual obligations to protect intellectual property rights of our customers and
us, there is no assurance that such measures will effectively prevent leakage of confidential
information or infringement of intellectual property rights, or at all. During the Track Record
Period and up to the Latest Practicable Date, we were not aware of any incident of failure to
protect the intellectual property rights of our customers. In the event that our measures and
precautions we have taken do not adequately safeguard our customers’ intellectual property
rights or at all, customers may initiate legal proceedings against us or even reduce or
discontinue their purchase orders with us, which would have a material adverse effect on our
business, financial condition and results of operations.
RISK FACTORS
–6 3–


--- page 74 ---
Moreover, we may be subject to claims from other parties such as industry participants
and competitors, software developers, and other third parties alleging our infringement of their
patents, trademarks and/or other intellectual property rights in the future. Any legal or
administrative proceedings resulting from such allegations is likely subject us to significant
liability and even to cause a declaration of invalidity of our existing intellectual property
rights. These lawsuits or proceedings would be time-consuming and costly to resolve, and
would divert much of our managerial attention and administrative resources.
In addition, we rely on a combination of applicable intellectual property laws as well as
confidentiality agreements to protect our patents, trade names, copyrights and other intellectual
property rights. For details of our intellectual property rights, please refer to “Business —
Intellectual Property” and “Appendix VI — Statutory and General Information — B. Further
Information about Our Business — 2. Our Material Intellectual Property Rights” to this
prospectus. Our intellectual property rights may be subject to various forms of infringement.
During the Track Record Period and up to the Latest Practicable Date, we were not aware of
any material violations or infringements of our trademarks, trade names, copyrights, patents or
any other intellectual property rights.
Policing unauthorized use of proprietary technology is difficult and costly, and we may
need to resort to litigation to enforce or defend patents issued to us or to determine the
enforceability, scope and validity of our proprietary rights or those of others. Any such
litigation may require significant expenditure of financial and managerial resources and could
have a material adverse impact on our business, financial condition and results of operations.
An adverse determination in any such litigation will impair our intellectual property rights and
may harm our business, prospects and reputation. In addition, given that the enforceability and
scope of protection of proprietary rights in Chinese mainland are uncertain and still evolving,
we may choose not to litigate or spend significant resources in litigation to enforce our
intellectual property rights or to defend our patents against unauthorized use by third parties.
We may be the subject of unfair competition, harassing, or other detrimental conduct by
third parties including complaints to regulatory authorities, negative social media
postings, and the public dissemination of malicious assessments of our business that could
harm our reputation and cause us to lose market share, customers and revenue.
We may be the subject of unfair competition, harassing, or other detrimental conduct by
third parties. Such conduct includes complaints, anonymous or otherwise, to regulatory
authorities. We may be subject to government or regulatory investigation as a result of such
third-party conduct and may be required to expend significant time and incur substantial costs
to address such third-party conduct, and there is no assurance that we will be able to
conclusively refute each of the allegations within a reasonable period of time, or at all.
Additionally, allegations, directly or indirectly against us, may be posted online by anyone,
whether or not related to us, on an anonymous basis. Customers value readily available
information concerning manufacturers and their products and services and often act on such
information without further investigation or authentication and without regard to its accuracy.
The availability of information on social media is virtually immediate, as is its impact. Social
RISK FACTORS
–6 4–


--- page 75 ---
media immediately publish the content their subscribers and participants post, often without
filters or checks on the accuracy of the content posted. Information posted may be inaccurate
and adverse to us, and it may harm our reputation, business operations and financial
performance. The harm may be immediate without affording us an opportunity for redress or
correction. Our reputation may be negatively affected as a result of the public dissemination
of anonymous allegations or malicious statements about our business, which in turn may cause
us to lose market share, customers and revenue.
We could be adversely affected as a result of our operations and investments in certain
countries and business areas that are subject to evolving economic sanctions and
restrictions of the United States government, the United Nations Security Council, the EU
and other relevant sanctions authorities.
The United States and other jurisdictions or organizations, including the EU, the U.K., the
United Nations and Australia, have comprehensive or broad economic sanctions targeting
certain countries, or against industry sectors, groups of companies or persons, and/or
organizations within such countries (the “ Relevant Countries ”). For details, see “Regulatory
Overview — Sanction Laws and Regulations.” We cannot predict the interpretation or
implementation of government policy at the U.S. federal, state or local levels or the
interpretation or implementation of any policy by the EU, the U.K., the United Nations or the
government of Australia or by the governments or agencies of other applicable jurisdictions
with respect to any current or future activities by us or our affiliates in these countries. Our
business and reputation could be adversely affected if the government of the United States, the
EU, the U.K., the United Nations or any governmental entities were to determine that any of
our activities constitute violations of the sanctions they impose. In addition, as sanctions
programmes evolve over time, new requirements or restrictions may render our business
activities to be the subject of sanctions and increase our associated risks. During the Track
Record Period, we sold our ODM products to a customer listed on the Entity List, and certain
components we procured are subject to the United States Export Administration Regulations,
15 C.F.R. Parts 730-774 (“ EAR”). For details, see “Business — Compliance with International
Sanctions Laws and Regulations.” We cannot be certain what additional export control actions
the U.S. government may take that could impact our products, suppliers or customers. The U.S.
government could further expand the scope of items subject to the EAR in a manner that
captures our products. Additional actions could also take the form of additional designations
on the Entity List, which could make our products subject to the EAR for certain transactions
if involving those parties. In addition, in the event that any of our customers becomes subject
to economic sanctions in the future, we may have to discontinue our business with such
customers due to potential economic sanctions liability risks. In such events, our financial
results may be materially and adversely affected. We cannot provide any assurance that our
future business will be free of sanctions risk or our business will conform to the expectations
and requirements of the authorities of U.S. or any other jurisdictions. Our business and
reputation could be adversely affected if the authorities of U.S., the EU, the U.K., the United
Nations, Australia or any other jurisdictions were to determine that any of our future activities
constitutes a violation of the sanctions or export controls they impose or provides a basis for
a sanctions designation of us.
RISK FACTORS
–6 5–


--- page 76 ---
We are subject to stringent environmental protection laws and regulations, both in
Chinese mainland and in the international jurisdictions in which we operate. Any failure
to comply with the relevant laws and regulations could result in significant penalties,
operational disruptions, and reputational damage to us.
Our production and operation are subject to various environmental protection laws and
regulations in Chinese mainland and in the international jurisdictions in which we operate. The
relevant regulatory authorities may also promulgate new environmental protection laws and
regulations and enforce more stringent interpretations of environmental protection laws and
regulations in the future. As a result, additional costs may be incurred to introduce relevant
preventive or remedial measures, adjust our production process, purchase new pollution control
equipment and enhance our compliance and monitoring system to ensure compliance with such
amended laws and regulations.
Failure to comply with environmental protection laws and regulations could subject us to,
among other things, legal liability, fines, suspension of production, a loss of licenses to operate
certain facilities and other sanctions, interruptions to operations, securities litigation and a
general loss of investor confidence, any one of which could have a material adverse impact on
our business, financial performance and brand reputation.
Our limited insurance coverage may not cover all losses, which may increase our
operational costs.
In accordance with applicable laws, we contribute to statutory social insurance programs
for our employees, including pension, medical, unemployment, work-related injury, and
maternity insurance. In addition, we provide supplementary commercial insurance coverage,
such as group accident insurance, group medical insurance, and critical illness insurance, and
have also purchased employer liability insurance. From an operational risk perspective, we
have procured various commercial insurance policies, including property all-risk insurance,
cargo transportation insurance, and commercial general liability insurance covering product
liability, completed operations, and premises liability. To mitigate trade-related risks, we have
also secured domestic and short-term export credit insurance, with coverage tailored based on
specific customer profiles and transaction terms. We do not, however, carry insurance in
respect of certain risks that we believe are not insured under customary industry practice in
China, or which are uninsurable on commercially acceptable terms, if at all, such as key man
life insurance. Accordingly, there may be circumstances in which we will not be covered or
compensated, in part or at all, for specific losses, damages and liabilities. We cannot guarantee
that our insurance coverage is sufficient to cover potential losses.
In addition, we are subject to the risks of losses arising from the misappropriation of cash
or other assets by our employees or third parties, which losses may not be sufficiently covered
by our insurance policies. Any risk that is not adequately covered by insurance may have an
adverse effect on our business, results of operations and financial condition.
RISK FACTORS
–6 6–


--- page 77 ---
We may not be able to detect and prevent fraud or other misconduct committed by our
employees, customers, suppliers or other third parties.
We may be exposed to fraud or other misconduct committed by our employees,
customers, suppliers or other third parties that could affect our reputation and subject us to
litigation, financial losses and penalties imposed by governmental authorities. Such
misconduct could include:
 hiding unauthorized or unlawful activities;
 intentionally concealing material facts or failing to perform necessary due diligence
procedures designed to identify potential risks that are material to our decision to
make or dispose of investments and to engage in certain projects;
 improperly using or disclosing confidential information;
 engaging in improper activities such as offering bribes to, or receiving bribes from,
counterparties in return for any type of benefit or gain;
 misappropriating funds;
 conducting transactions that exceed authorized limits;
 engaging in misrepresentation or fraudulent, deceptive or otherwise improper
activities; or
 otherwise failing to comply with applicable laws or our internal policies and
procedures.
Our internal control procedures are designed to monitor our operations and ensure overall
compliance. However, such internal control procedures may be unable to identify all instances
of misconducts of our employees relating to our operations, non-compliance or suspicious
transactions in a timely manner, if at all. Furthermore, it is not always possible to detect and
prevent fraud and other misconduct and the precautions we take to prevent and detect such
activities may not be effective. There is no assurance that fraud or other misconduct will not
occur in the future. If such fraud or other misconduct does occur, it may result in negative
publicity for us.
Our leased properties may be subject to non-compliances or challenges that could expose
us to penalties and incremental costs.
We own and lease properties in Chinese mainland and overseas primarily for office,
manufacturing, warehousing, and staff dormitory functions. For details, see “Business —
Properties.”
RISK FACTORS
–6 7–


--- page 78 ---
Under PRC law certain leases are required to be registered with the PRC government. As
of the Latest Practicable Date, certain of our lease agreements in Chinese mainland had not
been registered. Although failure to register does not in itself invalidate the leases, we may be
subject to fines if we fail to rectify such non-compliance within the prescribed time frame after
receiving notice from the relevant PRC government authorities. The penalty ranges from
RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the relevant
authority. As of the Latest Practicable Date, we were not subject to any penalties arising from
the non-registration of lease agreements. However, we cannot assure you that we would not be
subject to any penalties and/or requests from local authorities to fulfill the registration
requirements, which may increase our costs in the future. If any of our leases is terminated or
becomes unenforceable as a result of challenges from third parties, we would need to seek
alternative properties and incur relocation costs. Any relocation could lead to disruptions to our
operations and adversely affect our business, financial conditions and results of operations.
Failure to comply with anti-corruption laws and regulations, or effectively manage our
employees, affiliates and business partners, could severely damage our reputation, and
materially and adversely affect our business, financial condition, results of operations and
prospects.
We have adopted stringent internal policies to ensure compliance of our business with
applicable laws and regulations. However, we are still subject to risks in relation to actions
taken by us, our employees, affiliates or business partners that constitute violations of the
anti-corruption laws and regulations. We cannot guarantee that we maintain compliance to the
applicable laws and regulations at all times or across jurisdictions where we operate our
business. If we, our employees, affiliates or business partners violate these laws, rules or
regulations, we could be subject to fines and/or other penalties. Actions by PRC regulatory
authorities or the courts to provide an interpretation of PRC laws and regulations that differs
from our interpretation or to adopt additional anti-bribery or anti-corruption related regulations
could also require us to make changes to our operations. Our reputation, corporate image, and
business operations may be materially and adversely affected if we fail to comply with these
measures or become the target of any negative publicity as a result of actions taken by us, our
employees, affiliates or business partners, which may in turn have a material adverse effect on
our business, financial condition, results of operations and prospects.
Our operations rely on IT systems and networks and our business and reputation may be
impacted by IT system failures, network disruptions or cybersecurity breaches.
We rely extensively on IT systems, some of which are supported by third-party vendors,
to manage and operate our business. We may have failures of these systems in the future. If
these systems cease to function properly, if these systems experience security breaches or
disruptions or if these systems do not provide the anticipated benefits, our ability to manage
our operations could be impaired, which could have a material adverse impact on our results
of operations, financial condition, and cash flows. If the software installed on the computers
used by us and our employees is not properly authorized or licensed, we may be subject to
claims or litigations from software vendors. We may be subject to IT system failures or
RISK FACTORS
–6 8–


--- page 79 ---
network disruptions caused by natural disasters, accidents, power disruptions,
telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic
break-ins, or other events or disruptions. System redundancy and other continuity measures
may be ineffective or inadequate, and our business continuity and disaster recovery planning
may not be sufficient for all eventualities. Such failures or disruptions could adversely impact
our business by, among other things, preventing access to our internet services, interfering with
customer transactions or impeding the assembling and shipping of our products. These events
could materially and adversely affect our reputation, financial condition and operating results.
Our IT systems may be subject to computer viruses or other malicious codes,
unauthorized access attempts, phishing and other cyberattacks. We continue to assess potential
threats and make investments seeking to address and prevent these threats, including
monitoring of our networks and systems and upgrading skills, employee training and security
policies for us and our third-party providers. However, because the techniques used in these
cyberattacks change frequently and may be difficult to detect for periods of time, we may face
difficulties in anticipating and implementing adequate preventative measures. During the Track
Record Period and up to the Latest Practicable Date, we had not seen any material impact on
our business or operations from these attacks. However, we cannot guarantee that our security
efforts will prevent breaches or breakdowns to our or our third-party providers’ databases or
systems. If the IT systems, networks or service providers we rely upon fail to function properly
or if we or one of our third-party providers suffer a loss, significant unavailability of or
disclosure of our business or stakeholder information and our business continuity plans do not
effectively address these failures on a timely basis, we may be exposed to reputational,
competitive and business harm as well as litigation and regulatory action, including
administrative fines. The costs and operational consequences of responding to breaches and
implementing remediation measures could be significant.
Our business operations are susceptible to disruptions from force majeure events,
including natural disasters, outbreaks of contagious diseases, and other extraordinary
events, which could materially and adversely affect our business and results of operations,
and such losses may not be fully covered by insurance.
Our business may be adversely affected by the occurrence of force majeure events,
including natural disasters, outbreaks of contagious diseases, and other extraordinary events,
such as typhoons, severe storms, earthquakes, floods, fires or other natural disasters or similar
events especially in the areas where we operate. In addition, any outbreak of a contagious
disease, such as severe acute respiratory syndrome (SARS), Middle East respiratory syndrome,
avian influenza or novel coronavirus disease (COVID-19), could disrupt our operations with
respect to our global supply chain, production, delivery and sales. Such events could decrease
the demand for our products, impact the productivity of our workforce, make it difficult or
impossible for us to manufacture and deliver products to our customers in a timely manner, or
to receive materials and equipment from our suppliers. Should major public health
emergencies, including pandemics, arise, we could be adversely affected by more stringent
employee travel restrictions, additional requirements in freight, relevant policies affecting the
movement of products between regions, delays in the ramp-up of the manufacturing capacity
RISK FACTORS
–6 9–


--- page 80 ---
and disruptions in the operations of our suppliers. In the event of a natural disaster, we could
incur significant losses, which could require substantial recovery time and result in significant
expenditures in order to resume operations.
Differences embedded in the legal systems of certain geographic markets where we
operate could affect our business, financial condition and results of operations.
The legal systems of geographic markets where we operate are consistently evolving.
Laws and regulations that are recently enacted may not sufficiently cover all aspects of
economic activities in such markets. In particular, the interpretation and enforcement of these
laws and regulations are subject to future implementations, and the application of some of these
laws and regulations to our businesses still needs further clarification. Since local
administrative and court authorities are authorized to interpret and implement statutory
provisions and contractual terms, it may be difficult to evaluate the outcome of administrative
and court proceedings and the level of legal protection we have in many of the geographic
markets where we operate. Local courts may have discretion to reject enforcement of foreign
awards or arbitration awards, which may affect our judgment on the relevance of legal
requirements and our ability to enforce our contractual rights or claims.
Furthermore, many of the legal systems in the geographic markets where we operate are
based in part on their respective government policies and internal interpretations, some of
which are published from time to time and may have retroactive effects. As a result, we may
not be aware of our violation of certain policies or rules until sometime after the violation. In
addition, administrative and court proceedings in certain of our geographic markets may be
protracted, resulting in substantial costs and diversion of resources and management attention
depending on the complexity of the cases.
It is possible that a number of laws and regulations may be adopted or construed to be
applicable to us in our geographic markets and elsewhere that could affect our businesses and
operations. Scrutiny and regulations of the industries in which we operate may further increase,
and we may be required to devote additional legal and other resources to addressing these
regulations. Developments in current laws or regulations or the imposition of new laws and
regulations in our geographic markets may affect the growth of our industries and affect our
business, financial condition and results of operations.
RISKS RELATING TO GOVERNMENT REGULATIONS
Developments in social and economic policies, as well as the interpretation and
enforcement of laws, rules and regulations, may affect our business, financial condition,
results of operations and prospects.
We operate in Chinese mainland and some overseas regions and therefore our business,
financial condition, results of operations and prospects may be affected by local economic,
social and legal policies. We cannot guarantee that our business operations will be able to
benefit from such measures. In addition, laws, rules and regulations may also be amended from
RISK FACTORS
–7 0–


--- page 81 ---
time to time, and the application, interpretation and enforcement of such evolving laws, rules
and regulations may affect our business operations. Any of the foregoing may have a material
and adverse effect on our business, financial condition, results of operations and prospects.
Failure to comply with labor laws and regulations in jurisdictions where we operate,
including regulations in relation to labor dispatch and social insurance and housing fund
contributions for our employees, could subject us to legal liabilities, fines and other legal
or administrative sanctions, and reputational harm.
We employ some of our workforce through labor dispatch arrangements, wherein workers
are hired by third-party staffing agencies but perform services for us. On December 28, 2012,
the Labor Contract Law of the PRC () was amended to impose
more stringent requirements on labor dispatch and such amendments became effective on July
1, 2013. For example, dispatched workers may only engage in temporary, auxiliary or
substitute work. In addition, the number of dispatched workers engaged by an employer may
not exceed a certain percentage of its total number of workers, to be decided by the Ministry
of Human Resources and Social Security. Pursuant to the Interim Provisions on Labor Dispatch
() (the “ Interim Provisions on Labor Dispatch ”) which has become
effective since March 1, 2014, an employer shall strictly control the number of dispatched
workers engaged, which shall not exceed 10% of the total number of its workers (the “ Limit ”).
As of December 31, 2024, the number of dispatched workers engaged by us exceeded the
Limit, primarily because with the customers’ order demand growth, we need additional workers
to deliver customer orders in short term, resulting in the number of dispatched workers
exceeding the stipulated Limit in relevant periods. By the end of May 2025, we had enhanced
our dispatched worker arrangements to ensure the number of dispatched workers engaged by
us was within the Limit. For details, see “Business — Employees — Labor Dispatch.”
However, we cannot assure you that the relevant government authorities will not impose
penalties on us and our subsidiaries for such historical non-compliance, which may adversely
affect our business, profitability and reputation.
In addition, we are required to contribute to a number of social insurance funds, including
funds for pension insurance, unemployment insurance, basic medical insurance, work-related
injury insurance, maternity insurance and housing provident fund on behalf of our employees
in Chinese mainland. According to the Regulation on the Administration of Housing Provident
Funds (၍ଣૢԷ), an enterprise in Chinese mainland is required to set up
housing provident fund accounts (ሪ˒) and pay the housing provident fund in time
and in full for its employees. According to the PRC Social Insurance Law ( ʕശɛ͏΍ձ਷
), an enterprise in Chinese mainland is required to complete social insurance
registration for its employees and to pay the social insurance contributions in time and in full.
On July 31, 2025, the Supreme People’s Court promulgated Interpretation II of the Supreme
People’s Court on Issues Concerning the Application of Law in the Trial of Labor Dispute
Cases (༆ᙑ(ɚ)) (the “ New
Judicial Interpretation ”), which stipulated, among others, that effective September 1, 2025,
if an employer and an employee agree or if the employee undertakes that social insurance
RISK FACTORS
–7 1–


--- page 82 ---
contributions need not be paid, the People’s Court shall deem such agreement or undertaking
invalid. Our PRC Legal Advisors are of the view that the New Judicial Interpretation does not
repeal or revise the social insurance laws and regulations currently in force in the PRC, and
would not cause us to undertake additional social insurance exposure. For details, see
“Regulatory Overview – Overview of the Laws and Regulations in the PRC – Laws and
Regulations on Labor – Social Insurance and Housing Provident Fund.”
During the Track Record Period, we did not pay social insurance and housing provident
fund in full for some of our employees. During the Track Record Period and up to the Latest
Practicable Date, we had not been subject to any administrative penalties in connection with
our contribution of social insurance plans during the Track Record Period. For details, see
“Business — Employees — Social Insurance and Housing Provident Funds.” We cannot
guarantee you that the competent government authorities will not require us to settle the
outstanding amount within the specified time limit or impose late payment penalties on us
based on such complaints, reports or other claims. In the event of any such non-compliance,
we may be required to pay any shortfall in social insurance contributions within a prescribed
time period and to pay penalties if we fail to do so.
In addition to the above, if we fail to comply with any other relevant labor laws and
regulations in jurisdictions where we operate, we may be exposed to penalties or be required
to pay damages to employees. Compliance with the relevant labor laws and regulations in
jurisdictions where we operate could substantially increase our labor costs. Increases in our
labor costs and future disputes with our employees could adversely affect our business,
financial condition and results of operations. In particular, an increase in labor costs could
increase our future production costs. We might not be able to pass these increases on to our
consumers due to competitive pricing pressure.
We are exposed to risks in relation to work safety and occurrence of accidents as well as
other operational, occupational and environment related risks, which could materially
and adversely affect our business, financial condition and results of operations.
Our business and production are subject to various risks, including operational risks and
occupational and environmental hazards. We must comply with the extensive environmental,
handling of hazardous substances, chemical manufacturing, health and safety laws and
regulations and stringent standards in relation to the manufacturing and sale of products which
are promulgated by the government authorities in Chinese mainland. According to these laws
and regulations, we are required to maintain safe production conditions and protect the
occupational health of our employees. For example, if any of our subsidiaries in Chinese
mainland engaging in manufacturing fails to comply with the relevant laws on prevention and
treatment of occupational diseases, then such subsidiary may be subject to fines and other
administrative penalties, and also, any employees who are deemed to suffer from occupational
diseases may have rights to seek compensation from us. We may experience various types of
difficulties in connection with the manufacturing of our products. Accidents, if they occur,
could materially affect our production and may give rise to personal injuries and fatalities,
damages to or destruction of properties or manufacturing facilities, and pollution and other
RISK FACTORS
–7 2–


--- page 83 ---
environmental damages. Any of these consequences, if significant, could result in business
interruption, legal liability and damages to our reputation and corporate image. While we
conduct regular inspections of the facilities we operate and conduct regular equipment
maintenance to ensure that our operations comply with applicable laws and regulations, we
cannot assure you that we will not experience any major accidents or work-related injuries in
our future production processes.
Our business is subject to a variety of laws, rules, policies and other obligations regarding
data protection domestically and aboard. Any losses or unauthorized access to or
unauthorized releases of confidential information and personal data could subject us to
significant reputational, financial, legal and operational consequences.
Our business involves the utilization and storage of certain information. The types of data
we collect may include product performance and testing data generated during design
validation and production processes, operational and supply chain data, specifications and
technical documentation provided by customers and internal system usage data. We do not
transfer personal information or important data collected and generated during operations
within Chinese mainland to outside of Chinese mainland. We also do not allow foreign
institutions, organizations or individuals to access, retrieve, download or export data stored
within Chinese mainland. For details, see “Business — Data Protection and Information
Security.” We are subject to laws relating to the collection, use, retention, protection and
transfer of personal information domestically and aboard. Several jurisdictions have passed
laws in this area, and other jurisdictions are considering imposing additional restrictions. These
laws continue to develop and may vary from jurisdiction to jurisdiction. During the Track
Record Period and up to the Latest Practicable Date, we complied with all relevant laws and
regulations in relation to data privacy and security in the jurisdictions in which we operate in
all material respects. Complying with emerging and changing overseas requirements may cause
us to incur substantial costs or require us to change our business practices. Non-compliance
could result in significant penalties or legal liability. Any failure by us to comply with other
domestic and foreign privacy-related or data protection laws and regulations could result in
proceedings against us by governmental entities or others, which may lead to reputational
impacts and significant legal liabilities.
We are also subject to various cybersecurity laws and regulations that govern the
protection of digital infrastructure, data integrity, and network security. These laws often
require businesses to implement robust cybersecurity measures, report incidents of data
breaches, and ensure compliance with security frameworks. Failure to comply with these laws
to the extent applicable to us or a cybersecurity incident could result in severe financial
penalties, operational disruptions, and reputational damage. As cybersecurity laws continue to
evolve, we face the challenge of staying compliant across multiple jurisdictions, which may
necessitate significant investments in technology, personnel, and training.
RISK FACTORS
–7 3–


--- page 84 ---
We have implemented systems and processes intended to secure our information
technology systems and prevent unauthorized access to or loss of sensitive data. As with all
companies, these security measures may not be sufficient for all eventualities and may be
vulnerable to hacking, employee error, malfeasance, system error, faulty password
management or other non-compliant incidents.
Any lack of requisite approvals, licenses or permits applicable to our business, or any
non-compliance with relevant laws and regulations as a result of the complexity of laws
and regulations and revisions of laws and regulations from time to time, may have a
material and adverse effect on our business, financial condition, results of operations and
prospects.
Our business is subject to supervision and regulation by various competent regulatory
authorities in jurisdictions where we operate. These authorities promulgate and enforce laws
and regulations governing a wide range of business activities relevant to our operations. Such
regulations typically govern market entry, the permitted business scope and the requisite
approvals, licenses, permits, filings and registrations. According to our PRC Legal Advisors,
we had obtained all material licenses and approvals necessary for our main business during the
Track Record Period and up to the Latest Practicable Date. For details, see “Business —
Licenses and Approvals.”
In addition to obtaining the necessary approvals, licenses and permits, we are also
required to comply with applicable laws and regulations in the course of our operations.
Certain aspects of our business are subject to a complex and evolving regulatory regime and
extensive government oversight. Given the pace and complexity of regulatory developments,
we may not always be fully informed of new or updated requirements in a timely manner. Even
where we are aware of such developments, the interpretation and scope of the applicable rules
may remain unclear, making it difficult to determine whether our conduct is fully compliant.
In some cases, we may not be able to adapt our operations or offerings promptly in response
to changes in the regulatory environment, which may lead to instances of non-compliance.
Furthermore, as the applicable laws and regulations, including their interpretation and
enforcement, may change from time to time, there can be no assurance that we have obtained,
or will be able to obtain, all necessary approvals, licenses, permits, filings or registrations
required for our operations, or that we will be able to maintain or renew them or complete the
requisite annual inspections (as applicable) in a timely manner. Any failure to do so, or any
non-compliance with relevant laws and regulations, could result in administrative penalties,
fines or other regulatory actions, and could disrupt our business operations. In certain
circumstances, we may be required to suspend or adjust certain aspects of our business, which
could materially and adversely affect our business, financial condition and results of
operations. We are also subject to approval/filing requirements in respect of our outbound
investment. If any of our historical or future outbound investment was regarded as failed to
comply with the requisite approval/filing requirements, we may be subject to administrative
penalties and/or any other liabilities, including order us to suspend or terminate such
implementation of our outbound investments.
RISK FACTORS
–7 4–


--- page 85 ---
We are subject to certain regulatory requirements over foreign currency conversion and
remittance.
We receive a majority of payments from our operations in Chinese mainland in RMB and
may need to convert certain Renminbi into other currencies for payment of dividends, if any,
to holders of our Shares, and to fund our business activities outside of Chinese mainland,
among other things. The convertibility of RMB into foreign currencies and, in certain cases,
the remittance of currency out of Chinese mainland are subject to related regulatory
requirements. Shortages in the availability of foreign currency may restrict our ability to remit
sufficient foreign currency to pay dividends or other payments, or otherwise fulfill our foreign
currency denominated obligations. Under current foreign exchange regulations of Chinese
mainland, payment of current account items, including profit distributions and trade and
service-related foreign exchange transactions, can be made in foreign currencies without prior
approval from the SAFE or its local branches, through licensed banks for foreign exchange
business, by complying with certain procedural requirements. If we cannot fulfill the
regulatory requirements over foreign currency conversion to obtain sufficient foreign
currencies to satisfy our foreign currency demands, we may not be able to pay dividends in
foreign currencies to our Shareholders. However, prior registration and other procedures with
competent government authorities is required where Renminbi is to be converted into foreign
currency and remitted out of Chinese mainland to pay capital expenses. Further, there is no
assurance that new regulations will not be promulgated in the future that would have further
requirements on the remittance of Renminbi into or out of Chinese mainland. Any existing and
future requirements on currency exchange may limit our ability to purchase raw materials and
components outside of Chinese mainland or otherwise fund any future business activities that
are conducted in foreign currencies.
Non-PRC resident holders of our H Shares may be subject to Chinese mainland income
tax obligations.
Under the EIT Law and its implementation rules, subject to any applicable tax treaty or
similar arrangement between the Chinese mainland and a non-Chinese mainland investor’s
jurisdiction of residence that provides for a different income tax arrangement, Chinese
mainland withholding tax at the rate of 10% is normally applicable to dividends from Chinese
mainland sources payable to investors that are non-PRC resident enterprises, which do not have
an establishment or place of business in Chinese mainland, or which have an establishment or
place of business in Chinese mainland if the relevant income is not effectively connected with
such establishment or place of business. Any gains realized on the transfer of shares by such
investors are subject to a 10% Chinese mainland income tax rate if such gains are regarded as
income from sources within Chinese mainland unless a treaty or similar arrangement provides
otherwise.
Under the Individual Income Tax Law of the PRC ()
and its implementation rules, dividends from sources within Chinese mainland paid to foreign
individual investors who are not PRC resident individuals are generally subject to a
withholding tax at a rate of 20% and gains from Chinese mainland sources realized by such
RISK FACTORS
–7 5–


--- page 86 ---
investors on the transfer of shares are generally subject to a 20% income tax rate, in each case,
subject to any reduction or exemption set forth in applicable tax treaties and laws in Chinese
mainland. Pursuant to the Circular on Questions Concerning the Collection of Individual
Income Tax Following the Repeal of Guo Shui Fa [1993] No. 045 (਷೼೯[1993]045 ໮
) (Guo Shui Han [2011] No. 348) dated June 28,
2011, issued by the SA T, dividends paid to non-PRC resident individual holders of H Shares
are generally subject to individual income tax of Chinese mainland at the withholding tax rate
of 10%, depending on whether there is any applicable tax treaty between Chinese mainland and
the jurisdiction in which the non-PRC resident individual holder of H Shares resides as well
as the tax arrangement between Chinese mainland and Hong Kong. Non-PRC resident
individual holders who reside in jurisdictions that have not entered into tax treaties with
Chinese mainland are subject to a 20% withholding tax on dividends received from us.
However, pursuant to the Circular Declaring that Individual Income Tax Continues to be
Exempted over Income of Individuals from Transfer of Shares (੻ᘱᚃ
) issued by the MOF and the SA T on March 30, 1998, gains of
individuals derived from the transfer of listed shares of enterprises may be exempt from
individual income tax. In addition, on December 31, 2009, the MOF, the SA T and the CSRC
jointly issued the Circular on Relevant Issues Concerning the Collection of Individual Income
Tax over the Income Received by Individuals from Transfer of Listed Shares Subject to Sales
Limitation () (Cai
Shui [2009] No. 167) which states that individuals’ income from the transfer of listed shares
on certain domestic exchanges shall continue to be exempted from individual income tax,
except for the relevant shares which are subject to sales restrictions as defined in the
Supplementary Circular on Relevant Issues Concerning the Collection of Individual Income
Tax over the Income Received by Individuals from Transfer of the Listed Shares Subject to
Sales Limitations (໾̂ஷ
) (Cai Shui [2010] No. 70). As of the Latest Practicable Date, the aforesaid provision had
not expressly provided that individual income tax shall be collected from non-PRC resident
individuals on the sale of shares of PRC resident enterprises listed on overseas stock
exchanges. If Chinese mainland income tax is imposed on gains realized from the transfer of
our H Shares or on dividends paid to our non-Chinese mainland resident investors, the value
of your investment in our H Shares may be affected. Furthermore, our Shareholders whose
jurisdictions of residence have tax treaties or arrangements with Chinese mainland may not
qualify for benefits under such tax treaties or arrangements.
Our offshore subsidiaries may be treated as a resident enterprise for tax purposes in
Chinese mainland.
Under the EIT Law and the Regulation on the Implementation of the Enterprise Income
Tax Law of the PRC (ૢԷ), enterprises established
under the laws of jurisdictions outside of Chinese mainland with “de facto management
bodies” located in Chinese mainland may be considered PRC resident enterprises for tax
purposes and may be subject to the PRC EIT at the rate of 25% on their global income. In
addition, the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated
Enterprises as PRC Resident Enterprises on the Basis of De Facto Management Bodies ( ਷
RISK FACTORS
–7 6–


--- page 87 ---
ஷ
) (Guo Shui Fa [2009] No. 82) (the “Circular 82”), specifies that certain Chinese-
controlled offshore incorporated enterprises, defined as enterprises incorporated by enterprises
or enterprise groups within Chinese mainland as major controlling shareholders under the laws
of foreign countries (regions) will be classified as resident enterprises if all of the following
conditions are met: (i) senior management personnel and departments that are responsible for
daily production, operation and management are located mainly within Chinese mainland; (ii)
financial and personnel decisions are subject to determination or approval by bodies or persons
in Chinese mainland; (iii) primary properties, accounting books, company seal, and minutes of
board meetings and shareholders’ meetings are located or kept within Chinese mainland; and
(iv) at least half of the directors with voting rights or senior management reside within Chinese
mainland. The SA T has subsequently provided further guidance on the implementation of
Circular 82.
As our Company is a PRC enterprise, our offshore subsidiaries may be questioned by the
competent regulatory authorities, and if our offshore subsidiaries are deemed PRC resident
enterprises, the competent regulatory authorities may request EIT at 25% on such our offshore
subsidiaries’ global income, except that the dividends they receive from our Chinese mainland
subsidiaries, if any, may be exempt from the EIT to the extent such dividend income constitutes
“dividends received by a PRC resident enterprise from its directly invested entity that is also
a PRC resident enterprise.” Nonetheless, it remains subject to future interpretation as to what
type of enterprise would be deemed a “PRC resident enterprise” for such purposes. The EIT on
our subsidiaries’ global income could significantly increase our tax burden and affect our cash
flows and profitability.
Y ou may experience difficulties in effecting service of process upon or enforcing foreign
judgments against us or our Directors or senior management.
Most of our assets are situated in Chinese mainland. In addition, most of our Directors
and senior management reside in Chinese mainland, and are citizens of Chinese mainland. As
cross-border service of process is typically cumbersome and time-consuming, it may be
difficult for investors outside of Chinese mainland to effect service of process upon us or our
management residing in Chinese mainland. As Chinese mainland does not have any treaties or
other forms of written arrangement with the United States that provide for the reciprocal
recognition and enforcement of foreign judgments, you may fail to enforce in courts in Chinese
mainland the judgments obtained in U.S. courts based on the civil liability provisions of the
U.S. federal securities laws against us or our Directors or senior management. On January 18,
2019, the Supreme People’s Court and the Hong Kong Government signed the Arrangement on
Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the
Courts of the Mainland and of the Hong Kong Special Administrative Region (ʫήၾ
τર) (the “ Arrangement ”), which
came into effect on January 29, 2024 and seeks to establish a mechanism with greater clarity
and certainty for recognition and enforcement of judgments in wider range of civil and
commercial matters between Hong Kong and the Chinese mainland. The Arrangement
discontinued the requirement for a choice of court agreement for bilateral recognition and
RISK FACTORS
–7 7–


--- page 88 ---
enforcement. After the Arrangement became effective, a judgment rendered by a Hong Kong
court can generally be recognized and enforced in the Chinese mainland even if the parties in
the dispute do not enter into a choice of court agreement in writing. However, we cannot
guarantee that all judgments made by Hong Kong courts will be recognized and enforced in the
Chinese mainland, as whether a specific judgment will be recognized and enforced is still
subject to a case-by-case examination by the relevant court in accordance with the
Arrangement.
RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of Chinese
mainland and Hong Kong.
As we are listed on the Shanghai Stock Exchange and will be listed on the Main Board
of the Stock Exchange, we will be required to comply with the listing rules (where applicable)
and other regulatory regimes of both jurisdictions, unless an exemption is available or a waiver
has been obtained. Accordingly, we may incur additional costs and resources in continuously
complying with all sets of listing rules in the two jurisdictions.
Our A Shares are listed on the Shanghai Stock Exchange, and the characteristics of the
A share and H share markets may differ.
Our A Shares are listed and traded on the Shanghai Stock Exchange. Following the Global
Offering, our A Shares will continue to be traded on the Shanghai Stock Exchange and our H
Shares will be traded on the Stock Exchange. Under current laws and regulations of Chinese
mainland, without the approval from the relevant regulatory authorities, our H Shares and A
Shares are neither interchangeable nor fungible, and there is no direct trading or settlement
between the H Share and A Share markets. With different trading characteristics, the H Share
and A Share markets have divergent trading volumes, liquidity and investor bases, as well as
different levels of retail and institutional investor participation. As a result, the trading
performance of our H Shares and A Shares may not be comparable. Nonetheless, fluctuations
in the price of our A Shares may adversely affect the price of our H Shares, and vice versa. Due
to the different characteristics of the H Share and A Share markets, the historical prices of our
A Shares may not be indicative of the performance of our H Shares. Y ou should therefore not
place undue reliance on the trading history of our A Shares when evaluating the investment
decision in our H Shares.
There has been no prior public market for our H Shares, and an active trading market for
our H Shares may not develop or be sustained.
Prior to the Global Offering, there was no public market for our H Shares. We cannot
assure you that a public market for our H Shares with adequate liquidity and trading volume
will develop and be sustained following completion of the Global Offering. In addition, the
Offer Price of our H Shares is expected to be fixed by agreement between the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us, and may not be an
RISK FACTORS
–7 8–


--- page 89 ---
indication of the market price of our H Shares following completion of the Global Offering. If
an active public market for our H Shares does not develop following completion of the Global
Offering, the market price and liquidity of our H Shares may be materially and adversely
affected.
The price and trading volume of our H Shares may be volatile, which could lead to
substantial losses to investors.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of the
securities in Hong Kong and elsewhere in the world. The Stock Exchange and other securities
markets have, from time to time, experienced significant price and trading volume volatility
that are not related to the operating performance of any particular company. The business and
performance and the market price of the shares of other companies engaging in similar business
may also affect the price and trading volume of our H Shares. In addition to market and
industry factors, the price and trading volume of our H Shares may be highly volatile for
specific business reasons, such as fluctuations in our revenue, earnings, cash flows,
investments, expenditures, regulatory developments, relationships with our business partners,
movements or activities of key personnel, or actions taken by competitors. Moreover, shares
of other companies listed on the Stock Exchange have experienced price volatility in the past,
and it is possible that our H Shares may be subject to changes in price not directly related to
our performance.
Holders of our H Shares are subject to the risk that the trading price of our H Shares
could fall during this period before the trading of our H Shares begins.
The Offer Price of our H Shares is expected to be determined on the Price Determination
Date. However, our H Shares will not commence trading on the Stock Exchange until they are
delivered, which is expected to be several business days after the pricing date. As a result,
investors may not be able to sell or otherwise deal in our H Shares during that period. The price
of our H Shares could fall before trading begins due to adverse market conditions or other
adverse developments between the time of sale and the date on which the trading begins.
Y ou will incur immediate and substantial dilution, and may experience further dilution in
the future.
The Offer Price of the H Shares is higher than the net tangible asset value per H Share
immediately prior to the Global Offering. Therefore, purchasers of the H Shares in the Global
Offering will experience an immediate dilution in pro forma consolidated net tangible asset
value. In order to expand our business, we may consider offering and issuing additional Shares
in the future. Purchasers of the H Shares may experience dilution in the net tangible asset value
per H Share of their H Shares if we issue additional Shares in the future at a price which is
lower than the net tangible asset value per H Share at that time. Furthermore, we may issue
Shares pursuant to any existing or future share option incentive scheme, which would further
dilute our Shareholders’ interests in our Company.
RISK FACTORS
–7 9–


--- page 90 ---
Future sales or perceived sales of substantial amounts of our H Shares in the public
market could have a material adverse effect on the prevailing market price of our H
Shares and our ability to raise additional capital in the future, or may result in dilution
of your shareholding.
The market price of our H Shares and our ability to raise equity capital in the future at
a time and price that we deem appropriate could be negatively impacted as a result of future
sales of a substantial number of our H Shares or other securities relating to our H Shares in the
public market, especially by our Directors, executive officer, or the issuance of new shares or
other securities, or the perception that such sales or issuances may occur. In addition, our
Shareholders may experience dilution in their holdings if we issue more securities in the future.
Furthermore, we may issue shares pursuant to any existing or future share option incentive
schemes, which would further dilute our Shareholders’ interests in our Company. New shares
or shares-linked securities issued by us may also confer rights and privileges that take priority
over those conferred by the H Shares. Market sale of Shares by such Shareholders and the
availability of these Shares for future sale may have a negative impact on the market price of
our H Shares.
In addition, while investors subscribing shares in the Global Offering are not subject to
any restrictions on the disposal of the H Shares they subscribed, they may have existing
arrangements or agreement to dispose part or all of the H Shares they hold immediately or
within certain period upon completion of the Global Offering for legal and regulatory, business
and market, or other reasons. Such disposal may occur within a short period or any time or
period after the Listing Date. Any sale of the H Shares subscribed by such investors pursuant
to such arrangement or agreement could adversely affect the market price of our H Shares and
any sizeable sale could have a material and adverse effect on the market price of our H Shares
and could cause substantial volatility in the trading volume of our H Shares
Our historical dividends may not be indicative of our future dividend policy, and there
can be no assurance whether and when we will pay dividends in the future.
We have declared dividends in the past. However, there is no assurance that dividends of
any amount will be declared or distributed by us in any year in the future. Under the applicable
laws and regulations of Chinese mainland, the payment of dividends may be subject to certain
limitations, and the calculation of our profit under the Accounting Standards for Business
Enterprises may differ in certain respects from the calculation under the IFRS Accounting
Standards (“ IFRSs ”). The declaration, payment and amount of any future dividends are subject
to the discretion of our Directors, after taking into account various factors, including but not
limited to our results of operations, financial condition, cash flows, capital expenditure
requirements, market conditions, our strategic plans and prospects for business development,
regulatory restrictions on the payment of dividends and other factors as our Directors may
deem relevant, and subject to the approval at Shareholders’ meeting. Any declaration and
payment as well as the amount of dividends will be subject to our constitutional documents and
the applicable laws and regulations of Chinese mainland. See “Financial Information —
RISK FACTORS
–8 0–


--- page 91 ---
Dividends” for further details of our dividend policy. No dividend shall be declared or payable
except out of our profits and reserves lawfully available for distribution. Our historical
dividends should not be taken as indicative of our dividend policy in the future.
This prospectus contains certain facts, forecast and other statistics derived from various
government resources. These have not been independently verified and may not be
reliable.
Certain facts, forecast and other statistics in this prospectus are derived from various
government resources. However, our Directors cannot guarantee the quality or reliability of
such source materials. Nevertheless, information from official government sources has not
been independently verified by us, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters or any
of their respective affiliates or advisers and, therefore, we make no representation as to the
accuracy of such facts and statistics. Further, we cannot assure our investors that they are stated
or compiled on the same basis or with the same degree of accuracy as similar statistics
presented elsewhere. In all cases, our investors should consider carefully how much weight or
importance should be attached to or placed on such facts or statistics.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This prospectus contains forward-looking statements with respect to our business
strategies, operating efficiencies, competitive positions, growth opportunities for existing
operations, plans and objectives of management, certain pro forma information and other
matters. The words “aim”, “anticipate”, “believe”, “could”, “predict”, “potential”, “continue”,
“expect”, “intend”, “may”, “might”, “plan”, “seek”, “will”, “would”, “should” and the negative
of these terms and other similar expressions identify a number of these forward-looking
statements. These forward-looking statements, including, amongst others, those relating to our
future business prospects, capital expenditure, cash flows, working capital, liquidity and
capital resources are necessarily estimates reflecting the best judgment of our Directors and
management and involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors,
including those set out in this section. Accordingly, such statements are not a guarantee of
future performance and investors should not place undue reliance.
RISK FACTORS
–8 1–


--- page 92 ---
Y ou should read the entire prospectus carefully and only rely on the information included
in this prospectus to make your investment decision, and we strongly caution you not to
rely on any information contained in press articles or other media coverage relating to us,
our Shares or the Global Offering.
We strongly caution our investors not to rely on any information contained in press
articles or other media regarding us, our Shares and the Global Offering. Prior to the
publication of this prospectus, there may be press and media coverage regarding the Global
Offering and us. Such press and media coverage may include references to certain information
that does not appear in this prospectus, including certain operating and financial information
and projections, valuations and other information. We have not authorized the disclosure of any
such information in the press or media and do not accept any responsibility for any such press
or media coverage or the accuracy or completeness of any such information or publication. We
make no representation as to the appropriateness, accuracy, completeness or reliability of any
such information or publication. To the extent that any such information is inconsistent or
conflicts with the information contained in this prospectus, we disclaim responsibility for it
and our investors should not rely on such information.
RISK FACTORS
–8 2–


--- page 93 ---
In preparation for the Listing, we have sought the following waivers from strict
compliance with the Listing Rules and exemption from strict compliance with the Companies
(Winding Up and Miscellaneous Provisions) Ordinance:
Rules Subject matter
Rules 3.28 and 8.17 of the Listing Rules /H1118Appointment of joint company secretaries
Rules 8.12 and 19A.15 of the Listing
Rules /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Management presence in Hong Kong
Rule 4.04(1) of the Listing Rules and and
Paragraphs 27 and 31 of the Third
Schedule to the Companies (Winding
Up and Miscellaneous Provisions)
Ordinance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Inclusion of Accountants’ Report for the
year ended December 31, 2025
Rule 10.04 of and Paragraph 1C(2) of
Appendix F1 to the Listing Rules /H1118/H1118/H1118/H1118/H1118
Allocation of H Shares to existing minority
shareholders and their close associates
and Existing Shareholder Employee
Participants
Paragraph 1B and Paragraph 1C(1) of
Appendix F1 to the Listing Rules /H1118/H1118/H1118/H1118/H1118
Allocation to connected client under the
Employee Preferential Offering and in
cornerstone investment
Paragraph 15(2)(c) of Appendix 1A to the
Listing Rules /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Disclosure of Offer Price
APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rule 8.17 of the Listing Rules, we must appoint a company secretary who
satisfies the requirements under Rule 3.28 of the Listing Rules. According to Rule 3.28 of the
Listing Rules, we must appoint as our company secretary an individual, who, by virtue of his
or her academic or professional qualifications or relevant experience, is, in the opinion of the
Stock Exchange, capable of discharging the functions of company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); or
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
W AIVERS AND EXEMPTIONS
–8 3–


--- page 94 ---
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience”, the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he or she
played;
(b) familiarity with the Listing Rules and other relevant law and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Mr. ZHOU Liangliang ( մԄ૑)( “Mr. Zhou ”), our Board secretary as
our joint company secretary with effect from the Listing Date. Our Group’s key operations and
principal business activities are conducted outside of Hong Kong. We believe that the company
secretary role requires a person to be deeply familiar with our operations and the specific
industry context, and to be able to cultivate strong relationships with both the Board and the
management. It would be in the best interests of our Company and our corporate governance
to have as its joint company secretary a person such as Mr. Zhou who has been with our
Company since October 2019. As our Board secretary, Mr. Zhou is deeply familiar with our
operations and is able to cultivate strong relationships with both the Board and the
management. Our Directors believe that Mr. Zhou’s intimate knowledge of our Company and
operations is essential for the performance of company secretary duties in the most effective
and efficient manner. For biographical details, see “Directors and Senior Management.”
Since Mr. Zhou does not possess the qualifications stipulated in Rule 3.28 of the Listing
Rules, he is not able to fulfill the requirements to act as a company secretary of a listed issuer
stipulated under the Listing Rules. To support Mr. Zhou in performing the duties of company
secretary, we have appointed Mr. CHOW Shing Lung ( ཅ፴Ꮂ)( “ Mr. Chow ”), who is an
associate member of both The Hong Kong Chartered Governance Institute (formerly known as
the Hong Kong Institute of Chartered Secretaries) and The Chartered Governance Institute in
the United Kingdom and meets the requirements under Rule 3.28 of the Listing Rules, as a joint
company secretary to provide assistance for a three-year period from the Listing Date so as to
enable Mr. Zhou to acquire the relevant experience as required under Note 2 to Rule 3.28 of
the Listing Rules to duly discharge his duties.
Accordingly, we have applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with the requirements under Rules 3.28 and 8.17 of the Listing Rules in
relation to the appointment of Mr. Zhou as our joint company secretary for a period of three
years from the Listing Date. Such waiver has been granted on the conditions that: (i) Mr. Zhou
is assisted by Mr. Chow, who possesses the qualifications or experience as required under Rule
3.28 of the Listing Rules and is appointed as our joint company secretary throughout the
W AIVERS AND EXEMPTIONS
–8 4–


--- page 95 ---
three-year waiver period, to discharge his function as a company secretary and gain the
relevant experience under Rule 3.28 of the Listing Rules; and (ii) this waiver will be revoked
in the event of any material breaches of the Listing Rules by our Company. In addition, Mr.
Zhou will comply with the annual professional training requirements under Rule 3.29 of the
Listing Rules and enhance his understanding of the Listing Rules during the three-year period
from the Listing Date. We will further ensure that Mr. Zhou has access to the relevant training
and support to familiarize himself with the Listing Rules and the duties of a company secretary
of an issuer listed on the Stock Exchange. Prior to the expiration of the three-year period, we
will further evaluate the qualifications and experience of Mr. Zhou to determine whether he has
satisfied the requirements as stipulated under the Listing Rules and whether he needs further
assistance. We will liaise with and seek the Stock Exchange’s confirmation on whether Mr.
Zhou, having benefited from the assistance of Mr. Chow for three years, has acquired the skills
necessary to carry out the duties of a company secretary and the relevant experience within the
meaning of Note 2 to Rule 3.28 of the Listing Rules and is capable of discharging the functions
of company secretary alone so that a further waiver will not be necessary.
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, an issuer must have sufficient management
presence in Hong Kong. This normally means that at least two of the executive Directors must
be ordinarily resident in Hong Kong. Pursuant to Rule 19A.15 of the Listing Rules, the
requirement in Rule 8.12 may be waived having regard to, among other considerations, the
arrangements for maintaining regular communication with the Stock Exchange.
We currently do not have two executive Directors who are ordinarily resident in Hong
Kong for the purposes of Rule 8.12 of the Listing Rules. Since our headquarters and most of
our business operations are managed and conducted in the PRC, 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 and undesirable for our Company to
arrange for two executive Directors to be ordinarily resident in Hong Kong, either by means
of relocation of existing executive Directors or appointment of additional executive Directors.
Therefore, we do not, and do not contemplate in the foreseeable future that we will, have
sufficient management presence in Hong Kong for the purpose of satisfying the requirements
under Rule 8.12 of the Listing Rules.
Accordingly, we have applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with Rules 8.12 and 19A.15 of the Listing Rules, on the basis that we
implement the following arrangements to ensure there is an effective channel of
communication between our Company and the Stock Exchange:
(a) Authorized representatives: both of our Company’s authorized representatives,
Mr. Du, our executive Director, and Mr. Chow Shing Lung ( ཅ፴Ꮂ)( “ Mr. Chow ”),
our joint company secretary, will act as our principal channels of communication
with the Stock Exchange. Accordingly, our authorized representatives will be able
W AIVERS AND EXEMPTIONS
–8 5–


--- page 96 ---
to meet with the relevant members of the Stock Exchange on reasonable notice and
will be readily contactable by telephone, facsimile and/or email to promptly deal
with enquiries from the Stock Exchange;
(b) Directors: each of our authorized representatives has means to contact all members
of our Board (including our independent non-executive Directors) promptly at all
times as and when the Stock Exchange wishes to contact the members of our Board
for any matters. In the event that any Director expects to travel or otherwise be out
of office, he/she will provide a contactable phone number of him/her to the
authorized representatives. Pursuant to Rule 3.20 of the Listing Rules, each of our
Directors shall provide their telephone number, mobile phone number, facsimile
number (if available), email address (if available), residential address and
correspondence address to the Stock Exchange. To the best of our knowledge and
information, each Director who does not ordinarily reside in Hong Kong possesses
or can apply for valid travel documents to visit Hong Kong and can meet with the
Stock Exchange within a reasonable period upon request of the Stock Exchange;
(c) Compliance advisor: we have appointed Guotai Junan Capital Limited as our
Compliance Advisor upon Listing pursuant to Rule 3A.19 of the Listing Rules, who
will, in addition to the authorized representatives and our Directors, act as an
additional channel of communication with the Stock Exchange for a period
commencing on the Listing Date and ending on the date on which we comply with
Rule 13.46 of the Listing Rules in respect of our financial results for the first full
financial year commencing after the Listing Date. Pursuant to Rule 3A.23 of the
Listing Rules, the Compliance Advisor will have access at all times to our
authorized representatives, the Directors and other senior management. We shall
also ensure that our authorized representatives, Directors and senior management
will promptly provide such information and assistance as the Compliance Advisor
may need or may reasonably require in connection with the performance of the
Compliance Advisor’s duties as set forth in Chapter 3A of the Listing Rules. We
shall ensure that there are adequate and efficient means of communication among
our Company, authorized representatives, Directors, senior management and the
Compliance Advisor, and will keep the Compliance Advisor fully informed of all
communications and dealings between the Stock Exchange and us. Any meeting
between the Stock Exchange and our Directors will be arranged through the
authorized representatives or the Compliance Advisor or directly with our Directors
within a reasonable time frame. We will also inform the Stock Exchange promptly
in respect of any change in the Compliance Advisor; and
(d) Hong Kong legal advisor: we will retain a Hong Kong legal advisor to advise us
on the on-going compliance requirements, any amendment or supplement to and
other issues arising under the Listing Rules and other applicable laws and
regulations in Hong Kong after the Listing.
W AIVERS AND EXEMPTIONS
–8 6–


--- page 97 ---
W AIVER FROM STRICT COMPLIANCE WITH RULE 4.04(1) OF THE LISTING
RULES AND EXEMPTION FROM STRICT COMPLIANCE WITH SECTION 342(1)(b)
IN RELATION TO PARAGRAPH 27 OF PART I AND PARAGRAPH 31 OF PART II OF
THE THIRD SCHEDULE TO THE COMPANIES (WINDING UP AND
MISCELLANEOUS PROVISIONS) ORDINANCE IN RESPECT OF INCLUSION OF
ACCOUNTANTS’ REPORT FOR THE YEAR ENDED DECEMBER 31, 2025
Relevant requirements under the Companies (Winding Up and Miscellaneous Provisions)
Ordinance
Section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance requires, subject to Section 342A of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, all prospectuses to state the matters specified in Part I of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance and set out
the reports specified in Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
According to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, a listing applicant is required to include in its
prospectus a statement as to the gross trading income or sales turnover (as may be appropriate)
of the listing applicant during each of the three financial years immediately preceding the issue
of its prospectus, as well as an explanation of the method used for the computation of such
income or turnover and a reasonable breakdown of the more important trading activities.
According to paragraph 31 of Part II of the Third Schedule to the Companies (Winding
Up and Miscellaneous Provisions) Ordinance, a listing applicant is required to include in its
prospectus a report by the auditors of the listing applicant with respect to profits and losses and
assets and liabilities in respect of each of the three financial years immediately preceding the
issue of the prospectus.
According to Section 342A(1) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the SFC may issue, subject to such conditions (if any) as it thinks fit,
a certificate of exemption from compliance with the relevant requirements of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the circumstances,
the SFC considers that the exemption will not prejudice the interests of the investing public and
compliance with the relevant requirements would be irrelevant or unduly burdensome, or is
otherwise unnecessary or inappropriate.
Relevant requirements under the Listing Rules
Rule 4.04(1) of the Listing Rules requires that the consolidated results of the listing
applicant and its subsidiaries in respect of each of the three financial years immediately
preceding the issue of the prospectus of the listing applicant, or such shorter period as may be
acceptable to the Stock Exchange, be included in the accountants’ report of the prospectus.
W AIVERS AND EXEMPTIONS
–8 7–


--- page 98 ---
Relevant requirements under the Guide for New Listing Applicants
Appendix II to Chapter 1.1A of the Guide for New Listing Applicants issued by the Stock
Exchange provides that where an applicant issues its prospectus in the second month after the
latest year end, a Rule 4.04(1) waiver would be subject to the following conditions:
(a) the applicant must list on the Stock Exchange within three months after the latest
year end;
(b) the applicant must obtain a certificate of exemption from the SFC on compliance
with the relevant Companies (Winding Up and Miscellaneous Provisions) Ordinance
requirements;
(c) the prospectus must include a profit estimate for the latest financial year that
complies with Rules 11.17 to 11.19 of the Listing Rules or provide justification why
a profit estimate cannot be included; and
(d) the prospectus must include a directors’ statement that there is no material adverse
change to an applicant’s financial and trading positions or prospects with specific
reference to the trading results from the end of the stub period to the latest financial
year end.
Grounds for the Waiver and Exemption Application
The financial year of our Company ends on December 31. This prospectus contains the
consolidated results of our Group for the three years ended December 31, 2024 and the nine
months ended September 30, 2025, but does not include the financial statements and results of
our Group in respect of the full financial year immediately preceding the issue of this
prospectus as required under paragraph 27 of Part I and paragraph 31 of Part II of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
The strict compliance with the requirements under Rule 4.04(1) of the Listing Rules and
paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance would be unduly burdensome for our
Company and the waiver and exemption applied for would not prejudice the interest of the
investing public, as:
(a) there would not be sufficient time for our Company and the reporting accountants
of our Company (the “ Reporting Accountants ”) to finalize the audited consolidated
financial statements of our Group for the year ended December 31, 2025 for
inclusion in this prospectus. It would be unduly burdensome for our Company and
the Reporting Accountants to undertake the considerable amount of work required
W AIVERS AND EXEMPTIONS
–8 8–


--- page 99 ---
to prepare, update and finalize the Accountants’ Report to cover such additional
period within a short period of time. If the results for the full year ended December
31, 2025 are to be included in this prospectus, there would be a significant delay in
the listing timetable;
(b) our Company has included in this prospectus (i) the Accountants’ Report covering
the three years ended December 31, 2024 and the nine months ended September 30,
2025, (ii) the profit estimate of our Group for the year ended December 31, 2025 that
complies with Rules 11.17 to 11.19 of the Listing Rules, and (iii) the information
regarding the recent development of our Group subsequent to the Track Record
Period and up to the Latest Practicable Date, as disclosed in “Summary — Recent
Development and No Material Adverse Change;”
(c) our Company is of the view that the Accountants’ Report covering the three years
ended December 31, 2024 and the nine months ended September 30, 2025, as set out
in Appendix I to this prospectus, the unaudited pro forma financial information as
set out in Appendix II to this prospectus, the profit estimate for the year ended
December 31, 2025 as set out in Appendix IA to this prospectus, together with other
disclosure in this prospectus, have already provided the potential investors with
adequate and reasonably up-to-date information in the circumstances to form a view
on the track record of our Company, and that all information which is necessary for
the investing public to make an informed assessment of the business, assets and
liabilities, financial position, management and prospects has been included in this
prospectus. Therefore, the granting of the waiver and exemption will not prejudice
the interest of the investing public;
(d) our Directors and Joint Sponsors after performing all due diligence work which they
consider appropriate, confirm that, up to the date of this prospectus, there has been
no material adverse change to the financial and trading positions or prospects since
September 30, 2025 (being the date of the latest audited statement of financial
position in the Accountants’ Report set out in Appendix I to this prospectus) to the
date of this prospectus; and there has been no event since September 30, 2025 and
up to the date of this prospectus which would materially affect the information
shown in the Accountants’ Report as set out in Appendix I to this prospectus, the
profit estimate for the year ended December 31, 2025 as set out in Appendix IA to
this prospectus and the section headed “Financial Information” in this prospectus
and other parts of this prospectus; and
(e) our Company will publish its preliminary results announcement and annual report
for the year ended December 31, 2025 in accordance with Rules 13.49(1) and
13.46(2) of the Listing Rules. Our Company currently expects to issue its annual
results and annual report for the financial year ended December 31, 2025 on or
before March 31, 2026 and April 30, 2026, respectively. In this regard, our Directors
W AIVERS AND EXEMPTIONS
–8 9–


--- page 100 ---
consider that the Shareholders, the investing public as well as potential investors of
our Company will be kept informed of the financial results of our Group for the
financial year ended December 31, 2025.
Waiver and Exemption Application
In light of the above, we have applied to the Stock Exchange for, and the Stock Exchange
has granted us, a waiver from strict compliance with the requirements under Rule 4.04(1) of
the Listing Rules relating to inclusion in the Accountants’ Report of the consolidated results
of our Group in respect of the full financial year ended December 31, 2025, on the conditions
that:
(a) this prospectus will be issued on or before January 14, 2026 and the Listing Date
shall not be later than three months after the latest financial year end of our
Company (i.e. on or before March 31, 2026);
(b) our Company obtained from the SFC a certificate of exemption from strict
compliance with the requirements under section 342(1)(b) in relation to paragraph
27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance; and
(c) this prospectus contains a profit estimate for the year ended December 31, 2025 (in
compliance with Rules 11.17 to 11.19 of the Listing Rules) and a Directors’
statement that there is no material adverse change to the financial and trading
positions or prospects of our Company with specific reference to the trading results
since September 30, 2025 and up to December 31, 2025.
We have also applied to the SFC for, and the SFC has granted us, a certificate of
exemption under section 342A of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance from strict compliance with section 342(1)(b) in relation to paragraph 27 of Part I
and paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance to the extent that our Company’s financial statements in
this prospectus do not fully comply with the relevant requirements, on the conditions that:
(a) the particulars of this exemption are set forth in this prospectus; and
(b) this prospectus will be issued on or before January 14, 2026 and the H Shares will
be listed on or before January 22, 2026 (i.e. within three months after the end of our
Company’s latest financial year immediately preceding the issue of this prospectus).
W AIVERS AND EXEMPTIONS
–9 0–


--- page 101 ---
W AIVER IN RESPECT OF ALLOCATION OF H SHARES TO EXISTING MINORITY
SHAREHOLDERS AND THEIR CLOSE ASSOCIATES
Rule 10.04 of the Hong Kong Listing Rules requires that a person who is an existing
shareholder of a listing applicant may only subscribe for or purchase any securities for which
listing is sought that are being marketed by or on behalf of a listing applicant either in
his/her/its own name or through nominees if the conditions in Rule 10.03 of the Hong Kong
Listing Rules are fulfilled, namely that (i) no securities are to be offered to the existing
shareholders on a preferential basis and no preferential treatment is given to them in the
allocation of the securities; and (ii) the minimum prescribed percentage of public shareholders
required by Rule 8.08(1) of the Hong Kong Listing Rules is achieved. Paragraph 1C(2) of
Appendix F1 to the Hong Kong Listing Rules states that, without the prior written consent of
the Hong Kong Stock Exchange, no allocations will be permitted to be made to directors or
existing shareholders of a listing applicant or their close associates, unless the conditions set
out in Rules 10.03 and 10.04 are fulfilled.
Paragraph 13 of Chapter 4.15 of the Guide provides that the Hong Kong Stock Exchange
will consider granting a waiver from Rule 10.04 of the Hong Kong Listing Rules and a consent,
pursuant to Paragraph 1C(2) of Appendix F1 to the Hong Kong Listing Rules, to allow a listing
applicant’s existing shareholders or their close associates to participate in its initial public
offering if any actual or perceived preferential treatment arising from their ability to influence
the listing applicant during the allocation process can be addressed.
Paragraph 14 of Chapter 4.15 of the Guide sets out the conditions required to be fulfilled
and confirmations from relevant parties to be provided when the Hong Kong Stock Exchange
considers granting the aforesaid waiver and consent.
Prior to the Listing, our Company’s share capital comprises entirely A Shares listed on the
Shanghai Stock Exchange. Our Company has a large and widely dispersed public A Share
shareholder base. Our Company can only obtain register (“ Register of A Shareholders ”) of its
A Share shareholders (“ A Shareholders ”) from China Securities Depository and Clearing
Corporation Limited showing the largest 200 A Shareholders, but not all A Shareholders, for
specified dates, namely on the 10th day, 20th day and the end of the month, and a full list of
Register of A Shareholders for the date of shareholders’ meeting. Having considered that A
Shares are freely transferable and there may be time difference between the date of Register
of A Shareholders and the date of bookbuilding, it would not be practicable for the Company
and the Overall Coordinators to ascertain whether the placees hold any A Shares by merely
checking the Register of A Shareholders. In addition, there may be circumstances where an
investor purchases the A Shares through a nominee and the nominee’s name is shown on the
Register of A Shareholders, resulting difficulties in identifying the actual ultimate beneficial
owner of A Shares.
W AIVERS AND EXEMPTIONS
–9 1–


--- page 102 ---
As disclosed in the section headed “Structure of the Global Offering — The International
Offering — Employee Preferential Offering” in this prospectus, certain Offer Shares initially
available for subscription under the International Offering, are available for subscription as
Employee Reserved Shares by the Eligible Employees on a preferential basis under the
Employee Preferential Offering according to Rule 10.01 of the Listing Rules. To the best
knowledge of the Company upon due and careful enquiry, certain of the Eligible Employees
(the “ Existing Shareholder Employee Participants ”) currently holds A Shares, and may
continue to hold A Shares of the Company prior to the completion of the Global Offering. The
Eligible Employees have been selected by the Company by taking into consideration, among
others, their respective seniority, current position as well as contribution made to the Group,
and the Company does not take into regard whether its employee is an existing Shareholder or
not when determining the list of Eligible Employees. In addition, none of the Existing
Shareholder Employee Participants (i) is a core connected person of the Company or their close
associate; or (ii) holds more than 1% A Shares as of the date of this prospectus. Accordingly,
such Existing Shareholder Employee Participants would not be able to exert any influence on
the allocation process in the Employee Preferential Offering. Furthermore, there is no
preferential treatment to Existing Shareholder Employee Participants compared to the other
Eligible Employees.
We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strict
compliance with Rule 10.04 of, and a consent under Paragraph 1C(2) of Appendix F1 to the
Hong Kong Listing Rules to permit H Shares in the International Offering to be placed to
certain existing minority Shareholders (including Existing Shareholder Employee Participants
subscribing through the Employee Preferential Offering) who (i) hold less than 5% of the
voting rights in our Company prior to completion of the Global Offering and (ii) are not and
will not become (upon completion of the Global Offering) core connected persons of the
Company or the close associates of any such core connected person (together, the “ Permitted
Existing Shareholders ”, each a “ Permitted Existing Shareholder ”), on the following
conditions:
(i) each Permitted Existing Shareholder to whom the Company may allocate the H
Shares under the International Offering holds less than 5% of the voting rights in the
Company prior to completion of the Global Offering;
(ii) each Permitted Existing Shareholder is not, and will not be, a core connected person
of the Company or any close associate of any such core connected person
immediately prior to or following the Global Offering;
(iii) none of the Permitted Existing Shareholders has the power to appoint any Directors
nor have any other special rights in the Company;
(iv) allocation to the Permitted Existing Shareholders and their close associates will not
affect the Company’s ability to satisfy the public float requirement as prescribed by
the Hong Kong Stock Exchange;
W AIVERS AND EXEMPTIONS
–9 2–


--- page 103 ---
(v) to the best knowledge and belief of the Company and the Joint Sponsors, and based
on discussions between the Company and the Overall Coordinators and
confirmations required to be submitted to the Hong Kong Stock Exchange by the
Joint Sponsors, the Company will confirm to the Hong Kong Stock Exchange that:
a. in case of participation as cornerstone investors, no preferential treatment has
been, nor will be, given to the Permitted Existing Shareholders and/or their
close associates by virtue of their relationship with the Company, other than
the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide, nor
is any Permitted Existing Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, and the
Permitted Existing Shareholders’ cornerstone investment agreements do not
contain any material terms which are more favorable to the Permitted Existing
Shareholders than those in other cornerstone investment agreements; or
b. in case of participation as placees, no preferential treatment will be given to the
Permitted Existing Shareholders and/or their close associates in the allocation
process (other than the allocation to the Eligible Employees on a preferential
basis under the Employee Preferential Offering following the principles set out
in Rule 10.01 of the Listing Rules), nor is any Permitted Existing Shareholder
in a position to exert influence on the Company to obtain actual or perceived
preferential treatment, by virtue of their relationship with the Company;
(vi) in the case of participation as placees, the Overall Coordinators will confirm to the
Hong Kong Stock Exchange that, to the best of their knowledge and belief, no
preferential treatment has been, nor will be, given to any of the Permitted Existing
Shareholders or their close associates by virtue of their relationship with the
Company in any allocation in the International Offering (other than the allocation to
the Eligible Employees on a preferential basis under the Employee Preferential
Offering following the principles set out in Rule 10.01 of the Listing Rules); and
(vii) the Joint Sponsors will confirm to the Hong Kong Stock Exchange that based on (a)
their discussions with the Company and the Overall Coordinators; and (b) the
confirmations provided to the Hong Kong Stock Exchange by the Company and the
Overall Coordinators, and to the best of their knowledge and belief, they have no
reason to believe that the Permitted Existing Shareholders and/or their close
associates received any preferential treatment in the allocation process either as
cornerstone investors or as placees by virtue of their relationship with the Company,
other than, in the case of participation as cornerstone investors, the preferential
treatment of assured entitlement under a cornerstone investment following the
principles set out in Chapter 4.15 of the Guide, and details of allocation to the
Permitted Existing Shareholders holding more than 1% of the issued share capital of
the Company immediately prior to completion of the Global Offering will be
disclosed in this prospectus (for cornerstone investors) and allotment results
announcement (for both cornerstone investors and placees) of the Company.
W AIVERS AND EXEMPTIONS
–9 3–


--- page 104 ---
CONSENT IN RESPECT OF ALLOCATION OF OFFER SHARES TO CONNECTED
CLIENT UNDER THE EMPLOYEE PREFERENTIAL OFFERING
Paragraph 1B(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
Paragraph 1C(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s))
(collectively, the “ Distributors ”, and each a “ Distributor ”), without the prior written consent
of the Hong Kong Stock Exchange.
Haitong International Securities Company Limited (“ HISCL ”) and Guotai Junan
Securities (Hong Kong) Limited (“ GTJA HK ”) are two of the Sponsor-Overall Coordinators,
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers and
Underwriters in connection with the Global Offering. As further described in the section
headed “Structure of the Global Offering – Employee Preferential Offering” in this prospectus,
GTJA Investments shall hold the Offer Shares for hedging purpose as the single underlying
asset of several sets of back-to-back total return swap transaction (the “ GTHT Back to-back
TRS”) to be entered into between GTJA Investments and Guotai Haitong Securities Co., Ltd.
(the “ GTHT Onshore Parent ”) in connection with the total return swap orders (the “ GTHT
Client TRS ”) to be entered into by GTHT Onshore Parent and the relevant ultimate clients (the
“GTHT Onshore Ultimate Client ”), respectively. Such GTHT Client TRS is to be fully
funded by the GTHT Onshore Ultimate Client, an investment trust subscribed by the Eligible
Employees as ultimate beneficiaries through the Company’s labour union as the trustor, with
Y unnan International Trust Co, Ltd. (ʮ̡) as the trustee and a private fund
nominated by the trustor as the investment vehicle for the GTHT Back to-back TRS. GTJA
Investments HISCL and GTJA HK are members of the same group of companies, and therefore,
GTJA Investments is a connected client of HISCL and GTJA HK for the purpose of paragraph
1C(1) of Appendix F1 to the Listing Rules.
We have applied for, and the Hong Kong Stock Exchange has granted, a consent under
paragraph 1C(1) of Appendix F1 to the Listing Rules to permit GTJA Investments to participate
in the Global Offering as a placee on the following basis and conditions as set out in Paragraph
6 of Chapter 4.15 of the Guide for New Listing Applicants:
(a) any Offer Shares to be allocated to GTJA Investments will be held on non-
discretionary basis on behalf of the GTHT Onshore Ultimate Client. None of the
Eligible Employees is a core connected person (as defined under the Listing Rules)
of the Company, and none of the Eligible Employees has control over the GTHT
Onshore Ultimate Client;
W AIVERS AND EXEMPTIONS
–9 4–


--- page 105 ---
(b) no preferential treatment has been, nor will be, given to GTJA Investments by virtue
of their relationship with HISCL and GTJA HK in any allocation of Offer Shares in
the International Offering other than the allocation to Eligible Employees under the
Employment Preferential Offering following the principals set out in Rule 10.01 of
the Listing Rules;
(c) each of the Company, the Overall Coordinators, GTJA Investments, HISCL and
GTJA HK has provided the Stock Exchange with written confirmations in
accordance with Chapter 4.15 of the Guide for New Listing Applicants; and
(d) the total number of the Employee Reserved Shares subscribed by the Eligible
Employees will be disclosed in the allotment results announcement of the Company.
CONSENT IN RESPECT OF ALLOCATION OF OFFER SHARES TO CONNECTED
CLIENT
Paragraph 1B(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
Paragraph 1C(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s)), without
the prior written consent of the Stock Exchange.
As disclosed in the section headed “Cornerstone Investor” in this prospectus, Guotai
Junan Investments (Hong Kong) Limited (“ GTJA Investments ”) and Guotai Haitong
Securities Co., Ltd. (ʮ̡)( “ GTHT Onshore Parent ”) will enter into
a series of cross border delta-one OTC swap transaction (collectively, the “ Guanlan OTC
Swaps ”) with each other and the ultimate clients, namely Guanlan Investment Flexible
Allocation No. 3 Private Equity Investment Fund (ৣໄ3ږ)
the “ Guotai Haitong Ultimate Client (Guanlan) ”) managed by Qingdao Guanlan Investment
Management Co., Ltd. (ʮ̡)( “Qingdao Guanlan ”), pursuant to which
GTJA Investment will hold the Offer Shares on a non-discretionary basis to hedge the Guanlan
OTC Swaps while the economic risks and returns of the underlying Offer Shares are passed to
the Guotai Haitong Ultimate Client (Guanlan), subject to customary fees and commissions. No
single ultimate beneficial owner of Qingdao Guanlan holds 30% or more interests in the Guotai
Haitong Ultimate Client (Guanlan).
The Guanlan OTC Swaps will be fully funded by the Guotai Haitong Ultimate Client
(Guanlan). During the terms of the Guanlan OTC Swaps, all economic returns of the Offer
Shares subscribed by GTJA Invesments will be passed to the Guotai Haitong Ultimate Client
(Guanlan) and all economic loss shall be borne by the Guotai Haitong Ultimate Client
(Guanlan) through the Guanlan OTC Swaps. GTJA Invesments will not take part in any
economic return or bear any economic loss in relation to the Offer Shares.
W AIVERS AND EXEMPTIONS
–9 5–


--- page 106 ---
For further information about Qingdao Guanlan, please refer to the section headed
“Cornerstone Investor — Our Cornerstone Investors — Qingdao Guanlan and Guotai Junan
Investments (Hong Kong) Limited (in connection with Guanlan OTC Swaps)” in this
prospectus.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, its
consent pursuant to paragraph 1C(1) of Appendix F1 to the Listing Rules for GTJA Investments
to participate as a cornerstone investor in the Global Offering subject to the following
conditions:
(a) the Offer Shares to be allocated to GTJA Investments, to the best of the Overall
Coordinators’ knowledge and belief, will be held on a non-discretionary basis on
behalf of the ultimate beneficial owners of Guotai Haitong Ultimate Client
(Guanlan), who are Independent Third Parties of GTHT Onshore Parent and its
group companies;
(b) no preferential treatment has been, nor will be, given to GTJA Investments by virtue
of its relationship with Haitong International Securities Company Limited
(“HISCL ”) and GTJA HK (other than the assured entitlement in respect of the
cornerstone investment in connection with the Guanlan OTC Swaps);
(c) each of our Company, the Overall Coordinators, GTJA Investments, HISCL and
GTJA HK has provided the Stock Exchange a written confirmation in accordance
with Chapter 4.15 of the Guide for New Listing Applicants; and
(d) details of the allocation have been disclosed in this prospectus and will be disclosed
in the allotment results announcement of our Company.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or
offer price of each security must be disclosed in this prospectus. Pursuant to Paragraph 12 of
Chapter 4.14 of the Guide for New Listing Applicants, the Stock Exchange also allows an
indicative offer price range to be included in the prospectus, as an alternative to the disclosure
of a fixed offer price.
We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that the Company will only disclose the
maximum Offer Price in this prospectus on the below basis:
(a) the Offer Price will be determined with reference to, among other factors, the
closing price of our Company’s A Shares on the Shanghai Stock Exchange on the
last trading day on or before the Price Determination Date. Our Company is unable
to control the trading price of our A Shares on the Shanghai Stock Exchange;
W AIVERS AND EXEMPTIONS
–9 6–


--- page 107 ---
(b) setting a fixed offer price or an offer price range with a low-end may adversely
affect our ability to price our H Shares in the best interests of our Shareholders and
the market price of the A Shares and the Hong Kong Offer Shares;
(c) pursuant to paragraphs 9 and 10(b) of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, the amount payable on
application and allotment on each share, and the price to be paid for shares
subscribed for, shall be specified in this prospectus, respectively. Disclosure of a
maximum offer price complies with the requirements prescribed under paragraphs 9
and 10(b) of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance by providing a clear indication of the
maximum subscription consideration a potential investor shall pay for the Offer
Shares; and
(d) a maximum Offer Price will be disclosed in this prospectus. This alternative
disclosure approach would not prejudice the interests of the investing public in
Hong Kong.
The Stock Exchange has granted to us a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules on the conditions that this prospectus will
disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical closing prices of our Company’s A Shares and trading volume on the
Shanghai Stock Exchange during the Track Record Period (since its listing on the
Shanghai Stock Exchange on March 1, 2024) and up to the Latest Practicable Date;
(d) the determinants of the final Offer Price; and
(e) the source for investor to access the latest market price of our Company’s A Shares.
See “Structure of the Global Offering — Pricing of the Global Offering” in this
prospectus for the historical closing prices of our A Shares and trading volume on the Shanghai
Stock Exchange.
W AIVERS AND EXEMPTIONS
–9 7–


--- page 108 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Listing Rules, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and the Securities and Futures (Stock
Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) for the purpose of giving
information to the public with regard to our Group. Our Directors, having made all reasonable
enquiries, confirm that to the best of their knowledge and belief, the information contained in
this prospectus is accurate and complete in all material respects and not misleading or
deceptive, and there are no other matters the omission of which would make any statement
herein or this prospectus misleading.
RESTRICTIONS ON OFFER AND SALE OF H SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to confirm, or be deemed by his acquisition of the Hong Kong Offer Shares
to confirm, that he is aware of the restrictions on offers and sales of the Hong Kong Offer
Shares in this prospectus.
No action has been taken to permit a public offering of the Offer Shares in any
jurisdiction other than Hong Kong, or the distribution of this prospectus in any jurisdiction
other than Hong Kong. Accordingly, this prospectus may not be used for the purpose of, and
does not constitute, an offer or invitation for subscription in any jurisdiction or in any
circumstances in which such an offer or invitation for subscription is not authorized or to any
person to whom it is unlawful to make such an offer or invitation for subscription. The
distribution of this prospectus and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under the
applicable securities laws of such jurisdictions pursuant to registration with or authorization by
the relevant securities regulatory authorities or an exemption therefrom. In particular, the Hong
Kong Offer Shares have not been publicly offered, directly or indirectly, in the PRC or the
United States.
CSRC FILING
We have obtained a filing notice dated December 9, 2025 from the CSRC for the Global
Offering and the Listing of the H Shares on the Stock Exchange. In granting such filing notice,
the CSRC accepts no responsibility for the financial soundness of us or for the accuracy of any
of the statements made or opinions expressed in this prospectus. No other approvals under the
PRC laws and regulations are required to be obtained for the listing of the H Shares on the
Stock Exchange.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 8–


--- page 109 ---
UNDERWRITING AND INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering.
For applications under the Hong Kong Public Offering, this prospectus contains the terms and
conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong
Public Offering of 5,226,000 H Shares initially offered and the International Offering of
47,033,100 H Shares initially offered (subject, in each case, to reallocation on the basis under
the section headed “Structure of the Global Offering” in this prospectus) and, in case of the
International Offering, to any exercise of the Over-allotment Option.
The Listing of our H Shares on the Stock Exchange is sponsored by the Joint Sponsors
and the Global Offering is managed by the Overall Coordinators. Pursuant to the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering is fully underwritten by the Hong
Kong Underwriters subject to the Offer Price being agreed between the Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters) and us. The International
Offering is expected to be fully underwritten by the International Underwriters pursuant to the
terms of the International Underwriting Agreement which is expected to be entered into on or
about the Price Determination Date, subject to agreement on the Offer Price. Further details of
the Underwriters and the underwriting arrangements are set out in the section headed
“Underwriting” in this prospectus.
The Offer Shares are offered solely on the basis of the information contained and
representations made in this prospectus and on the terms and subject to the conditions set out
herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained herein must not be relied upon as having been
authorized by the Company, the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Lead Managers, the Joint Bookrunners, the Capital Market
Intermediaries, the Underwriters, any of our or their affiliates or any of their respective
directors, officers, employees, advisers, agents or representatives, or any other persons or
parties involved in the Global Offering.
Neither the delivery of this prospectus nor any subscription or acquisition made under it
shall, under any circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information in this prospectus is correct as
of any subsequent time.
Details of the structure of the Global Offering (including its conditions) and the
arrangements relating to the Over-allotment Option and stabilization, are set out in the section
headed “Structure of the Global Offering” and “Underwriting” in this prospectus, and the
procedures for applying for the Hong Kong Offer Shares are set out in “How to Apply for Hong
Kong Offer Shares” of this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 9–


--- page 110 ---
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 exercise of the Over-allotment Option). Dealings
in the H Shares on the Hong Kong Stock Exchange are expected to commence on Thursday,
January 22, 2026. Except for the A Shares that have been listed on the Shanghai Stock
Exchange and our pending application to the Hong Kong Stock Exchange for the listing of, and
permission to deal in, the H Shares, no part of our share or debt securities is listed on or dealt
in on the Hong Kong Stock Exchange or any other stock exchange and no such listing or
permission to list is being or proposed to be sought in the near future.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before
the expiration of three weeks from the date of the closing of the application lists, or such longer
period (not exceeding six weeks) as may, within the said 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 listing of, and permission to deal in, the H Shares on the Hong
Kong Stock Exchange and our compliance with the stock admission requirements of HKSCC,
the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H Shares
on the Hong Kong Stock Exchange or any other date as HKSCC chooses. Settlement of any
transactions between participants of the Hong Kong Stock Exchange is required to take place
in CCASS on the second settlement day after any trading day. All necessary arrangements have
been made for our H Shares to be admitted into CCASS. All activities under CCASS are subject
to the General Rules of HKSCC and the HKSCC Operational Procedures in effect from time
to time. Investors should seek the advice of their stockbroker or other professional advisers for
details of the settlement arrangements as such arrangements may affect their rights and
interests.
REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Global Offering will be
registered on our H Share register to be maintained in Hong Kong by our H Share Registrar,
Computershare Hong Kong Investor Services Limited. Our principal register of members will
be maintained by us at our headquarters in Chinese mainland.
Dealings in the H Shares registered in our H Share Register will be subject to Hong Kong
stamp duty.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 100 –


--- page 111 ---
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of our H Shares will be paid to the shareholders as recorded on the H Share Register
of our Company in Hong Kong and sent by ordinary post, at the shareholders’ risk, to the
registered address of each shareholder of our Company.
PROFESSIONAL TAX ADVICE RECOMMENDED
Y ou should consult your professional advisers if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding, disposal of, dealing in or the exercise of
any rights in relation to our H Shares. None of our Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Lead Managers, the Joint Bookrunners,
the Underwriters, the Capital Market Intermediaries, any of our or their affiliates or any of their
respective directors, officers, employees, advisers, agents or representatives, or any other
persons or parties involved in the Global Offering accepts responsibility for any tax effects on,
or liabilities of, any person resulting from the subscription, purchase, holding, disposal of,
dealing in, or the exercise of any rights in relation to, our H Shares.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, the
English version of this prospectus shall prevail. The English names of the Chinese laws and
regulations, government authorities, institutions, natural persons, other entities (including
certain of our subsidiaries), facilities, certificates and titles included in this prospectus are
translations of their Chinese names for identification purposes only. In the event of any
inconsistency, the Chinese version shall prevail.
ROUNDING
Certain amounts and percentage figures, such as share ownership and operating data,
included in this prospectus may have been subject to rounding adjustments. Accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
preceding them. Any discrepancies in any table, chart or elsewhere between totals and sums of
amounts listed therein are due to rounding.
CURRENCY TRANSLATIONS
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 101 –


--- page 112 ---
Unless otherwise specified, this prospectus contains certain translations for the
convenience purposes at the following rates: Renminbi into Hong Kong dollars at the rate of
RMB0.9014 to HK$1.00, Renminbi into U.S. dollars at the rate of RMB7.0230 to US$1.00 and
Hong Kong dollars into U.S. dollars at the rate of HK$7.7911 to US$1.00. The RMB to HK$
and RMB to US$ exchange rates are quoted by the PBOC for foreign exchange transactions
prevailing on the Latest Practicable Date.
No representation is made that any amounts in RMB, Hong Kong dollars or U.S. dollars
can be or could have been at the relevant dates converted at the above rate or any other rates
or at all.
MARKET SHARE DATA CONVENTION
The statistical and market share information contained in this prospectus has been derived
from official government publications and other sources, including information or data
provided by Frost & Sullivan. Unless otherwise indicated, the information has not been
verified by us independently. This statistical information may not be consistent with other
statistical information from other sources within or outside the PRC. While reasonable caution
has been made in the process of reproducing the data and statistics extracted from such official
government publications or other sources, our Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, any of our and their respective directors, officers, employees, advisors,
agents or representatives, or any other persons or parties involved in the Global Offering make
no representation to the appropriateness, accuracy, completeness or reliability of any such
statistical and market share information.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 102 –


--- page 113 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. DU Junhong (ߎࠏRoom 703
No. 26, Lane 99, Dongxiu Road
Pudong New District
Shanghai
PRC
Chinese
Mr. GE Zhengang (ၤ) Room 1404
No. 4, Lane 3158, Caobao Road
Minhang District
Shanghai
PRC
Chinese
Mr. GUAN Y adong (؇Room 404
No. 11, Xinsong Third Village
Minhang District
Shanghai
PRC
Chinese
Ms. QIN Y anling (ޛRoom 702
No. 4, Lane 31, Y azhi Road
Minhang District
Shanghai
PRC
Chinese
Independent Non-executive Directors
Dr. SHEN Jianxin (อ) Room 501
Unit 1, Building 62
Waidongshan Lane
Xihu District
Hangzhou City
Zhejiang Province
PRC
Chinese
Mr. Y ANG Chuan ( เʇ) Room 1802
No. 6, Lane 699, Longlan Road
Xuhui District
Shanghai
PRC
Chinese
Dr. NIU Shuangxia ( ˬ㢶ᒳ) 11/F
Hung Hing Court
1 V alley Road
Hung Hom
Kowloon
Hong Kong
Chinese
(Hong Kong)
For further details of our Directors, see “Directors and Senior Management.”
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 103 –


--- page 114 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors Citigroup Global Markets Asia Limited
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Haitong International Capital Limited
Suites 3001-3006 and 3015-3016
One International Finance Centre
No. 1 Harbour View Street
Central
Hong Kong
Guotai Junan Capital Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Sponsor-Overall Coordinators Citigroup Global Markets Asia Limited
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Haitong International Securities
Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 104 –


--- page 115 ---
Overall Coordinators Citigroup Global Markets Asia Limited
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Haitong International Securities Company
Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 105 –


--- page 116 ---
Joint Global Coordinators Citigroup Global Markets Asia Limited
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Haitong International Securities
Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F
Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 106 –


--- page 117 ---
Joint Bookrunners Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public
Offering)
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Citigroup Global Markets Limited
(in relation to International Offering)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
Haitong International Securities Company
Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F
Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 107 –


--- page 118 ---
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road
Central
Hong Kong
Joint Lead Managers Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public
Offering)
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Citigroup Global Markets Limited
(in relation to International Offering)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
Haitong International Securities Company
Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No. 1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 119 ---
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road
Central
Hong Kong
ABCI Securities Company Limited
10/F
Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road
Central
Hong Kong
Capital Market Intermediaries Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public
Offering)
50/F, Champion Tower
Three Garden Road
Central
Hong Kong
Citigroup Global Markets Limited
(in relation to International Offering)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 109 –


--- page 120 ---
Haitong International Securities Company
Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Guotai Junan Securities (Hong Kong)
Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road 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
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 0–


--- page 121 ---
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road
Central
Hong Kong
Open Securities Limited
Room 3208-09, 32/F,
Tower 6, The Gateway
9 Canton Road
Tsim Sha Tsui, Kowloon
Hong Kong
Legal Advisors to Our Company As to Hong Kong and U.S. laws:
Kirkland & Ellis
26/F, Gloucester Tower
The Landmark
15 Queen’s Road Central
Hong Kong
As to PRC laws:
Beijing DeHeng Law Offices
12/F, Tower B
Focus Place
No. 19 Financial Street
Beijing
PRC
As to Indian laws:
Dentons Link Legal
5, Link Road, Block M
Jangpura Extension
New Delhi 110 014
India
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 111 –


--- page 122 ---
As to Vietnamese laws:
Vietthink Law Firm
3rd Floor, 97-99 Lang Ha Building
Dong Da Ward
Hanoi City
Vietnam
As to U.S. regulatory laws and International
Sanctions laws:
Hogan Lovells
11th Floor, One Pacific Place
88 Queensway
Hong Kong
Legal Advisors to the Joint Sponsors and
Underwriters
As to Hong Kong and U.S. laws:
Herbert Smith Freehills Kramer
23/F, Gloucester Tower
15 Queen’s Road Central
Hong Kong
As to PRC laws:
Jingtian & Gongcheng
34/F, Tower 3
China Central Place
77 Jianguo Road
Chaoyang District
Beijing
PRC
Reporting Accountants and Auditor Ernst & Y oung
Certified Public Accountants and Registered
Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road Quarry Bay
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 2–


--- page 123 ---
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai
Branch Co.
Room 2504, Wheelock Square
No. 1717 West Nanjing Road
Jing’an District
Shanghai
PRC
Compliance Advisor Guotai Junan Capital Limited
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Receiving Bank Bank of China (Hong Kong) Limited
Bank of China Tower
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 3–


--- page 124 ---
Registered Office in Chinese Mainland
and Headquarters
Floor 1, Building 1
401 Caobao Road
Xuhui District
Shanghai
PRC
Principal Place of Business in Hong Kong 46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Company’s Website www.longcheer.com
(Information contained in this website does
not form part of this prospectus)
Joint Company Secretaries Mr. ZHOU Liangliang ( մԄ૑)
Building 1, 401 Caobao Road
Xuhui District
Shanghai
PRC
Mr. CHOW Shing Lung ( ཅ፴Ꮂ)
an associate member of both The
Hong Kong Chartered Governance Institute
and The Chartered Governance Institute in
the United Kingdom
46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Authorized Representatives Mr. DU Junhong (ߎࠏ)
Building 1, 401 Caobao Road
Xuhui District
Shanghai
PRC
Mr. CHOW Shing Lung ( ཅ፴Ꮂ)
46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
CORPORATE INFORMATION
–1 1 4–


--- page 125 ---
Audit Committee Mr. Y ANG Chuan (Chairperson)
Dr. SHEN Jianxin
Dr. NIU Shuangxia
Remuneration and Assessment Committee Dr. NIU Shuangxia (Chairperson)
Mr. Y ANG Chuan
Dr. SHEN Jianxin
Nomination Committee Dr. SHEN Jianxin (Chairperson)
Mr. DU Junhong
Dr. NIU Shuangxia
Strategy and ESG Committee Mr. DU Junhong (Chairperson)
Mr. GE Zhengang
Dr. SHEN Jianxin
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Principle banks China Merchants Bank Co., Ltd.
Shanghai Minhang Sub-branch
365 Xinsong Road
Minhang District
Shanghai
PRC
Shanghai Pudong Development Bank Co.,
Ltd. Huizhou Branch
1/F, Dewei Building
4 Y unshan West Road
Huicheng District
Huizhou City
Guangdong Province
PRC
CORPORATE INFORMATION
–1 1 5–


--- page 126 ---
The information and statistics set out in this section and other sections of this
prospectus were extracted from the Frost & Sullivan Report, which was commissioned
by us, and from various official government publications and other publicly available
publications. We engaged Frost & Sullivan to prepare the Frost & Sullivan Report, an
independent industry report, in connection with the Global Offering. We believe that
the sources of this information are appropriate sources for such information. We have
no reason to believe that such information is false or misleading or that any fact has
been omitted that would render such information false or misleading. The information
from official government sources has not been independently verified by us, the Joint
Sponsors, Joint Overall Coordinators, Joint Global Coordinators, Joint Bookrunners,
Joint Lead Manager, Underwriters, any of their respective directors and advisors, or
any other persons or parties involved in the Global Offering, and no representation is
given as to its accuracy.
OVERVIEW OF GLOBAL SMART DEVICE MANUFACTURING INDUSTRY
The Evolution of Smart Device Manufacturing
Industrialization of smart device manufacturing is becoming increasingly forward-
looking, with comprehensive cross-sector coverage: At the beginning of the 21st century,
smart devices represented by smartphones emerged rapidly as enabled by breakthroughs in
mobile computing, touch interaction and other key technologies. Designing, producing,
processing and assembling these complex, high-precision whole machine and functional
modules required wireless communication technology, structural design technology and other
related technologies, gradually forming the innovative implementation platform. Subsequent
advances of wireless RF, artificial intelligence (AI) and other technologies progressively
expanded boundaries of smart device manufacturing from smartphones to broader fields. In the
early stage of technological evolution, smart device manufacturing primarily focused on
consumer electronics products such as smartphones, tablets, laptops, and AIoT devices. This
technological maturation broadened applications into residential, commercial, and industrial
ecosystems. Notably, smart vehicles evolved from basic mobility tools into multifunctional
platforms integrating commute, business and entertainment, while smart robots transitioned
from industrial settings to residential, commercial, healthcare and educational environments.
The deepening convergence of electrification and intelligence in smart vehicle and smart
robotic products urgently necessitates manufacturing platforms with agile deployment response
capabilities, promoting the forward-looking approach of smart device manufacturing from
consumer electronics towards ubiquitous ecological manufacturing.
INDUSTRY OVERVIEW
–1 1 6–


--- page 127 ---
Analysis of smart device manufacturing participants: Currently, participants of smart
device manufacturing mainly include Original Design Manufacturing (ODM) and Electronic
Manufacturing Service (EMS) providers. ODM providers offer brand owners full-stack smart
device services, including R&D, design, production and delivery. EMS providers focus on
meeting the large-scale manufacturing and supply chain requirements of brand owners. Thus,
EMS provider concerns the mid-to-downstream segments of the electronics manufacturing
industry, serving brand owners mainly on production process. By contrast, ODM providers
allow brand owners to concentrate on brand building and market expansion since they provide
solutions from product design. As ODM providers deliver end-to-end solutions from product
definition, industrial design, hardware and software development to manufacturing and
delivery, they can also serve as EMS suppliers to brand owners. Meanwhile, leading market
participants are building co-developed ODM and EMS models and flexible manufacturing
systems to meet brands’ end-to-end needs from prototype development to mass production.
Comparison Analysis of ODM & EMS Providers
Product
Definition
Industrial
Design
Key Material
Definition
and
Selection
Hardware &
Software
Design and
Development
Component
and Material
Procurement
Supply Chain
and Logistics
Management
Production
and Product
Testing
Mass
Production
Limited
After-sales
Service and
Support
Component
and Material
Procurement
Supply Chain
and Logistics
Management
Production
and Product
Testing
Mass
Production
Limited
After-sales
Service and
Support
ODM
EMS
Source: Frost & Sullivan
As the core concepts and innovation implementation platform for smart devices,
leading ODM providers will grasp more business extension opportunities: Currently, as the
types and demand of smart devices evolve, brand customers’ cooperation with ODM providers
continues to deepen and diversify. Leading ODM providers, such as our Group, are no longer
just responsible for product design and manufacturing, but have become key strategic partners
for brand owners throughout the entire process from conceptualization, design and
development, to mass production, delivery and market feedback tracking. This close
cooperation mechanism enables ODM providers not only to assist customers in developing
their existing product, but also to proactively propose forward-looking innovation directions.
This helps customers achieve product innovation and mass production, continuously enhancing
product value. In this process, leading ODM providers, as key strategic extensions of brand
owners, will seize more business opportunities as global top brands diversify their smart device
ecosystems.
INDUSTRY OVERVIEW
–1 1 7–


--- page 128 ---
In the context of AI-era, leading ODM providers enable brand owners to deliver
efficiently by utilizing their sharp market insights and streamlined, platform-based
solutions: Leading ODM providers have become crucial partners for brand owners seeking to
expand their smart device lines as AI rapidly integrates into various industries. These ODM
providers leverage their keen market insights and mature platform capabilities to facilitate this
growth. Through deep collaboration with brands across multiple industries and product
categories, leading ODM providers have established systematic, multi-dimensional market
insight and feedback mechanisms. Their understanding of AI allows them to accurately identify
diverse consumer trends and technological advancements. This enables them to extract
common patterns, providing forward-looking support for product planning and technical
decision-making, ultimately helping brand owners develop products with strong market
potential. Further, ODM providers’ years of experience in modular platforms and efficient,
controllable design capabilities significantly shorten development cycles. This boosts the speed
from concept to launch, adapting to the rapid changes in product forms and iteration driven by
AI. ODM providers with comprehensive market judgment, integrated industry resources, and
platform capabilities are becoming core to the smart device ecosystem. As brand owners
accelerate their AI-era product strategies, these manufacturers will play a pivotal role in
enabling efficient commercial delivery, fostering industrial collaboration, reshaping the value
chain, and securing a proactive stance in future competition.
Building Growth-oriented Product Matrix through ODM’s Integrated Hardware and
Software Capabilities
 Scalable hardware manufacturing: Leading ODM providers leverage their scaled
manufacturing, flexible production systems, and comprehensive supply chain to form a
digital manufacturing platform. This enables breakthroughs in smart manufacturing,
including product mounting and inspection. They also optimize hardware performance by
integrating new AI hardware with core technologies like audio, display, camera,
materials, and simulation.
 Mature software R&D and testing system: ODM providers possess mature software
customization capabilities. Their underlying architecture is deeply adapted for smart
device OS development and optimization across hardware platforms. Systematic software
testing, automated analysis, and debugging tools ensure overall system functionality,
fluidity, and task management.
 Integrated hardware and software capabilities: As crucial partners from concept to
market, ODM providers excel at integrating hardware and software. This enhances
product performance and user experience while accelerating development and time-to-
market. Brand owners increasingly collaborate with leading ODM providers to jointly
develop new products.
INDUSTRY OVERVIEW
–1 1 8–


--- page 129 ---
Value Chain of Global Smart Device ODM Industry
Pioneering companies are instrumental in driving the construction of robust industrial
value chain: Leading ODM providers of smart devices have built comprehensive, end-to-end
service system covering R&D, design, manufacturing, supply chain management, and global
delivery. This has been achieved through deep ecological collaboration and strong supply chain
integration capabilities. By working closely with upstream component suppliers and
downstream brand clients, leading ODM providers forged a symbiotic and mutually beneficial
industrial chain, significantly improving product market responsiveness and innovation
capabilities.
Upstream — leading ODM providers are tightly integrated with their supply chains:
The upstream primarily consists of suppliers of chips, sensing and interaction hardware,
electronic components, software systems, and structural parts. Leading smart device ODM
providers, relying on close collaboration with the supply chain, quickly respond to market
changes, launch competitive products, and provide superior services to customers. For
instance, they deeply engage in the selection and development of semiconductor components,
promoting and accelerating the introduction of new products.
Midstream — smart manufacturing drives efficiency gains for leading ODM providers:
In the midstream, smart device ODM providers offer a comprehensive suite of services
including product definition, structural and industrial design, circuit system and embedded
software development, component selection and procurement, testing and validation,
manufacturing, supply chain management, etc. Leading providers distinguish themselves
through rapid product iteration, robust intelligent manufacturing systems, and digitized supply
chain management, allowing them to meet the demands of multi-brand, multi-category
products for large-scale production while achieving high yield rates and short delivery cycles
through refined processes and stringent quality control.
Downstream — product definition capabilities expand the range of scenarios covered
by smart devices: The downstream consists of global smart device brand owners, including
smartphones, tablets, laptops, various AIoT terminals, automotive electronics, smart robots and
other smart devices. As one of the core manufacturing modes in the consumer electronics
sector, penetration rate of ODM mode in consumer electronics products grew from 40.3% in
2020 to 46.2% in 2024, and is expected to reach 50.8% by 2029. The ODM mode will also
continue to penetrate emerging fields like automotive electronics and smart robots. Leveraging
their technological expertise and market demand forecasting, ODM manufacturers provide
product definition solutions to clients, helping them continuously and efficiently launch more
competitive smart devices and expand their coverage across the smart device industry chain.
INDUSTRY OVERVIEW
–1 1 9–


--- page 130 ---
Smart Device ODM Industry Value Chain
Upstream Midstream Downstream
Core Chip
Memory Units
Screens
Cameras
Other Smart Products
Functional Integrated
Circuit (IC)
Electroacoustic
Components
Smartphones
Raw
Material
Suppliers
Consumer
Electronics
Batteries
Printed Circuit Board
(PCB)
Cases
Radio Frequency (RF)
Components & Others
Software Systems
Product Definition
Structural & Industrial Design
Testing & Validation
Component Selection &
Procurement
Smart Device
ODM
Manufacturers
Manufacturing
Supply Chain Management
Industrialized Application
Circuit Systems & Embedded
Software Development
Performance Optimization
End-to-End Smart Product
Management Services
Tablets
Laptops
Smart Watches/Bands
TWS Earphones
Smart Eyewear
Automotive Electronics
Smart Robots
Source: Frost & Sullivan
Market Drivers and Trends of Global Smart Device ODM Industry
New opportunities for smart device ODM providers presented by AI wave
The AI wave is driving a comprehensive revolution in the functions, forms, and user
experience of smart devices, leading to rapid industry iteration. Smart device ODM providers,
with their mature modular design capabilities, agile supply chain response systems, and
extensive experience in multi-category, large-scale product manufacturing, are helping new
products efficiently transition from AI technology prototypes to mass-produced products,
ushering in new development opportunities. Core AI smart devices include AI smartphones, AI
PCs, AIoT devices, AI robots, etc. Smart device ODM providers’ efficient, cost-effective,
hardware-software integrated platform solutions are accelerating the commercialization of
these product categories.
Globalized end-to-end supply chain collaboration
Smart device ODM providers are accelerating their global strategic expansion to better
meet the large-volume, widespread global supply chain demands of clients in industries such
as consumer electronics, automotive electronics, and smart robots. Currently, leading
companies in the sector are enhancing market competitiveness by establishing multinational
R&D, production, and sales networks. On one hand, they are establishing smart manufacturing
bases in key regions like Southeast Asia, India, and North America. On the other hand, they are
continuously optimizing their global supply chain collaboration systems to achieve globalized
INDUSTRY OVERVIEW
– 120 –


--- page 131 ---
R&D, production, and sales. Smart device ODM manufacturers are fully leveraging their core
technologies and economies of scale while significantly shortening product delivery cycles
through localized production, thereby realizing a full-chain collaborative service.
Growing demand for end-to-end services and diversified needs in smart device
manufacturing
Due to intensifying market competition and accelerated product iteration, smart device
brand owners are experiencing an increase in demand for integrated design, manufacturing, and
delivery services across the entire process, as well as diversified needs. In light of this trend,
smart device manufacturers must build an end-to-end service system encompassing product
definition, innovative design, production management, and logistics delivery to enhance
product realization efficiency and market responsiveness. Leading smart device ODM
providers are actively deploying supply chain resources that align with their strategic
development, constructing capabilities for synergistic ODM/EMS mode development and
flexible manufacturing systems. This approach allows them to meet the diverse needs of brand
owners, thereby strengthening their comprehensive service capabilities and market
competitiveness in the smart device manufacturing sector.
OVERVIEW OF GLOBAL CONSUMER ELECTRONICS ODM INDUSTRY
Consumer electronics refer to smart electronic products used by consumers in their daily
lives. They are typically easy to operate and feature characteristics such as entertainment and
portability. Consumer electronics products include smartphones, tablets, laptops and AIoT
devices (smart watches/bands, TWS earphones, smart eyewear).
The consumer electronics industry is propelled by technological innovation, rapid product
iteration, and evolving consumer preferences. Industry cycles are typically characterized by
breakthrough technologies that ignite periods of exponential growth, followed by phases of
market maturation. For example, recent advancements in AI have significantly revitalized the
sector. Additionally, global economic conditions and policy frameworks, such as trade-in
incentives in the Chinese market, play a pivotal role in accelerating product replacement cycles
and stimulating consumer demand. On average, the replacement cycle for consumer electronics
ranges from three to five years, reflecting the dynamic innovation and market forces.
Market Size of Global Consumer Electronics Industry
From 2021 to 2023, the consumer electronics industry experienced a downturn, primarily
due to the deterioration of the global macroeconomic environment. Intensifying inflation and
geopolitical tensions weakened consumer purchasing power. In addition, supply chain
disruptions and chip shortages during the pandemic drove up the prices of certain consumer
electronics products, and further dampened market demand. In 2024, the industry began to
recover, driven mainly by technological innovation and the release of replacement demand.
INDUSTRY OVERVIEW
– 121 –


--- page 132 ---
The rapid proliferation of AI technologies accelerated the iteration of products such as
smartphones, tablets, and AIoT products. New categories like AI smartphones and AI PCs have
stimulated consumer interest in product upgrades.
As consumers’ purchases of consumer electronics products are not one-time transactions,
their replacement needs are heavily influenced by factors such as product innovation and
upgrades, attractive pricing driven by cost control and policy support, as well as spending
preference. Therefore, the historical periodic decline does not necessarily indicate a continued
decrease in the future. Looking ahead, the consumer electronics industry is expected to grow
under the dual drivers of technological innovation and policy support. The rapid adoption of
AI technologies is accelerating the expansion of product types. At the same time, policy
initiatives in China, such as consumer electronics trade-in policy is continuously stimulating
replacement demand, further revitalizing the market. China formally implemented the trade-in
subsidy policy on January 20, 2025 for the purchase of new consumer electronics products,
including smartphones, tablets, smart watches/bands, and other products. For products priced
between RMB3,300 and RMB6,000, a subsidy of RMB500 would be provided, while products
priced below RMB3,300 receive a subsidy calculated at 15% of the purchase price. Consumer
electronics trade-in policy lowers the purchase barrier and cost for consumers while
stimulating the supply vitality, thereby accelerating the adoption of new products. This trade-in
policy will further stimulate consumers’ appetite for spending on new consumer electronics
products and bolster the recovery of consumption.
Thus, global shipments of consumer electronics are expected to grow from 2,113.3
million units in 2024 to 2,489.6 million units in 2029. As human-computer interaction methods
evolve, smart eyewear is set to become the category with the greatest development potential
in the consumer electronics industry, with the global shipments expected to grow from 9.6
million units in 2024 to 62.3 million units in 2029, representing a CAGR of 45.4% during this
period.
The global consumer electronics market is experiencing heightened competition,
characterized by shortening product life cycles and accelerating technological iterations. It is
increasingly difficult for small and medium-sized brand owners to survive within the
ecosystems of large brand owners and established supply chains. Consequently, the market is
expected to become more concentrated, with a larger market share held by a few leading
companies. Further, leading companies in the consumer electronics industry will intensely
focus on end-device technology evolution trends, building differentiated product portfolios
through forward-looking R&D to continuously solidify their leading positions.
INDUSTRY OVERVIEW
– 122 –


--- page 133 ---
Global Shipments of Consumer Electronics by Product Types, 2020-2029E
2020-2024
CAGR
Total
CAGR
2024-2029E2020
Million Units
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
2,120.2
2,270.9
2,073.4 1,991.9
2,113.3 2,169.2 2,175.8
2,296.0 2,398.1 2,489.6
Smartphones
Tablets
Laptops
Smart Eyewear
Smart Watches/Bands
TWS Earphones
0
500
1,000
1,500
2,000
2,500
2.6%1,405.21,357.71,301.71,232.71,251.51,238.81,164.11,205.91,354.81,292.2
4.1%171.1164.5157.4149.9147.0140.1128.5161.6168.8164.0
2.1%223.7217.2209.9201.8208.0201.2192.7226.3250.3210.1
3.9%231.3223.3215.1206.8200.8191.4194.1182.8193.0189.5
3.6%396.0382.6367.9352.1346.9332.2303.6287.7292.8257.6
45.4%62.352.844.032.515.09.68.99.111.26.8
3.3%2,489.62,398.12,296.02,175.82,169.22,113.31,991.92,073.42,270.92,120.2
-1.0%
-3.9%
-1.1%
0.2%
6.6%
9.0%
-0.1%
Source: Frost & Sullivan
The global shipments of consumer electronics are relatively stable. In 2024, the market
shares for Europe, North America, China, Asia-Pacific excluding China and other regions
reached 13.5%, 18.9%, 23.0%, 26.1% and 18.5%, respectively. By 2029, it is projected that the
market shares for China and other regions will increase, with Europe, North America, China,
Asia-Pacific excluding China, and other regions reaching 13.0%, 18.9%, 23.3%, 25.8% and
19.0%, respectively.
Global Shipments of Consumer Electronics by Regions, 2020, 2024 and 2029E
16.5%
20.1%
23.3%
23.8%
16.3%
Europe North America China Asia Pacific Excluding China Others
13.5%
18.9%
23.0%
26.1%
18.5% 13.0%
18.9%
23.3%
25.8%
19.0%
2020 2024 2029E
Source: Frost & Sullivan
INDUSTRY OVERVIEW
– 123 –


--- page 134 ---
The global consumer electronics industry has seen a remarkable increase in the market
share of consumer electronics ODM and EMS providers in terms of shipments, rising from
75.1% in 2020 to 79.7% in 2024. In particular, consumer electronics ODM providers accounted
for 40.3% within the whole global consumer electronics market in 2020, growing to 46.2% by
2024. The market share of consumer electronics ODM and EMS providers in terms of
shipments is expected to further increase to 82.5% by 2029, with ODM providers alone
expected to contribute 50.8% of global consumer electronics shipments, maintaining the rapid
growth rate in global consumer electronics industry.
Consumer electronics ODM refers to the manufacturer with full-stack R&D and
manufacturing capabilities, which can independently complete the entire cycle from product
definition, design and development, to production and delivery.
Platform-based capabilities enable full-chain empowerment in consumer electronics:
The consumer electronics industry is characterized by its immense scale and diverse product
portfolios. Intricate upstream and downstream supply chains for individual products are also
notable, with a prevalent trend towards fine-grained specialization within the industry. As this
professional division of labor progresses, leading ODM providers leverage their
comprehensive capabilities and extensive technological expertise. They serve as vital
collaborators for brand owners, demonstrating significant economies of scale in aspects like
product solution design, supply chain enablement, and management.
Simultaneously, as demand in the consumer electronics market continues to grow, the
penetration rate of ODM mode will continue to rise. For brand owners that intend to
self-manufacture products, they are required to invest significant initial capital to build and
maintain factories, production lines, and extensive manufacturing supply chains. Furthermore,
their internal factories often lack the rapid response capability needed for scaling capacity or
converting product types rapidly. Major brand owners continue to focus their resources and
efforts on core competencies such as branding, marketing, and software development and
design. By contrast, ODM providers offer one-stop services encompassing product design,
R&D, engineering, and testing, thereby more suitable to meet brand owners’ needs for
cost-efficiency, economies of scale, and rapid iteration.
Market Size of Global Consumer Electronics ODM Industry
Consumer electronics ODM providers leverage their established technological
capabilities, economies of scale, and efficient supply chain management to deliver end-to-end
solutions for the consumer electronics sector. This strategic approach refines the global
division of industrial labor, enabling highly efficient resource integration across the industry.
Consumer electronics brand owners will increasingly cooperate with ODM providers
depending on ODM providers’ R&D, design and manufacturing capabilities, while focusing
themselves on brand marketing and channel development. As a result, global ODM shipments
of consumer electronics grew from 853.5 million units in 2020 to 976.9 million units in 2024.
INDUSTRY OVERVIEW
– 124 –


--- page 135 ---
Smartphones are the core category of consumer electronics ODM industry, accounting for
54.3% of overall ODM shipments in 2024. Currently, the major manufacturing modes for
smartphones and tablets are ODM and EMS, while laptops are predominantly manufactured
through the ODM model.
It is anticipated that the ODM mode will continue to expand into various product
categories in the future, driven by the increasing popularity of smart devices, shortened product
iteration cycles in the AI-era, and the expected further growth of ODM global shipments of
consumer electronics to 1,265.7 million units by 2029. Meanwhile, the mergers and
acquisitions related to a leading ODM provider reshaped the competitive landscape of this
industry. The consumer electronics ODM industry is expected to become more concentrated
among the other top players.
Global ODM Shipments of Consumer Electronics by Product Types, 2020-2029E
2020-2024
CAGR
Total
CAGR
2024-2029E2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Smartphones
Tablets
Laptops
Smart Eyewear(1)
Smart Watches/Bands
TWS Earphones
853.5
947.8 884.2 839.9
976.9 1,001.6 1,033.7
1,114.0
1,189.3
1,265.7
Million Units
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
3.0%2.7%613.8575.8539.1503.8508.9530.0455.9484.8511.2476.3
5.7%82.578.173.669.066.662.451.870.584.780.6
2.7%181.6175.7169.1162.0165.6158.7147.1173.8195.6162.7
7.1%1.9%110.6103.696.890.385.078.674.967.371.373.0
9.3%26.3%214.9203.3191.4176.1160.5137.6101.378.773.854.1
45.4%9.0%62.352.844.032.515.09.68.99.111.26.8
5.3%3.4%1,265.71,189.31,114.01,033.71,001.6976.9839.9884.2947.8853.5
-6.2%
-0.6%
Source: Frost & Sullivan
Note:
(1) The manufacturing cooperation for smart eyewear is characterized by a blended and evolving landscape,
including models such as ODM and EMS. This diversification and integration, driven by ongoing product
iterations, makes it challenging to distinctly segment the various cooperation types.
The global ODM shipments of consumer electronics are mainly concentrated in
Asia-Pacific excluding China and China. In 2024, the market shares for Europe, North
America, China, Asia-Pacific excluding China, and other regions reached 13.5%, 14.4%,
26.2%, 27.4% and 18.5%, respectively. By 2029, it is projected that the market shares for
Europe, North America, China, Asia-Pacific excluding China, and other regions will reach
13.1%, 13.7%, 27.0%, 27.6% and 18.6%, respectively.
INDUSTRY OVERVIEW
– 125 –


--- page 136 ---
Global ODM Shipments of Consumer Electronics by Regions, 2020, 2024 and 2029E
14.5%
16.1%
25.0%
27.1%
17.3%
Europe North America China Asia Pacific Excluding China Others
13.5%
14.4%
26.2%
27.4%
18.5% 13.1%
13.7%
27.0%
27.6%
18.6%
2020 2024 2029E
Source: Frost & Sullivan
Market Drivers and Trends of Global Consumer Electronics ODM Industry
Consumer electronics market rebounds and AI technology adoption accelerates
Global consumer electronics shipments grew by 6.1% in 2024, returning to a growth
trajectory, as user demand for smart devices recovers. AI technology is accelerating its
on-device implementation in smartphones, laptops, smart eyewear, etc., driving consumer
electronics products toward intelligence and connectivity. As a new feature in consumer
electronics, AI continues to transform product forms and create new opportunities for the
supply chain and consumer electronics ODM providers. AI-powered consumer electronics
products, including AI smartphones and AI PCs will offer broad growth potential in the future.
Among sub-categories of consumer electronics products, smartphones and laptops are core
product forms, with their combined shipments accounting for 68.1% of total consumer
electronics shipments in 2024. Global shipments of AI smartphones are expected to grow
rapidly from 235.0 million units in 2024 to 1,060.9 million units in 2029, representing a CAGR
of 35.2%. And global shipments of AI PCs are expected to increase rapidly from 34.2 million
units in 2024 to 174.5 million units in 2029, with a CAGR of 38.5%. In the future, brand
owners will leverage AI computing power for enhanced features such as image recognition,
voice interaction, and personalized recommendations, improving user experience and
encouraging shorter replacement cycles. This will continuously expand the overall consumer
electronics market size, bringing new product design and manufacturing demands for ODM
providers.
Surge in demand for AIoT device ODM
The expanding IoT ecosystem encompasses from wearables and in-car terminals to
various smart home components. AIoT devices requires higher standards for device-edge-cloud
collaboration, low-power communication, and system security, making ODM providers with
multi-category, integrated R&D, and mass-delivery capabilities indispensable partners in
industrial, consumer, and commercial scenarios. Advancements in edge computing and
INDUSTRY OVERVIEW
– 126 –


--- page 137 ---
increased scenario intelligence are driving exponential growth in AI-powered AIoT devices.
Smart eyewear, leveraging a system-level integration of hardware architecture and intelligent
algorithms, have not only broken through traditional interaction paradigms but have also
explored a new market, with shipment volume projected to reach 62.3 million units by 2029.
The highly integrated and customized nature of AIoT devices prompts ODM providers with
capabilities in hardware-software co-development, AI algorithm adaptation, and supply chain
expertise to become a critical link in the industry. This trend will drive a rapid increase in
demand for AIoT device ODM mode, leading to a scaled and highly efficient industrial division
of labor.
Increasing ODM penetration rate
Driven by cost-effectiveness and supply chain optimization, more brands are outsourcing
design and production of their main best-selling and mature products to ODM providers. Brand
owners can effectively reduce fixed capital investment, and as ODM providers serve multiple
brands and clients, they possess advantages in economies of scale for procurement.
Concurrently, ODM providers offer one-stop services from design to production, which can
significantly shorten the development and mass production cycles for new products, allowing
for a swift response to market changes in the AI era. This effectively optimizes the supply chain
and enhances value after resource concentration. Further, as ODM providers enhance their
customization capabilities and delivery reliability, they are evolving into a core platform within
the consumer electronics industry chain. Their penetration in the global market is expected to
rise steadily. For example, the ODM penetration rate by shipment volume for smartphones,
tablets, laptops, smart watches/bands, and TWS earphones are projected to increase from
42.8%, 44.5%, 78.9%, 41.1%, and 41.4% in 2024 to 43.7%, 48.2%, 81.2%, 47.8%, and 54.3%
by 2029, respectively. Looking ahead, as the adoption of AI and manufacturing automation
technologies increases among ODM manufacturers, their technological intensity will grow,
leading to overall industry efficiency improvements and continuous expansion of their product
coverage.
Rising technical threshold
Next-generation smartphones require better network performance, optical imaging
systems, thermal management, and system integration. For instance, 5G SA RF circuit discrete
design technology can optimize RF antenna layout, fully unleashing device performance.
Thermal simulation technology, through thermal simulation models, enables the design of heat
dissipation structures, ensuring the thermal performance of consumer electronic products.
Therefore, based on continuously enhancing their technological reserves, ODM providers need
to prioritize investment in R&D areas such as RF antenna layout, efficient heat dissipation
structures, and embedded software optimization. This will allow them to consistently introduce
the latest technologies and features into mature product price segments, thereby boosting
product competitiveness. Furthermore, in the face of the high complexity and rapid iteration
demands of AI smart hardware, ODM providers need to possess leading capabilities in
intelligent manufacturing cost optimization and scaled production. By leveraging their
advantages in supply chain management, customized development, and rapid iteration, they
INDUSTRY OVERVIEW
– 127 –


--- page 138 ---
can maintain stable customer relationships. Consequently, rapid, efficient, and high-quality
R&D and design capabilities are crucial for ODM providers, making their R&D and design
prowess one of their core competencies in consumer electronics.
Consolidation among leading ODM providers
As the technological barrier for smart devices rises, brand owners which master core
technologies are showing a trend towards centralization among top-tier participants. This
consolidation trend is already evident in the fields of smartphones, tablets, and other consumer
electronics. The pattern is expected to extend to the AI product sector. ODM providers, with
extensive experience and technical strength gained from long-term collaborations with leading
tech companies, are well-positioned to participate in the technological layout and innovation
breakthroughs of emerging products. This collaborative model allows ODM providers to
quickly enter new technological fields, maintaining a competitive advantage during industrial
upgrades, and the trend of strengthening leading enterprises is becoming increasingly
significant.
Entry Barrier of Global Consumer Electronics ODM Industry
 Customer resource barrier: Leading brands impose extremely stringent qualification
reviews on their suppliers. Only ODM providers that successfully navigate complex
product validation and production capability assessments can be added to their approved
vendor lists. The long-standing collaborations between brand owners and their mature
ODM partners have fostered stable demand forecasting and collaboration mechanisms,
from concept to final product realization. New participants, often lacking industry
reputation and a track record of fulfilling large orders, typically find it difficult to secure
trial orders and ongoing partnership opportunities.
 Technical expertise barrier: The consumer electronics ODM industry spans a
multidisciplinary range of fields, including antenna design, baseband processing, optical
modules, embedded software, thermal management, and simulation testing. This
necessitates that ODM providers possess comprehensive technical expertise across the
entire product development lifecycle, from product definition to integrated hardware and
software debugging. Furthermore, it requires collaboration among experts in various
domains such as project management, supply chain, and quality assurance. New entrants
must rapidly establish a profoundly skilled R&D team and a robust testing and
certification system. Failing to do so will make it challenging to meet brand owners’ dual
demands for innovation and quality.
 Production and delivery barrier: Consumer electronics products are characterized by
rapid iteration and global launch and delivery, which requires ODM providers to possess
highly flexible production line switching, high yield control, and global logistics network
capabilities. Once a design is finalized, it’s necessary to complete process optimization,
production ramp-up, and quality verification in an extremely short period. Any delay can
INDUSTRY OVERVIEW
– 128 –


--- page 139 ---
cause brand owners to miss their market window. New entrants, lacking large-scale smart
factories and mature operation and maintenance systems, will find it difficult to compete
with experienced manufacturers in terms of delivery cycles and quality stability.
 Capital barrier: The ODM mode relies on scaled production to amortize R&D and
manufacturing costs. This necessitates substantial upfront capital investment for
establishing automated production lines, procuring high-end testing and packaging
equipment, and maintaining ample work-in-progress and inventory funding. Without
stable financing channels and sufficient cash flow, new entrants will struggle not only to
build out production lines but also to maintain cost competitiveness when faced with raw
material price fluctuations, making it difficult to achieve sustainable economies of scale.
Competitive Landscape of Global Consumer Electronics ODM Industry
Global shipments of consumer electronics ODM reached 976.9 million units in 2024, with
combined and concentrated market share of the top five participants being 68.7%. Among
them, our Group achieved ODM shipments of consumer electronics, primarily including
smartphones, tablets, laptops, smart watches/bands, TWS earphones and smart eyewear, of
219.1 million units in 2024, ranking second in the global market with a market share of 22.4%.
Competitive Landscape of
Global Shipments of
Consumer Electronics ODM, 2024
Top 5 ODM Providers in Global Consumer
Electronics ODM by Shipments, 2024
22.8%
6.7%
22.4%
31.3%
5.1%
11.7%
Global Shipments of Consumer Electronics ODM Industry:
976.9 Million Units
Company A
Our Group
Company B
Company C
Company D
Others
Ranking Company
Shipments of Consumer
Electronics ODM Providers
(Million Units)
Market
Share (%)
1 Company A 222.3 22.8%
2 Our Group 219.1 22.4%
3 Company B 113.9 11.7%
4 Company C 65.3 6.7%
5 Company D 50.0 5.1%
Source: Frost & Sullivan
INDUSTRY OVERVIEW
– 129 –


--- page 140 ---
Global shipments of smartphone ODM reached 530.0 million units in 2024, with
combined and concentrated market share of the top three participants being 75.1%. Among
them, our Group achieved ODM shipments of smartphone of 172.9 million units in 2024,
ranking first in the global market with a market share of 32.6%.
Competitive Landscape of
Global Shipments of Smartphone ODM, 2024
Top 3 ODM Providers in Global Smartphone
ODM by Shipments, 2024
32.6%
27.4%
24.9%
15.1%
Global Shipments of Smartphone ODM Industry:
530.0 Million Units
Our Group
Company A
Company B
Others
Ranking Company
Shipments of Smartphone
ODM Providers
(Million Units)
Market
Share (%)
1 Our Group 172.9 32.6%
2 Company A 145.0 27.4%
3 Company B 80.0 15.1%
Source: Frost & Sullivan
Global shipments of tablet ODM reached 62.4 million units in 2024, with combined and
concentrated market share of the top three participants being 86.5%. Among them, our Group
achieved ODM shipments of tablet of 12.3 million units in 2024, ranking third in the global
market with a market share of 19.7%.
Competitive Landscape of
Global Shipments of Tablet ODM, 2024
Top 3 ODM Providers in Global Tablet
ODM by Shipments, 2024
40.5%
26.3%
13.5%
19.7%
Global Shipments of Tablet ODM Industry:
62.4 Million Units
Company A
Company B
Our Group
Others
Ranking Company
Shipments of Tablet
ODM Providers
(Million Units)
Market
Share (%)
1 Company A 25.3 40.5%
2 Company B 16.4 26.3%
3 Our Group 12.3 19.7%
Source: Frost & Sullivan
INDUSTRY OVERVIEW
– 130 –


--- page 141 ---
Global shipments of smart watches/bands ODM reached 78.6 million units in 2024, with
combined and concentrated market share of the top three participants being 87.4%. Among
them, our Group achieved ODM shipments of smart watches/bands of 23.7 million units in
2024, ranking second in the global market with a market share of 30.2%.
Competitive Landscape of
Global Shipments of
Smart Watches/Bands ODM, 2024
Top 3 ODM Providers in Global Smart
Watches/Bands ODM by Shipments, 2024
35.6%
30.2%
21.6%
12.6%
Global Shipments of Smart Watches/Bands ODM Industry:
78.6 Million Units
Company C
Our Group
Company A
Others
Ranking Company
Shipments of Smart
Watches/Bands ODM
Providers (Million Units)
Market
Share (%)
1 Company C 28.0 35.6%
2 Our Group 23.7 30.2%
3 Company A 17.0 21.6%
Source: Frost & Sullivan
Notes:
1. Founded in 2005 and headquartered in Shanghai, China, Company A is a listed company specializing in the
design and manufacturing of smart devices, including intelligent terminals, high-performance computing
devices, and AIoT solutions. Company A focuses on the ODM of smartphones, tablets, smart watches/bands,
laptops and TWS earphones.
2. Founded in 2006 and headquartered in Zhejiang Province, China, Company B is a listed company specializing
in ODM of consumer electronics and semiconductor solutions across multiple application domains.
Company B specializes in the ODM of smartphones, tablets and other AIoT products.
3. Founded in 2001 and headquartered in Shandong Province, China, Company C is a listed company with core
business operations encompassing precision components, intelligent acoustic systems, and smart hardware
solutions. Company C focuses on the ODM of TWS earphones, smart watches/bands, and smart eyewear.
4. Founded in 2005 and headquartered in Guangdong Province, China, Company D is a non-listed company
mainly specializing in ODM of smartphones.
Raw Material of Global Consumer Electronics ODM Industry
China’s producer price index for the electronic component manufacturing industry is a
key indicator reflecting fluctuations in raw material costs associating with the consumer
electronics ODM industry. The electronic component manufacturing industry and the producer
price index are subject to cyclical market fluctuations, primarily driven by factors including
volatility of global supply chain, geopolitical tensions, global pandemic, fluctuation of raw
material costs, and acceleration of technological advancements. In recent years, this producer
price index has experienced intermittent declines. Specifically, during 2021Q1 and 2022Q2,
the outbreak of the pandemic led to supply chain disruptions and constrained production
capacity, severely impacting the component supply. And between 2022 and 2023, the price
INDUSTRY OVERVIEW
– 131 –


--- page 142 ---
index saw a downturn, largely attributed to the mitigation of electronic component shortage
and slowdown in consumer electronics demand. In 2024, as the consumer electronics industry
recovered, the price index was stabilizing and gradually showing an upward trend.
The market cycle in the electronic component manufacturing industry generally last from
four to five years. After a period when the China’s producer price index for the electronic
component manufacturing industry remains at a relatively low level, there typically reaches the
stage of supply shortage driven by factors such as rise of demand and technological innovation,
thus leading to an increase in raw material prices. For example, with the accelerating iteration
of AI products, continuous market demand pull is expected to gradually guide the index in 2025
back to the level of four to five years ago. Further, these cyclical market fluctuations are
closely related to the raw material cost variations in the global consumer electronics ODM
industry. Amid component shortages and volatile demand, raw material prices typically rise,
subsequently pushing up both manufacturing costs and the final average selling price.
However, the core component such as SoCs are usually procured directly by the brand owners.
Therefore, raw material cost of ODM manufacturers has not seen a major fluctuation.
China’s Producer Price Index for the
Electronic Component Manufacturing Industry, 2020-2024
2020
Q1
2020
Q2
2020
Q3
2020
Q4
2021
Q1
2021
Q2
2021
Q3
2021
Q4
2022
Q1
2022
Q2
2022
Q3
2022
Q4
2023
Q1
2023
Q2
2023
Q3
2023
Q4
2024
Q1
2024
Q2
2024
Q3
2024
Q4
Producer Price Index for the Electronic Component Manufacturing Industry
0
97
98
99
100
101
102
103
Source: National Bureau of Statistics (NBS) of China, Frost & Sullivan
Note: China’s producer price index for the electronic component manufacturing industry reflects the overall trend
and magnitude of change in the factory gate prices of electronic component manufacturing enterprises’
products when they are first sold within a given period.
INDUSTRY OVERVIEW
– 132 –


--- page 143 ---
OVERVIEW OF GLOBAL AUTOMOTIVE ELECTRONICS INDUSTRY
Automotive electronics are crucial components of the automotive industry and intelligent
vehicle technology solutions. They primarily encompass automotive electronic control systems
and in-car electronic and electrical systems. The automotive electronic control systems include
engine electronic systems, chassis electronic systems, driving assistance systems, and body
electronic systems. The in-car electronic and electrical systems cover safety and comfort
systems, as well as infotainment and connectivity systems.
ODM Mode Accelerates the Reshaping of Automotive Electronics Supply Chain
The software and hardware manufacturing segments of the automotive electronics
industry are attracting more leading consumer electronics ODM providers. They are primarily
entering with intelligent automotive electronic products such as smart cockpit domain
controllers, chassis domain ECUs, vehicle communication modules, LiDAR, and AR-HUD.
Traditional suppliers have only recently entered the emerging smart vehicle industry, and the
competitive landscape is still dynamically adjusting. Amidst this trend, manufacturing models
are progressively evolving towards a more specialized and customized collaborative division
of labor. The ODM mode, already mature and widely applied in the massive and established
consumer electronics sector, represents a more efficient way of industrial chain division.
In the smart vehicle sector, as market competition intensifies, OEMs are shifting their
strategy from emphasizing full-stack capabilities to prioritizing cost and efficiency. V ehicle
manufacturers are increasingly entrusting development and manufacturing to automotive
electronics producers. Under the backdrop of vehicle manufacturers’ “technology architecture
authorization”, the ODM mode will become an increasingly important partnership for vehicle
manufacturers seeking rapid, customized delivery. Among these, ODM/EMS providers whose
core business is consumer electronics, after entering the automotive electronics field, can
leverage their robust precision manufacturing, supply chain, and modular platform integration
capabilities to achieve rapid mass production and cost control. They are gradually forming
comprehensive solution-based service capabilities in core smart vehicle elements like smart
cockpits and intelligent chassis. In the future, the penetration rate of ODM/EMS providers
primarily focused on consumer electronics is expected to rise rapidly in the automotive
electronics industry.
Market Size of Global Automotive Electronics Industry
Continuous advancement of technologies such as AI, cloud computing, big data, 5G
communications, and vehicle-to-everything (V2X) is further driving the upgrade of intelligent
cockpit, intelligent driving, and intelligent connected solutions, leading to sustained growth in
the automotive electronics market. The market size of global automotive electronics industry
grew from RMB1,880.0 billion in 2020 to RMB2,493.4 billion in 2024, representing a CAGR
of 7.3%. Looking forward, the development of automotive intelligence is expected to further
INDUSTRY OVERVIEW
– 133 –


--- page 144 ---
drive the demand for automotive electronics and hence push the market growth. The market
size of global automotive electronics is expected to grow further to RMB3,330.3 billion in
2029, representing a CAGR of 6.0% from 2024 to 2029.
Market Drivers and Trends of Global Automotive Electronics Industry
Technical platform integration capabilities accelerate the scaled delivery of automotive
electronics
The rapid advancements in electrification and intelligent technologies are reshaping the
trajectory of the automotive industry, fostering the integration of traditional components with
emerging innovative technologies. For instance, modern smart cockpit domain products are
progressively adopting intelligent multi-modal interaction methods like touchscreens, voice
recognition, and gesture control, replacing conventional buttons. This provides seamless
interaction with vehicle functions, entertainment systems, and navigation. Leading enterprises
possess the capability to integrate technology platforms, thereby enhancing industry
production efficiency. They are also building a responsive, cost-controllable, and supply-chain-
optimized platform for the large-scale delivery of automotive electronics, bridging the gap
from product design to commercialization. In the future, leading consumer electronics ODM
providers, leveraging their efficient and cost-effective product platform capabilities to enter the
automotive electronics sector, are expected to form deeply interdependent business cooperation
models with vehicle manufacturers, enabling the scaled delivery of automotive electronic
products.
Consumer electronics ODM providers possess cross-domain synergy advantages
ODM providers with extensive experience in mass production within the consumer
electronics sector can significantly empower the automotive electronics industry by
accelerating iteration, reducing costs, improving efficiency, and ensuring consistent product
quality control. Simultaneously, leading clients in the consumer electronics ODM industry are
rapidly expanding into the smart vehicle domain. This strategic extension will directly drive
the migration of the mature consumer electronics ODM mode to the automotive electronics
sector. Long-term cooperating ODM providers, leveraging their mature modular design
capabilities, large-scale production experience, and existing supply chain collaborative
advantages, will be among the first to seize opportunities in the automotive electronics arena,
thereby reshaping the competitive landscape of the automotive electronics industry.
SOURCE OF INFORMATION
We commissioned Frost & Sullivan to conduct market research on global smart device
manufacturing, consumer electronics ODM and automotive electronics industries and prepare
the Frost & Sullivan Report. Frost & Sullivan is an independent global consulting firm founded
in 1961 in New Y ork that offers industry research and market strategies. We have contracted
to pay RMB450,000 to Frost & Sullivan for compiling the Frost & Sullivan Report.
INDUSTRY OVERVIEW
– 134 –


--- page 145 ---
In preparing the Frost & Sullivan Report, Frost & Sullivan conducted detailed primary
research which involved discussing the status of the industry with certain leading industry
participants and conducting interviews with relevant parties. Frost & Sullivan also conducted
secondary 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 market 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 investigated during the research phase of the project. These elements
primarily include expert-opinion forecasting methodology, integration of market drivers and
restraints, integration with the market challenges, integration of the market engineering
measurement trends and integration of econometric variables.
The Frost & Sullivan Report is compiled based on the following assumptions: (i) the
social, economic and political environment of the globe and Chinese mainland 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.
INDUSTRY OVERVIEW
– 135 –


--- page 146 ---
OVERVIEW OF THE LA WS AND REGULATIONS IN THE PRC
The content disclosed in this section is an overview of the major Chinese laws,
regulations and provisions related to our business and does not constitute a detailed analysis
of Chinese laws. It is not all Chinese laws applicable to our business operations in China, and
such Chinese laws may change in the future.
Laws and Regulations on Companies and Foreign Investment
In accordance with the Company Law of the People’ s Republic of China (ʕശɛ͏΍
) promulgated by the SCNPC on December 29, 1993, last amended on December
29, 2023 and implemented since July 1, 2024, companies are generally classified into two
categories, namely, limited liability companies and joint stock limited companies. Except as
otherwise provided by relevant laws on foreign investment, the Company Law of the People’ s
Republic of China also applies to foreign-invested limited liability companies and joint stock
limited companies.
In accordance with the Foreign Investment Law of the People’ s Republic of China (ʕ
) promulgated by the NPC on March 15, 2019 and implemented on
January 1, 2020 and the Regulations on Implementing the Foreign Investment Law of the
People’ s Republic of China (ૢԷ) promulgated by the
State Council on December 26, 2019 and implemented on January 1, 2020, the foreign
investment refers to investment activities carried out directly or indirectly by foreign natural
persons, enterprises or other organizations in China, including the following: (1) Foreign
Investors establishing foreign-invested enterprises in China alone or collectively with other
investors; (2) Foreign Investors acquiring shares, equities, properties or other similar rights of
Chinese domestic enterprises; (3) Foreign Investors investing in new projects in China alone
or collectively with other investors; and (4) Foreign Investors investing through other ways
prescribed by laws and regulations or the State Council. Foreign-invested enterprises refer to
enterprises that are wholly or partly invested by foreign investors and registered under the PRC
laws within China. Foreign investment enterprises may obtain financing in China or overseas
pursuant to the law via public offering of securities such as shares and corporate bonds, as well
as public or non-public offering of other financing instruments and borrowing foreign debts.
Foreign investors’ capital contributions, profits, capital gains, income from asset disposal,
licensing fees of intellectual property rights obtained, legally obtained compensation or
indemnification, and liquidation income that are made or obtained in China, may be freely
remitted in or out of China in RMB or foreign exchange according to law. The State Council
adopts the management system of pre-establishment national treatment and negative list for
foreign investment. Foreign investors shall not invest in areas that are prohibited in the
Negative List. Foreign investors shall comply with the special administrative measures on
restrictive admission such as equity requirements, senior management personnel requirements
etc. stipulated by the Negative List in order to invest in areas that are categorized by the
Negative List as restricted category. Foreign investors shall follow the same principle as
domestic investors in order to invest in areas that are not on the Negative List.
REGULATORY OVERVIEW
– 136 –


--- page 147 ---
On October 26, 2022, the MOFCOM and the NDRC published the Encouraged Industry
Catalogue for Foreign Investment (2022 V ersion) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و))
(the “Encouraging Catalogue”), which was implemented on January 1, 2023, further expanding
the scope of encouraged industry catalogue for foreign investment. The Special Administrative
Measures for the Entry of Foreign Investment (Negative List) (2024 version) (ɝ
݄(૶ఊ) (2024و)) (hereinafter referred to as the “Negative List”) jointly
issued by the NDRC and the MOFCOM on September 6, 2024, which became effective on
November 1, 2024, uniformly listed the special administrative measures for the entry of foreign
investment, such as shareholding requirements and senior management requirements, as well
as the industries that are prohibited for foreign investment. The Negative List covers 11
industries, and any field not falling in the Negative List shall be administered under the
principle of equal treatment for domestic and foreign investment. Our business does not
involve any category listed in the Negative List. According to the Encouraging Catalogue, our
businesses, namely “Software Development and Production” and “Manufacturing of Wearable
Smart Devices”, fall within the scope that encourages foreign investment.
In accordance with the Measures for the Reporting of Foreign Investment Information
() promulgated by the MOFCOM and the SAMR on December 30,
2019, which came into effect on January 1, 2020, for foreign investors carrying out investment
activities directly or indirectly in China, the foreign investors or foreign-invested enterprises
shall submit investment information to the competent commerce authorities through the
enterprise registration system and the National Enterprise Credit Information Publicity System.
Pursuant to the National Security Law of the People’ s Republic of China (ʕശɛ͏΍
) issued by the SCNPC on February 22, 1993 and last amended and
implemented on July 1, 2015, the state shall establish the rules and mechanisms for national
security review and supervision, and conduct national security review of foreign investment,
particular materials and key technologies, network information technology products and
services that affect or may affect national security, construction projects that involve national
security matters, and other major matters and activities.
Pursuant to the Measures for the Security Review of Foreign Investment (̮ਠҳ༟τ
) promulgated by the NDRC and the MOFCOM on December 19, 2020, which
came into effect on January 18, 2021, the Office of the Working Mechanism for Security
Review of Foreign Investment was set up under the NDRC. Under the leadership of the NDRC
and the MOFCOM, the office is responsible for the routine work of the security review of
foreign investment. Foreign investor or relevant parties in the PRC who intend to invest in the
following areas should proactively apply for a security review of foreign investment prior to
implementation of the investment: (1) the investments in the military industry, military
industrial supporting and other fields relating to the security of national defence, and
investments in areas surrounding military facilities and military industry facilities; (2)
investments in important agricultural products, important energy and resources, important
equipment manufacturing, important infrastructure, important transport services, important
cultural products and services, important information technology and Internet products and
services, important financial services, key technologies and other important fields relating to
national security, and obtain control in the target enterprise.
REGULATORY OVERVIEW
– 137 –


--- page 148 ---
Laws and Regulations on Artificial Intelligence
The rapid growth of China’s artificial intelligence (AI) market is driven by various
favorable factors, including government policies. On May 8, 2015, the State Council issued the
Notice of the State Council on Issuing “Made in China 2025 ”(Ι೯<ʕ਷Ⴁி
2025>), which emphasized on acceleration of the integrated development of
new-generation information technology and manufacturing technology, positioning smart
manufacturing as the main direction for the comprehensive integration of informatization and
industrialization. Meanwhile, it emphasized to focus on the development of smart equipment
and products, promote the intelligentization of production processes, cultivate new production
methods, and comprehensively enhance the intelligentization level of enterprise R&D,
production, management, and services.
On July 8, 2017, the State Council issued the Notice on Issuing the “Development Plan
on the New Generation of Artificial Intelligence” (Ι೯<஝ྌ>ٙ
), which outlined three strategic steps for developing new-generation artificial
intelligence technology, and specified the goal for China’s artificial intelligence technology to
reach a world-leading level and for China to become a major global artificial intelligence
innovation center. On November 8, 2018, the MIIT issued the Work Plan for Unveiling Key
Tasks for Innovation in the New Generation Artificial Intelligence Industry (อɓ˾ɛʈ౽
), encouraging the selection of a group of innovative
enterprises possessing key artificial intelligence technologies to jointly strive to enhance
products, platforms, and services with advanced technologies and excellent performance.
On August 1, 2019, the Ministry of Science and Technology promulgated and
implemented on the same day the Work Guidelines for the Construction of National Open
Innovation Platforms for the New Generation Artificial Intelligence (อɓ˾ɛʈ౽ঐක
ˏ). The guidelines highlighted “opening and sharing” as an
important concept of promoting AI-related technological innovation and industry development
in China, and encouraged the testing of open innovation platforms to form standardized and
modular models, middleware, and application software, and to provide open and shared
hardware and software services to society through open interfaces, model libraries, algorithm
packages, and other means. The Work Guidelines for the Construction of National New
Generation Artificial Intelligence Innovation Development Pilot Zones (Revised Edition) (਷
ˏ(وࠈࡌ)), promulgated by the Ministry of
Science and Technology on August 29, 2019, revised on September 29, 2020, and came into
effect on the same day, emphasized creating an institutional environment conducive to the
innovative development of artificial intelligence, advancing the construction of artificial
intelligence infrastructure, and strengthening the support for the innovative development of
artificial intelligence.
REGULATORY OVERVIEW
– 138 –


--- page 149 ---
On March 11, 2021, the National People’s Congress approved the Outline of the 14th
Five-Year Plan for National Economic and Social Development and Vision 2035 of the People’ s
Republic of China (ʞϋ஝ྌձ2035 ϋჃ౻ͦ
), which pointed out the focus will be on high-end chips, operating systems, key
artificial intelligence algorithms, sensors, and other key fields, and that China should
accelerate R&D breakthroughs and iterative applications in basic theories, fundamental
algorithms, equipment materials, and other areas.
On July 29, 2022, the Ministry of Science and Technology and five other relevant
government departments jointly issued the Guiding Opinions on Accelerating Scenario
Innovation and Promoting High-quality Economic Development with High-level Application of
Artificial Intelligence (ܸٙ࢝
ኬจԈ), which proposed to encourage in-depth exploration of application scenarios for
artificial intelligence technology in key industries.
The Measures for the Management of Generative Artificial Intelligence Services (͛ϓ
), issued by the Cyberspace Administration of China on July 10, 2023,
defined generative artificial intelligence as models and technologies capable of generating
content such as text, images, audio, and video. According to the Measures for the Management
of Generative Artificial Intelligence Services , providers of generative artificial intelligence
services shall take effective measures to improve the accuracy and reliability of content
generated by generative artificial intelligence. Providers of generative artificial intelligence
services shall (1) assume responsibility as content producers in accordance with the law and
fulfill network information security obligations; (2) assume responsibility as personal
information processors in accordance with the law and fulfill personal information protection
obligations; and (3) carry out training data processing activities such as pre-training and
optimization training in accordance with the law, including (i) using data and underlying
models with legitimate sources; (ii) where intellectual property is involved, the intellectual
property rights enjoyed by others in accordance with the law shall not be infringed upon; (iii)
where personal information is involved, the consent of the individual shall be obtained or other
circumstances stipulated by laws and administrative regulations shall be met; and (iv) taking
effective measures to improve the quality of training data and enhance the authenticity,
accuracy, objectivity, and diversity of training data. In addition, providers of generative
artificial intelligence services with characteristics of public opinion or capable of social
mobilization shall, in accordance with the Provisions on the Security Assessment for Internet
Information Services with Characteristics of Public Opinions or Capable of Social
Mobilization (), declare a
security assessment to the national cybersecurity administration department, and perform
algorithm recordation in accordance with the Provisions on the Administration of Algorithmic
Recommendations for Internet Information Services ().
REGULATORY OVERVIEW
– 139 –


--- page 150 ---
Regulations on Intelligent Connected Vehicles
According to the Opinions on Strengthening the Access Administration of Intelligent
Connected V ehicles Manufacturers and Products (ࡘۜ
จԈ), issued by the MIIT on July 30, 2021 and came into effect on the same day,
manufacturers of intelligent connected vehicles should strengthen their capabilities in vehicle
data security management and vehicle cybersecurity assurance; regulate online upgrade
activities for vehicle products, ensure the safety of such upgrades, and shall not add autopilot
functions to vehicles through online software upgrades without approval.
Laws and Regulations on Production Safety
Pursuant to the Production Safety Law of the People’ s Republic of China (ʕശɛ͏΍
) promulgated by the SCNPC on June 29, 2002, last amended on June 10,
2021, and implemented on September 1, 2021, the emergency management department of the
State Council shall implement comprehensive supervision and management of production
safety nationwide. Production and operation entities must implement national or industry
standards for ensuring production safety formulated in accordance with the law, establish and
improve a production safety responsibility system for all employees and production safety
rules and regulations. Production and operation entities that fail to meet production safety
conditions shall not engage in production and operation activities. Production and operation
entities shall conduct production safety education and training for their employees, ensure that
employees possess necessary production safety knowledge, and provide them with labor
protective equipment that complies with national or industry standards.
Regulations on the Management of Medical Devices
According to the Regulation on the Supervision and Administration of Medical Devices
(ᔼᐕኜ૛္ຖ၍ଣૢԷ), which came into effect on April 1, 2000, last amended on
February 9, 2021, and became effective on June 1, 2021, the state shall conduct the
classification administration of medical devices according to their risk levels. The medical
devices of Class I shall be subject to product recordation administration, and the medical
devices of Class II and Class III shall be subject to product registration administration.
According to the Measures for the Supervision and Administration of Medical Device
Production () promulgated on July 20, 2004 and last amended
on March 10, 2022, which came into effect from May 1, 2022, whoever plans to engage in the
production of Class II medical devices shall be subject to the approval of the medical products
administration of the province, autonomous region, or municipality directly under the Central
Government at the place where it is located and obtain the medical device production permit
in accordance with the law. Whoever plans to engage in the production of Class I medical
devices shall undergo recordation for the production of medical devices with the medical
products administration at the level of a districted city where it is located.
REGULATORY OVERVIEW
– 140 –


--- page 151 ---
According to the Measures for the Supervision and Administration of Medical Devices
() promulgated on July 30, 2014, amended on November 17,
2017, and last amended on March 10, 2022, which came into effect on May 1, 2022, licensing
or recordation is not required for business activities involving Class I medical devices.
Recordation administration shall apply to business activities involving Class II medical
devices. Licensing administration shall apply to business activities involving Class III medical
devices.
The classification of specific medical devices is stipulated in the Medical Device
Classification Catalog ( ᔼᐕኜ૛ʱᗳͦ፽), which was issued on August 31, 2017 and
amended on March 28, 2022 and August 15, 2023. Certain of our smart watches that is capable
of measuring adult blood pressure and pulse rate and/or collecting single-lead ECG data from
the adult wrist, are classified as Class II medical devices by the Medical Device Classification
Catalog, and blood glucose monitor that is externally sourced and sold with a specific model
of our smart watches is classified as a Class III medical device. Our PRC subsidiary has
obtained the Medical Device Production License and Medical Device Operation License for
these devices.
Regulations on Radio Transmission Equipment
According to the Radio Regulation of the People’ s Republic of China (ʕശɛ͏΍ձ਷
ೌᇞཥ၍ଣૢԷ) promulgated by the State Council and the Central Military Commission on
September 11, 1993 and revised on November 11, 2016, which came into effect on December
1, 2016, the production or import of radio transmission equipment for sale and use in China
shall comply with laws and regulations regarding product quality, national standards, and
relevant provisions of national radio management. For the production or import of radio
transmission equipment that requires type approval, in addition to complying with the
aforementioned provisions, it shall also meet the technical specifications approved in the radio
transmission equipment type approval certificate, and the type approval code shall be marked
on the equipment. Except for micro-power short-range radio transmission equipment (devices
with low transmission power and short transmission distance, intended to cover radio
transmitters providing unidirectional or bidirectional communication and having a low
capability of causing interference to other radio equipment), the production or import of other
radio transmission equipment for domestic sale and use requires application for type approval
from the national radio regulatory authority. The catalog of type-approval of radio transmission
equipment is published by the national radio regulatory authority.
According to the Types and Sample Requirements for Radio Transmission Equipment Type
Approval (Ӌ) issued by the MIIT, certain of
our products that includes smartphones, AI PCs, automotive electronics, tablets, smart
watches/bands and smart eyewear, with 5.8/2.4GHz band wireless local area network and
Bluetooth are classified as regulated radio transmitting equipment (which is categorized as
5.8/2.4GHz band wireless local area network equipment). These products have obtained the
REGULATORY OVERVIEW
– 141 –


--- page 152 ---
Radio Transmitting Equipment Type Approval Certificate (ᗇ)
issued by the MIIT, certifying its compliance with the Radio Regulation of the People’ s
Republic of China .( ʕശɛ͏΍ձ਷ೌᇞཥ၍ଣૢԷ)
Laws and Regulations on Radiation Safety
According to the Law of the People’ s Republic of China on Prevention and Control of
Radioactive Pollution () promulgated by the SCNPC
on June 28, 2003, which came into effect from October 1, 2003, an entity producing, selling
or using radioisotope and ray devices shall, in accordance with the relevant provisions of the
State Council on prevention of radioactivity from the radioisotope and ray devices, apply to
obtain a permit, and make registration accordingly. An entity producing, selling, using or
storing radioactive sources shall set up and improve the security system, designate special
persons to be responsible for the system, ensure the implementation of the system of liability
for safety, and formulate the necessary measures for meeting emergency from accidents.
According to the Regulation on the Safety and Protection of Radioisotopes and Radiation
Devices (ᇞༀໄτΌձԣᚐૢԷ) promulgated by the State Council on
September 14, 2005 (last amended and implemented on March 2, 2019), and the Measures for
the Administration of Safety Licensing for Radioisotopes and Radiation Devices (Ν
) promulgated by the former Ministry of Environmental
Protection on January 18, 2006 (last amended and implemented on January 4, 2021), any entity
that produces, sells, or uses radioisotopes or radiation devices shall obtain a radiation safety
permit. We had obtained the Radiation Safety License required for users of radiation devices
under the People’s Republic of China on Prevention and Control of Radioactive Pollution as
we use Class III radiation devices.
Regulations on Urban Drainage
According to the Administrative Measures for the Licensing of Discharge of Urban
Sewage into the Drainage Network () promulgated
by the Ministry of Housing and Urban-Rural Development on January 22, 2015, and last
amended on December 1, 2022, which came into effect on February 1, 2023, enterprises, public
institutions, and individual industrial and commercial households engaged in industrial,
construction, catering, medical, and other activities that discharge sewage into urban drainage
facilities shall apply for and obtain a drainage license.
Laws and Regulations on Environmental Protection
The Environmental Protection Law
According to the Environmental Protection Law of the People’ s Republic of China (ʕ
) promulgated by the SCNPC on December 26, 1989, last amended
on April 24, 2014 and implemented on January 1, 2015, the environmental protection
administrative department of the State Council shall generally supervise and administer the
REGULATORY OVERVIEW
– 142 –


--- page 153 ---
national environmental protection work. An environmental impact assessment shall be
conducted as legally required for the construction of a project impacting the environment. The
construction of a construction project that has not undergone environmental impact assessment
as legally required may not be commenced. Pollution prevention and control facilities in
construction projects shall be designed, constructed, and put into operation simultaneously
with the main project. Pollution prevention and control facilities shall meet the requirements
of the approved environmental impact assessment documents and shall not be dismantled or
left idle without authorization. The state implements a pollutant discharge permit management
system in accordance with legal provisions.
Pollutant Discharge Permit Management
According to the Classification Administration List of Pollutant Discharge Permitting for
Fixed Pollution Sources (2019 Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و))
promulgated and implemented by the Ministry of Ecology and Environment on December 20,
2019, the state implements key management, simplified management, and registration
management for pollutant discharge permits based on the generation volume, discharging
volume and the degree of impact on the environment of the pollutants of the pollutant
discharging entity.
According to the Measures for Pollutant Discharge Permitting Administration (રϮ஢
) promulgated by the Ministry of Ecology and Environment on April 1, 2024 and
implemented on July 1, 2024, enterprises, public institutions and other producers and operators
subject to pollutant discharge permit management in accordance with the law (hereinafter
referred to as the “pollutant discharging entities”) shall apply for and obtain a pollutant
discharge permit in accordance with the law and discharge pollutants in accordance with the
provisions of the pollutant discharge permit. Without a pollutant discharge permit, no pollutant
may be discharged. Enterprises, public institutions, and other producers and operators that are
required by law to fill out a pollutant discharge registration form (hereinafter referred to as
“pollutant discharge registration entities”) shall register their pollutant discharge on the
national pollutant discharge permit management information platform. Pollutant discharging
entities shall, before the actual act of discharging pollutants occurs, apply to the ecological
environment department of the local people’s government at or above the municipal level of
a districted city where their production and operation site is located to obtain a pollutant
discharge permit. Pollutant discharge registration entities shall, before the actual act of
discharging pollutants occurs, fill out the pollutant discharge registration form through the
national pollutant discharge permit management information platform. After submission, a
registration number and receipt will be generated in real time, which shall be retained by the
pollutant discharge registration entity.
Construction Project Environmental Protection
According to the Law of the People’ s Republic of China on Environmental Impact
Assessment (), promulgated by the SCNPC on October
28, 2002, and most recently revised and implemented on December 29, 2018, and the
REGULATORY OVERVIEW
– 143 –


--- page 154 ---
Regulations on the Administration of Construction Project Environmental Protection (ண
ᚐ၍ଣૢԷ), promulgated by the State Council on November 29, 1998, and last
amended and implemented on July 16, 2017, the state practices the construction project
environmental impact evaluation system. Catalog for the classified control of construction
project environmental impact evaluation shall be compiled and published by the competent
department of environmental protection administration under the State Council based on expert
argumentation and solicitation of opinions from relevant authorities, industry associations,
enterprises, public institutions, and the public. The construction entity shall organize the
preparation of a report on environmental impact, a statement on environmental impact, or fill
in an environmental impact registration form in accordance with the following provisions: (1)
a report on environmental impact should be compiled for a construction project that may cause
major impact on the environment, giving comprehensive and detailed evaluation of the
pollution generated and environmental impact caused by the construction project; (2) a
statement on environmental impact should be compiled for a construction project that may
cause light impact on the environment, giving analysis or special-purpose evaluation of the
pollution generated and environmental impact caused by the construction project; or (3) an
environmental impact registration form should be filled out and submitted for a construction
project that has slight impact on the environment and necessitates no environmental impact
evaluation. Unless otherwise stipulated by laws and regulations, construction enterprises that
need to prepare an environmental impact report or an environmental impact statement shall
undergo environmental protection acceptance after the completion of the construction project.
Environmental protection facilities that need to be built in conjunction with a construction
project must be designed, constructed, and put into operation simultaneously with the main
project. After the environmental protection facilities of a construction project pass the
acceptance inspection, the construction project can be officially put into production or use.
According to the Interim Measures for the Environmental Protection Acceptance upon
Completion of Construction Projects (), promulgated
and implemented by the Ministry of Ecology and Environment on November 20, 2017, the
construction entity is the responsible entity for the environmental protection acceptance upon
completion of a construction project. It shall organize the acceptance of the supporting
environmental protection facilities in accordance with the procedures and standards stipulated
in these measures, prepare an acceptance report, disclose relevant information, accept public
supervision, and ensure that the environmental protection facilities required for the
construction project are put into operation or use simultaneously with the main project. Where
the environmental protection facilities are not completed simultaneously with the main project,
or where a pollutant discharge permit is required but not obtained, the construction entity shall
not commission the environmental protection facilities of the construction project.
Laws and Regulations on Fire Protection
According to the Fire Protection Law of the People’ s Republic of China (ʕശɛ͏΍
), promulgated by the SCNPC on April 29, 1998, last amended and implemented
on April 29, 2021, and the Interim Provisions on the Administration of Fire Protection Design
Review and Final Inspection of Construction Projects (᜕ϗ၍ଣᅲБ
REGULATORY OVERVIEW
– 144 –


--- page 155 ---
), promulgated by the Ministry of Housing and Urban-Rural Development on April 1,
2020, last amended on August 21, 2023, and implemented on October 30, 2023, the
construction entity shall assume primary responsibility for the fire protection design and
construction quality of construction projects in accordance with the law. Special construction
projects are subject to a fire protection acceptance system. Those that have not undergone fire
protection acceptance or have failed the fire protection acceptance are prohibited from being
put into use. Apart from special construction projects, other construction projects are subject
to a recordation and spot-check system. After the acceptance of other construction projects, the
construction entity shall report to the competent department of housing and urban-rural
construction for fire protection acceptance recordation. The competent department of housing
and urban-rural construction conducts random spot checks for fire protection acceptance of
recorded other construction projects. If a project fails the spot check, the relevant construction
project shall cease to be used.
Laws and Regulations on the Import and Export of Goods
According to the Foreign Trade Law of the People’ s Republic of China (“the Foreign
Trade Law ”) ((“”)), promulgated by the
SCNPC on May 12, 1994 and revised on December 30, 2022, the filing and registration system
for foreign trade operators was abolished from December 30, 2022. The Chinese government
implements a system of free import and export of goods and technology, except as otherwise
provided by laws and administrative regulations. Before December 30, 2022, foreign trade
operators engaged in the import and export of goods or technology were required to complete
filing and registration with the foreign trade department of the State Council or its authorized
agency, unless otherwise stipulated by laws, administrative regulations, or the foreign trade
authority of the State Council. Where any foreign trade operator failed to file for archival
registration according to relevant provisions, the customs shall not handle the procedures of
customs declarations and release of the import or export goods.
According to the Provisions on the Recordation of Customs Declaration Entities of the
People’ s Republic of China (), promulgated
by the General Administration of Customs on November 19, 2021 and implemented from
January 1, 2022, a customs declaration entity is the consignee or consignor of imported or
exported goods or a customs declaration enterprise, as filed with the customs. Where the
consignee or consignor of imported or exported goods or a customs declaration enterprise
applies for recordation, it shall obtain the qualification of market entities. In addition, where
the consignee or consignor of imported or exported goods applies for recordation, it shall be
put on record as a foreign trade operator. The recordation of customs declaration entities shall
be valid for a long time. Temporary recordation is valid for one year, and a new recordation
application may be made after the expiration of the period.
REGULATORY OVERVIEW
– 145 –


--- page 156 ---
Laws and Regulations on Product Quality
According to the Product Quality Law of the People’ s Republic of China (ʕശɛ͏΍
), promulgated by the SCNPC on February 22, 1993, and last amended and
implemented on December 29, 2018, quality of products shall pass standard examinations and
no sub-standard products shall be used as standard ones. Producers shall be responsible for the
quality of the products they produce. Sellers shall be responsible for repair, replacement or
return and compensate for the damages done to end-users or consumers if one of the following
cases occurs: (1) The product does not possess the performance it should have, and no prior
explanation was given; (2) the product does not conform to the product standards indicated on
the product or its packaging; or (3) the product does not conform to the quality status indicated
by product descriptions, physical samples, etc.
Laws and Regulations on Product Sales
Anti-Unfair Competition
Pursuant to the Anti-Unfair Competition Law of the People’ s Republic of China (ʕശ
), promulgated by the Standing Committee of the National
People’s Congress on September 2, 1993 and last amended and implemented on April 23, 2019,
the state has formulated a series of measures to curb unfair competition and safeguard market
order. These measures include prohibitions against trade secret infringement, improper sales
with awards, confusing commercial practices, fabrication and dissemination of false or
misleading information, and other such acts. Business operators shall not bribe employees of
the trading counterparty, any entities or individuals entrusted by the trading counterparty to
handle relevant affairs, or entities or personnel who may influence the trading counterparty
through authority or influence to obtain business opportunities or competitive advantages. In
transactional activities, business operators may explicitly offer discounts to trading
counterparties or pay commissions to intermediaries. When offering discounts to their trading
counterparties or pay commissions to intermediaries, business operator shall accurately record
these transactions in their accounting books. Recipients of discounts/commissions by business
operators shall also be accurately recorded in the accounting books. Where a business operator
violates relevant provisions of this Law, the regulatory authority may order cessation of illegal
acts, confiscate illegal gains, and impose a fine not less than RMB50,000 but not more than
RMB3,000,000 depending on severity; its business license may be revoked in severe cases.
Anti-Money Laundering
Pursuant to the Anti-Money Laundering Law of the People’ s Republic of China ,
promulgated by the Standing Committee of the National People’s Congress on October 31,
2006, most recently amended on November 8, 2024, and implemented on January 1, 2025,
anti-money laundering refers to the adoption of measures prescribed by this Law to prevent
money laundering activities, namely, the concealment or disguise of the origin and nature of
proceeds derived from drug-related crimes, organized crime, terrorist activities, smuggling,
REGULATORY OVERVIEW
– 146 –


--- page 157 ---
corruption and bribery, crimes disrupting financial management order, financial fraud, and
other crimes through various means. Violations of this Law that constitute crimes shall be
prosecuted for criminal responsibility in accordance with the law.
Laws and Regulations on Intellectual Property Rights
Trademarks
In accordance with the Trademark Law of the People’ s Republic of China (ʕശɛ͏΍
) promulgated by the Standing Committee of the National People’s Congress on
August 23, 1982, last amended on April 23, 2019, and implemented on November 1, 2019, and
the Implementing Regulations of the Trademark Law of the People’ s Republic of China (ʕ
ૢԷ) issued by the State Council on August 3, 2002, last amended
on April 29, 2014, and implemented on May 1, 2014, a registered trademark refers to a mark
approved and registered by the Trademark Office of China National Intellectual Property
Administration, including product trademarks, service trademarks, collective trademarks, and
certification trademarks; the trademark registrant enjoys exclusive rights to the trademark,
which are protected by law. The validity period of a registered trademark is 10 years, calculated
from the date of registration. The trademark may be renewed for an additional 10-year period,
with the renewal term commencing on the day following the expiration of the previous validity
period. Additionally, the Trademark Law of the People’ s Republic of China adopts the
“first-to-file” principle for trademark registration.
Patents
Under the Patent Law of the People’ s Republic of China ()
promulgated by the Standing Committee of the National People’s Congress on March 12, 1984,
last amended on October 17, 2020, and implemented on June 1, 2021, and the Implementing
Regulations of the Patent Law of the People’ s Republic of China (ྼ
) issued by the China National Intellectual Property Administration on January 19,
1985, last amended by the State Council on December 11, 2023, and implemented on January
20, 2024, the term “invention-creation” refers to inventions, utility models, and designs. The
duration of invention patent rights is 20 years, the duration of utility model patent rights is 10
years, the duration of design patent rights is 15 years, and all are calculated from the date of
application. Patent holders’ rights are protected by law, and others may use the patent only with
proper authorization. Except as provided by law, exploiting a patent without the patentee’s
permission constitutes patent infringement.
Copyright and Software Products
The Copyright Law of the People’ s Republic of China (“Copyright Law”) ( ʕശɛ͏΍
(“”)), promulgated by the Standing Committee of the National
People’s Congress on September 7, 1990, last amended on November 11, 2020, and
implemented on June 1, 2021, stipulates that works created by Chinese citizens, legal entities,
or other organizations, including literary, artistic, natural science, social science, engineering,
REGULATORY OVERVIEW
– 147 –


--- page 158 ---
and computer software works, enjoy copyright protection regardless of publication. Copyright
holders are granted statutory rights, including the right of publication, right of authorship, and
right of reproduction. The 2010 amendment to the Copyright Law extended copyright
protection to Internet activities, products disseminated via the Internet, and software products.
Additionally, the Copyright Law establishes a voluntary registration system administered by
the China Copyright Protection Center.
Under the Regulations on Computer Software Protection (ᚐૢԷ)
issued by the State Council on December 20, 2001 and last amended on January 30, 2013,
software copyright owners may register their works with software registration agencies
recognized by the copyright administrative department under the State Council. Software
copyright owners may license their rights to others and are entitled to royalties.
Domain Name
Pursuant to the Administrative Measures for Internet Domain Names (ʝᑌၣਹΤ၍ଣ
) issued by the MIIT on August 24, 2017 and implemented on November 1, 2017,
domain name registration services shall generally follow the “first-come, first-served”
principle, unless otherwise stipulated in the detailed implementation rules for corresponding
domain name registrations. The maximum validity period for domain name registration shall
not exceed ten years. An applicant shall be deemed the domain name holder upon completion
of registration.
Laws and Regulations on Construction
Land Administration
Under the Land Management Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷
) promulgated by the Standing Committee of the National People’s Congress on
June 25, 1986, last amended on August 26, 2019, and implemented from January 1, 2020,
construction entities that acquire the right to use state-owned land through paid means such as
land grants shall pay land grant premium and other land use fees and charges in accordance
with the standards and methods stipulated by the State Council before they may use the land.
The construction entity using state-owned land shall utilize the land in accordance with the
stipulations of the paid-use contract such as the land use rights transfer agreement, or the
provisions of the land use rights allocation approval document. If there is a genuine need to
alter the construction purpose of the parcel of land, consent shall be obtained from the relevant
natural resources authority of the people’s government, and approval shall be sought from the
original people’s government that approved the land use. Among them, if the land use is to be
changed within an urban planning zone, consent shall first be obtained from the competent
urban planning administrative department prior to submission for approval.
REGULATORY OVERVIEW
– 148 –


--- page 159 ---
According to the Regulations for the Implementation of the Land Management Law of the
People’ s Republic of China (ૢԷ), promulgated on
January 4, 1991, last amended on July 2, 2021, and implemented on September 1, 2021,
construction entities using state-owned land shall obtain the land through paid-use methods,
unless laws or administrative regulations permit allocation. The paid-use methods for
state-owned land include: (1) Grant of state-owned land-use rights; (2) Lease of state-owned
land; (3) Capital contribution or equity participation with state-owned land-use rights.
Construction Engineering Planning Permit
Pursuant to the Urban and Rural Planning Law of the People’ s Republic of China (ʕ
), promulgated by the Standing Committee of the National People’s
Congress on October 28, 2007 and last amended on April 23, 2019, any construction entity or
individual carrying out building, structure, road, pipeline, or other engineering projects within
urban or town planning areas shall apply for a Construction Engineering Planning Permit from
the urban and rural planning authority of the city/county people’s government or the town
people’s government designated by the people’s government of the province, autonomous
region, or municipality directly under the Central Government. If construction proceeds
without obtaining a Construction Engineering Planning Permit or fails to comply with its
provisions, the urban and rural planning authority at or above the county level shall order a halt
to construction. If corrective measures can be taken to mitigate the impact on planning
implementation, rectification shall be required within a specified period, along with a fine of
5% to 10% of the construction cost. If corrective measures are ineffective, demolition shall be
ordered within a deadline. If demolition is unfeasible, the physical structure or illegal income
shall be confiscated, and an additional fine of up to 10% of the construction cost may be
imposed.
Construction Work Permit
Pursuant to the Construction Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷
), promulgated by the Standing Committee of the National People’s Congress on
November 1, 1997 and last amended and implemented on April 23, 2019, prior to commencing
construction, the construction entity shall apply for a Construction Work Permit from the
competent construction administrative department of the local people’s government at or above
the county level in accordance with national regulations, except for small-scale projects below
the threshold set by the State Council’s construction administrative department. According to
the Measures for the Administration of Construction Permits for Construction Projects (ܔ
), issued and implemented by the Ministry of Housing and
Urban-Rural Development of the People’s Republic of China on March 30, 2021, construction
projects with an investment amount below RMB300,000 or a floor area below 300 square
meters are exempt from applying for a Construction Work Permit.
REGULATORY OVERVIEW
– 149 –


--- page 160 ---
Completion Acceptance of Construction Projects
Pursuant to the Regulations on the Quality Management of Construction Projects (ܔ
ணʈ೻ሯඎ၍ଣૢԷ) promulgated and implemented by the State Council on April 23, 2019,
the construction entity shall, prior to commencement, complete the formalities for construction
quality supervision in accordance with national regulations. The quality supervision formalities
may be processed together with the Construction Work Permit or commencement report. Upon
receiving the completion report of a construction project, the construction entity shall organize
completion acceptance inspection with relevant parties, including the design, construction, and
project supervision units. A construction project may be delivered for use only after passing the
completion acceptance inspection.
Laws and Regulations on Property Leasing
According to the Administrative Measures for the Leasing of Commercial Housing (ਠ
) issued by the Ministry of Housing and Urban-Rural Development of
the People’s Republic of China on December 1, 2010, within 30 days after signing a lease
contract, the parties involved shall register the lease with the competent construction (real
estate) authority of the people’s government of the municipality directly under the Central
Government, city, or county where the leased property is located. Violations of the above
provisions may result in fines not less than RMB1,000 but not more than RMB10,000 per lease
agreement imposed by the competent authority.
Laws and Regulations on Labor
Labor Law and Labor Contract
Pursuant to the Labor Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷௶ਗ
) promulgated by the Standing Committee of the National People’s Congress on July 5,
1994 and last amended and implemented on December 29, 2018, workers are entitled to rights
including equal employment and choice of occupation, remuneration for labor, rest and leave,
occupational safety and health protection, vocational skills training, social insurance and
welfare, resolution of labor disputes, and other labor rights prescribed by law. Employers shall
establish and improve rules and regulations in accordance with the law to safeguard workers’
labor rights and ensure the fulfillment of labor obligations.
Under the Labor Contract Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷௶
) promulgated on June 29, 2007, last amended on December 28, 2012, and
implemented on July 1, 2013 by the Standing Committee of the National People’s Congress,
and the Regulations on the Implementation of the Labor Contract Law of the People’ s Republic
of China (ૢԷ) issued by the State Council on September
18, 2008 and implemented on the same day, enterprises and other employers in China shall
apply this Law when establishing labor relationships with workers, as well as in the conclusion,
performance, modification, termination, or discharge of labor contracts. When hiring workers,
employers shall truthfully inform them of job responsibilities, working conditions, workplace
REGULATORY OVERVIEW
– 150 –


--- page 161 ---
location, occupational hazards, work safety conditions, remuneration, and other information
requested by the workers. A written labor contract shall be concluded to establish a labor
relationship. A labor contract shall include the following terms: name, domicile, and legal
representative or principal responsible person of the employer; name, address, and number of
ID card or other valid identity document of the worker; term of the labor contract; job
description and workplace location; working hours, rest, and leave; labor remuneration; social
insurance; labor protection, working conditions, and occupational hazard prevention; and other
matters required by laws and regulations to be included in the labor contract.
Dispatched Laborers
According to the Provisional Regulations on Labor Dispatch ()
issued by the Ministry of Human Resources and Social Security of the People’s Republic of
China on January 24, 2014 and implemented from March 1, 2014, employers may only use
dispatched workers for temporary, auxiliary, or substitutable positions. The aforementioned
temporary positions refer to those with a duration of no more than six months; auxiliary
positions refer to non-core business positions that provide services to core business positions;
substitutable positions refer to those where the employer’s regular employees are unable to
work for a certain period due to reasons such as study leave or vacation, and other workers may
be temporarily employed to replace them. Under the Provisional Regulations on Labor
Dispatch , employers must strictly control the number of dispatched workers, and the number
of dispatched workers used must not exceed 10% of the total workforce (i.e., the sum of
employees under labor contracts and dispatched workers).
Pursuant to the Provisional Regulations on Labor Dispatch , the Labor Contract Law of
the People’ s Republic of China , and the Regulations on the Implementation of the Labor
Contract Law of the People’ s Republic of China , if an employer violates the regulations on
labor dispatch, the labor administration authority shall order it to rectify within a specified
period; if the employer fails to rectify within the time limit, a fine ranging from RMB5,000 to
RMB10,000 per dispatched worker exceeding the 10% ratio shall be imposed.
Social Insurance and Housing Provident Fund
Under the Social Insurance Law of the People’ s Republic of China (ٟ
) promulgated by the Standing Committee of the National People’s Congress on
October 28, 2010, and last amended and implemented on December 29, 2018, as well as the
Provisional Regulations on Collection and Payment of Social Insurance Premiums (ڭ
ᎈ൬ᅄᖮᅲБૢԷ) issued by the State Council on January 22, 1999, and last amended and
implemented on March 24, 2019, the state establishes social insurance systems including basic
pension insurance, basic medical insurance, work-related injury insurance, unemployment
insurance, and maternity insurance, employees shall participate in these insurance schemes,
with both employers and employees contributing to basic pension, medical, and unemployment
insurance, while employers solely shall contribute to work-related injury and maternity
insurance, with employees exempt from these contributions.
REGULATORY OVERVIEW
– 151 –


--- page 162 ---
Under the Social Insurance Law of the People’ s Republic of China and the Provisional
Regulations on Collection and Payment of Social Insurance Premiums , employers shall
complete social insurance registration simultaneously with business registration. If an
employer fails to register its employees for social insurance, the social insurance agency shall
determine the social insurance premiums that the employer should pay. If an employer fails to
complete social insurance registration, the social insurance administrative department shall
order it to rectify within a specified period. If the employer fails to rectify within the time limit,
it shall be fined one to three times the amount of social insurance premiums payable, and its
directly responsible supervisors and other liable personnel shall be fined between RMB500 and
RMB3,000. If an employer fails to pay social insurance premiums on time and in full, the social
insurance premium collection agency shall order it to pay or make up the amount within a
specified period and impose a late fee of 0.05% per day from the date of default. If the
employer still fails to pay within the time limit, the relevant administrative department may
impose a fine ranging from one to three times the amount of arrears.
In accordance with the Interpretation II of the Supreme People’s Court on Issues
Concerning the Application of Law in the Trial of Labor Dispute Cases (׵
༆ᙑ(ɚ)) which was promulgated by the Supreme
People’s Court on July 31, 2025, and effective as of September 1, 2025, if an employer and an
employee agree or the employee undertakes that social insurance contributions need not to be
paid, the People’s Court shall deem such agreement or undertaking invalid. Where an employer
fails to pay social insurance contributions in accordance with the law, and the employee seeks
to terminate the labor contract and claims economic compensation from the employer in
accordance with the Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ
), the People’s Court shall support such claims in accordance with the law.
Where an employer subsequently makes up the unpaid social insurance contributions in
accordance with the law and requests the employee to return the compensation already paid for
social insurance contributions, the People’s Court shall support such claims in accordance with
the law.
According to the Opinions of the General Office of the State Council on the
Comprehensive Implementation of Merging Maternity Insurance and Basic Medical Insurance
for Employees (จ
Ԉ) issued on March 6, 2019 and implemented on the same day, employees participating in
basic medical insurance for employees shall simultaneously participate in maternity insurance,
and the maternity insurance fund shall be merged into the basic medical insurance fund and
collected uniformly.
Under the Regulations on Management of Housing Provident Fund (၍ଣૢ
Է) issued by the State Council on April 3, 1999, and last amended and implemented on
March 24, 2019, foreign-invested enterprises, urban private enterprises, and other entities shall
register with the housing provident fund management center for housing provident fund
contributions and handle the formalities for establishing housing provident fund accounts for
their employees. Employers shall make timely and full contributions to the housing provident
fund and shall not make late deposits or underpayments. If an employer fails to register for
REGULATORY OVERVIEW
– 152 –


--- page 163 ---
housing provident fund contributions or fails to handle the formalities for establishing housing
provident fund accounts for its employees, the housing provident fund management center shall
order it to complete the formalities within a specified period. If the employer fails to comply
within the time limit, a fine of RMB10,000 to RMB50,000 shall be imposed. If an employer
delays or underpays the housing provident fund, the housing provident fund management
center shall order it to make the payment within a specified period. If the employer still fails
to pay within the time limit, the center may apply to the People’s Court for compulsory
enforcement.
Occupational Diseases
In accordance with the Law of the People’ s Republic of China on the Prevention and
Control of Occupational Diseases () promulgated on
October 27, 2001 and subsequently amended on December 31, 2011, July 2, 2016, November
4, 2017, and December 29, 2018, employers shall provide workers with a working environment
and conditions that comply with national occupational health standards and requirements.
Employers shall take measures to ensure workers’ access to occupational health protection,
establish and improve accountability systems for occupational disease prevention and control,
strengthen management of occupational disease prevention, enhance the level of occupational
disease prevention, and bear responsibility for occupational hazards arising within their
operations.
Laws and Regulations on Taxes
Corporate Income Tax
Under the Enterprise Income Tax Law of the People’ s Republic of China (ʕശɛ͏΍
) promulgated by the Standing Committee of the National People’s
Congress on March 16, 2007, and last amended and implemented on December 29, 2018, as
well as the Implementation Regulations of the Enterprise Income Tax Law of the People’ s
Republic of China (ૢԷ) issued by the State Council
on December 6, 2007, amended on December 6, 2024, and implemented on January 20, 2025,
enterprises are classified as resident enterprises and non-resident enterprises. A resident
enterprise refers to an enterprise established in China under Chinese law or an enterprise
established under foreign (regional) law but with its actual management institution located in
China. Resident enterprises shall pay enterprise income tax at a rate of 25% on their income
derived from both within and outside China. Eligible small and low-profit enterprises shall be
subject to corporate income tax at a reduced rate of 20%. High-tech enterprises that are key to
national support shall be subject to corporate income tax at a reduced rate of 15%.
According to the Administrative Measures for the Recognition of High-Tech Enterprises
() jointly issued by the Ministry of Science and Technology of
the People’s Republic of China, the Ministry of Finance, and the State Taxation Administration
on April 14, 2008, amended on January 29, 2016, and implemented from January 1, 2016,
enterprises recognized as high-tech enterprises under these measures may declare and enjoy
REGULATORY OVERVIEW
– 153 –


--- page 164 ---
preferential tax policies in accordance with the Enterprise Income Tax Law of the People’ s
Republic of China and its implementation regulations, the Tax Collection and Administration
Law of the People’ s Republic of China () and its
implementation rules, and other relevant provisions. The high-tech enterprise qualification is
valid for three years from the date of certificate issuance. After obtaining the recognition as a
high-tech enterprise, an enterprise may enjoy preferential tax treatment from the year in which
the high-tech enterprise certificate is issued and may handle the formalities for preferential tax
treatment with the competent tax authority.
V alue-Added Tax (VAT)
Under the Provisional Regulations of the People’ s Republic of China on V alue-Added Tax
(೼ᅲБૢԷ) issued by the State Council on December 13, 1993, and
last amended and implemented on November 19, 2017, as well as the Detailed Rules for the
Implementation of the Provisional Regulations on V alue-Added Tax of the People’ s Republic of
China () issued by the Ministry of Finance on
December 25, 1993, last amended on October 28, 2011, and implemented from November 1,
2011, entities and individuals engaged in the sale of goods, processing or repair and
replacement services, sale of services, intangible assets, real estate, or import of goods within
China shall pay V A T. Unless otherwise stipulated, the V A T rate for the sale of goods, services,
or leasing of tangible movable property, or import of goods is generally 17%.
According to the Notice on Adjusting VAT Rates (),
jointly issued by the Ministry of Finance and the State Taxation Administration on April 4,
2018 and effective from May 1, 2018, for taxable V A T sales or import of goods originally
subject to 17% and 11% rates, the rates were adjusted to 16% and 10% respectively starting
from May 1, 2018.
Pursuant to the Announcement on Deepening VAT Reform Policies (೼ҷ
ʮѓ), jointly issued by the Ministry of Finance, the State Taxation
Administration, and the General Administration of Customs of the People’s Republic of China
on March 20, 2019, and effective from April 1, 2019, for general V A T taxpayers engaged in
taxable V A T sales or import of goods originally subject to a 16% rate, the rate was adjusted to
13%; for those originally subject to a 10% rate, the rate was adjusted to 9%.
Dividend Distribution
Pursuant to the Company Law of the People’ s Republic of China promulgated by the
Standing Committee of the National People’s Congress on December 29, 1993, last amended
on December 29, 2023, and implemented from July 1, 2024, when a company distributes its
after-tax profits for the current year, it shall allocate 10% of the profits to the company’s
statutory reserve fund until the cumulative amount of such reserve reaches 50% of the
company’s registered capital. If the company’s statutory reserve is insufficient to cover prior
years’ losses, the current year’s profits shall first be used to offset such losses before allocating
to the statutory reserve. After offsetting losses and allocating to the reserve fund, the remaining
REGULATORY OVERVIEW
– 154 –


--- page 165 ---
after-tax profits of a limited liability company shall be distributed to shareholders in proportion
to their paid-in capital contributions, unless all shareholders agree otherwise. For a joint stock
limited company, profits shall be distributed in proportion to shareholders’ shareholdings,
unless otherwise stipulated in the company’s articles of association.
Under the Arrangement Between the Mainland and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income (ᅄ೼ձԣ˟ਊဍ೼
τર) promulgated by the State Taxation Administration on August 21, 2006 and effective
from December 8, 2006, and related protocols, if a Hong Kong enterprise directly holds no less
than 25% of the equity in a Chinese company, dividends distributed shall be taxed at a rate of
5%; otherwise, the income tax rate shall be 10%.
According to the Administrative Measures for Non-Resident Taxpayers to Enjoy Treaty
Benefits () issued by the State Taxation
Administration on October 14, 2019 and effective from January 1, 2020, non-resident
taxpayers may enjoy tax treaty benefits under the principle of “self-assessment, declaration for
benefits, and retention of relevant data for future reference”. If a non-resident taxpayer
self-assesses that it meets the conditions for enjoying treaty benefits, it may enjoy such benefits
during tax declaration or through withholding agents during withholding declaration. At the
same time, it shall collect and retain relevant data in accordance with regulations for future
reference and accept subsequent management by the tax authorities.
Laws and Regulations on Outbound Investment
Under the Administrative Measures for Outbound Investment ()
issued by the Ministry of Commerce on September 6, 2014 and implemented from October 6,
2014, the Ministry of Commerce and provincial-level competent commercial authorities shall
implement filing or approval management for outbound investment by enterprises based on
different circumstances. Outbound investments involving sensitive countries/regions or
sensitive industries are subject to an approval system. Other outbound investments are subject
to a filing system.
Pursuant to the Administrative Measures for Enterprise Outbound Investment (Άุྤ
) issued by the National Development and Reform Commission on
December 26, 2017 and effective from March 1, 2018, domestic enterprises or investors
conducting outbound investments shall obtain approval or complete filing for outbound
investment projects, fulfill information reporting obligations, and accept supervision and
inspection. Sensitive projects, including those involving sensitive countries/regions or
industries, conducted directly or through controlled overseas enterprises by the investor,
require approval. Non-sensitive projects directly conducted by investment entities, i.e.,
non-sensitive projects in which investment entities directly invest assets, rights, or provide
financing or guarantees, shall be subject to filing.
REGULATORY OVERVIEW
– 155 –


--- page 166 ---
Laws and Regulations on Foreign Exchange Administration
According to the Foreign Exchange Administration Regulation of the People’ s Republic
of China (ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) issued by the State Council on January 29, 1996,
and last amended and implemented on August 5, 2008, RMB is freely convertible under the
current account transactions supported by authentic and legally compliant documentation, such
as foreign exchange transactions related to dividend distributions, interest and royalty
payments and trade and services. However, free exchange for capital account transactions,
including direction investment, loans, securities investments and repatriation of investment,
remains subject to the approval or registration requirements with foreign exchange
administration authorities.
According to the Circular on Relevant Issues Concerning Foreign Exchange
Administration of Overseas Listing () promulgated
by the SAFE and implemented on December 26, 2014, a domestic company shall, within 15
working days after the completion of overseas listing and offering, register the overseas listing
with the local foreign exchange administration at the place where it is registered with relevant
material. A domestic company (other than banking financial institutions) shall, by virtue of its
registration certificate for overseas listing business, open a “special foreign exchange account
for overseas listing of domestic companies” with a domestic bank for its initial offering (or
additional offering) and repurchase business to handle the exchange and transfer of funds for
the relevant business. The overseas listing for domestic companies may repatriate raised funds
to China or retain them offshore, provided that the use of such funds complies with the purpose
stipulated in this prospectus and other publicly disclosed documents.
According to the Notice on Further Simplifying and Improving Policies on the Foreign
Exchange Administration of Direct Investment (݁
) issued on February 13, 2015 and implemented on June 1, 2015, the SAFE has
canceled the confirmation of foreign exchange registration under domestic direction
investment and the confirmation of foreign exchange registration under overseas direction
investment, and banks shall directly examine and handle foreign exchange registration under
domestic direct investment and foreign exchange registration under overseas direct investment
instead.
Pursuant to the Notice on Reforming the Management of Foreign Exchange Capital
Settlement for Foreign-Invested Enterprises (ഐි၍ଣ˙
) issued by the SAFE on March 30, 2015, and implemented on June 1, 2015,
foreign-invested enterprises (FIEs) may exercise voluntary FX settlement for their foreign
exchange capital funds, which means foreign exchange capital in FIEs’ capital account that has
undergone monetary capital contribution rights verification by SAFE (or has been registered as
a capital contribution deposit by an authorized bank), may be exchanged into RMB at banks
based on real operational needs of FIEs. The use of capital by FIEs shall comply with the
principles of authenticity and self-use within the business scope of the enterprise. FIE capital
and converted RMB funds are prohibited from: (i) the direct or indirect use for expenditures
that fall outside the enterprises’ business scope, or the use for purposes which are not allowed
REGULATORY OVERVIEW
– 156 –


--- page 167 ---
by the relevant laws and regulations; (ii) the direct or indirect use for securities investments,
unless otherwise stipulated by laws and regulations; (iii) the direct or indirect use for extending
RMB entrusted loans (except where permitted under the business scope), repaying inter-
enterprise loans (including third-party advances), or repaying bank RMB loans that have been
on-lent to third parties; (iv) the direct or indirect use for payment of expenses related to the
purchase of non-self-use real estate, except for foreign-invested real estate enterprises.
The SAFE issued and implemented the Circular on Further Promoting Cross-border
Trade and Investment Facilitation ()
on December 4, 2023. The Circular allows the foreign-invested enterprises to legally use
FX-converted RMB capital for domestic equity investments based on the authentic and legally
compliant domestically invested projects without violation of the provisions of the Special
Administrative Measures for Foreign Investment Access (Negative List).
According to the Circular on Optimizing Administration of Foreign Exchange to Support
the Development of Foreign-related Business (ஷ
) issued by the SAFE on April 10, 2020 and implemented on June 1, 2020, the reform of
facilitating the payment of income under the capital accounts shall be promoted nationwide.
Under the prerequisite of ensuring authentic and legally compliant use of funds and compliance
with the prevailing administrative provisions on use of income from capital projects,
enterprises which satisfy the criteria are allowed to use income under capital account, such
capital funds, foreign debts and overseas listing, for domestic payment without the need to
provide proof materials for veracity to the bank beforehand for each transaction.
Laws and Regulations on Overseas Listing
Overseas Securities Offering and Listing
According to the Interim Measures for the Administration of Overseas Securities Offering
and Listing by Domestic Enterprises ()
(hereinafter referred to as “Interim Measures for the Administration”) promulgated by the
CSRC on February 17, 2023 and implemented on March 31, 2023, together with its seven
related guidelines, overseas offering and listing by PRC domestic enterprises shall be made in
strict compliance with relevant laws, administrative regulations and rules concerning national
security in spheres of foreign investment, cybersecurity, data security and etc., and duly fulfill
their obligations to protect national security. Where security review is required, the relevant
security review procedures shall be duly completed in accordance with applicable laws prior
to submitting any listing application to overseas securities regulators or exchanges.
Circumstances under which domestic enterprises are prohibited from overseas securities
offerings and listings include: (1) such listing and fund-raising are explicitly prohibited by law,
administrative regulations or relevant state stipulations; (2) the oversea offering and listing
may endanger national security as reviewed and determined by competent authorities under the
State Council in accordance with laws; (3) either the domestic company or its controlling
shareholder(s), or the de facto controller(s), has/have committed crimes such as corruption,
bribery, embezzlement, misappropriation of property or undermining the order of the socialist
REGULATORY OVERVIEW
– 157 –


--- page 168 ---
market economy during the latest three years; (4) the domestic company is suspected of
committing a crime or severe violation of laws and regulations, and is under investigation in
accordance with law and no clear conclusion has been made thereof yet; or (5) there is/are
material ownership dispute(s) over equity interests held by the controlling shareholder(s) or the
shareholder(s) that are controlled by the controlling shareholder(s) or the de facto controller(s).
In addition, the Interim Measures for the Administration provide that PRC domestic
companies that seek to offer or list securities overseas, both directly and indirectly, shall file
with the CSRC and submit a filing report, a legal opinion and other relevant materials. Where
a PRC domestic company issuer procures an overseas initial public offering or listing, it shall
file with the CSRC within three business days after submitting application documents for
overseas securities offering and listing. Where a domestic company fails to complete the filing
procedure or submits filing materials containing false records, misleading statements or
material omissions, such domestic company may be subject to administrative penalties, such
as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the
person directly in charge and other directly liable persons may also be subject to administrative
penalties, such as warnings and fines.
Confidentiality and Archives Administration
Pursuant to the Provisions on Strengthening Confidentiality and Archives Administration
for Overseas Securities Offering and Listing by Domestic Enterprises (̋੶ྤʫΆุྤ
) jointly promulgated by the CSRC and
three other regulatory authorities on February 24, 2023 and implemented on March 31, 2023,
domestic enterprises conducting overseas securities offerings and listings shall establish a
sound confidentiality and archive work system, and implement corresponding confidentiality
and archives management responsibilities. A domestic enterprise must obtain approval from the
competent departments with the authority to examine and approve, in accordance with the
laws, and file a record with the administrative department for confidentiality at the same level,
when providing or publicly disclosing, or providing or public disclosing through its overseas
listed entities, documents and data involving secrets of the State and work secrets of the
organizations of the State to relevant securities companies, securities service institutions,
overseas regulatory authorities, and other entities and individuals. Domestic enterprises shall
strictly perform relevant procedures in compliance with the relevant provisions of the State,
when providing or publicly disclosing, or providing or public disclosing through its overseas
listed entities, any other documents or data which, if disclosed, may adversely affect national
security or public interests, to relevant securities companies, securities service institutions,
overseas regulatory authorities, and other entities and individuals. The working papers
generated domestically by securities companies and securities service institutions, which
provide services in respect of overseas offering and listing for domestic enterprises, shall be
stored within the territory. Those that need to transmit working papers outbound shall go
through examination and approval formalities in accordance with the relevant provisions of the
State.
REGULATORY OVERVIEW
– 158 –


--- page 169 ---
OVERVIEW OF THE LA WS AND REGULATIONS IN VIETNAM
The regulations in Vietnam that have significant impact on our business are set out below:
Laws on Investment and Enterprises
The Law on Investment (as enacted under Law No. 61/2020/QH14) and its implementing
decrees/circulars, sets out the principal legal framework governing foreign investment in
Vietnam. It sets forth provisions on investment conditions, procedures, incentivized and
conditional sectors, and guarantees of investors’ rights, including property ownership and the
right to transfer assets abroad. Foreign investors must comply with the investment conditions
as prescribed under this Law. Before establishing an economic organization in Vietnam, they
are required to develop an investment project and obtain an Investment Registration Certificate
from the competent authority.
Enacted as Law No. 59/2020/QH14, the Law on Enterprises serves as the principal legal
foundation for business operations in Vietnam. It sets forth the classification of enterprise
types, the procedures for their formation, and key aspects such as asset ownership, capital
contribution mechanisms, and profit allocation. The Law further specifies the scope of
authority and duties assigned to corporate executives, including their role in formulating
internal governance rules and authorizing company transactions and contractual agreements.
Laws and Regulations relating to the Environment Protection
Environmental protection obligations applicable to production facilities in Vietnam are
governed by the Law on Environmental Protection, as enacted under Law No. 72/2020/QH14.
Under this legal framework, facilities engaged in environmentally sensitive operations, such as
those discharging wastewater or air pollutants, are required to fulfill specific environmental
compliance duties.
These duties include conducting environmental impact assessments and securing
environmental permits for operations deemed to pose potential risks. Facilities involved in
activities like wastewater discharge or emissions must also adhere to applicable standards for
treatment, monitoring, inspection, and environmental reporting throughout their operational
lifecycle.
Laws on Construction, Fire and Rescue
The regulatory framework governing investors’ responsibilities in construction,
renovation, and repair activities in Vietnam is established under the Law on Construction,
enacted as Law No. 50/2014/QH13 and its amended documents. This Law outlines key
obligations such as design appraisal, application for construction permits, inspection and
acceptance procedures, and the formal completion of works for operational use.
REGULATORY OVERVIEW
– 159 –


--- page 170 ---
For facilities subject to fire safety oversight, particularly industrial and manufacturing
facilities, compliance is mandated under the Law on Fire Prevention, Fighting, and Rescue
No. 55/2024/QH15. This legislation requires: (1) appraisal and approval of fire prevention and
fighting system designs, and (2) inspection and acceptance of fire safety infrastructure prior to
commissioning and operational launch.
Labor Laws
Labor-related issues in Vietnam are governed by a set of core legislative instruments:
 The Labor Code, as enacted under Law No. 45/2019/QH14, sets out the foundational
legal framework for regulating the relationship between employers and employees.
It sets out mandatory provisions on wages, working hours, rest periods, occupational
safety and hygiene, and social insurance obligations. The Code also establishes
mechanisms for resolving labor disputes and applies to both domestic and foreign
workers operating in Vietnam.
 Complementing the Labor Code are several specialized laws that define employer
responsibilities in detail. These include the Law on Social Insurance (Law No.
41/2024/QH15), the Law on Health Insurance (Law No. 25/2008/QH12, as amended
by Law No. 51/2024/QH15), and the Law on Occupational Safety and Hygiene (Law
No. 84/2015/QH13). These laws govern obligations related to insurance
contributions, workplace safety standards, environmental hygiene, and employee
welfare. Collectively, these regulations form a comprehensive legal framework
aimed at safeguarding workers’ rights and ensuring compliance across all sectors of
employment in Vietnam.
Laws and Regulations relating to Commercial Activities
Property ownership rights, the rights and obligations of traders in commercial activities,
and other essential business transactions, such as sale, lease, loan, and borrowing, are primarily
governed by the Civil Code 2015 (Law No. 91/2015/QH13). The Civil Code 2015 sets out the
foundational legal framework for civil relations, including personal and property rights,
contract formation, and dispute resolution. In addition, specialized laws such as the
Commercial Law (Law No. 36/2005/QH11) and the Law on Foreign Trade Management (Law
No. 05/2017/QH14) regulate specific aspects of commercial conduct, including trade practices,
trader obligations, and international goods transactions.
REGULATORY OVERVIEW
– 160 –


--- page 171 ---
Laws on Taxes
In Vietnam, corporate tax policies, applicable tax rates, and tax incentives for businesses
are governed by several key legislative instruments:
 Law on Corporate Income Tax (Law No. 14/2008/QH12, amended by Laws
No. 32/2013/QH13, No. 71/2014/QH13, and No. 61/2020/QH14) : This law regulates
taxable income, applicable tax rates, exemptions and reductions, and the mechanism
for carrying forward business losses.
 Law on V alue-Added Tax (Law No. 48/2024/QH15) : Goods and services used for
production, business, and consumption in Vietnam are subject to V alue-Added Tax
(V A T), except for specific categories exempted under the Law. The law also outlines
V A T calculation methods, credit and refund mechanisms, and obligations for
domestic and foreign suppliers.
 Law on Export and Import Duties (Law No. 107/2016/QH13) : This law governs tax
obligations related to the export and import of goods, including the basis for tax
calculation, payment deadlines, and conditions for exemption, reduction, and refund
of duties.
For export processing enterprises, eligibility for incentives on export duties requires
confirmation from the customs authority regarding compliance with inspection and supervision
requirements.
Laws and Regulations on Bank and Finance
The State Bank of Vietnam (SBV) has issued Circular No. 06/2019/TT-NHNN governing
the opening and management of foreign investment capital accounts for foreign investors,
which are used to record revenue and expenditure transactions related to foreign direct and
indirect investment activities in Vietnam. Obligations related to the registration of foreign
loans and the conversion of mid-term loans with the SBV are set out in Circular
No. 12/2022/TT-NHNN.
REGULATORY OVERVIEW
– 161 –


--- page 172 ---
LA WS AND REGULATIONS RELATED TO BUSINESS IN INDIA
The regulations in India that have significant impact on our business are set out below:
Laws and Regulations relating to Corporate Governance and Foreign Exchange
Transactions
The Companies Act, 2013
The Companies Act, 2013 came into force on September 12, 2013. This statute governs
the incorporation, regulation, management, governance and dissolution of companies. It aims
to promote corporate governance, protect the interests of shareholders and other stakeholders,
ensure transparency and accountability, facilitate ease of doing business, and regulate financial
and managerial aspects of companies.
Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)
Secretarial Standards are approved by the Central Government under Section 118(10) of
the Companies Act, 2013, are professional guidelines that enhance the quality and transparency
in corporate governance practices, specifically regarding company meetings. These Standards
aim to ensure uniformity, accountability, and legal compliance in the conduct of Board
meetings and General meetings across companies incorporated under the Companies Act, 2013.
They serve to assist companies in adhering strictly to the procedural and disclosure
requirements mandated by law, thereby promoting efficient decision-making and safeguarding
the interests of members and stakeholders. A revised version of the Secretarial Standards took
effect on April 1, 2024.
The Foreign Exchange Management Act
The Foreign Exchange Management Act, 1999 (“ FEMA ”), is a comprehensive legislation
which governs foreign exchange transactions. FEMA came into force on June 1, 2000,
replacing the restrictive Foreign Exchange Regulation Act of 1973. FEMA aims to facilitate
external trade and international payments, making it easier for Indian businesses and
individuals to engage in global commerce. It seeks to promote a stable and well-organized
foreign exchange market that supports India’s economic growth and integration with the global
economy. Additionally, FEMA provides clear regulatory procedures for foreign exchange
transactions, ensuring transparency and ease of compliance for all stakeholders.
Laws and Regulations relating to Labor and Employment
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 (“ POSH Act ”), came into force on December 9, 2013. The primary aim of POSH Act
is to prevent incidents of sexual harassment by creating awareness among employees,
REGULATORY OVERVIEW
– 162 –


--- page 173 ---
employers, and organizations about what constitutes sexual harassment and implementing
preventive measures. POSH Act seeks to establish a zero-tolerance policy towards sexual
harassment while promoting gender equality and ensuring women’s fundamental right to work
with dignity.
The Payment of Gratuity Act
The Payment of Gratuity Act, 1972 (“ Gratuity Act ”) which came into force on September
16, 1972, is a social-welfare legislation to ensure that employees receive a lump /H5009sum benefit
in recognition of their long and meritorious service at the time of retirement, resignation, death
or disablement. Gratuity Act aims to provide financial security and social protection to
employees in factories, mines, oilfields, plantations, ports, railway companies, shops and other
establishments employing ten or more persons. By mandating a uniform scheme nationwide,
Gratuity Act prevents disparity in gratuity payments across industries and regions and fosters
employees’ confidence in the stability of their post /H5009service income.
The Maternity Benefit Act
The Maternity Benefit Act, 1961 (“ Maternity Benefit Act ”) came into force on
November 1, 1963. It is a comprehensive social security legislation to regulate the employment
of women in certain establishments during periods before and after childbirth while providing
maternity and other related benefits . Maternity Benefit Act ensures benefit or fully paid leave
from employment for women to take care of their child, and its purpose is to regulate
employment in certain establishments of women workers for certain period before and after
childbirth. Maternity Benefit Act is applicable to every shop and establishment in which 10
(ten) or more persons are employed.
The Equal Remuneration Act
The Equal Remuneration Act, 1976 came into force on March 8, 1976, to eliminate
gender /H5009based wage discrimination and to ensure that men and women receive equal pay for the
same work or work of a similar nature. Its principal aim is to give effect to the constitutional
guarantee of equality of opportunity and non /H5009discrimination in matters of employment and
remuneration, thereby promoting gender justice and workplace fairness.
The Minimum Wages Act
The Minimum Wages Act, 1948 (“ Minimum Wages Act ”), which came into force on
March 15, 1948, is a foundational labor statute enacted to protect workers from exploitation by
ensuring they receive a basic standard of pay that meets their subsistence needs. Its primary
objective is to guarantee that every worker is paid at least the statutory minimum wage for their
employment, thereby preventing unduly low wages and fostering social justice. Minimum
Wages Act empowers both the Central and State Governments to fix, review, and revise
minimum rates of wages for scheduled employments and groups of workers, taking into
account the cost of living, the need for social security, and regional economic conditions.
REGULATORY OVERVIEW
– 163 –


--- page 174 ---
The Delhi Shops and Establishments Act
The Delhi Shops and Establishments Act, 1954 (“ Delhi S&E Act ”), which came into
force on February 1, 1955, regulates the conditions of work and employment in commercial
establishments within the National Capital Territory of Delhi. Its primary aim is to ensure fair
and humane working conditions, prevent exploitation, and safeguard the health, safety, and
welfare of employees engaged in shops, offices, residential hotels, restaurants, theatres, and
other establishments. By mandating standardized norms for hours of work, rest intervals, leave
entitlements, and record-keeping, Delhi S&E Act promotes orderly regulation of trade and
commerce while protecting workers’ rights.
Uttar Pradesh Dookan Aur V anijya Adhishthan Adhiniyam
Uttar Pradesh Dookan Aur V anijya Adhishthan Adhiniyam, 1962 (“ UP S&E Act ”), which
came into force on December 26, 1962, governs the regulation of commercial and service
establishments across Uttar Pradesh, with the principal aim of securing humane working
conditions and protecting the rights of employees. It applies to all shops, restaurants, hotels,
cinemas, theatres, residential hotels, dispensaries, workshops, and other establishments where
business is carried on by retail or services — in Uttar Pradesh.
The Industrial Disputes Act
The Industrial Disputes Act, 1947 (“ ID Act ”) came into force on April 1, 1947. ID Act
was enacted to secure industrial peace by providing a legal framework for the investigation and
settlement of disputes between employers and employees in industrial establishments,
including companies. Its primary objective is to promote harmonious employer-employee
relations, prevent work stoppages, and ensure uninterrupted production while safeguarding
workers’ rights. It provides for various mechanisms like conciliation, arbitration, and
adjudication, while also addressing issues like layoffs, retrenchment, and unfair labor
practices.
Laws and Regulations relating to Taxation
The Income Tax Act
The Income Tax Act, 1961 (“ Tax Act ”) came into force on April 1, 1964. Tax Act is
India’s principal statute governing the levy, administration, and collection of direct taxes from
any assessee, which includes a company. Tax Act aims to raise revenue for public expenditure
while promoting equity and economic growth through progressive taxation, exemptions,
deductions, and incentives. Tax Act seeks to balance the government’s fiscal needs with
taxpayers’ ability to pay, enshrining the principles of fairness, neutrality, and transparency.
REGULATORY OVERVIEW
– 164 –


--- page 175 ---
The Goods and Services Tax Act
The Goods and Services Tax Act, 2017 (“ GST Act ”) came into force on July 1, 2017. It
is a comprehensive, destination /H5009based consumption tax that replaced India’s cascading indirect
tax regime by subsuming multiple central and state levies into a single unified levy. Its aims
to create a common national market by eliminating tax /H5009on/H5009tax, simplifying compliance, and
enhancing transparency in the movement of goods and services across states. By integrating
central excise duty, service tax, value /H5009added tax, and several other levies, GST Act fosters ease
of doing business and reduces transaction costs. Its main goal is to establish a single, efficient
tax system that lowers tax rates, simplifies business processes, and fosters economic growth.
Laws and Regulations relating to Information Technology and Data Protection
The Information Technology Act
The Information Technology Act, 2000 (“ IT Act ”), which came into force on October 17,
2000, provides a legal framework for various aspects of digital transactions, data privacy and
protection, cybersecurity, and cybercrime in India. It outlines penalties for cyber offenses and
establishes mechanisms for addressing them.
The Sensitive Personal Data or Information (SPDI) Rules
The Sensitive Personal Data or Information (SPDI) Rules, 2011, framed under the
Information Technology Act, 2000, came into force on April 11, 2011, and established a critical
framework for the protection and management of sensitive personal data in India. The primary
aim of the SPDI Rules is to safeguard individuals’ sensitive personal information by mandating
reasonable security practices and procedures for organizations that collect, store, process, or
transfer such data. SPDI Rules seek to prevent unauthorized access, disclosure, or misuse of
sensitive personal data or information, thereby protecting privacy rights and promoting trust in
electronic transactions.
Laws and Regulations relating to Product Liability
The Consumer Protection Act
The Consumer Protection Act, 2019 (“ CP Act ”), which came into force on July 20, 2020,
was designed to safeguard consumer interests and provide a mechanism for the timely
resolution of consumer disputes. It replaces the former Consumer Protection Act, 1986 and
aims to address the evolving landscape of consumer markets, including e-commerce and online
transactions. CP Act introduces the concept of product liability, holding manufacturers, sellers,
and service providers accountable for defective products and services.
REGULATORY OVERVIEW
– 165 –


--- page 176 ---
SANCTIONS LA WS AND REGULATIONS
United States
The Office of Foreign Assets Control (“ OFAC”) is the primary agency responsible for
administering U.S. sanctions programmes against targeted countries, entities, and individuals.
“Primary” U.S. sanctions apply to “U.S. persons” or activities involving a U.S. nexus (e.g.,
funds transfers in U.S. currency even if performed by non-U.S. persons), and “secondary” U.S.
sanctions apply extraterritorially to the activities of non-U.S. persons even when the
transaction has no U.S. nexus. Generally, U.S. persons are defined as entities organized under
U.S. law (such as companies and their U.S. subsidiaries); any U.S. entity’s domestic and
foreign branches (sanctions against Iran and Cuba also apply to U.S. companies’ foreign
subsidiaries or other non-U.S. entities owned or controlled by U.S. persons); U.S. citizens or
permanent resident aliens (“green card” holders), regardless of their location in the world;
individuals physically present in the United States; and U.S. branches or U.S. subsidiaries of
non-U.S. companies.
Depending on the sanctions program and/or parties involved, U.S. law also may require
a U.S. company or a U.S. person to “block” (freeze) any assets/property interests owned,
controlled or held for the benefit of a sanctioned country, entity, or individual when such
assets/property interests are in the United States or within the possession or control of a U.S.
person. Upon such blocking, no transaction may be undertaken or effected with respect to the
asset/property interest — no payments, benefits, provision of services or other dealings or
other type of performance (in case of contracts/agreements) — except pursuant to an
authorization or license from OFAC.
OFAC’s comprehensive sanctions programmes currently apply to Cuba, Iran, North
Korea, the Crimea region of Russia/Ukraine, and the self-proclaimed Luhansk People’s
Republic (LPR) and Donetsk People’s Republic (DPR) regions (the comprehensive OFAC
sanctions programme against Sudan was terminated on October 12, 2017). OFAC also prohibits
virtually all business dealings with persons and entities identified in the SDN List. Entities that
a party on the SDN List owns (defined as a direct or indirect ownership interest of 50% or
more, individually or in the aggregate) are also blocked, regardless of whether that entity is
expressly named on the SDN List. Additionally, U.S. persons, wherever located, are prohibited
from approving, financing, facilitating, or guaranteeing any transaction by a non-U.S. person
where the transaction by that non-U.S. person would be prohibited if performed by a U.S.
person or within the United States.
United Nations
The United Nations Security Council (the “ UNSC ”) can take action to maintain or restore
international peace and security under Chapter VII of the United Nations Charter. Sanctions
measures encompass a broad range of enforcement options that do not involve the use of armed
force. Since 1966, the UNSC has established 30 sanctions regimes.
REGULATORY OVERVIEW
– 166 –


--- page 177 ---
The UNSC sanctions have taken a number of different forms, in pursuit of a variety of
goals. The measures have ranged from comprehensive economic and trade sanctions to more
targeted measures such as arms embargoes, travel bans, and financial or commodity
restrictions. The UNSC has applied sanctions to support peaceful transitions, deter non-
constitutional changes, constrain terrorism, protect human rights and promote non-
proliferation.
There are 14 ongoing sanctions regimes which focus on supporting political settlement of
conflicts, nuclear non-proliferation, and counter-terrorism. Each regime is administered by a
sanctions committee chaired by a non-permanent member of the UNSC. There are ten
monitoring groups, teams and panels that support the work of the sanctions committees. United
Nations sanctions are imposed by the UNSC, usually acting under Chapter VII of the United
Nations Charter. Decisions of the UNSC bind members of the United Nations and override
other obligations of United Nations member states.
European Union
Under European Union sanction measures, there is no “blanket” ban on doing business in
or with a jurisdiction targeted by sanctions measures. It is not generally prohibited or otherwise
restricted for a person or entity to do business (involving non-controlled or unrestricted items)
with a counterparty in a country subject to European Union sanctions where that counterparty
is not a Sanctioned Person and not engaged in prohibited activities, such as exporting, selling,
transferring or making certain controlled or restricted products available (either directly or
indirectly) to, or for use in a jurisdiction subject to sanctions measures, provided that no funds
and economic resources are made available to the Sanctioned Persons.
United Kingdom and United Kingdom overseas territories
As of January 1, 2021, the United Kingdom is no longer an EU member state. EU law
including EU sanctions measures continued to apply to and in the United Kingdom until
December 31, 2020. EU sanctions measures had also been extended by the United Kingdom on
a regime-by-regime basis to apply in the United Kingdom overseas territories, including the
Cayman Islands. Starting from January 1, 2021, the United Kingdom applies its own sanctions
programs and has extended its autonomous sanctions regimes to apply to and in the United
Kingdom overseas territories.
Australia
The Australian restrictions and prohibitions arising from the sanctions laws apply broadly
to any person in Australia, any Australian anywhere in the world, companies incorporated
overseas that are owned or controlled by Australians or persons in Australia, and/or any person
using an Australian flag vessel or aircraft to transport goods or transact services subject to
United Nations sanctions.
REGULATORY OVERVIEW
– 167 –


--- page 178 ---
U.S. EXPORT CONTROLS
The United States has implemented and has proposed additional restrictions, some of
which may impact Chinese companies, including us. BIS has, since October 2022, amended the
EAR to limit the PRC from accessing U.S. technology in advanced computing, semiconductors
and related items used in the manufacturing of semiconductors. For instance, in October 2022,
BIS issued an interim final rule (the “ BIS October 2022 IFR ”) requiring license for exports,
re-exports, or transfers of any item subject to the EAR when there is “knowledge” that the item
is destined for end use in the development or production of ICs at a fab in China that fabricates
ICs meeting certain criteria. On December 2, 2024, BIS issued an interim final rule (the “ BIS
December 2024 IFR ”) and a final rule (the “ BIS December 2024 FR ”), which expanded
controls in the EAR on advanced computing and semiconductor manufacturing items. The
United States has increased export controls restrictions on China through the Export
Administration Regulations (the “ EAR”), administered by the Bureau of Industry and Security
of the U.S. Department of Commerce (the “ BIS”), which includes a list of foreign persons on
which certain trade restrictions are imposed, including businesses, research institutions,
government and private organizations, individuals and other types of legal persons (the “ Entity
List ”). Products produced outside of the United States (i.e., foreign produced items in U.S.
export controls context) that contain a de minimis threshold (usually varies from 10% to 25%)
of controlled U. S.-origin items, or otherwise subject to the foreign direct product rules because
of the end-user or end-use, would be subject to the EAR export restrictions because of the U.
S.-origin incorporated in or otherwise used in the development of such products. Where a
foreign person is included on the Entity List, the export, re-export and/or transfer (in-country)
of items which are subject to the EAR including the type of aforementioned foreign produced
items generally is prohibited unless the specified license requirements are met.
In addition, EAR also maintains a list of items, software, and technology that are subject
to export controls (the “ Commerce Control List ”). The Commerce Control List is primarily
based on multilateral export control lists, such as the Wassenaar Arrangement’s List of
Dual-Use Goods and Technologies and Munitions List, BIS can also implement unilateral
licensing requirements and other controls on items subject to U.S. export controls jurisdiction
that can restrict exports and reexports to certain countries, as well as transfers within a country
to a different end-user or end-use. The Commerce Control List is divided into ten categories,
represented by the first digit of the Export Control Classification Number (“ ECCN ”). An item
subject to the EAR is classified with an ECCN. The type(s) of designated export controls
measures applied on such item are set out in the Commerce Control List under each ECCN
entries or products are classified as EAR99. During the Track Record Period, certain
components we procured (“ Procured Items ”) are subject to the EAR. These Procured Items are
classified under the ECCNs as 3A991, 4A994, 5A991, 5A992.c, or EAR99. These Procured
Items, other than those classified as EAR99, are controlled for anti-terrorism reasons, and are
only subject to a license requirement (i.e. export restrictions) for export, re-exports or transfers
(in-country) to entities designated on the BIS’ Entity List, Denied Persons List or Unverified
List (the “ BIS Lists Entities ”) and Crimea region, Cuba, Iran, Luhansk People’s Republic and
Donetsk People’s Republic regions, North Korea and Syria, as well as Russia and Belarus
(collectively, the “ AT Sanctioned Countries ”), or restricted under the U.S. Chip Export
REGULATORY OVERVIEW
– 168 –


--- page 179 ---
Restrictions if intended for use in Chinese Mainland, Hong Kong SAR, or Macau SAR for
certain prohibited end-uses set forth in section 744.23 of the EAR. Those classified as EAR99
are generally low-technology consumer goods that do not require a license in most situations.
Our procurements of these Procured Items subject to the EAR are not subject to licensing
requirement; and our sales to certain regions or entities subject to International Sanctions did
not represent a violation to the applicable export restrictions. See “Business — Compliance
with International Sanctions Laws and Regulations” for details of our procurements and sales
of items subject to the EAR.
U.S. TARIFFS
On May 14, 2024, the Office of the United State Trade Representative announced a plan
to raise the tariff rate applicable to U.S. imports of electric vehicles from China from 25% to
100%. On September 13, 2024, the United States Trade Representative announced the final
Section 301 tariff increases on imports from China, which imposed a tariff rate of 100%
effective from September 27, 2024. China responded with increased tariffs. Since February
2025, both countries raised reciprocal tariffs on each other’s imported goods to 125%.
However, on May 12, 2025, both the U.S. and China modified these tariff measures: the U.S.
removed the 125% tariff and temporarily reduced tariffs on Chinese goods to 10% by
suspending a 24% duty for 90 days. The PRC government announced the same tariff
adjustments, removing the 125% retaliatory tariff and cutting tariffs on U.S. goods from 34%
to 10% for the same period. On August 12, 2025, both the U.S. and China announced to extend
these tariff measures for another 90 days. On November 1, 2025, the U.S. government
announced that the 10% reciprocal tariff will be maintained until November 10, 2026.
During the Track Record Period, our exports to the U.S. represented approximately 0.9%
of our total revenue for the same period. Given that (i) the sales revenue from our U.S. exports
is negligible, (ii) our main exported products, such as smartphones and tablets, fall under the
categories exempt from reciprocal tariffs imposed by the U.S. mentioned above, and (iii) our
customers, who import the end products incorporating our products in the U.S., are responsible
for the tariffs pursuant to the relevant clause in the sales agreement, any rise in U.S. tariffs are
unlikely to have a material impact on our business operations.
REGULATORY OVERVIEW
– 169 –


--- page 180 ---
OVERVIEW
Our Company was established in 2004, when our Founder, Mr. Du, perceptively identified
the opportunities and potential in the consumer electronics industry. Over the past decades, we
have evolved into a leading global provider of smart devices and services, offering solutions
— including product research, design, manufacturing, and support — for renowned smart
device brands and leading technology companies worldwide. The ongoing and expanding
success of our Group was predominantly driven by the dedication and efforts of our
management team, led by Mr. Du, the chairman of our Board and our executive Director, and
Mr. Ge, our executive Director and general manager. For details of the background and industry
experience of Mr. Du, see “Directors and Senior Management — Board of Directors —
Executive Directors.”
In March 2024, the A Shares of our Company were listed on the Shanghai Stock Exchange
(stock code: 603341). See “— Corporate Development and Major Shareholding Changes —
Conversion into a Joint Stock Limited Company and Listing on the Shanghai Stock Exchange”
for more details.
KEY CORPORATE AND BUSINESS DEVELOPMENT MILESTONES
The following table sets forth our key corporate and business development milestones:
Y ear Milestones
2004 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Group was established in Shanghai, the PRC.
2005 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Longcheer Holdings Limited, a then offshore investment holding
entity which indirectly held 100% equity interest in our Company,
was listed on the Singapore Stock Exchange in May.
2011 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Huizhou manufacturing base commenced production, marking us
as one of the pioneering companies in the industry to develop ODM
business.
2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our AIoT devices entered mass production.
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Nanchang manufacturing base, another major production base,
commenced production and achieved an annual shipment volume
exceeding 100 million units.
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We established a strategically distributed manufacturing network
across Huizhou, Nanchang, Vietnam and India to support our
large-scale, manufacturing operations in Asia and enhance delivery
efficiency for both domestic and international customers.
HISTORY AND CORPORATE STRUCTURE
– 170 –


--- page 181 ---
Y ear Milestones
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company was listed on the Shanghai Stock Exchange in March
(stock code: 603341). We became the second largest global consumer
electronics ODM company by consumer electronics ODM shipments,
and the world’s largest smartphone ODM company by smartphone
ODM shipments, according to Frost & Sullivan.
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We established our Xi’an and Suzhou R&D centers.
OUR MAJOR SUBSIDIARIES
Set out below are the major subsidiaries that made material contributions to our results
of operations during the Track Record Period.
Subsidiary (1) Principal business activities
Date of
establishment Jurisdiction
Huizhou Longcheer /H1118/H1118/H1118/H1118/H1118/H1118Manufacture and
procurement of raw
materials
November 26,
2009
PRC
Nanchang Longcheer /H1118/H1118/H1118/H1118/H1118Manufacture and
procurement of raw
materials
July 17, 2017 PRC
Miaobo Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118R&D and sales of software January 16,
2014
PRC
Shanghai Longcheer Smart
Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
R&D and design of
technology and sales in
the domestic market
October 19,
2021
PRC
HK Longcheer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Overseas procurement of
raw materials and sales
April 21, 2004 Hong Kong
Vietnam Longcheer
(1) /H1118/H1118/H1118/H1118/H1118Assembly, processing,
manufacture, export, and
wholesale of electronic
components
May 20, 2020 Vietnam
Note:
(1) Our Company held 100% equity interests in the above major subsidiaries throughout the Track Record
Period, expect for Vietnam Longcheer, which was held as to 49% and 51% by our Group and Meiko
Elec. Hong Kong Co., Ltd. (“ Meiko ”) upon its establishment, and subsequently became an 80% owned
subsidiary of our Group in May 2023 as a result of the acquisition by our Group of the 31% equity
interest from Meiko. Upon completion of the acquisition and up to the Latest Practicable Date. Meiko
held the remaining 20% equity interest in Vietnam Longcheer.
HISTORY AND CORPORATE STRUCTURE
– 171 –


--- page 182 ---
CORPORATE DEVELOPMENT AND MAJOR SHAREHOLDING CHANGES
Establishment and Early Development
The history of our Company can be traced back to the first few years of the 21st century,
when our Founder, Mr. Du, perceptively identified the opportunities and potential in the
consumer electronics industry. On October 27, 2004, our Company was established as a wholly
foreign owned enterprise in the PRC and an indirect subsidiary of Longcheer Holdings Limited
(currently known as LCT Holdings Limited, the “ LCT Holdings ”, together with its then
subsidiaries, the “ LCT Group ”), a company founded by Mr. Du in Bermuda in August 2004
as an offshore investment holding entity. Upon establishment, our Company was a PRC
operating entity of the LCT Group to operate the group’s mobile business.
Previous Listing on the Singapore Stock Exchange and Subsequent Restructuring
On May 13, 2005, LCT Holdings was listed on the Singapore Stock Exchange under the
stock symbol of BJL. LCT Holdings was primarily engaged in providing customers with
complete knock-down (CKD) and semi knock-down (SKD) design solutions at the time of its
Singapore listing.
Given our strategic pivot to consumer electronics ODM services since 2010, a sector
where domestic players already held significant market presence, we believed that returning to
the domestic capital market would better facilitate our growth and brand development. In
anticipating of this strategic move, LCT Group underwent a series of restructurings between
June 2014 and March 2015 including corporate structure reorganization and business and assets
restructuring, to inject all consumer electronics ODM business previously held and operated by
LCT Group into our Group, and the then management of LCT Group (including Mr. Du, our
founder, chairman of our Board and our executive Director, and Mr. GUAN Y adong, our
executive Director and deputy general manager) conducted a buyout of our Group. Upon
completion of the aforesaid, our Company was converted from a foreign invested enterprise to
a domestic company and became the holding company of our Group. Our Group has since been
focusing on the consumer electronics ODM business and separated from the LCT Group, and
the remaining LCT Group has since been engaging in investment holding and real estate
management and was taken private and subsequently delisted from the Singapore Stock
Exchange in December 2020 following the completion of a conditional cash tender offer
initiated by its then shareholder, an entity controlled by Mr. Du.
For details of the listing on and delisting from the Singapore Stock Exchange, see
“— Previous Listing on the Singapore Stock Exchange and A-Share Listing Attempt.”
HISTORY AND CORPORATE STRUCTURE
– 172 –


--- page 183 ---
Conversion into a Joint Stock Limited Company and Listing on the Shanghai Stock
Exchange
In May 2015, our Company accomplished all procedures required to convert from a
limited liability company to a joint stock limited company.
On March 1, 2024, our Company completed the A-Share Listing and our A Shares
commenced trading on the Shanghai Stock Exchange (stock code: 603341). In the A-Share
Listing, we issued an aggregate of 60,000,000 A Shares, accounting for approximately 12.90%
of our Company’s total issued Shares immediately following the A-Share Listing, for total
gross proceeds of RMB1.56 billion. For details, see “— Listing on the Shanghai Stock
Exchange and Reasons for the Listing on the Stock Exchange.”
Except for the outstanding share incentives under Restricted Share Scheme, the dilution
effect of which is detailed in “Appendix VI — Statutory and General Information — C.
Employee Incentive Schemes — 1. Restricted Share Scheme” to this prospectus, there were no
other outstanding options, warrants, or convertible securities that could potentially affect the
shareholding structure of our Company as of the Latest Practicable Date.
MAJOR ACQUISITION, DISPOSALS AND MERGERS
Our Company did not carry out any major acquisitions, disposals or mergers during the
Track Record Period and up to the Latest Practicable Date.
PREVIOUS LISTING ON THE SINGAPORE STOCK EXCHANGE AND A-SHARE
LISTING ATTEMPT
Previous Listing on the Singapore Stock Exchange
Listing on and Delisting from the Singapore Stock Exchange
On May 13, 2005, LCT Holdings, the then offshore investment holding company of our
Company, was listed on the Singapore Stock Exchange under the stock symbol of BJL.
Having considered our then development strategy and our desire to focus on providing
consumer electronics ODM services, a sector where domestic players already held significant
market presence, listing on the Singapore Stock Exchange no longer aligned with our strategic
roadmap and financing needs. As the competitive landscape evolved, we recognized the need
to restructure our equity structure, aligning with our geographic focus and operational
footprint. As such, our Group conducted a series of restructurings to separate from LCT Group,
upon completion of which our Company became the holding company of our Group in March
2015 and has since been focusing on the consumer electronics ODM business.
HISTORY AND CORPORATE STRUCTURE
– 173 –


--- page 184 ---
LCT Group continued its operations in investment holding and real estate management
since our separation, and was subsequently delisted from the Singapore Stock Exchange on
December 21, 2020 by way of a conditional general offer initiated by an entity wholly owned
by Mr. Du.
Compliance During Listing on the Singapore Stock Exchange
Our Directors confirm that, to the best of their knowledge and belief:
(a) during the period when our Group (as a part of the LCT Group) was listed on the
Singapore Stock Exchange (i) the LCT Group was in compliance in all material
respects with all applicable rules and regulations of the Singapore Stock Exchange
and applicable laws in Singapore; and (ii) the LCT Group was not subject to any
administrative penalty by the Singapore Stock Exchange and/or any relevant law
enforcement authority or regulator related to securities supervision; and
(b) there are no further matters in relation to the prior listing of our Group (as a part of
the LCT Group) on the Singapore Stock Exchange and the subsequent delisting that
needs to be brought to the attention of the Stock Exchange, our Shareholders or the
potential investors.
Based on the independent due diligence conducted by the Joint Sponsors, nothing has
come to the Joint Sponsors’ attention that would reasonably cause the Joint Sponsors to
disagree with the Directors’ confirmation above.
Previous A-Share Listing Attempt
On December 11, 2015, our Company submitted an application for listing on the ChiNext
of the Shenzhen Stock Exchange (the “ Proposed A-Share Listing ”) to the CSRC. Guotai
Haitong Securities Co., Ltd (formerly known as Haitong Securities Co., Ltd) was engaged as
the sponsor for the Proposed A-Share Listing. At the time of the Proposed A-Share Listing, our
Group was operated in the current line of business, offering solutions (including product
research, design, manufacturing, and support) for smart device brands and technology
companies. Our market focus at that time, however, was predominantly domestic/regional,
whereas our Group has since expanded our geographic footprint to target a global customer
base. On May 25, 2018, our Company was informed that the Proposed A-Share Listing
application did not pass the review by the Issuance Examination Committee of CSRC primarily
due to A-share regulator’s concern over the profitability of our business model, certain
seasonal fluctuation features in revenue recording, and customer concentration.
Our Directors believe that the non-passing of the then review of the Proposed A-Share
Listing in 2018 does not have a material impact on our current operation and our listing
application on the Stock Exchange, considering that, (i) although our Group was already
operating in the current line of business at the time of the Proposed A-Share Listing, our
business and operations has since been strengthened by remarkable progress achieved in
HISTORY AND CORPORATE STRUCTURE
– 174 –


--- page 185 ---
several key areas, including accelerated product technology iteration, an expanded geographic
reach of client base, and a strategic focus on premium customers, all of which have resulted
in substantially improved profitability; (ii) our Group has established procedures, systems and
controls that are adequate and effective having regard to our obligations to comply with the
Listing Rules and other applicable legal and regulatory requirements; (iii) our Company was
successfully listed on the Shanghai Stock Exchange on March 1, 2024; and (iv) since the
Proposed A-Share Listing, we have optimized our business and demonstrated strong and
sustainable operating capabilities.
Our Directors confirm that, to the best of their knowledge, our Directors are not aware of
(i) any matters relating to the Proposed A-Share Listing that are relevant to the Listing on the
Stock Exchange and should be reasonably highlighted in the prospectus for potential investors
to form an informed assessment of our Company; (ii) any enquiries from the CSRC regarding
the Proposed A-Share Listing that would affect the Company’s suitability for the Listing on the
Stock Exchange; (iii) any matters relating to the Proposed A-Share Listing that may have
implications on our Company’s suitability for the Listing on the Stock Exchange or on the
truthfulness, accuracy and completeness of information disclosed in the prospectus; (iv) any
disagreement or dispute between us and the professional parties involved in the Proposed
A-Share Listing; or (v) any matters that need to be brought to the attention of the Stock
Exchange and potential investors in relation to the Proposed A-Share Listing.
Based on the independent due diligence conducted by the Joint Sponsors, nothing
material has been brought to the Joint Sponsors’ attention to cast doubt on the Directors’
confirmation above.
LISTING ON THE SHANGHAI STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
On March 1, 2024, our Company completed the A-Share Listing and our A Shares
commenced trading on the Shanghai Stock Exchange (stock code: 603341). Our Directors
confirm that, since our listing on the Shanghai Stock Exchange and up to the Latest Practicable
Date, we had no instances of material non-compliance with the rules of the Shanghai Stock
Exchange and other applicable securities laws and regulations of the PRC in any material
respects, and, to the best knowledge of our Directors having made all reasonable enquiries,
there was no material matter that should be brought to the investors’ attention in relation to our
compliance record on the Shanghai Stock Exchange. Our PRC Legal Advisors are of the view
that the confirmation of our Directors above with regard to our compliance records is accurate
and reasonable. Based on the independent due diligence conducted by the Joint Sponsors,
nothing has come to the Joint Sponsors’ attention that would cause them to disagree with the
Directors’ confirmation with regard to the compliance records of the Company on the Shanghai
Stock Exchange.
HISTORY AND CORPORATE STRUCTURE
– 175 –


--- page 186 ---
Our Company seeks to list on the Hong Kong Stock Exchange to further enhance our
capital strength and overall competitiveness, improve our international image and profile, meet
the needs of the development of our overseas business and advance our globalization strategy.
For details, see “Business — Our Strategies” and “Future Plans and Use of Proceeds.”
CONCERT PARTY ARRANGEMENT
On November 1, 2021, Mr. Du and Mr. Ge entered into an acting-in-concert agreement,
pursuant to which, (i) when exercising direct voting rights in our Company, and/or exercising
indirect shareholder’s rights in our Company through the shareholding platforms controlled by
them, namely Kunshan Longcheer (through Shanghai Xinhe), Chengmai Qihe and Kunshan
Qiyun, Mr. Ge (and the persons under his direction) shall always consistently align with Mr.
Du in expressing intentions and taking actions; (ii) in the event that the consensus could not
be reached during discussion or at the time of exercising shareholder rights, Mr. Du’s view
shall prevail and Mr. Ge (including the persons under his control) shall exercise voting rights
or proposal rights in line with Mr. Du’s views (the “ Concert Party Arrangement ”). The
Concert Party Arrangement will continue to be in effect for sixty months commencing from the
date of the A-Share Listing.
In light of the above, Mr. Du and Mr. Ge together with the entities respectively controlled
by them that directly or indirectly hold our Shares, will be a group of Controlling Shareholders
upon the Listing. For details, see “Relationship with Our Controlling Shareholders —
Overview.”
PUBLIC FLOAT
Pursuant to Rule 8.08(1) (as amended and replaced by Rule 19A.13A of the Listing Rules)
of the Listing Rules, where a new applicant is a PRC issuer with other listed shares at the time
of listing, this will normally mean that the portion of H shares for which listing is sought that
are held by the public, at the time of listing, must (a) represent at least 10% of the issuer’s total
number of issued shares in the class to which H shares belong (excluding treasury shares); or
(b) have an expected market value of not less than HK$3.0 billion.
Our A Shares are listed on the Shanghai Stock Exchange. Assuming that (i) 52,259,100
H Shares are allotted and issued in the Global Offering and none of which will be allocated to
any core connected person of our Company, (ii) the Over-allotment Option is not exercised, and
(iii) 470,331,544 A Shares are in issue and outstanding upon completion of the Global
Offering, 52,259,100 H Shares, representing 10.02% of our total issued and outstanding Shares
(excluding any treasury Shares), will be counted towards the public float. Based on the above,
it is expected that our Company will satisfy the public float requirements as required under
Rule 19A.13A(2) of the Listing Rules. With respect to the maximum Offer Price of HK$31.00
per Offer Share, the expected market capitalization of our H Shares held by the public would
be HK$1,620.0 million.
HISTORY AND CORPORATE STRUCTURE
– 176 –


--- page 187 ---
FREE FLOAT
Pursuant to Rule 8.08A (as amended and replaced by Rule 19A.13C) of the Listing Rules,
where a new applicant is a PRC issuer with other listed shares at the time of listing, this will
normally mean that the portion of H shares for which listing is sought that are held by the
public and not subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise), at the time of listing, must: (a) represent at least 5% of the total
number of issued shares in the class to which H shares belong at the time of listing (excluding
treasury shares), with an expected market value at the time of listing of not less than HK$50.0
million; or (b) have an expected market value at the time of listing of not less than HK$600.0
million.
Assuming that the Over-allotment Option is not exercised, and that the final Offer Price
is fixed at the maximum Offer Price of HK $31.00 per Offer Share, save for 14,200,900 H
Shares (representing 2.71% of our total issued Shares immediately upon completion of the
Global Offering) to be issued to the cornerstone investors that are subject to disposal
restrictions for a period of six months from the Listing Date, the remaining 38,058,200 H
Shares with an expected market capitalization of HK$1,179.8 million will be held by the public
and will not be subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise) at the time of the Listing. Our Company will satisfy the free float
requirement under Rule 19A.13C of the Listing Rules.
HISTORY AND CORPORATE STRUCTURE
– 177 –


--- page 188 ---
OUR SHAREHOLDING AND CORPORATE STRUCTURE
Shareholding and Corporate Structure Immediately before the Global Offering
The following chart depicts a simplified shareholding and corporate structure of our Group immediately before completion of the Global
Offering (assuming no other changes are made to the issued share capital of our Company between the Latest Practicable Date and the Listing):
Our Company
(PRC)
4.94% 56.99%
100%
100%
100%100%
100%100% 100% 100%
Miaobo
Software
(PRC)
Shanghai Haocheng
(PRC)
Hefei Longcheer
Smart Technology
(PRC)
Shanghai Huanmi
Technology Co., Ltd.
(PRC)
Nanchang Longcheer
(PRC)
100%
Haikou Longcheer
(PRC)
100%
100%
HK Longcheer
(Hong Kong)
Huizhou
Longcheer
(PRC)
100%100%
Shanghai Longcheer
Smart Technology
(PRC)
100%
100%
100%100%
38.07 %
Shanghai
Xinhe(1)
Kunshan
Qiyun(1)(4)
3.40%9.75% 20.37 %
51%
4.56%
Kunshan
Longcheer(1)(2)
Equity interest
General partner
Parties acting in concert
Mr. Du(1) Mr. Ge(1)
Chengmai Qihe(1)(3)
Shanghai Longcheer
Information Co., Ltd
(PRC)
Guolong Information
Technology (Shanghai)
Co., Ltd.
(PRC)
Shanghai Longcheer
Industrial Co., Ltd.
(PRC)
Nanchang Sinolong
Co., Ltd.
(PRC)
Huizhou Longcheer
Automotive Electronics
Co., Ltd.
(PRC)
Nanchang Longcheer
Smart Technology
(PRC)
Sinolong Technology
(H.K.) Limited
(Hong Kong)
Longcheer Technology
(U.S.) Limited
(USA)
100%
Huizhou Longhe
Technology Co., Ltd.(7)
(PRC)
100%
LONGCHEER
INTERNATIONAL
PTE. LTD.
(Singapore)
100%
LONGCHEER
TECHNOLOGY
PTE. LTD.
(Singapore)
100%
LONGCHEER INTELLIGENT
TECHNOLOGY
(MALAYSIA) SDN. BHD.
(Malaysia)
100% 100%
100%
100%100% 80%
Longcheer Mobile
(India) Private Limited
(India)
Longcheer
Telecommunication
Company Limited
(Malaysia)
Longcheer Korea
Technology Limited
(Korea)
Vietnam Longcheer(8)
(Vietnam)
LONGCHEER
INTELLIGENCE
PTE. LTD.
(Singapore)
Longcheer Japan
Co., Ltd.
(Japan)
Other Shareholders
of A Shares(6)
Tianjin
Jinmi(5)
49%
HISTORY AND CORPORATE STRUCTURE
– 178 –


--- page 189 ---
Notes:
(1) As of Latest Practicable Date, (a) Kunshan Longcheer was a limited partnership controlled by its general partner, Shanghai Xinhe, which was a limi ted liability company owned
by Mr. Du as to 51% and Mr. Ge as to 49%; (b) Chengmai Qihe was a limited partnership controlled by Mr. Du as its general partner; and (c) Kunshan Qiyun was a l imited
partnership controlled by Mr. Ge as its executive general partner. Mr. Du and Mr. Ge and entities respectively controlled by each of them were parties a cting in concert. For
details, see “Relationship with our Controlling Shareholders” and “Substantial Shareholders.”
(2) As of the Latest Practicable Date, Shanghai Xinhe held 1% partnership interests in Kushan Longcheer. Kushan Longcheer had 18 limited partners, in which (a) 52.95% of the
partnership interest was held by Mr. Du, (b) 9.50% of the partnership interest was held by Mr. GUAN Y adong (an executive Director and our deputy general manager), (c) 9.23%
of the partnership interest was held by Mr. Ge, (d) 2.68% of the partnership interest was held by Mr. CHENG Lihui (our deputy general manager), (e) 0.30% of the partnership
interest was held by Mr. ZHENG Qi’ang (our deputy general manager), (f) 0.24% of the partnership interest was held by Mr. ZHANG Zhijiong (our chief fina ncial officer),
(g) 0.23% of the partnership interest was held by Mr. ZHOU Liangliang (our Board secretary and deputy general manager), and (h) the remaining 23.87% of partnership interest
was held by 11 employees and former employees of our Group.
(3) As of the Latest Practicable Date, Mr. Du held 99% of the partnership interest in Chengmai Qihe. The remaining 1% partnership interest was held by an individual, an
Independent Third Party.
(4) As of the Latest Practicable Date, Mr. Ge held 45.08% of the partnership interest in Kunshan Qiyun. Ms. QIN Y anling (our employee representative Di rector), as a general partner
(non-executive in nature as she does not have managing power over the partnership’s daily operations and cannot exercise voting rights attaching to t he Shares held by Kunshan
Qiyun) of Kunshan Qiyun, held 0.92% of the partnership interest in Kunshan Qiyun. Kunshan Qiyun had 19 limited partners, in which (a) 26.17% partnersh ip interest was held
by Mr. Du, (b) 2.16% of the partnership interest was held by Mr. W ANG Boliang (our deputy general manager), (c) 1.54% of the partnership interest was hel d by Mr. CHENG
Lihui, (d) 0.09% partnership interest was held by Mr. ZHENG Qi’ang, (e) 11.52% partnership interest was held by 14 employee and former employees of our Group, and (f)
the remaining 12.52% partnership interest was held by an employee shareholding platform of our Group with Mr. CHENG Lihui (our deputy general manager ) as the general
partner holding 4.73% of the partnership and none of the 41 limited partners (being our employees and former employees) holding 30% or more of the partn ership interest therein.
(5) As of Latest Practicable Date, Tianjin Jinmi was a limited partnership controlled by Tianjin Jinxing as its general partners, which was wholly own ed by Xiaomi Inc., a
consolidated affiliated company of Xiaomi Corporation, a company listed on the Stock Exchange (stock code: 1810), and ultimately controlled by Mr. L EI Jun (“ Mr. Lei ”).
For further details of Tianjin Jinmi, see “Substantial Shareholders.”
(6) Including 1,229,937 A Shares held in our Company’s stock repurchase account as treasury Shares and 6,270,000 A Shares held in the designated secur ities account of our
Employee Stock Ownership Scheme, representing 1.59% of our total issued Shares as of the Latest Practicable Date.
(7) The Company acquired the entire equity interest of Huizhou Longhe Technology Co., Ltd. from Shanghai Lilong Investment Management Co., Ltd. (ʮ
̡), a company controlled by Mr. Du, at a consideration of RMB57.8 million, which was completed on May 8, 2025.
(8) As of Latest Practicable Date, Vietnam Longcheer was owned as to 20% by Meiko Elec. Hong Kong Co., Ltd., a subsidiary of Meiko Electronics Co., Ltd., a Japanese company
listed on the Tokyo Stock Exchange (stock code: 6787).
HISTORY AND CORPORATE STRUCTURE
– 179 –


--- page 190 ---
Shareholding and Corporate Structure upon Completion of the Global Offering
The following chart depicts a simplified shareholding and corporate structure of our Group upon completion of the Global Offering (assuming
the Over-allotment Option is not exercised):
Our Company
(PRC)
4.44% 51.29%
100%
100%
100%100%
100%100% 100% 100%
Miaobo
Software
(PRC)
Shanghai Haocheng
(PRC)
Hefei Longcheer
Smart Technology
(PRC)
Shanghai Huanmi
Technology Co., Ltd.
(PRC)
Nanchang Longcheer
(PRC)
100%
Haikou Longcheer
(PRC)
100%
100%
HK Longcheer
(Hong Kong)
Huizhou
Longcheer
(PRC)
100%100%
Shanghai Longcheer
Smart Technology
(PRC)
100%
100%
100%100%
34.26%
Shanghai
Xinhe(1)
Kunshan
Qiyun(1)(4)
3.06%8.77% 18.33%
51% 49%
4.10%
Kunshan
Longcheer(1)(2)
Equity interest
General partner
Parties acting in concert
Mr. Du(1) Mr. Ge(1)
Chengmai Qihe(1)(3)
Shanghai Longcheer
Information Co., Ltd
(PRC)
Guolong Information
Technology (Shanghai)
Co., Ltd.
(PRC)
Shanghai Longcheer
Industrial Co., Ltd.
(PRC)
Nanchang Sinolong
Co., Ltd.
(PRC)
Huizhou Longcheer
Automotive Electronics
Co., Ltd.
(PRC)
Nanchang Longcheer
Smart Technology
(PRC)
Sinolong Technology
(H.K.) Limited
(Hong Kong)
Longcheer Technology
(U.S.) Limited
(USA)
100%
Huizhou Longhe
Technology Co., Ltd.(7)
(PRC)
100%
LONGCHEER
INTERNATIONAL
PTE. LTD.
(Singapore)
100% 100%
100%
100%100% 80%
Longcheer Mobile
(India) Private Limited
(India)
Longcheer
Telecommunication
Company Limited
(Malaysia)
Longcheer Korea
Technology Limited
(Korea)
Vietnam Longcheer(8)
(Vietnam)
LONGCHEER
INTELLIGENCE
PTE. LTD.
(Singapore)
Longcheer Japan
Co., Ltd.
(Japan)
Other Shareholders
of A Shares(6)
10.00%
Shareholders
of H Shares
Tianjin
Jinmi(5)
100%
LONGCHEER
TECHNOLOGY
PTE. LTD.
(Singapore)
100%
LONGCHEER INTELLIGENT
TECHNOLOGY
(MALAYSIA) SDN. BHD.
(Malaysia)
Notes (1) to (8): See “— Shareholding and Corporate Structure Immediately before the Global Offering.”
HISTORY AND CORPORATE STRUCTURE
– 180 –


--- page 191 ---
OVERVIEW
We are a leading global provider of smart devices and services, offering solutions —
including product research, design, manufacturing, and support — for renowned smart device
brands and leading technology companies worldwide. According to Frost & Sullivan, we are
the world’s second largest consumer electronics ODM company by consumer electronics ODM
shipments in 2024 with the market share of 22.4%, and the world’s largest smartphone ODM
company by smartphone ODM shipments in 2024, with the market share of 32.6%. We
primarily compete in the global consumer electronics ODM market, which is a subset of the
global smart devices ODM market, and in turn, a subset of the global smart device
manufacturing industry.
Founded in 2004, we have consistently upheld our core values of “customer centric,
inspiring dedication, and long-term driven.” Over the past two decades, we have developed
industry-leading capabilities across smart devices and formed a solution matrix, including
prototype design, hardware innovation, system-level software platform development, lean
production, supply chain integration, and quality control. Leveraging this sophisticated value
chain expertise, we have built a diverse product portfolio that includes smartphones, AI PCs,
automotive electronics, tablets, smart watches/bands, and smart eyewear. We have also
established an extensive core customer base, including leading brands such as Xiaomi,
Samsung Electronics, Lenovo, Honor, OPPO, and vivo. Such achievements are supported by
our R&D and engineering team of around 5,200 professionals, who possess profound
experience in product development across multiple platforms and operating systems.
Furthermore, our global footprint and product customization capabilities enable us to deliver
solutions worldwide. In 2024, we successfully listed on the main board of the Shanghai Stock
Exchange (stock code: 603341).
BUSINESS
– 181 –


--- page 192 ---
Our Products and Solution
We have built the industry’s most expansive and integrated smart devices ecosystem
across most popular platforms, such as Android and Windows. In response to emerging
customer demands, market opportunities, and technology innovations in the AI era, our product
portfolio encompasses a “ 1+2+X ” framework. At the core is our “1” — smartphones, which
form the bedrock of our business. “2” represents our key growth drivers — personal computing
and automotive electronics. And “X” encompasses a diverse array of emerging consumer
electronics, including tablets, wearables, TWS earphones, and smart eyewear, completing our
comprehensive product portfolio.
Smart
Mobility Smart
Home Smart
Health
Smart
Life
Extended
Reality
Smart
OfficeX
2
1
Automotive
Electronics
Personal
Computing
Smartphone
Automotive
 Smartphone Business: Smartphones are the primary driver of our operations and
financial performance. In 2024, revenue from our smartphone products reached
RMB36,132.7 million, accounting for approximately 77.9% of our total annual
revenue. That same year, our ODM shipments for smartphones reached 172.9
million units, ranking us the world’s largest smartphone ODM company by
smartphone ODM shipments in 2024, according to Frost & Sullivan. While
solidifying our strong position in the 4G smartphone market, we have also
proactively invested in R&D for 5G products. This strategic deployment has enabled
us to successfully secure large-scale 5G model orders from leading global brands.
Additionally, we are at the forefront of pioneering AI-powered, high-performance
smartphone innovations. We have demonstrated a keen ability to accurately
anticipate evolving market demands and respond effectively through technological
innovations. Furthermore, we have strategically expanded into emerging regions and
continuously optimized our customer base to ensure the ongoing success of our
smartphone business.
BUSINESS
– 182 –


--- page 193 ---
 Tablet Business: We generated revenue from our tablet business of RMB3,696.3
million in 2024, accounting for approximately 8.0% of our total annual revenue.
That same year, our ODM shipments for tablets reached 12.3 million units. We have
continued to grow our customer base by attracting more leading companies in China,
and we have successfully become a major ODM supplier for three top-tier domestic
tablet brands. Our tablet products include both affordable entry-level models and
premium flagship devices, which enable us to meet the diverse demands of
mass-market consumers, enterprise professionals, and educational institutions. As a
result, we have cemented our position as one of the global top three tablet ODM
companies by tablet ODM shipments in 2024, according to Frost & Sullivan.
 AIoT Business: Our AIoT business experienced rapid growth in 2024, with revenue
reaching RMB5,573.1 million, accounting for approximately 12.0% of our total
annual revenue. This represented a revenue growth of 122.0% compared to 2023. In
2024, our ODM shipments for AIoT devices reached 33.9 million units. We have
risen to the forefront of the global smart wearables ODM market, with leading
shipments for smart watches/bands.
 Emerging Businesses : In addition, we have made strategic investments in AI PCs
and automotive electronics. In AI PCs, we successfully launched our first Qualcomm
Snapdragon-based laptop products in the third quarter of 2024, supporting the
expansion of AI applications in commercial and consumer domains. In automotive
electronics, we have established partnerships with multiple OEMs and Tier-1
customers and secured over ten design wins, and are actively positioning ourselves
in the overseas automotive electronics market.
In addition to hardware delivery, we offer standalone professional services, mainly
including R&D and technical services and EMS, that allow us to further leverage our R&D,
design, and manufacturing capabilities.
Expanded Global Footprint and Integrated Delivery Capabilities
Our R&D efforts are anchored by our five major centers in Shanghai, Shenzhen, Huizhou,
Nanchang, and Hefei. We have recently expanded this network with new R&D centers in Xi’an
and Suzhou. Across this expansive R&D ecosystem, our team of around 5,200 professionals as
of September 30, 2025 brings deep expertise in developing solutions for Qualcomm and other
leading platforms. They also possess strong software development capabilities spanning most
popular platforms, such as Android and Windows.
On the manufacturing side, we operate modern manufacturing centers in Huizhou and
Nanchang. We have further established overseas manufacturing centers in Vietnam and India.
This manufacturing network across Asia enables us to seamlessly fulfill worldwide customer
needs.
BUSINESS
– 183 –


--- page 194 ---
To support our global customer base, we have set up branch offices in the United States,
South Korea, Japan, Hong Kong and Singapore. Leveraging our end-to-end, comprehensive
service capabilities — spanning product definition, design, and mass-production — and our
excellence in quality and cost control, we empower customers to rapidly bring innovative
products to market. This integrated approach has allowed us to cultivate multiple well-received
models with shipments exceeding 10 million units since their initial launch.
US
Branch Office
South Korea
Branch Office
Japan
Branch Office
Hong Kong
Branch Office
Singapore
Branch Office
Xi’an
R&D Center
Hefei
R&D Center
Huizhou
Manufacturing &
R&D Center
Shanghai
Global Headquarters
&
R&D Center
India
Manufacturing
Center
Vietnam
Manufacturing
Center
Shenzhen
R&D Center
Suzhou
R&D Center
Nanchang
Manufacturing &
R&D Center
Shanghai
Global Headquarters
R&D Centers
Shanghai, Shenzhen, Huizhou,
Nanchang, Hefei, Xi’an, Suzhou
Manufacturing Centers
Huizhou, Nanchang, India, Vietnam
Branch Offices
US, Japan, South Korea,
Hong Kong S.A.R, Singapore
Our Market Opportunities
In the early stages of technological evolution, smart device manufacturing has primarily
focused on consumer electronics products such as smartphones, tablets, laptops, and AIoT
devices. Leveraging the innovation and breakthroughs in these emerging product categories,
the smart device market has further expanded to introduce high-potential new product
categories such as automotive electronics and smart robotic products. According to Frost &
Sullivan, the global shipments of consumer electronics are expected to increase from 2,113.3
million units in 2024 to 2,489.6 million units in 2029, representing a CAGR of 3.3%. Driven
by continuous technological advancements and innovations, consumer electronics products are
poised for ongoing updates, iterations, and sustained innovation in the coming years. For
instance, the proliferation of 5G and AI technologies, coupled with growing consumer upgrade
demand, will gradually revive the consumer electronics market, leading to products becoming
increasingly lightweight, personalized, intelligent and premium.
As the largest consumer electronics segment, the global shipments of smartphones are
expected to increase from 1,238.8 million units in 2024 to 1,405.2 million units in 2029,
representing a CAGR of 2.6%. The consumer appetite for AI-powered smartphones is a key
driver that will fuel ongoing growth and evolution within the smartphone market. As brand
owners continue to leverage AI to differentiate their flagship device offerings and deliver more
intelligent, personalized experiences, consumers will be incentivized to continuously upgrade
their smartphones.
BUSINESS
– 184 –


--- page 195 ---
Beyond smartphones, we are also well-positioned to capitalize on opportunities in other
emerging smart device categories. For example, the rollout of Windows 11 and the increasing
penetration of AI-powered PCs are expected to drive further development in the PC market.
With the advancement of AI and breakthroughs in new materials and applications, many
emerging wearable electronics markets are poised for significant growth in the coming years.
Smart eyewear, in particular, is anticipated to be a key growth driver for the industry. Backed
by policy support and technological innovation, the smart automotive market is expected to
continue soaring in the coming years. As vehicle intelligence deepens, this will unlock new
opportunities in the automotive electronics market.
Our Financial Highlights
In 2024, our ODM shipments of smartphones, tablets, and AIoT devices reached 172.9
million units, 12.3 million units, and 33.9 million units, respectively. Notably, we ranked first
in the global smartphone ODM industry in terms of smartphone ODM shipments in 2024, with
a market share of 32.6%, according to Frost & Sullivan. At the same time, our total revenue
in 2024 reached RMB46,382.5 million, representing a robust 70.6% year-over-year growth.
This growth was underpinned by the strong performance across our three core business
segments: smartphones, tablets and AIoT devices. Specifically, our revenue from smartphones,
tablets and AIoT devices amounted to RMB36,132.7 million, RMB3,696.3 million and
RMB5,573.1 million, respectively, in 2024.
In the nine months ended September 30, 2025, our ODM shipments of smartphones,
tablets, and AIoT devices reached 117.3 million units, 9.1 million units, and 29.0 million units,
respectively. During the same period, our total revenue amounted to RMB31,331.6 million.
Specifically, our revenue from smartphones, tablets and AIoT devices amounted to
RMB21,704.1 million, RMB2,990.4 million and RMB5,603.5 million, respectively, in the nine
months ended September 30, 2025.
OUR STRENGTHS
As a pioneering force and industry front-runner in smart device R&D, design, and
manufacturing, we have built competitive advantages across various areas, and have cultivated
a formidable competitive moat around our business.
Established Market Position and Comprehensive Capabilities in the Growing Global
Smart Device ODM Market
We are a leading global provider of smart devices and services, offering solutions —
including product research, design, manufacturing, and support — for renowned smart device
brands and leading technology companies worldwide. Deeply-rooted for over two decades in
the industry, we have amassed strong capabilities across smart devices and formed a solution
matrix, including prototype design, hardware innovation, system-level software platform
development, lean production, supply chain integration, and quality control. This has enabled
us to gradually build a comprehensive product portfolio spanning smartphones, AI PCs,
automotive electronics, tablets, smart watches/bands, and smart eyewear.
BUSINESS
– 185 –


--- page 196 ---
The smart device market has expanded from consumer electronics products – which
constitute the largest part of the smart device market – such as smartphones, tablets, laptops,
and AIoT devices, to emerging product categories such as automotive electronics as well as
smart robotic products. According to Frost & Sullivan, the global consumer electronics market
is experiencing rapid growth, with shipments expected to increase from 2,113.3 million units
in 2024 to 2,489.6 million units in 2029, representing a CAGR of 3.3%. On one hand, the
consumer electronics market will continue to undergo steady, intelligent and interconnected
development driven by the inelastic upgrade demand of consumers, resulting in continuous
updates, iterations and sustained innovation. On the other hand, empowered by advanced
technologies, smart devices products will also continually expand into new segments such as
automotive electronics and smart robotics in the coming years. As the industry leader, we are
well-positioned to capitalize on the favorable market trends and dynamics currently unfolding.
By leveraging these powerful industry tailwinds, we can further reinforce our existing market
leadership.
According to Frost & Sullivan, we are the world’s second largest consumer electronics
ODM company in terms of consumer electronics ODM shipments in 2024:
 We are the world’s largest smartphone ODM company by smartphone ODM
shipments in 2024, according to Frost & Sullivan, attaining unparalleled scale and
industry expertise. Our ODM shipments for smartphones reached 172.9 million units
in 2024, with a market share of 32.6% in the global smartphone ODM industry.
 In recent years, our AIoT business has experienced rapid growth, with our shipments
of smart watches/bands ranking in the top two within such segment, positioning us
at the forefront of the global smart wearables ODM market, according to Frost &
Sullivan. Specifically in the smart eyewear segment, we have maintained close
collaborations with global internet giants, successfully launching a wide range of
smart eyewear with total shipments exceeding 2 million units in 2024, cementing
our position as a globally leading smart eyewear provider.
As a globally preeminent ODM company, we have gained widespread industry
recognition. In recent years, we have been honored with prestigious accolades from top-tier
customers such as the Xiaomi Best Partner Award (2024), and the Lenovo Quality Innovation
Award (2024). We have also been named one of Shanghai’s Top 100 Enterprises and included
in the Fortune China 500 in 2024 and 2025. These accolades reflect our long-term corporate
culture and serve as a testament to our technological prowess, product innovation, market
expansion, and brand-building efforts.
BUSINESS
– 186 –


--- page 197 ---
Strategic Foresight Driving Industry Development Through Long-term Partnerships with
Blue-Chip Customers and a Diversified Product Portfolio
Our leading market position and strong brand reputation have enhanced customer trust,
fueling a virtuous cycle. Since our inception, we have remained committed to our mission of
providing industry-leading R&D, design, manufacturing, and comprehensive services to the
world’s leading smart device brands, establishing ourselves as a trusted partner to global
industry titans.
In our core smartphone business, we serve a majority of the world’s top-ranked
smartphone manufacturers. Among the world’s top 10 smartphone brands in terms of shipment
in 2024 according to Frost & Sullivan, we have established partnerships with eight of them. As
of the Latest Practicable Date, our collaborations with these eight brands have lasted an
average of over five years. Additionally, we have continuously strengthened and expanded
these partnerships across multiple product categories, demonstrating our solid customer base
and developing market coverage capabilities.
In addition, our proven track record of partnerships with key customers has cultivated
extremely strong customer loyalty, translating into a stable and sizeable market share. We
typically maintain long-term, deep partnerships with our key customers, which have fostered
a high degree of mutual trust and seamless coordination, resulting in extremely strong customer
stickiness. Renowned brands are highly selective when choosing ODM partners, meticulously
evaluating factors such as technical expertise, production processes and manufacturing
capabilities, product quality, and delivery abilities. Once an ODM partner has been proven
capable across these key criteria, the renowned brands are reluctant to change ODM partner
and often decide to forge long-term, large-scale business partnerships. Leveraging our stellar
delivery track record and consistently extraordinary customer service, we have earned
unwavering customer loyalty. Within the smartphone segment, we rank among the top three
suppliers for eight of the above-mentioned world’s top 10 smartphone brands, according to
Frost & Sullivan.
Our comprehensive strategic collaborations with our key customers have further
amplified our co-growth trajectory, enabling us to continuously expand our business
boundaries by capitalizing on the diversification of our customers’ product categories and
ecosystems. Many of our key customers initially started from the smartphone segment, and
have gradually expanded into other product categories, branching out beyond smartphones into
areas such as tablets, smart watches/bands, laptops, and even automotive electronics.
Correspondingly, the scope of our collaborations with these key customers has also expanded
in tandem with their diversification, evolving from smartphones to tablets, smart
watches/bands, laptops, and automotive electronics. For example, Xiaomi, one of our key
customers, has transitioned from smartphones to tablets, smart watches/bands, and automotive
segments, while our partnership has evolved from the initial smartphone collaboration in 2014
to encompass smart watches/bands in 2019, tablets in 2022, and automotive electronics in
2023.
BUSINESS
– 187 –


--- page 198 ---
By partnering with these industry leaders, we can quickly respond to market demands and
industry trends. Combined with our own industry insights and foresight, this enables us to
effectively guide market development and support our technological innovation and product
upgrades. The high standards set by key customers have further strengthened our capabilities,
allowing us to better serve new customers. Furthermore, leveraging the market influence of
these key customers has aided us in jointly spearheading industry development trends,
maintaining our global leadership position, deepening collaborations, and realizing mutual
success.
Comprehensive Capabilities Driven by a Longstanding Focus on R&D and Innovation
We have consistently viewed R&D and innovation as the core drivers of our development,
and possess an industry-leading R&D team and deep technical expertise. Our formidable R&D
capabilities ensure our technological leadership in product design and solution development,
enabling us to spearhead industry-transforming innovations and rapidly respond to customers’
specific needs.
Besides our five R&D centers in Shanghai, Shenzhen, Huizhou, Hefei, and Nanchang, we
have recently established additional R&D centers in Xi’an and Suzhou. These facilities enable
us to cover the entire product development and manufacturing process, including product
definition, comprehensive solution design, system-level software platform development,
product testing and certification, supply chain management and integration, production
operations, and final product delivery. As of September 30, 2025, our R&D team comprises
approximately 5,200 professionals, accounting for 29.1% of our total employees, spanning
multidisciplinary fields. As of the same date, we owned 755 registered patents, among which
many were strategically focused on high-value patents in categories such as smart eyewear and
automotive electronics.
In developing smart devices for multiple scenarios and categories, we possess rich
experience and comprehensive capabilities in smart device ecosystem technologies and product
solutions. This helps us shorten development cycles and rapidly respond to customer demands.
We have built core technologies such as wireless communications, audio, display, optics,
cameras, materials, and simulation. By leveraging universal hardware and software
development platforms, AI large-model platforms, automated testing platforms, and advanced
product architecture, we support R&D across diverse product categories and scenarios.
Furthermore, we emphasize the establishment of forward-looking technology platforms,
proactively researching and developing for future product forms and core components. In
response to the trend of “hardware intelligence,” we have founded the “2111 Lab” dedicated
to exploring new technologies, materials, and products, deepening industry-academia-research
collaborative innovation and incubating new business categories.
BUSINESS
– 188 –


--- page 199 ---
Moreover, we are actively embracing the global AI technology development trend,
exploring the positive application of AI in R&D, manufacturing, and digital operations to
enhance R&D efficiency, empower smart devices, improve user experience, and optimize
operational efficiency.
 By integrating large language models, we have built our own proprietary vertical
application models tailored to specific ODM scenarios, achieving software test
automation, R&D process intelligence, and automated code generation. Our
technical team conducts manual reviews and quality control to ensure high
standards, effectively reducing repetitive work and accelerating development cycles.
During the Track Record Period, we have already successfully deployed these
models and demonstrated their effectiveness in enhancing productivity.
 In smart manufacturing, we primarily leverage AI technologies for intelligent
detection and defect identification, such as applying machine vision for surface
scratch detection, assembly precision verification (such as smartphone or PCBA
scratches, missing parts, misalignment), and utilizing acoustic detection for product
sound quality, noise, and interference assessment. Additionally, we are enhancing
digital intelligence in our manufacturing centers across four dimensions: industrial
technology digitalization, equipment and tool automation, manufacturing process
standardization, and management decision intelligence.
 We also continuously optimize our own operational efficiency through AI
technologies and digital management. For instance, our “Longcheer Wisdom ( Ꮂ࿩
ᅆਪ)” platform empowers enterprise knowledge management and accelerates
personnel training, while “Longcheer Intelligent Audit ( Ꮂ࿩౽ᄲ)” leverages AI to
enhance financial auditing precision. We have also established and continuously
upgraded our digital systems, including product lifetime management system
(“PLM”), warehouse management system (“ WMS”), quality management system
(“QMS”), supplier relationship management system (“ SRM”) and financial
performance management (“ FPM”). These systems optimize the entire product
lifecycle — from R&D, through procurement and supply chain, to production and
service delivery — improving operational efficiency and management effectiveness
to ensure accurate and scalable execution of customer projects.
Full-stack Solutions Leveraging Our Comprehensive Product Portfolio and Industry
Chain Optimization
We provide our customers with full-stack ODM solutions, spanning from product
definition and R&D to mass production and delivery. Our team has cultivated extensive
expertise and established advantages throughout the entire value chain, including product
hardware design, module customization, system-level software platform development,
radiofrequency and antenna tuning, system-level testing and certification, supply chain
management and component selection, as well as scalable manufacturing operations. Such
comprehensive service capabilities allow us to deeply integrate into our customers’ product
development processes, collaboratively defining functionalities and specifications to facilitate
rapid iteration.
BUSINESS
– 189 –


--- page 200 ---
Leveraging our robust full-stack capabilities, we have strategically expanded from
single-category smartphone ODM to a diversified smart device ODM, building a rich product
portfolio that has significantly broadened our market reach. Beyond smartphones, we have
achieved scalable shipments and accumulated successful cases in tablets, AIoT devices, AI
PCs, and automotive electronics. Notably, we have secured leading positions in high-growth
segments such as smart watches/bands and smart eyewear.
Multi-category operations not only enhance our resilience against volatility in individual
sectors but also generate technological synergies that drive economies of scale and business
growth. The expertise we gained in smartphone R&D and manufacturing, such as
communications, radiofrequency and cameras, can be rapidly replicated across segments like
tablets and in-vehicle systems, reducing development costs. Additionally, sharing supply chain
resources and manufacturing facilities across multiple product categories has improved asset
utilization and strengthened our bargaining power in procurement.
Furthermore, we are committed to integrating and optimizing the industrial supply chain.
As a leading consumer electronics ODM, we maintain close relationships with upstream
component suppliers and downstream brand customers. Through collaborative R&D efforts
with these upstream suppliers, we continuously refine key components to align with evolving
consumer demands. This enables more components to meet the rigorous standards of renowned
brands, which are then seamlessly incorporated into our product offerings. These enhancements
not only ensure the unparalleled performance of our smart devices, but also strengthen our
overall supply chain competitiveness by driving ongoing product upgrades — creating a
symbiotic feedback loop of enhanced performance and supply capabilities.
For example, since 2022, we have expanded our collaboration with Bestechnic, a leading
semiconductor and chipset provider in China, across multiple product categories, including
wearables, watches/bands, TWS earphones and others. Under the framework of our
collaboration, we are primarily responsible for product definition, system integration, and
technical solution recommendation in accordance with the requirements of our customers.
Bestechnic is responsible for supplying critical SoC and component solutions, as well as
providing ongoing technical support and customization services to meet our specifications.
While Bestechnic also supplies similar solutions to other companies in the industry, our
collaboration leverages the respective strengths of both parties. Through our joint technical
expertise and parameter optimization, we have recommended and successfully integrated
Bestechnic’s solutions into wearable product lines of a global leading brand, and also helped
ensure that the critical components provided by Bestechnic can be reliably delivered to end
customers on time and to their specified quality standards. The collaboration has also resulted
in enhanced product features, improved power efficiency, and accelerated time-to-market for
the relevant product categories.
Furthermore, we are exploring additional end-product possibilities through partnerships
within our supply chain. In 2023, we established a strategic collaboration with Qualcomm, a
global leader in semiconductor and wireless technology, covering multiple product segments,
including smartphones, tablets, PC, smart watches, smart eyewear, etc. We are developing
BUSINESS
– 190 –


--- page 201 ---
products based on the Snapdragon computing platform and Snapdragon XR platform, as well
as exploring the application of the Snapdragon Auto platform in our automotive electronics
projects. Our partnership with Qualcomm reflects our commitment to and facilitates our efforts
in advancing product innovation and exploring new end-product possibilities through
collaborations within our supply chain.
Scalable Delivery Based on Our Global Footprint, Localized Deployment, Flexible and
Efficient Supply Chain and Smart Manufacturing
Combining global footprint and localized deployment, our delivery system is designed to
enable rapid scalability while meeting local quality requirements. To fulfill the needs of our
globally customers and construct a diversified supply chain, we have proactively expanded our
domestic and overseas manufacturing capabilities through strategic and forward-looking
planning.
We have established four manufacturing centers in Huizhou, Nanchang, Vietnam and
India. To support our global customer base, we have set up branch offices in the United States,
South Korea, Japan, Hong Kong and Singapore. Our manufacturing network across Asia
provides customers with localized, flexible and reliable supply support. Domestically, we have
two major manufacturing centers in Huizhou and Nanchang, strategically located in the core
regions of the electronic supply chain in South and East China. These centers benefit from
comprehensive supporting resources and a strong talent pool. Overseas, we have manufacturing
centers in Vietnam and India, serving customer demands across various global markets while
proactively addressing geopolitical risks. Furthermore, our multi-center global production
deployment allows us to flexibly allocate manufacturing tasks between domestic and overseas
centers based on location of the orders and international trade conditions. Closely collaborating
with suppliers and partners worldwide, we can effectively mitigate the uncertainties posed by
trade frictions and tariff barriers, ensuring supply chain security and efficiency.
We have also established a global supply chain management system, with international
procurement and logistics centers in Hong Kong and Shenzhen. This enables us to efficiently
coordinate raw material supply and cross-border transportation, ensuring timely component
availability and on-time product delivery. Our “One Plan” MRP planning engine and
end-to-end digitalized integrated management system enable massive-scale, flexible global
delivery. By collecting different requests, converting product demands into material
requirements, and sharing instructions with all supply chain partners, we ensure a single source
for business activity instructions. This reduces potential confusion, eliminates multiple
instructions, and ultimately improves operational efficiency.
BUSINESS
– 191 –


--- page 202 ---
BI
Visualized
Management
Manufacturing
Execution
Supply
Chain
Customer
Demand
Management
Manufacturing
Su
C
r
Warehouse
Management
System
Transportation
Management
System
Supplier
Relationship
Management
Demand
Management
System
Manufacturing
Execution
System
S&OP
Decision Center
Material
Requirement
Planning
FCST
vs
ATP
FCST
vs
Commit
S&OP vs
Precise Delivery
Intelligent
Supply Chain Planning
One Plan
Benefiting from our extensive operational footprint and effective supply chain
management, we can achieve rapid product scalability, massive-scale delivery, high-quality
control, and efficient supply chain operations.
For smart manufacturing, we have constructed an intelligent manufacturing platform
through years of automation efforts and the adoption of digital manufacturing systems. By
introducing emerging smart technologies, we have achieved breakthroughs and widespread
application of intelligent manufacturing techniques in areas such as product assembly and
smart detection. Currently, dozens of our process steps, including PCBA visual inspection,
system assembly, and end-product testing, have been largely automated, showcasing the
economies of scale in our manufacturing capabilities.
Visionary Founders and Seasoned Executive Team with Profound Industry Insights
Our founder, Mr. Du, is an entrepreneur endowed with strategic foresight, innovative
spirit, strong execution capabilities, and keen market acumen, possessing deep industry
experience. Mr. Du’s visionary strategic mindset, exceptional ability to grasp the macro trends
of the industry, and the wealth of practical experience he has amassed over the years have
played a pivotal role in the Company’s global success and development. Since the founding of
our Company in 2004, Mr. Du has been responsible for spearheading our Company’s
overarching strategic planning, guiding the remarkable accomplishments over the past two
decades. Mr. Du has been widely recognized in the industry, having received prestigious
accolades such as the 2010 Shanghai Leader Talent award and the 2020 Shanghai Model
Worker honor. Our Director and general manager, Mr. Ge, possesses deep industry knowledge
BUSINESS
– 192 –


--- page 203 ---
and impeccable management expertise. Mr. Ge has held various pivotal business and
operational leadership roles at our Company, formulating overall strategy and overseeing
business operations and daily management of our Group.
Under the visionary guidance of Mr. Du and the astute leadership of Mr. Ge, we have
assembled a world-class management team that is highly proficient in our business,
experienced, and globally-minded. Many of our executive Directors and senior managers boast
over 20 years of industry experience, with distinguished backgrounds in R&D and advanced
technology. We have also thoughtfully attracted management personnel and technical experts
around the globe, bringing diverse backgrounds and expansive international perspectives to
further enrich our leadership cadre. For details, see “Directors and Senior Management.” We
firmly believe that the rich management experience and keen market insights of our seasoned
leaders will play a crucial role in formulating insightful business strategies, achieving our
strategic objectives with precision, and fostering exceptional team cohesion — ultimately
helping us sustain our trajectory of stable and accelerated business growth.
Our employees, regardless of whether they are long-serving employees or internationally
recruited talents, are united by the common core values of “customer centric, inspiring
dedication, and long-term driven.” We persistently uphold a people-centric corporate culture,
continuously enhancing employee welfare and well-being through the provision of a healthy
and safe work environment, as well as comprehensive care measures.
OUR STRATEGIES
We plan to leverage the following strategic initiatives to fully seize market opportunities,
expand our business domains, solidify our industry-leading position, and achieve quality
growth:
Continuing to Expand the “ 1+2+X ”P r oduct Portfolio and Penetrate High Potential
Segments
We will further concentrate on developing smartphone models with commanding market
share, solidifying our global leadership position as a smartphone ODM, while closely aligning
with technology trends like 5G and AI to deliver highly competitive products for our valued
customers.
We will also proactively explore and continuously develop new high-potential smart
product lines, building a diversified and dynamic smart device ecosystem. We will persist in
identifying and targeting high-growth, high-value niche markets. In particular, we will
maintain our steadfast strategic focus on the smart eyewear segment, strengthening our
in-depth collaboration with global leading technology companies. Additionally, we are
planning to establish a joint venture with Agibot, a renowned player in the field of robotics.
Leveraging our comprehensive R&D and manufacturing experience and industry insights for
ODM products, combined with Agibot’s deep knowledge in robotics, the joint venture will
work to industrialize the application of robots in modern smart manufacturing factories, aiming
BUSINESS
– 193 –


--- page 204 ---
to solve practical challenges in industrial production scenarios and achieve automation and
intelligence upgrading in industrial manufacturing. In September 2025, we entered into a
framework procurement agreement with Agibot as our preliminary step to solidify such
partnership. Pursuant to the agreement, we will mainly procure an initial order of embodied
robots from Agibot to enhance the intelligence and automation of our manufacturing processes.
While Agibot may also supply similar robots to its other business partners, the robots to be
procured for our use will be customized to a certain extent to meet the specific requirements
of our operations. The partnership also involves a joint exploration to identify and develop
specific applications for embodied robots within our manufacturing environment and
establishes a basis for us to potentially provide ODM services to Agibot for certain products
in the future. Agibot retains full ownership of all intellectual property rights related to the
products under this agreement. We retain ownership of all data generated from the use of these
products, while granting Agibot a license to use such data as necessary for operational and
product improvement purposes. While specific commercial terms remain under discussions at
this stage, we believe this partnership represents an important step in our strategy to expand
into advanced manufacturing technologies.
For our other existing smart product business, we will continue to accelerate market
expansion and strategic collaboration opportunities, seizing industry trends to rapidly establish
leading positions in niche segments, diversifying and optimizing our overall revenue sources.
Expanding Product Categories for and Deepening Collaborations with Our Customers
We will continue to strengthen and expand our collaborative relationships with
distinguished customers such as Xiaomi, Samsung Electronics, Lenovo, Honor, OPPO and
vivo. By providing them with superior solutions and comprehensive, tailored services, we aim
to secure more model projects or diversify into new product segments with each of these
esteemed blue-chip customers, establishing stable “one customer, multi-category, long-term
cooperation” relationships.
While steadfastly maintaining our existing customer base, we will proactively cultivate
new customers, particularly American and European brands, self-owned brands, and IoT
hardware manufacturers, aiming to replicate our successful experience with a broader and more
diversified customer ecosystem. This will enable us to capture greater market share and
optimize the composition of our customer base.
Strengthening R&D and Product Innovation with AI as the Core Innovation Engine
Positioning AI as the driving force for innovation, we are committed to enabling
comprehensive enhancements across our products, R&D, operations, management, and talent
development.
BUSINESS
– 194 –


--- page 205 ---
On the product front, we will steadfastly increase our R&D investments and amplify our
technological innovation capabilities. We will proactively expand into high-growth, high-value
emerging business segments, such as AI PCs, automotive electronics, and smart eyewear,
coalescing these focus areas into a comprehensive product matrix centered on AI to capitalize
on prevailing market tailwinds. Furthermore, we will accelerate the seamless integration of AI
with other hardware, empowering our customers with more “AI-native” product solutions. This
includes smart devices equipped with built-in AI co-processors and devices endowed with local
large model inference capabilities. Within our expansive AI product portfolio, we have already
commenced production of AI PCs and smart eyewear, and will continue to strengthen new AI
applications in ecosystems and user behaviors. Concurrently, we will persistently explore the
integration touchpoints between our existing businesses and AI technologies, further driving
the scaling of our AI-powered hardware products, such as AI tablets and other AI-infused
product forms.
Operationally, we will construct an AI-driven digital operation system to optimize our
supply chain and production scheduling. On the management front, we will further leverage AI
tools to enhance the efficiency and scientificity of our R&D project management and human
resources management. By deeply integrating AI into the very fabric of our operations, we will
build a truly AI-empowered organization. Regarding talent, we will continue to recruit
passionate individuals and technology elites to better support our business development
aspirations.
Integrating Our Domestic and International Operations to Drive Unparalleled Synergies
We have already established strategic manufacturing centers in Vietnam and India to
serve the European, American, and South Asian markets. Building upon this solid foundation,
we plan to continuously invest in expanding and automating our existing overseas
manufacturing centers to handle a greater volume of overseas customer orders. Concurrently,
we will also evaluate the feasibility of setting up new manufacturing centers in Southeast Asia,
North America, and Eastern Europe, positioning ourselves closer to regional markets and key
customers.
We will consolidate the synergies between our domestic and overseas manufacturing
systems, enhancing the risk resilience of our supply chain and the flexibility of our global
delivery capabilities. Additionally, we will continue to strengthen our Longcheer Production
System, which is dedicated to driving relentless improvements in product quality. Moreover,
we will develop our AI PC benchmark factory in Nanchang.
Regarding R&D and business support, we will optimize our global resource allocation,
establishing dedicated R&D or customer support teams in key overseas markets to collaborate
seamlessly with our domestic R&D centers. This will enable us to provide our overseas
customers with instant, uninterrupted technical services, regardless of time-zone differences.
BUSINESS
– 195 –


--- page 206 ---
Strategic Investments and Acquisitions to Expand the Breadth of Our Business
To further bolster our technological capabilities and expand the breadth of our business
operations, we will selectively and judiciously pursue strategic investments or acquisitions of
technologies, teams, assets, or companies in complementary or synergistic segments. These
strategic investments or acquisitions will help optimize our technology landscape, expand our
business scope, and increase our market share, collectively driving our future growth. As of the
Latest Practicable Date, we have not yet identified any specific investment, collaboration or
acquisition targets.
OUR BUSINESS MODEL
We operate a highly integrated and flexible business model that features full-stack ODM
solutions. Our business model is designed to create long-term value by embedding ourselves
deeply in the product lifecycle of our customers — from concept and design to production and
delivery. We leverage our accumulated R&D capabilities, modernized manufacturing
infrastructure, and global supply chain network to deliver customized, high-quality products
and services at scale.
At the heart of our business model is our comprehensive ODM offering, through which
we provide integrated solutions that cover product hardware design, module customization,
system-level software platform development, radiofrequency and antenna tuning, system-level
testing and certification, supply chain management and component selection, as well as
scalable manufacturing operations. In most cases, we serve as one of the ODM partners of our
brand customers. For certain product categories, such as smart eyewear, we may currently act
as the exclusive ODM partner for the relevant brand customer.
Our ODM business is primarily driven by complete device sales, which represent the core
of our business model and the main source of our revenue. Under this arrangement, we deliver
fully assembled smart devices to our customers, who rely on us to manage the entire product
lifecycle. We are responsible for sourcing all or part of the electronic components and
materials, overseeing production and quality control, and ensuring on-time delivery. Through
entrusting us with such full-stack ODM services, our customers are able to reduce operational
complexity and time-to-market, while leveraging our scale and technical expertise. Through
organizing our ODM business primarily around complete device sales, we demonstrate our
strength in delivering end-to-end manufacturing excellence and long-term value to our
partners.
In limited cases, as requested by customers by typically considering different regional
trade policies for components and finished products, we also support customers through
component and semi-finished product sales. In these cases, we provide product design and
deliver customized components, modules, and semi-finished assemblies, while third-party
EMS providers arranged by customers then handle final integration. While this model offers
flexibility for specific regulatory or logistical needs, it remains a supplementary solution
offered by us.
BUSINESS
– 196 –


--- page 207 ---
We also provide customers with independent product development services, including
hardware and software design, system architecture, prototyping and validation. In addition, to
enhance the utilization and efficiency of our manufacturing facilities, particularly in our
Huizhou and Nanchang manufacturing centers, we also undertake EMS engagements with
select brand customers.
OUR PRODUCTS
We offer a broad and evolving portfolio of smart devices and solutions across multiple
product categories, including smartphones, tablets, AIoT devices, AI PCs and automotive
electronics. Each product line is designed with technical expertise to meet the dynamic needs
of global smart device brands and to serve a wide range of usage scenarios in the smart device
ecosystem. The following table sets forth the breakdown of our revenue by product category,
both in absolute amounts and as percentages of our total revenue, for the years/periods
indicated:
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,265,640 82.7 21,821,620 80.3 36,132,747 77.9 27,885,130 79.9 21,704,132 69.3
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,798,156 9.5 2,509,102 9.2 3,696,313 8.0 2,542,749 7.3 2,990,404 9.5
AIoT and other products (1) /H1118/H1118/H1118/H11181,887,127 6.5 2,510,561 9.2 5,573,138 12.0 3,837,130 11.0 5,603,482 17.9
– Smart wearables /H1118/H1118/H1118/H1118/H1118/H1118/H11181,413,365 4.8 1,798,583 6.6 3,643,370 7.9 2,576,022 7.4 2,861,052 9.1
– Smart eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,167 0.1 387,988 1.4 1,387,622 3.0 865,448 2.5 1,974,528 6.3
– AI PCs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 3,171 0.0 1,938 0.0 196,393 0.6
– Automotive electronics /H1118/H1118/H1118/H1118– – 704 0.0 20,716 0.0 15,284 0.0 95,633 0.3
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,595 1.6 323,286 1.2 518,259 1.1 378,438 1.1 475,876 1.6
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,229 1.3 343,781 1.3 980,274 2.1 655,851 1.8 1,033,585 3.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas, such as
AI PCs and automotive electronics.
(2) Primarily including smart speakers, smart learning devices, smart desk lamps and various accessory products.
(3) Primarily including sales of raw materials and scrap components, and provision of factoring arrangement. For
details on the factoring arrangement, see “Business — Sales and Marketing — Relationship with Our Largest
Customer.”
BUSINESS
– 197 –


--- page 208 ---
We have adopted and will continue to advance our product portfolio under our “ 1+2+X ”
strategy: maintaining smartphones as our core business with a focus on stability and leadership;
accelerating scale and innovation in two strategic areas, namely AI PCs and automotive
electronics; and further strengthening our presence in other categories such as tablets,
wearables, TWS earphones, and smart eyewear. Through this strategic framework, we are able
to capture emerging opportunities, deepen our capabilities across diversified smart device
verticals, and build a resilient, innovation-driven ecosystem for sustainable long-term growth.
Smartphones
Smartphones are our core product category and the foundation of our integrated product
strategy. We are the world’s largest smartphone ODM company in terms of smartphone ODM
shipments in 2024, according to Frost & Sullivan. We provide full-stack ODM services to a
wide range of leading global brands, including Xiaomi, Samsung Electronics, Lenovo, Honor,
OPPO, vivo, as well as major telecom operators. Over the years, we have successfully
delivered several best-selling models in the global market and the Chinese market, such as the
Redmi 9, Redmi Note 10, and Samsung Galaxy A05s, with cumulative shipments of each
exceeding tens of millions of units.
Our smartphones are developed through a full-cycle product development approach,
covering model selection of key components, appearance process design, optimization of
features as selling points, and support for system algorithms, among others. They are equipped
with precise connectors and feature light and thin design. Our smartphones are also designed
with dust-proof, watertight, and leak-proof structures for different applications. In addition,
through our proprietary multi-chip software compatibility technology, our smartphones achieve
power-on hardware self-adaptation, enabling seamless integration of functional modules across
platforms.
We customize competitive products according to the diversified demands of customers
while keeping pace with the development trends of cutting-edge products. For instance, our
design language spans trendy consumer styles to professional business aesthetics, allowing us
to support a wide spectrum of customer positioning strategies. Meanwhile, with continued
investment in 5G, AI-native capabilities, and next-generation user experiences, we are
committed to maintaining our leadership in the global smartphone ODM sector through
innovation, quality, and scale.
Leveraging our comprehensive and reliable solutions, as well as our stable partnerships
with our major customers, our smartphone business maintained rapid growth during the Track
Record Period. The ODM shipments of our smartphones amounted to 125.5 million units,
125.3 million units and 172.9 million units in 2022, 2023 and 2024, respectively, representing
a CAGR of 17.4% from 2022 to 2024. The ODM shipments of our smartphones amounted to
117.3 million units in the nine months ended September 30, 2025.
BUSINESS
– 198 –


--- page 209 ---
The following table sets forth the details of certain signature and representative
smartphones for which we provided ODM services during the Track Record Period:
Brand and Model Product Picture
Y ear of
Launch
Product Specifications
and Key Features
realme 12 /H1118/H1118/H1118/H1118/H1118
 2024 Chipset: MediaTek Dimensity 6100+
Dimensions: 165.6 x 76.1 x 7.69 mm
Display: 6.72 inches
Main camera: 108 MP+2M
Battery: 5000 mAh /L5052245W
Xiaomi Redmi
13C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 Chipset: MediaTek Dimensity 6100+
Dimensions: 168 x 78 x 8.1 mm
Display: 6.74 inches
Main camera: 50 MP+0.08 MP
Battery: 5000 mAh /L5052218W
Samsung Galaxy
A05s /H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 Chipset: Qualcomm SM6225 Snapdragon 680
Dimensions: 168 x 77.8 x 8.8 mm
Display: 6.7 inches
Main camera: 50 MP+2M+2M
Battery: 5000 mAh /L5052225W
vivo Y35 /H1118/H1118/H1118/H1118/H1118/H1118
2022 Chipset: MediaTek Dimensity 6020
Dimensions: 164.05 x 75.6 x 8.15 mm
Display: 6.517 inches
Main camera: 13 MP+2M
Battery: 5000 mAh /L5052215W
Honor Play 30 /H1118/H1118
2022 Chipset: Qualcomm SM4350-AC Snapdragon
480+
Dimensions: 163.7 x 75.1 x 8.7 mm
Display: 6.5 inches
Main camera: 13 MP
Battery: 5000 mAh /L5052210W
BUSINESS
– 199 –


--- page 210 ---
Tablets
Our tablet business has developed into a comprehensive product line that serves a wide
range of application scenarios as well as diverse requirements for form factors and
performance. We are among the top three tablet ODMs globally in terms of tablet ODM
shipments in 2024, according to Frost & Sullivan. We are a trusted ODM partner to leading
global brands, such as Lenovo and Xiaomi. As of the Latest Practicable Date, we had
established ourselves as the principal ODM partner for tablet devices to three top-tier brand
customers.
Our comprehensive product portfolio covers the full spectrum of tablet solutions, from
affordable entry-level models to premium flagship devices, which helps ensure that we meet
the diverse demands of mass-market consumers, enterprise professionals, and educational
institutions. Leveraging our expertise in industrial design, we create sleek, ergonomic, and
durable form factors that enhance user experience across all price segments. Our system
engineering capabilities enable hardware-software integration, optimizing performance for key
use cases such as mobile productivity, digital learning, and multimedia consumption.
Our technological strengths are central to our competitiveness in the tablet market. To
meet growing demands for longer usage time, we continuously optimize low-power circuit
design through hardware disassembly and power management strategies tailored to different
usage scenarios, achieving ever-improving battery performance across our tablet lineup. In
camera system integration, our multi-camera debugging technology supports flexible optical
configurations, including dual, triple, and quad-camera setups, allowing us to meet the
increasing demand for imaging capability without compromising on design aesthetics or
hardware compatibility. In addition, our proprietary multi-chip software compatibility
technology enables automatic adaptation to various hardware configurations during system
startup, which enhances operational efficiency and improves platform flexibility. The ODM
shipments of our tablets amounted to 6.3 million units, 7.4 million units and 12.3 million units
in 2022, 2023 and 2024, respectively, representing a CAGR of 39.7% from 2022 to 2024. The
ODM shipments of our tablets amounted to 9.1 million units in the nine months ended
September 30, 2025.
BUSINESS
– 200 –


--- page 211 ---
The following table sets forth the details of certain signature and representative tablets for
which we provided ODM services during the Track Record Period:
Brand and Model Product Picture
Y ear of
Launch
Product Specifications
and Key Features
Redmi Pad Pro /H1118/H1118
 2024 Dimensions: 280 x 181.9 x 7.5 mm
Display: 12.1 inches
Platform: Qualcomm SM7435-AB
Snapdragon 7s Gen 2
Front camera: 8MP
Battery: 10000mAh /L5052233W
Redmi Pad SE /H1118/H1118
2023 Dimensions: 255.5 x 167.1 x 7.4 mm
Display: 11 inches
Platform: Qualcomm SM6225 Snapdragon
680 4G
Front camera: 5MP
Battery: 8000mAh /L5052218W
Lenovo Tab /H1118/H1118/H1118/H1118
2024 Dimensions: 235.7 x 154.5 x 7.5 mm
Display: 10.1 inches
Platform: MTK G85 Octa core up to 2.0Ghz
Front camera: 5MP
Battery: 5100mAh /L5052215W
Lenovo Y700 /H1118/H1118/H1118
2023 Dimensions: 208.9 x 129.5 x 7.6 mm
Display: 8.8 inches
Platform: SM8475P (Snapdragon 8+ Gen 1)
Front camera: 8MP
Battery: 6550mAh /L5052268W
vivo Pad 3 /H1118/H1118/H1118/H1118/H1118
2024 Dimensions: 266.4 x 192 x 6.6 mm
Display: 12.1 inches
Platform: SM8635 Snapdragon 8s
Gen 3
Front camera: 5MP
Battery: 10000mAh /L5052244W
AIoT Devices
Our AIoT product portfolio encompasses a broad range of intelligent and connected
devices, including smart watches/bands, smart eyewear and TWS earphones. We are a top-tier
global AIoT ODMs in terms of shipment volume in 2024, according to Frost & Sullivan.
Specifically, we are the world’s second largest ODM in terms of ODM shipment volume for
smart watches/bands in 2024, according to Frost & Sullivan. The ODM shipments of our AIoT
devices amounted to 7.9 million units, 14.1 million units and 33.9 million units in 2022, 2023
BUSINESS
– 201 –


--- page 212 ---
and 2024, respectively, representing a CAGR of 107.2% from 2022 to 2024. The ODM
shipments of our AIoT devices increased from 22.6 million units in the nine months ended
September 30, 2024 to 29.0 million units in the nine months ended September 30, 2025.
Smart Wearables
We have established a leadership position in the smart wearable segment, providing
high-performance smart watches/bands to leading global brands, such as Xiaomi, Samsung
Electronics, OPPO, and Honor. Our smart wearables integrate functions including health
monitoring, fitness tracking, voice interaction, and notification management.
In particular, we have developed a range of advanced technologies to enhance the
performance and reliability of our smart watches/bands. By combining V0-rated flame-
retardant plastics with advanced double-shot molding, we achieve structural water resistance
and product safety. We have also developed innovative visual positioning algorithms for
touchscreen assembly to solve the industry challenge of misaligned dial markers in premium
circular smart watches. In functionality, our independently developed sports-related algorithm,
based on neural networks, supports over 100 activity types across various hardware platforms
with optimized power efficiency. Meanwhile, our health-related algorithm enables
comprehensive monitoring features such as resting heart rate, calorie tracking, heart rate alerts,
24-hour continuous blood oxygen measurement, and sleep apnea detection, delivering accurate,
real-time health insights for a wide range of user scenarios.
Smart Eyewear
Smart eyewear represents a strategic area of innovation and product differentiation among
our AIoT product portfolio. We have launched multiple generations of smart eyewear, each
integrating cutting-edge features, such as high-resolution cameras, advanced image processing,
AI-powered voice assistance, and enhanced battery performance. Our second-generation AI
glasses achieved strong commercial success and became one of the best-selling products in
their category, accelerating the broader adoption of AI glasses across the globe. In 2024, the
ODM shipments for our smart eyewear reached over 2 million units.
Building on the success in AI glasses, we have expanded our smart eyewear roadmap to
include AR and MR devices. Our AR glasses incorporate full-color optical waveguide displays,
delivering immersive visual overlays for navigation, training, and enhanced interaction with
augmented content. In the MR space, we are exploring next-generation spatial computing
devices featuring high-performance processors, extended battery life, and increased memory
capacity. These MR devices are engineered to deliver high levels of immersion and
responsiveness, catering to both entertainment and professional productivity applications.
BUSINESS
– 202 –


--- page 213 ---
The following table sets forth the details of certain signature and representative AIoT
devices for which we provided ODM services during the Track Record Period:
Brand and
Model Product Picture
Y ear of
Launch Product Specifications and Key Features
OPPO Watch X2
Mini /H1118/H1118/H1118/H1118/H1118/H1118/H1118
2025 Display: 1.32 inches
Battery: 3.5-day long battery life
Redmi Watch 5 /H1118/H1118
 2024 Display: 2.07 inches
Battery: 24-day ultra-long battery life
Xiaomi Band 9
Pro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 Display: 1.74 inches
Battery: 21-day ultra-long battery life
Samsung Galaxy
Fit3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 Display: 1.6 inches
Battery: 13-day ultra-long battery life
Emerging Business Areas
As part of our long-term growth strategy, we are actively expanding into strategically
important emerging categories, particularly AI PCs and automotive electronics. These
segments leverage our established expertise in smart devices design and manufacturing, while
creating new opportunities for technological innovation and business growth.
AI PCs
Since 2023, we have strategically positioned ourselves in the AI PC sector, launching
forward-looking initiatives to build foundational capabilities across technology research,
ecosystem integration, and supply chain planning. Such early-stage strategic focus laid the
groundwork for our accelerated business development and commercialization.
BUSINESS
– 203 –


--- page 214 ---
In 2024, we officially launched full-scale AI PC development programs and entered into
deep engagement with key customers to facilitate rapid productization. As of the Latest
Practicable Date, we had successfully secured partnerships with several leading domestic
brands, such as MECHREVO and Honor, marking a significant step forward in our AI PC
commercialization journey. Among these, the Honor AI PC project achieved volume production
and shipment within the same year, giving us a first-mover advantage in this emerging
category.
Our AI PC strategy builds on robust in-house industrial design and R&D capabilities in
the global smartphone ODM sector. From the outset, we have focused our initial product
offerings on the mid-to-high-end market, delivering devices that blend cutting-edge AI features
with refined aesthetics and premium materials. Our customers can further incorporate
next-generation technologies in these products, including AI touch control algorithms,
AI-connected productivity, AI-enhanced audio, and AI-optimized long battery life, delivering
smarter and more responsive computing experiences. At the same time, innovations in
materials and system architecture have elevated product performance and perceived value,
positioning our AI PC offerings as technology benchmarks within the industry. While
maintaining our leadership in high-end offerings, we will also enter the entry-level markets by
launching models to quickly scale our customer base and achieve economies of scale.
Automotive Electronics
Our automotive electronics business focuses on smart cockpit systems and chassis domain
ECUs, addressing the growing demand for intelligent in-car technologies. In the smart cockpit
domain, we offer a wide range of products, including cockpit domain controllers, center control
displays, smart control tablets, in-car wireless charging modules, and smart mounting brackets,
which are designed to enhance human-machine interaction, in-car entertainment delivery and
vehicle personalization. Many of these products have already entered mass production and
shipment. In the chassis domain, we manufacture key components such as suspension ECUs
and brake ECUs, engineered to support real-time responsiveness, safety and durability under
automotive-grade standards.
To support R&D and production in automotive electronics, we have established dedicated
production lines and validation laboratories at our manufacturing center in Huizhou. As of the
Latest Practicable Date, we had established partnerships in the automotive electronics sector
with multiple renowned OEMs and Tier-1 customers, such as Xiaomi and NIO, and had secured
over ten design wins.
BUSINESS
– 204 –


--- page 215 ---
At the same time, we are actively expanding into international automotive markets, with
multiple projects currently in customer evaluation and joint development stages. Our growing
automotive electronics capabilities demonstrate our commitment to becoming a core
technology supplier for the next generation of intelligent vehicles.
In-car Wireless Charging Modules Smart Control Tablets
RESEARCH AND DEVELOPMENT
We view research and development as a core driver of our long-term competitiveness,
scalability, and product innovation. Our R&D strategy is built on a commitment to continuous
investment, systematic capability-building, and forward-looking technological exploration. We
have established a comprehensive R&D system that integrates advanced infrastructure,
disciplined processes and close collaboration with ecosystem partners to support the
development of differentiated products across smartphones, AI PCs, automotive electronics
and other smart device categories. Reflecting our strong innovation focus, we incurred research
and development expenses of RMB1,507.8 million, RMB1,687.8 million, RMB2,080.2 million
and RMB1,951.1 million in 2022, 2023 and 2024 and the nine months ended September 30,
2025, respectively. As of September 30, 2025, we employed approximately 5,200 R&D
personnel, accounting for 29.1% of our total employees and underscoring our commitment to
deepening our technological capabilities as we scale into new product categories and global
markets.
R&D Infrastructure
We have established a comprehensive R&D infrastructure comprising multiple innovation
hubs across Chinese mainland, enabling agile development, resource integration, and close
proximity to both talent and customers. As of the Latest Practicable Date, we operated seven
R&D centers in Shanghai (R&D headquarters), Shenzhen, Huizhou, Nanchang, Hefei, Xi’an
and Suzhou. The primary function of each of our R&D centers is as follows:
 Shanghai R&D Center . Our Shanghai R&D center serves as our core innovation
headquarters, responsible for central planning, strategic research, and advanced
engineering across all product lines.
 Shenzhen R&D Center . Our Shenzhen R&D center focuses on serving major
customers in South China, such as Honor, OPPO, and vivo. It supports development
across smartphones, tablets, and AIoT products.
BUSINESS
– 205 –


--- page 216 ---
 Huizhou R&D Center . Co-located with our manufacturing operations in the city, our
Huizhou R&D center plays a key role in new product development and introduction,
ensuring seamless transition from design to production.
 Nanchang R&D Center . Also integrated with our manufacturing base in the city, our
Nanchang R&D center supports new product development and introduction,
enabling effective transition from prototype to mass production.
 Hefei R&D Center . Focused on the R&D of smartphones, tablets, and AIoT
products, our Hefei R&D center serves as a regional extension of the Shanghai R&D
headquarters, enhancing our capacity for parallel development and delivery.
 Xi’an R&D Center . Similar to our Hefei center, the Xi’an R&D center is engaged in
smartphone, tablet, and AIoT product R&D, providing additional support for
cross-regional project execution and talent diversification.
 Suzhou R&D Center . Our most recently established R&D center, the Suzhou center
is dedicated to the AI PC business, reinforcing our strategic focus on next-
generation PC innovation.
Our R&D operations are built around a coordinated network of specialized centers across
China, designed to maximize both innovation and market responsiveness. The Shanghai
headquarters leads strategic planning and core technology development, while regional
facilities, including our new Suzhou center focused on AI PCs, tailor solutions to specific
industry and customer needs. Such integrated structure enables parallel development across
smartphones, tablets, AIoT devices, AI PCs, and automotive electronics, ensuring both
technical excellence and rapid commercialization. By combining centralized R&D leadership
with localized expertise, we maintain strong synergies across all locations, accelerating design
cycles and cultivating technical talent. By doing so, we have established a highly adaptive
innovation engine that delivers calibrated solutions for China’s fast-evolving smart device
landscape.
Our R&D organization is structured by technical specialization, with dedicated
departments for hardware engineering, software development, mechanical design, industrial
design, key components, imaging, product management, testing, and project management. With
this structure, we intend to maintain deep technical expertise within our Group while
supporting cross-functional collaboration across product lines and innovation stages.
In addition, we have established the 2111 Laboratory, which focuses on innovation of
next-generation technologies, materials, and product categories. Our 2111 Laboratory is
dedicated to advancing product planning and preliminary research for N+1 generation
technologies, such as AI/AR glasses, as well as developing foundational technologies,
including advanced System-in-Package (“ SiP”), near-eye display, optics, AI large model
application, materials, and ergonomics. It also plays a pivotal role in fostering industry-
academia-research collaboration, building an ecosystem that bridges cutting-edge research
BUSINESS
– 206 –


--- page 217 ---
with practical applications. Its efforts have contributed to key R&D achievements, including
the proof-of-concept for AI/AR glasses and SiP , the establishment of a ergonomics database,
and the deployment of proprietary AI models for test automation and internal knowledge
management. By incubating new business lines and accelerating the commercialization of
innovative ideas, the 2111 Laboratory serves as a cornerstone of our strategy to drive long-term
technological advancements and market leadership.
During the Track Record Period, we retained increasing number of R&D personnel and
therefore significantly strengthened our product design and development capabilities in the
following key areas:
 Expansion of R&D Network and End-to-End Service Capabilities: As our R&D team
grew, we established new research and development centers in Xi’an and Suzhou
during the Track Record Period, strengthening our nationwide R&D footprint. This
expansion enhances our ability to provide end-to-end services, boosting efficiency
across the entire product lifecycle — from initial product definition, design
simulation, and circuit system design to software platform development, testing, and
certification. This has bolstered our integrated capabilities from initial concept to
final delivery.
 Cross-Category Technology Integration: Our R&D teams have accumulated
extensive experience across a diverse portfolio of products, including smartphones,
tablets, smart watches/bands, AI PCs, automotive electronics, TWS earphones, and
smart eyewear. This has advanced our capabilities in complex system integration
and cross-category technology fusion. Specifically, our in-depth development of
core underlying technologies such as wireless communication, audio, display, and
optics enables us to deliver integrated solutions for diverse scenarios like smart
offices, sports and health.
 Application of AI Technology: We are proactively embracing AI trends by exploring
the application of artificial intelligence in both our R&D processes and digital
operations. This strategic focus has not only improved our internal R&D efficiency
but has also empowered us to enhance the user experience of our end-products. This
demonstrates our strengthened capabilities in driving both innovation and
operational excellence.
BUSINESS
– 207 –


--- page 218 ---
R&D Process
We have built a comprehensive and structured R&D process that supports end-to-end
innovation across multiple product lines, including smartphones, tablets, AIoT devices, AI PCs,
and automotive electronics. Our R&D process covers all critical areas of the product
development lifecycle — hardware engineering, software development, industrial design,
mechanical design, simulation, and testing. With this comprehensive in-house capability, we
are able to rapidly iterate and commercialize new technologies, while maintaining high levels
of quality, reliability, and customer satisfaction.
To ensure systematic management and cross-functional integration, we have implemented
a company-wide integrated product development (“ IPD”) framework. The IPD process clearly
defines development phases, responsibility matrices, and collaboration protocols across
departments, aligning technical execution with business objectives. Under this framework,
cross-functional teams from engineering, product management, quality assurance, and
operations work together from the early concept stage through to mass production. As a result,
we have managed to reduce development cycle times, improve risk management, and enhance
product-market fit.
The IPD framework also facilitates continuous improvement and knowledge
accumulation, as each project cycle contributes to our internal knowledge base and informs
future development. By embedding process discipline and decision checkpoints into product
innovation, we are able to balance speed and quality, ensure resource efficiency, and maintain
strong alignment with customer requirements. With this structured yet agile approach to R&D,
we respond quickly to market dynamics while delivering robust, competitive, and scalable
solutions.
BUSINESS
– 208 –


--- page 219 ---
Case Studies
Driving Innovation in High-Performance and Ultra-Thin AI PCs
To address the growing demand for both high performance and portability in laptops, we
have invested in R&D focused on core technologies, such as processor performance
optimization, battery life enhancement, and lightweight design. Guided by market insights and
advanced technology pre-development, we have introduced a diverse range of products,
including ultra-thin laptops and mini-PCs.
For leading domestic clients such as MECHREVO and Honor, we provide full-stack
services covering hardware architecture design, system integration and adaptation, and supply
chain coordination. Throughout the entire product development lifecycle, our team works
closely with our customers to refine thermal solutions, interface layout, and software
ecosystem integration. Through multiple rounds of performance tuning and mold optimization,
we deliver tailored and differentiated solutions that meet diverse client needs.
For example, we successfully helped our customers address the dual demands of high
performance and portability for laptop users. By leveraging our expertise in structural design,
we applied magnesium alloy materials typically used in tablets to PC products, achieving an
ultra-lightweight design of around 1kg. In addition, we utilized our advanced architectural
capabilities to integrate an 80Wh high-capacity battery while maintaining a slim body
thickness of just 14.95mm. These innovations enabled our customers to deliver groundbreaking
products that combine exceptional battery life with unmatched portability, meeting evolving
market expectations.
Our commitment to breakthrough technological innovation has enabled us to establish
three core advantages: ultra-long battery life, ultra-thin design, and intelligent connectivity.
Centering user experience in our design philosophy, we seamlessly combine high-efficiency
battery management systems with lightweight body design to achieve a dual breakthrough in
ultra-long battery life and extreme slimness. At the same time, we deeply integrate intelligent
connectivity technologies to build a seamless digital ecosystem, setting new benchmarks in AI
PC design.
With years of expertise in the smart device sector, we have built strong capabilities across
key domains such as refined exterior design, display module development, touch technology
optimization, antenna module solutions, and embedded software development. These
technological strengths not only drive continuous innovation in our AI PC ODM business but
also empower us to stand out in a highly competitive market.
BUSINESS
– 209 –


--- page 220 ---
Customized Smart Control Tablets for Leading Automotive OEMs
As a Tier-1 supplier in the automotive electronics ODM sector, we have demonstrated our
strong R&D capabilities through the development of advanced smart control tablet solutions
aimed at enhancing the in-car user experience. Guided by the vision of delivering “technology
in your palm, one-touch control,” our team conducted extensive industry research and user
studies to address key technical challenges such as display quality, touch responsiveness, and
system compatibility in smart control applications.
Since we entered into the domain of automotive electronics ODM, we have supported
customers in achieving R&D breakthroughs by leveraging our comprehensive expertise and
advanced technologies. With IA TF 16949 automotive quality certification and ASPICE L2
software process certification, we developed intelligent domain controller solutions based on
advanced SoC platforms. Our full-stack R&D team, covering hardware, software, and testing,
enabled us to deliver industry-leading technical capabilities. The highly integrated domain
controller supports multi-screen interaction within the cabin, spanning the central console,
passenger display, and rear-seat screens, while incorporating innovative, portable designs.
These advancements not only enhanced functionality but also set new benchmarks for product
upgrades in the automotive industry.
Through iterative product definition and technical refinement, we successfully developed
customizable armrest screens and rear-seat control panels tailored for leading OEMs. Our R&D
team worked closely with each automaker to refine interface definitions, optimize installation
layouts, and provide detailed recommendations for integration with surrounding vehicle
components. Leveraging our deep expertise in display technology, touch interaction, and
embedded software — accumulated over years of experience in the smart device ODM sector
— we were able to deliver full-stack solutions that met the unique specifications of each
customer.
The development process involved multiple rounds of simulation, prototyping, and
fitment validation, enabling rapid design iteration and seamless adaptation across different
vehicle platforms. Our solutions have been recognized by OEM partners for their intelligent
functionality, luxury feel, and intuitive user experience, helping to elevate in-cabin comfort
and reinforce the premium positioning of their vehicle models. This project not only showcased
our ability to translate smart device innovation into automotive-grade applications, but also
underscored our agility in collaborative development and our commitment to customer-centric
design.
BUSINESS
– 210 –


--- page 221 ---
R&D Collaboration
We are committed to building a forward-looking R&D collaboration network that
integrates internal innovation capabilities with strategic external partnerships. Our R&D
strategy follows a dual approach, prioritizing the development of in-house technological
expertise while actively engaging with leading industry players, academic institutions, and
research organizations. We believe this model allows us to foster talent development,
accelerate knowledge exchange, and promote coordinated progress across the broader industry
value chain.
To advance collaborative innovation, we have established long-term relationships with
global technology leaders such as Qualcomm, working jointly on cutting-edge platform
integration and product innovation. At the same time, we maintain close research ties with
leading universities in Chinese mainland, particularly those located in the Y angtze River Delta
region, through joint R&D programs and talent development initiatives. For example, we have
partnered with a leading university on ergonomic design research for wearable products, and
have jointly established internship bases with over ten institutions to support industry-
academia cooperation and talent cultivation. By cultivating these multi-dimensional
partnerships, we are able to share resources, co-develop breakthrough technologies, and
strengthen the ecosystem surrounding smart hardware innovation.
R&D Policies
We have established a well-defined R&D policy framework that promotes innovation,
process discipline, and talent development. To foster a culture of continuous innovation, we
have implemented structured incentive mechanisms. Through these positive reinforcement
initiatives, we stimulate innovation across product design, manufacturing processes, and
technical iteration, ultimately enhancing product performance and market competitiveness.
To ensure the efficiency, standardization, and compliance of our R&D activities, we have
put in place a comprehensive set of internal management protocols. These standardized
procedures strengthen operational control and institutionalize innovation practices across our
Group.
In parallel, we actively invest in talent development for our R&D personnel, offering
structured technical and soft skills training, dual-career progression paths (technical and
managerial tracks), access to academic conferences, and advanced lab environments to foster
hands-on exploration. Our approach to R&D talent retention includes competitive
compensation, comprehensive benefits, and a values-driven culture that emphasizes mission
alignment and employee well-being. We also implement proactive retention programs,
including satisfaction surveys, exit interviews, and a dedicated “talent return” program for
rehiring high-performing former employees.
BUSINESS
–2 1 1–


--- page 222 ---
OUR TECHNOLOGY AND DIGITALIZATION
We are a technology-driven company with deep expertise in smart hardware innovation.
Our core strengths are rooted in sustained investment in foundational technologies, including
wireless communication, audio, display, optics, imaging, materials, and simulation. In line with
global AI trends, we are actively deploying AI technologies across R&D and digital operations,
exploring the use of AI agents to improve R&D efficiency, enhance product intelligence, and
elevate user experience. In parallel, we are accelerating digital transformation across all major
aspects of our operations, including R&D, manufacturing, supply chain, and quality
management. Through the deployment of proprietary systems, we enhance operational
transparency, drive process optimization, and achieve better cost control at scale.
Our Technology
Over the years, we have built a strong technological foundation that serves as a key
competitive barrier in the smart hardware ODM industry. Through continuous investment in
core R&D, deep vertical integration, and broad technical coverage across product categories,
we have developed robust and scalable technological capabilities that enable rapid innovation,
high levels of customization, and long-term customer engagement.
Our customization process is tailored to meet specific customer requirements and
involves a structured and collaborative approach. Based on the specific needs of our customers
to optimize and expand their product portfolios, customization may include algorithm
integration for display, audio, and camera systems, as well as meeting customer-specific needs
such as low-temperature long battery life and instant-on functionality. These requirements
often involve technological innovation and iteration to meet their specific needs. Our
customization workflow encompasses several stages: (i) requirements analysis, (ii) cross-
functional requirement alignment, (iii) implementation of customized features, and (iv)
validation of the customized product. Such end-to-end approach ensures that we deliver
solutions precisely aligned with customer needs, thereby strengthening our position as a trusted
partner in the industry.
Set forth below is a description of our key technology domains:
 Wireless RF and Antenna Technologies. We have developed proprietary capabilities
in multi-antenna design, high-performance RF paths, dual-band GPS optimization,
antenna performance testing technology, antenna miniaturization, and RF power
adjustment technologies, enabling us to deliver competitive RF solutions across
device categories.
 Baseband and Mainboard Design. We are proficient in mainboard design across
major chipset platforms, such as Qualcomm, as well as AIoT MCUs with strong
technical expertise in circuit design and printed circuit board (“ PCB”) stack
optimization.
BUSINESS
– 212 –


--- page 223 ---
 Audio and Optical System Engineering. We offer integrated design capabilities for
audio and optical modules, covering component selection, structural design, circuit
layout, and embedded software development. We possess advanced capabilities in
acoustic chamber design, ghosting reduction, multi-camera architecture, and optical
waveguide technologies.
 Mechanical and Structural Design. Our structural design team has extensive
experience in aesthetic design, stability optimization, and integration efficiency, and
has achieved technical breakthroughs in ultra-thin form factors, ultra-narrow bezels,
professional-grade waterproofing, and PCB stack miniaturization.
 Simulation Technologies. As one of the earliest ODM players in Chinese mainland
to invest in simulation-driven product development, we have built strong
capabilities in RF, antenna, acoustic, optical, signal, structural, and thermal
simulations. We use simulation modeling to accelerate development, reduce cost,
and increase reliability, and have established a material parameter database to
support simulation accuracy and reuse.
 System-level Engineering. We possess strong technical capabilities in operator
certification and low-power system design, ensuring our products meet stringent
global quality and compliance standards.
 Software Development. We have full-stack software development capabilities across
most popular platforms, such as Android, Windows, RTOS and Wear OS, covering
drivers, middleware, and user interface layers. We have also expanded our
embedded software development capabilities, establishing strong technical expertise
in specialized software algorithms for AIoT devices, including RTOS software
platform development and motion and health algorithm design technologies. In
addition, we also develop automated testing software tailored for different modules
to enhance product verification and compatibility.
 Intelligent Manufacturing. Through long-term production experience and
continuous technological innovation, we have developed advanced capabilities in
precision assembly, automated production line design, intelligent inspection, and
flexible manufacturing with rapid line-changeover technologies. These
advancements have driven our manufacturing centers toward greater intelligent
manufacturing, automated inspection, and flexible production capacity.
 Information Management Systems. To manage the complexity of ODM operations,
we have independently developed a Manufacturing Execution System (“ MES”) that
enables full-process digital management from supply chain and production to
logistics and delivery. The system supports real-time data collection across
thousands of components and devices, enabling intelligent control, process synergy,
and on-time, large-scale delivery.
BUSINESS
– 213 –


--- page 224 ---
While these above-mentioned technology domains are not unique to us but are rather both
generally applicable and critical to the smart device ODM industry, we have achieved a leading
position in many aspects. For example, in the area of mechanical and structural design, we
were the first in the industry to implement an IP68 waterproof design for a three-piece phone
structure consisting of the front cover, middle frame, and battery cover. Moreover, in
system-level engineering, we have developed a comprehensive and mature low-power system
solution, which has been successfully commercialized and mass-produced in products for both
domestic and international customers. These technological advancements underscore our
ability to innovate and maintain a competitive edge in the smart device ODM industry.
Digitalization
We have established a comprehensive digital management framework that enhances
coordination across the entire lifecycle of smart product development — from R&D and supply
chain to manufacturing and delivery. Building on years of operational experience, we have
independently developed and continuously upgraded a suite of digital tools to support
intelligent, data-driven operations, significantly improving efficiency, flexibility, and cost
control.
In project management, we have developed a proprietary project management system that
enables precise planning. In manufacturing and supply chain operations, our previously
introduced MES plays a central role in connecting production processes with upstream and
downstream systems, enabling real-time data collection, intelligent control, and process
coordination across multiple equipment types and workflows.
To support full-process digitalization, we have also implemented a range of enterprise
systems, including PLM, WMS, QMS, SRM, and FPM. These systems enable seamless
management of product design, procurement, inventory, quality assurance, supplier
collaboration, and financial planning, ensuring operational transparency and optimal resource
utilization throughout operations.
Furthermore, we are actively embracing AI large models and have begun deploying a
centralized knowledge platform to enhance the intelligence and automation of R&D,
manufacturing, and other aspects of our business operations. These initiatives further
strengthen our digital capabilities and support our ability to respond quickly to market
demands, deliver high-quality products at scale, and continuously improve customer
satisfaction.
MANUFACTURING
We operate a flexible and efficient manufacturing system that combines self-owned
manufacturing facilities with strategic outsourcing arrangements to support the diversified and
large-scale manufacturing needs of our customers. Over the years, we have established a
comprehensive manufacturing footprint in both Chinese mainland and overseas markets,
enabling us to enhance production capacity, improve cost efficiency, and respond swiftly to
BUSINESS
– 214 –


--- page 225 ---
dynamic customer demands. Our manufacturing capabilities are supported by advanced
production processes, intelligent automation, and rigorous quality control systems, ensuring
the consistent delivery of high-quality smart devices across categories such as smartphones,
tablets, and AIoT devices.
Manufacturing Models
We adopt a hybrid manufacturing approach that combines self-production and outsourced
processing, allowing us to flexibly allocate resources based on the technical requirements and
capacity needs of different production stages. This approach enhances our ability to manage
production quality, optimize costs, and respond efficiently to customer demands. As of the
Latest Practicable Date, our manufacturing centers located in Chinese mainland (Huizhou and
Nanchang), Vietnam and India serviced as the core of our manufacturing capabilities.
Self-production
Under the self-production model, we organize and execute production activities using our
own manufacturing facilities, equipment, and personnel. These manufacturing centers are
equipped with automated surface mount technology (“ SMT”) lines, precision assembly
systems, and intelligent testing equipment, enabling us to handle key processes such as PCB
assembly, module integration, final assembly, and quality inspection. The self-production
model allows us to maintain strict control over product quality, production timelines, and
intellectual property protection.
Outsourced Production
To meet delivery schedules and enhance overall production efficiency, we also engage
qualified third-party manufacturers to perform certain processing tasks. Our outsourced
production mainly covers SMT processing, final assembly and packaging. Upon completion of
outsourced processes, all products are subject to our internal quality inspection procedures.
Only products that meet our quality standards are approved for delivery to customers.
We have established a comprehensive management system to ensure the quality and
reliability of outsourced operations. Specifically, we have implemented the Outsourced
Processing Management Guidelines ( ։̮̋ʈ၍ଣ஝ᇍ), which set clear standards for
production quality and risk control. Our outsourcing management department oversees the
daily operations of our partnered factories, while the outsourcing quality assurance department
is responsible for auditing and evaluating potential and existing vendors.
All outsourced manufacturers must pass a formal qualification process before being
authorized to participate in production. The certification process includes qualification review,
on-site audits, sample trial production, and small-batch trial runs. Based on the results of this
assessment, we classify vendors into three tiers: strategic partners, core vendors, and reserve
vendors, taking into consideration of their production capabilities, industry reputation, and the
depth and breadth of their collaboration with us. In our outsourced manufacturing processes,
BUSINESS
– 215 –


--- page 226 ---
these parties play varying roles and levels of involvement depending on their technical
strengths, delivery capacity, and alignment with specific project needs. We also conduct
ongoing performance evaluations on a monthly and quarterly basis, jointly managed by our
engineering, planning, logistics, quality, and outsourcing management departments. This
structured approach ensures that our outsourcing partners meet our expectations in terms of
quality, efficiency, and compliance, while also mitigating the risk of over-reliance on any
single supplier.
Set forth below is a summary of the major terms in our contracts with key outsourced
manufacturers:
Contractual term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The term of the contract shall be determined by
mutual agreement between the parties, and any
renewal of the contract shall be subject to mutual
consultation and agreement prior to the expiration
of the current term.
Scope of service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Outsourced manufacturers shall, within the
specified timeframe, manufacture the required
quantity of products in accordance with the
composite process and quality standards, based on
the orders, raw materials, bill of materials
(“BOM”), drawings, technical specifications,
quality requirements, and testing
procedures/software provided by us. Depending on
specific requirements, outsourced manufacturers
may have to procure certain production
consumables on their own, or we may supply the
necessary production materials to them. We
generally require the outsourced manufacturers to
prioritize our delivery requirements in the event of
production capacity conflicts.
Subcontracting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Outsourced manufacturers are generally prohibited
from subcontracting any part of our orders to third
parties without our prior written consent. Without
our authorization, if any of our orders, raw
materials, or related items are sent to unapproved
manufacturing sites or facilities, we reserve the
right to cancel all affected orders and to demand
liquidated damages as well as full compensation for
any losses incurred as a result of such unauthorized
actions.
BUSINESS
– 216 –


--- page 227 ---
Orders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We shall issue processing orders to outsourced
manufacturers in advance and may request partial
deliveries with specified delivery schedules. Upon
receipt of an order, outsourced manufacturers shall
promptly arrange production accordingly. In
general, we reserve the right to request changes to
the order quantity or delivery dates, and outsourced
manufacturers shall accommodate such requests and
make timely adjustments to their production plans
upon receiving notice of the changes.
Processing fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The processing fee for each product shall be based
on the quotation or tender document mutually
agreed upon by both parties.
Manufacturing and delivery /H1118/H1118/H1118/H1118/H1118Outsourced manufacturers shall deliver the products
to us on time, in the required quantity and quality,
and in accordance with our specified production and
packaging requirements. If outsourced
manufacturers are unable to deliver on time due to
their own reasons, they shall take necessary
measures to meet the delivery schedule and
minimize any delay. In the event that the delay in
delivery is caused by the fault of the outsourced
manufacturers, we are entitled to terminate the
contract or cancel the current order. We reserve the
right to claim compensation for any losses suffered
by us due to such delay.
Confidentiality and IP protection /H1118Both parties shall be responsible for maintaining the
confidentiality of each other’s intellectual property
in accordance with the confidentiality provisions of
the contract. Outsourced manufacturers shall ensure
that any design drawings, documents, or other
information provided by us are used solely for the
purpose of performing the relevant contract and
orders. Any unauthorized use beyond the scope of
the contract shall constitute an infringement, for
which the outsourced manufacturers shall bear full
legal liability.
BUSINESS
– 217 –


--- page 228 ---
The following table sets forth the designed production capacity under the self-production
model, output, and utilization rate under the self-production model for our major product
categories for the years/periods indicated:
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Smartphones
Designed production capacity
(’000 units) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,632 60,240 93,000 71,200
Total output (’000 units) (2) /H1118/H1118/H1118/H111878,325 65,728 106,677 74,722
Self-production (’000 units) /H1118/H111855,074 54,554 83,896 63,419
Out-sourced production
(’000 units) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,251 11,174 22,781 11,303
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.9 90.6 90.2 89.1
Tablets
Designed production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,281 2,800 9,200 5,941
Total output (’000 units) (2) /H1118/H1118/H1118/H11185,428 5,992 11,663 8,424
Self-production (‘000 units) /H1118/H11181,159 2,397 8,177 5,225
Out-sourced production
(‘000 units) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,269 3,595 3,486 3,199
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890.5 85.6 88.9 87.9
AIoT
Designed production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,030 16,100 39,010 29,524
Total output (’000 units) (2) /H1118/H1118/H1118/H11187,366 14,054 36,469 29,643
Self-production (’000 units) /H1118/H11187,364 14,054 36,469 26,468
Out-sourced production
(’000 units) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 – – 3,175
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891.7 87.3 93.5 89.7
Notes:
(1) The designed production capacity is calculated based on a number of assumptions, including but not
limited to the daily operation time, the number of working days, the capacity of each production line
per hour and the total number of production lines installed for the relevant year/period.
(2) Total output represents the amount of output from both self-production and outsourced production.
(3) Utilization rate is calculated by dividing output of self-production only by designed production capacity
for the relevant year/period.
BUSINESS
– 218 –


--- page 229 ---
The following table sets forth the designed production capacity under the self-production
model, output, and utilization rate under the self-production model in our Huizhou, Nanchang
and Vietnam manufacturing centers for major product categories for the years/periods
indicated:
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Huizhou
Smartphones
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,066 37,351 63,370 48,995
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,494 34,369 56,961 44,473
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895.4 92.0 89.9 90.8
Tablets
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118598 1,049 6,852 3,564
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118522 911 6,041 3,057
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887.3 86.8 88.2 85.8
AIoT
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,026 4,025 5,383 7,507
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,745 3,373 4,793 6,642
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886.1 83.8 89.0 88.5
Total
Designated production capacity
(‘000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,690 42,425 75,605 60,066
Total output of self-production
(‘000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,761 38,653 67,795 54,172
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894.7 91.1 89.7 90.2
BUSINESS
– 219 –


--- page 230 ---
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Nanchang
Smartphones
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,566 22,889 29,624 19,699
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,580 20,185 26,935 16,884
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891.9 88.2 90.9 85.7
Tablets
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118683 1,351 1,614 2,371
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637 1,246 1,490 2,163
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.3 92.2 92.3 91.2
AIoT
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,004 12,075 32,961 14,538
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,619 10,681 31,267 13,494
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.6 88.5 94.9 92.8
Total
Designated production capacity
(‘000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,253 36,315 64,199 36,608
Total output of self-production
(‘000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,836 32,112 59,692 32,541
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892.3 88.4 93.0 88.9
BUSINESS
– 220 –


--- page 231 ---
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Vietnam
Smartphones (4)
Designated production capacity
(’000 Units) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,506
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,062
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 82.3
Tablets (5)
Designated production capacity
(’000 units) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 400 734 6
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 646 5
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 60.0 88.0 88.9
AIoT
Designated production capacity
(’000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 666 7,479
Total output of self-production
(’000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 409 6,332
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 61.4 84.7
Total
Designated production capacity
(‘000 units)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 400 1,400 9,991
Total output of self-production
(‘000 units) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 1,055 8,399
Utilization rate (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 60.0 75.4 84.1
Notes:
(1) The designed production capacity is calculated based on a number of assumptions, including but not
limited to the daily operation time, the number of working days, the capacity of each production line
per hour and the total number of production lines installed for the relevant year/period.
(2) Total output represents the amount of output from self-production only.
(3) Utilization rate is calculated by dividing output of self-production only by designed production capacity
for the relevant year/period.
(4) During the Track Record Period, we only started to produce smartphones in Vietnam manufacturing
center in the first half year of 2025.
(5) In the nine months ended September 30, 2025, influenced by evolving business dynamics, the
production in our Vietnam manufacturing center focused on the AIoT business, therefore causing a
marked increase in the production capacity and output of AIoT devices and a decrease in those of tablets.
BUSINESS
– 221 –


--- page 232 ---
Manufacturing Centers
To support our large-scale, manufacturing operations across Asia and enhance delivery
efficiency for both domestic and international customers, we have established a strategically
distributed manufacturing network across Huizhou, Nanchang, Vietnam and India. These
manufacturing centers are equipped with advanced production infrastructure, enabling us to
achieve high-capacity, high-quality, and flexible manufacturing for a wide range of smart
devices.
 Huizhou Manufacturing Center . Established in 2011, our Huizhou manufacturing
center serves as one of our core production hubs, supporting both domestic and
overseas orders. The facility is equipped with 34 SMT lines, 67 final assembly lines,
and two laboratories. Our Huizhou plant is capable of handling high-volume and
diversified manufacturing tasks and supporting both production and continuous
process optimization.
 Nanchang Manufacturing Center . Our Nanchang manufacturing center was
established in 2020. It complements our Huizhou operations and plays a key role in
enhancing our overall production capacity and geographic diversification. The
Nanchang facility is equipped with 24 SMT lines, 60 final assembly lines, and two
laboratories, serving both domestic and international customer orders. We have
completed phase I of our Nanchang manufacturing center in the four quarter of
2024, mainly focusing on smartphone production and using the proceeds raised from
A-Share Listing. As of the Latest Practicable Date, we were in the planning stage for
phase II of our Nanchang manufacturing center to further enhance our production
capacity. The phase II facility is expected to primarily focus on the manufacturing
of AI PCs and smart eyewear, which is expected to be supported by net proceeds
from the Global Offering.
 Vietnam Manufacturing Center . Established in 2023, our Vietnam manufacturing
center enables us to better serve overseas customers, especially under global supply
chain localization requirements. We chose to establish a manufacturing center in
Vietnam primarily because it offers a relatively favorable business environment for
companies from Chinese mainland, with supportive policies and a well-developed
downstream supply chain, and has become a proven location where many enterprises
from Chinese mainland have successfully operated. The facility is equipped with
eight SMT lines, 13 assembly lines, and one laboratory.
 India Manufacturing Center . Our India manufacturing center, with smartphones as
the primary products manufactured, is primarily responsible for SMT processing and
final assembly/packaging. In India, we currently collaborate with a related party,
DBG Technology (India) Private Limited, a subsidiary of DBG Technology Co.,
Ltd., as our EMS partner primarily serving the Indian market. The reason for
engaging an EMS partner for the assembling of our products in India was mainly due
to regulatory considerations, in view of the foreign direct investment (“ FDI”)
BUSINESS
– 222 –


--- page 233 ---
restrictions introduced by the Indian authorities. Pursuant to the Press Note No.3
(2020 Series) by the Ministry of Commerce & Industry of India, prior governmental
approvals for FDI would be required if such investment is from India’s neighboring
countries, including China. For details on our transaction with this EMS partner, see
“Financial Information — Related Party Transactions.” Under this arrangement, we
provide the components, primarily in the form of raw materials, to the EMS partner
and the EMS partner is responsible for assembling the finished products in India,
which are then delivered to our local customers. While we do not directly handle the
manufacturing tasks, the India manufacturing center in collaboration with our EMS
partner is a hub for the manufacturing of our products. To support production, we
coordinate the supply of materials to the EMS partner through entities based in
Chinese mainland and Hong Kong. The EMS partner is responsible for assembling
the finished products in the India manufacturing center in accordance with our
specified quality standards and technical requirements, and for delivering the
completed units to us within the agreed timelines. In addition, we intend to
strengthen our local supply chain capabilities and support the growing demand in the
Indian market.
Manufacturing Process
We have developed a robust and scalable production system that supports the efficient
manufacturing of a wide range of smart devices. The production of different products requires
different technical and production capabilities. Our production processes are optimized for
both smartphones and tablets as well as AIoT devices, enabling us to meet diverse customer
needs with high quality, consistency, and flexibility.
Smartphones and Tablets
Our production process for smartphones and tablets is comprehensive, standardized, and
supported by advanced automation technologies. It primarily consists of the following key
stages:
 Production Design and Iteration. We utilize product-level design methodologies,
combining system architecture, component selection, and iterative simulation to
define and optimize the bill of materials and technical specifications. Once the
product solution has passed internal verification procedures, it proceeds to the mass
production stage.
 Mainboard Manufacturing and Testing. We manufacture the mainboards for
smartphones and tablets using fully automated SMT production lines, which
accurately place the required components and electronic parts onto PCBs, followed
by software programming. The SMT process includes PCB laser QR code marking,
PCB loading into fixtures, PCB cleaning, solder paste printing, PCB component
placement, high-temperature reflow soldering, de-paneling of PCBA, adhesive
dispensing, adhesive curing, and installation of shielding covers. To ensure high
BUSINESS
– 223 –


--- page 234 ---
production yield and quality consistency, we have implemented multiple in-line
quality control measures throughout the SMT process, including X-ray inspection,
solder paste inspection (“ SPI”), automated optical inspection (“ AOI”), PCBA
functional testing, and visual inspections. Through the implementation of these
measures, we are able to detect and eliminate defects, such as missing components,
process deviations, soldering failures, and circuit anomalies.
 Final Assembly and Functional Testing. Following the completion of mainboard
production, we proceed with the integration of the mainboard with other modules
and components, such as the display, front and rear cameras, battery, speakers, and
housing to form the complete device. The assembled units are then subjected to a
series of comprehensive functional tests, including current testing, man-machine
interface testing, antenna testing, aging testing, receiver audio testing, camera
testing, component interface testing, and visual inspection.
 Packaging and Shipping. Once the assembled devices have passed all required tests,
they are packaged together with accessories according to customer-specific shipping
requirements. The packaging process ensures that each unit is sealed and labeled
properly before being prepared for shipment.
The manufacturing process flowchart for our smartphones and tablets is as follows:
Simulation Delivery
Material Definition and
Selection
Product Solution Delivery
Verification
Product design
SMT maintenance
PCB loading
PCB laser marking
PCB cleaning
Solder paste printing
SPI inspection
PCB surface mount
Pre-Reflow AOI inspection
High-temperature welding
Pre-Reflow AOI inspection
PCBA depaneling
X-ray spot check
PCBA singulation
Software download
Function test
PCBA dispensing
Adhesive curing
Fitting shield cover
Appearance inspection
BOX scanned for
warehousing
Three-in-one Processing
Installing front camera
gasket, the main and auxiliary
microphone brackets
Applying thermal gel on
front housing
Installing front and rear
cameras as well as battery
Current test
MMI test
ANT test
Aging test
Assembly
and Testing
of Complete
Machines
Assembly and Maintenance
Station
RAUD test
CAM testing
CIT test
Appearance inspection
Appointment for marking,
upgrading, writing numbers,
and packaging
OA spot check
Rework
Packaging and Shipping
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
Mainboard Production and Testing
Final QA check
before storage
Provision for plans
The production cycle of our smartphone and tablets, from R&D to mass production,
typically ranges from four to six months.
BUSINESS
– 224 –


--- page 235 ---
AIoT Devices
We have established a flexible and modular manufacturing process tailored to the diverse
specifications of our AIoT product portfolio. The process is designed to support a wide range
of form factors, functionalities, and integration requirements, while ensuring efficiency,
reliability, and product quality. The manufacturing process for our AIoT devices is largely
similar to that of our smartphones and tablets and generally consists of four main stages:
product design and iteration, mainboard manufacturing and testing, final assembly and
functional testing, and packaging and shipping.
During the final assembly and testing stage, a key distinction from smartphone and tablet
manufacturing is the inclusion of airtightness testing for the assembled device, which is
essential for many AIoT devices to ensure environmental durability and protection. In addition,
the functional testing procedures vary depending on the specific type and use case of the AIoT
devices. Each product undergoes targeted testing based on its core application and feature set,
ensuring it meets the necessary performance and reliability standards before shipment.
The manufacturing process flowchart for our AIoT devices is as follows:
Simulation Delivery
Material Definition and
Selection
Product Solution Delivery
Verification
Product design
SMT maintenance
PCB loading
PCB laser marking
PCB cleaning
Solder paste printing
SPI Inspection
PCB surface mount
Pre-Reflow AOI inspection
High-temperature welding
Pre-Reflow AOI inspection
PCBA depaneling
X-ray spot check
PCBA singulation
Software download
Function test
PCBA dispensing
Adhesive curing
Fitting shield cover
Appearance inspection
BOX scanned for
warehousing
Assembly
and Testing
of Complete
Machines
Assembly and Maintenance
Station
OA spot check
Rework
Packaging and Shipping
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
Mainboard Production and Testing
Final QA check
before storage
Provision for plans LCM processing
Three-in-one processing
Four-in-one processing
Complete machine assembly
Current test
MMI test
Complete machine
airtightness test
Aging test
CIT test
Audio testing
Appearance Inspection
Scanning the barcode to
enter MES for packaging
The production cycle of our smart wearables, from R&D to mass production, typically
ranges from five to eight months. For our smart eyewear products, the production cycle is
generally longer, typically around one year.
BUSINESS
– 225 –


--- page 236 ---
Automated and Intelligent Manufacturing
Our manufacturing initiative is driven by three core pillars: lean production, automation,
and design for manufacturability, with digital transformation serving as a critical enabler. By
deeply integrating advanced manufacturing technologies with information systems, we aim to
enhance our entire manufacturing value chain. With this strategic approach, we strive for
high-quality, cost-effective, agile, and on-time production, thereby providing operational
support for our global expansion strategy.
We have accumulated extensive experience in the application and development of
automation technologies. Over the years, we have achieved notable breakthroughs in key areas
such as automated component mount, intelligent inspection, and 3D-AI technologies. These
capabilities have enabled us to further advance toward lean management, intelligent
manufacturing, automated quality control, and flexible production lines. As of the Latest
Practicable Date, dozens of critical manufacturing processes, such as PCBA, attachment
mounting, and automated testing, have reached a level of near-complete unmanned operation,
delivering significant economies of scale.
To support the continued advancement of automation and intelligent production, we had
accumulatively invested over RMB2 billion in production equipment as of the Latest
Practicable Date. We continue to increase our investment in robotics and “machine replacement
for labor” initiatives. As of the Latest Practicable Date, these efforts had allowed us to reduce
labor demand by over 1,000 personnel annually, generating direct cost savings of more than
RMB70 million each year.
QUALITY CONTROL
We are committed to delivering reliable product quality as a cornerstone of our mission
to be a leading smart hardware and service provider. Our quality management system, certified
to ISO 9001 standards across all major domestic and overseas manufacturing centers, ensures
rigorous control processes from design to delivery. By integrating international best practices
with localized execution, we consistently meet and exceed customer expectations for
reliability, performance, and safety.
Policy and System
We have established a comprehensive quality control system that combines institutional
policies with digital tools to ensure product safety, consistency, and traceability throughout the
entire product lifecycle. Our internal procedures enable transparent management from raw
materials to finished goods, supporting effective identification and resolution of quality issues.
BUSINESS
– 226 –


--- page 237 ---
In 2024, we launched a company-wide initiative to integrate digital quality management
with lean operations, which featured the deployment of a unified quality management platform
(QMS 1.0) and other intelligent systems to streamline inspection, monitoring, auditing, and
reporting processes. As a result, over 90% of our quality operations were digitalized as of the
Latest Practicable Date, improving overall efficiency and reducing operational costs.
To foster a strong quality culture, we regularly conduct training, awareness campaigns,
and internal reviews. We also collaborate with external institutions to enhance the professional
capabilities of our quality teams. Our quality incentive program further encourages employee
participation in continuous improvement efforts, ensuring long-term operational excellence.
Quality Control Process
We have implemented a comprehensive quality management system that covers the entire
product lifecycle, structured around three core pillars — quality planning, quality control, and
quality improvement. Our quality control system is applied across four key dimensions, namely
R&D quality, raw material quality, manufacturing process quality, and customer service
quality, ensuring end-to-end oversight of product safety and performance. The details of our
quality control across the four key dimensions are as follows:
 R&D Quality. We proactively identify and mitigate potential product risks through
a series of rigorous validation and reliability tests, including but not limited to safety
protection mechanisms against battery overheating, short-circuiting, and thermal
runaway. By addressing these risks at the design stage, we ensure that our products
meet stringent safety standards and perform reliably under real-world usage
scenarios, thereby minimizing safety hazards and enhancing end-user protection.
 Raw Material Quality. When introducing new materials and technologies, we utilize
a digital management platform to support traceability and process oversight. Based
on the principles of planning, control, and improvement, we have established a set
of internal quality management guidelines, including Product Quality Planning
(ሯඎഄྌ), Product Quality Control (ሯඎછՓ), and Product
Quality Improvement (ሯඎҷආ), to standardize quality processes and
drive continuous performance enhancement.
 Manufacturing Process Quality. We incorporate fail-safe design features into
production equipment to prevent operational errors and ensure worker safety. In
addition, we maintain strict control over product appearance and surface quality to
minimize potential consumer safety risks, such as sharp edges or molding defects.
To further ensure consistency and compliance, we implement in-process quality
check, real-time monitoring, and automated testing across key stages of the
manufacturing line. These measures allow for early detection and timely correction
of anomalies, contributing to higher first-pass yield rates and lower rework ratios.
BUSINESS
– 227 –


--- page 238 ---
 Customer Service Quality. We are committed to delivering high-quality customer
service by integrating lean manufacturing principles with market insights and
user-centric innovation. Supported by a professional technical support team and a
24/7 response mechanism, we continuously refine our product quality monitoring
and after-sales service metrics. Through targeted, high-efficiency services, we aim
to reduce annual product failure and repair rates, translating product value into
tangible benefits for our customers.
Product Recall Mechanism
We have established a comprehensive product recall mechanism to ensure timely and
effective handling of post-market quality issues. In the manufacturing phase, we strictly follow
the procedures outlined in our Nonconforming Product Control Policy (છՓ೻
ҏ), which governs the traceability, isolation, and rework of defective or abnormal items.
Through this process, we strive for zero leakage of nonconforming products into the market.
For post-sales scenarios, including customer complaints and field issues, we have defined
clear product recall triggers and execution protocols. According to these protocols, we would
initiate a product recall at the request of brand customers in circumstances where issues arise
from product design, manufacturing processes, or component quality, such as in cases
involving significant safety risks, widespread functional defects, or major quality incidents.
These protocols also specify the scope of affected products, and the corrective actions to be
taken, covering all relevant functions such as customer service, after-sales repair, and delivery
logistics.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any product recall incidents that would, individually or in the aggregate, have
material adverse effects on our results of operations, financial position, or growth prospects.
SALES AND MARKETING
As a company with a global vision, we carry out sales and marketing activities across both
domestic and international markets. Our overseas sales have recorded an overall upward trend
with certain fluctuations during the Track Record Period, reflecting changes in global customer
demand, product launch schedules, and market conditions. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, revenue from overseas markets amounted to
RMB7,063.5 million, RMB3,792.3 million, RMB14,975.9 million, RMB11,879.1 million and
RMB12,266.0 million, respectively, accounting for 24.1%, 13.9%, 32.3%, 34.0% and 39.1% of
our total revenue in the respective year/period.
BUSINESS
– 228 –


--- page 239 ---
On the whole, the development of our overseas business has supported our revenue scale
expansion, enhanced customer diversification, and improved the resilience of our business
performance. Our exports to the U.S., however, only accounted for 1.7% of our total revenue
during the Track Record Period, and therefore our business has had limited direct exposure to
U.S. tariff measures and cross-broader trade policies. The expansion of overseas sales did not
result in any material adverse impact from tariff or cross-border trade matters. For details, see
“Regulatory Overview — U.S. Tariffs.” We have adopted a flexible and diversified global
production and supply chain strategy, including establishing overseas manufacturing centers
and working with local suppliers where appropriate, which enables us to manage logistics and
cost efficiency and mitigate potential trade-related risks. In particular, we have been
continuously strengthening our global manufacturing footprint, including establishing
manufacturing centers in Vietnam and India. We plan to further expand our Vietnam
manufacturing center, which we believe will help us better manage cross-border trade
uncertainties going forward.
Leveraging our strong product capabilities and commitment to innovation, we continue to
expand our market presence and strengthen brand recognition in Chinese mainland and
overseas. Through a customer-oriented approach, we strive to deliver value, build long-term
relationships, and respond effectively to evolving market demands.
Sales Model
We adopt a diversified and proactive sales approach to develop and expand our customer
base, including direct customer engagement, industry networking, and reputation-driven
referrals. To enter a customer’s approved supplier list, we are typically required to undergo a
comprehensive qualification process, which may include reviews of our technical capabilities,
manufacturing standards, quality management systems, and corporate compliance. Even after
qualification, we are subject to ongoing customer assessments and audits, which determine our
eligibility to participate in project bidding or procurement discussions.
Once admitted into the supplier system, we generally obtain orders through competitive
tenders, negotiated bids, or through customer-initiated procurement processes. In addition to
responding to specific project needs, we also actively engage with customers by proposing
forward-looking product and service solutions based on historical sales data, market trends,
and consumer insights. Upon customer approval, we proceed with customized R&D and
design, followed by production and delivery.
In most cases, once we are qualified as an approved supplier, we establish long-term and
stable cooperative relationships with our customers, enabling us to participate continuously in
future projects and deepen our strategic partnerships.
BUSINESS
– 229 –


--- page 240 ---
The following chart illustrates our typical sales process across key product development
stages:
Product Strategy Stage Concept St age Planning Stage Development Stage Validation and
Release Stage
Clue
Collection
Obtaining
Product
Demand
Package from
Customers
Making Sales
Strategies and
Bidding
Proposals
Bidding and
Technical
Specifications
Execution
of Sales
Contracts
Developing a
Sales Plan
Receiving
Customer
Orders
Follow up on
Production
and Delivery
Rolling Sales
Forecast
Follow up on
Payment
Recovery
Customers
Our customers primarily consist of leading global smart device brands and top-tier
technology companies, many of which maintain stringent supplier qualification standards. We
generally granted a credit period of between 60 to 90 days to our customers during the Track
Record Period.
During the Track Record Period, the aggregate revenue generated from the five largest
customers in each year/period amounted to RMB25,697.1 million, RMB21,650.3 million,
RMB38,131.2 million and RMB24,881.0 million in 2022, 2023 and 2024 and the nine months
ended September 30, 2025, respectively, representing approximately 87.6%, 79.6%, 82.2% and
79.4% of our total revenue in the respective year/period. The revenue generated from our
largest customer in 2022, 2023 and 2024 and the nine months ended September 30, 2025
amounted to RMB13,357.1 million, RMB11,519.9 million, RMB17,261.7 million and
RMB8,953.6 million, respectively, representing approximately 45.5%, 42.4%, 37.2% and
28.6% of our total revenue in the respective year. The following table sets forth details of our
five largest customers in each year/period during the Track Record Period:
Customer
Type of Products
Purchased Background
Y ear of
Commencement
of Business
Relationship
Revenue
Contribution
% of Total
Revenue
(RMB’000)
For the nine months ended September 30, 2025
Customer A /H1118/H1118/H1118/H1118/H1118/H1118Smartphones, AIoT
devices, and tablets
Affiliates of a public multinational
corporation that designs,
develops, and sells smartphones,
smart hardware, and Internet of
Things (IoT) products.
2014 8,953,639 28.6
BUSINESS
– 230 –


--- page 241 ---
Customer
Type of Products
Purchased Background
Y ear of
Commencement
of Business
Relationship
Revenue
Contribution
% of Total
Revenue
(RMB’000)
Customer B /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones, and
tablets
Affiliates of a technology group
specializing in smart devices,
software platforms, and internet
services.
2018 7,236,973 23.1
Customer C /H1118/H1118/H1118/H1118/H1118/H1118Smartphones and smart
watches
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2021 4,035,523 12.9
Customer D /H1118/H1118/H1118/H1118/H1118/H1118Tablets, smartphones
and earphones
Affiliates of a public multinational
corporation in the information
technology sector with
operations spanning mobile
devices, computing systems,
semiconductor solutions, and
telecommunications
infrastructure.
2011 2,730,766 8.7
Customer H /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices A multinational corporation that
designs, manufactures and sells
eyewear products
2020 1,924,084 6.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 24,880,985 79.4
BUSINESS
– 231 –


--- page 242 ---
Customer
Type of Products
Purchased Background
Y ear of
Commencement
of Business
Relationship
Revenue
Contribution
% of Total
Revenue
(RMB’000)
For the year ended December 31, 2024
Customer A /H1118/H1118/H1118/H1118/H1118/H1118Smartphones, AIoT
devices, and tablets
Affiliates of a public multinational
corporation that designs,
develops, and sells smartphones,
smart hardware, and Internet of
Things (IoT) products.
2014 17,261,692 37.2
Customer B /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones, and
tablets
Affiliates of a technology group
specializing in smart devices,
software platforms, and internet
services.
2018 8,012,394 17.3
Customer C /H1118/H1118/H1118/H1118/H1118/H1118Smartphones and smart
watches
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2021 6,903,382 14.9
Customer D /H1118/H1118/H1118/H1118/H1118/H1118Tablets, smartphones
and earphones
Affiliates of a public multinational
corporation in the information
technology sector with
operations spanning mobile
devices, computing systems,
semiconductor solutions, and
telecommunications
infrastructure.
2011 3,344,024 7.2
Customer E /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones and
tablets
A public company in information
and communications technology
(ICT) solutions and smart device
products.
2016 2,609,680 5.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
38,131,172 82.2
BUSINESS
– 232 –


--- page 243 ---
Customer
Type of Products
Purchased Background
Y ear of
Commencement
of Business
Relationship
Revenue
Contribution
% of Total
Revenue
(RMB’000)
For the year ended December 31, 2023
Customer A /H1118/H1118/H1118/H1118/H1118/H1118Smartphones, AIoT
devices, and tablets
Affiliates of a public multinational
corporation that designs,
develops, and sells smartphones,
smart hardware, and Internet of
Things (IoT) products.
2014 11,519,947 42.4
Customer F /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones, and
tablets
A public multinational corporation
that designs, develops, and
manufactures smartphones,
smart hardware, and AI-driven
ecosystem products.
2020 2,989,087 11.0
Customer D /H1118/H1118/H1118/H1118/H1118/H1118Tablets and
smartphones
Affiliates of a public multinational
corporation in the information
technology sector with
operations spanning mobile
devices, computing systems,
semiconductor solutions, and
telecommunications
infrastructure.
2011 2,832,977 10.4
Customer C /H1118/H1118/H1118/H1118/H1118/H1118Smartphones and smart
watches
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2021 2,528,173 9.3
Customer E /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones and
tablets
A public company in information
and communications technology
(ICT) solutions and smart device
products.
2016 1,780,076 6.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21,650,260 79.6
BUSINESS
– 233 –


--- page 244 ---
Customer
Type of Products
Purchased Background
Y ear of
Commencement
of Business
Relationship
Revenue
Contribution
% of Total
Revenue
(RMB’000)
For the year ended December 31, 2022
Customer A /H1118/H1118/H1118/H1118/H1118/H1118Smartphones, AIoT
devices, and tablets
Affiliates of a public multinational
corporation that designs,
develops, and sells smartphones,
smart hardware, and Internet of
Things (IoT) products.
2014 13,357,127 45.5
Customer C /H1118/H1118/H1118/H1118/H1118/H1118Smartphones and smart
watches
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2021 6,387,885 21.8
Customer E /H1118/H1118/H1118/H1118/H1118/H1118AIoT devices,
smartphones and
tablets
A public company in information
and communications technology
(ICT) solutions and smart device
products.
2016 2,166,753 7.4
Customer D /H1118/H1118/H1118/H1118/H1118/H1118Tablets and
smartphones
Affiliates of a public multinational
corporation in the information
technology sector with
operations spanning mobile
devices, computing systems,
semiconductor solutions, and
telecommunications
infrastructure.
2011 2,087,956 7.1
Customer G /H1118/H1118/H1118/H1118/H1118/H1118Smartphones, tablets,
and automotive
electronics
A state-owned corporation that
develops, manufactures, and
distributes telecommunications
equipment and ICT solutions.
2022 1,697,371 5.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 25,697,092 87.6
Except for Customer A which held a 4.94% equity interest of our Company as of the
Latest Practicable Date, to the best knowledge of our Directors, none of our Directors or their
respective close associates, and none of our Shareholders who own more than 5% of the Shares
in issue, had any interest in any of our five largest customers in each year during the Track
Record Period.
BUSINESS
– 234 –


--- page 245 ---
Relationship with Our Largest Customer
Customer A, representing Xiaomi Group, was our largest customer in each year/period
during the Track Record Period. As of the Latest Practicable Date, Xiaomi Group held 4.94%
equity interest of our Company.
Xiaomi Corporation was established in April 2010 and was listed on the Main Board of
the Stock Exchange (stock code: 1810) in July 2018. Xiaomi is a consumer electronics and
smart manufacturing company focus on smartphones, smart hardware and IoT platform. In
particular, Xiaomi is one of the leading global smartphone brands. According to Canalys, in the
second quarter of 2025, smartphone shipments of Xiaomi Group ranked among the top three
globally for the 20 consecutive quarters.
Our revenue generated from our sales to Xiaomi Group was RMB13,357.1 million,
RMB11,519.9 million, RMB17,261.7 million and RMB8,953.6 million in 2022, 2023, 2024
and the nine months ended September 30, 2025, respectively, representing 45.5%, 42.4%,
37.2% and 28.6% of our total revenue for the corresponding year/period, respectively. During
the Track Record Period, Xiaomi Group was also our supplier and provided procurement
services and the purchase amounts from Xiaomi Group accounted for 0.6% of our total
purchase amount during the Track Record Period. Our business relationships with Xiaomi
Group primarily include:
 Sales of Smart Devices . During the Track Record Period, we provided smartphones,
tablets, AIoT devices and automotive electronics to Xiaomi Group. For details, see
“— Our Products.”
 Factoring Arrangement. The factoring arrangements provided by us and Xiaomi
Group are primarily conducted via the Tianxing Supply Chain Finance Platform (the
“Tianxing Platform ”), which is a platform operated by Beijing Xiaomi Electronic
Software Technology Co., Ltd. (ʮ̡), and offers
factoring services by Xiaomi Commercial Factoring (Tianjin) Co., Ltd. (ڭ
ଣ(ݵ)ப΂ʮ̡) and Tianxing (Tianjin) Commercial Factoring Co., Ltd. ( ˂
݋(ݵ)ʮ̡) (collectively, the “ Factoring Services Companies ”)
and Xiaomi Finance H.K. Limited (“ Xiaomi Finance HK ”). After generating trade
receivables or receiving the electronic certificates of trade receivables issued by us,
the suppliers have two options on its own discretion. If the suppliers have urgent
funding needs, they can initiate a financing application on the Tianxing Platform at
any time before maturity date for trade receivable discounting, which will incur
certain interest expenses. If the suppliers do not have immediate funding
requirements, they can choose to hold the trade receivables of the corresponding
electronic certificates until maturity and drawdown without incurring any interest.
Upon receiving the financing application from the suppliers, the Tianxing Platform
will review the materials and extend the financing for trade receivables to the
suppliers if the requirements are met. The suppliers who submitted such factoring
applications to the Factoring Services Companies and Xiaomi Finance HK supply
general-purpose raw materials to us, rather than materials exclusively used in
products manufactured under the Xiaomi brand.
BUSINESS
– 235 –


--- page 246 ---
/H11568Factoring Arrangement regarding RMB-denominated Payment. We issue
electronic certificates of trade receivables on the Tianxing Platform to certain
suppliers who have accepted such electronic certificates of trade receivables as
the payment measures, within our pre-approved credit limit on this platform.
For our RMB-denominated payment suppliers, if they choose to apply for
financing, the relevant trade receivable of the suppliers will be transferred by
us to one of the Factoring Services Companies upon our confirmation, which
will directly pay the receivables to the suppliers. Upon maturity, we will
deposit the payment for trade receivables into the factoring business account.
For amounts where the suppliers have applied for financing arrangement, the
payments will be made to the Factoring Services Companies to settle the
receivables; for amounts where no financing arrangement has been applied, the
payments will be made directly to the suppliers.
/H11568Factoring Arrangement regarding USD-denominated Payment. We also have
limited number of USD-denominated payment suppliers which opt to transfer
relevant trade receivables to Xiaomi Finance HK through the Tianxing
Platform. Upon our confirmation, Xiaomi Finance HK, as the factoring service
provider, will directly advance the receivable payments to the suppliers. Upon
maturity, we will pay the full amount into the designated account of the
Tianxing Platform. The designated account will allocate the portion
corresponding to the suppliers’ financing to Xiaomi Finance HK to settle the
financing, and disburse the remaining non-financed portion to the suppliers.
Pursuant to the agreed proportion, Factoring Services Companies and Xiaomi
Finance HK will then pay a portion of service fee to us respectively for our
assistance in promoting the supply chain business cooperation through the platform,
including among others verifying transaction authenticity, validating associated
trade receivables, and processing timely payments to designated accounts. This
service fee is accounted for as “other revenue” and is distinct from, and not used to
offset, any trade receivables due from Xiaomi Group. Except as disclosed herein in
this paragraph, there were no other relationships or arrangements among our Group,
the Factoring Services Companies, Xiaomi Finance HK, and/or any of the suppliers
subject to the factoring arrangement during the Track Record Period and up to the
Latest Practicable Date. According to our PRC Legal Advisors, such factoring
arrangement had complied with the applicable PRC laws and regulations.
As advised by Frost & Sullivan, the practice where enterprises introduce clients to
factoring companies and assist them in verifying the authenticity of the receivables,
while charging a service fee, is not uncommon in the industry. It is commercially
reasonable for suppliers to accept such payment arrangements, as they may have
financing requirements that can be efficiently settled within a large-scale and
reliable platform like the Tianxing Platform or in cooperation with well-known
factoring companies affiliated with Xiaomi Group. In 2022, 2023, 2024 and the nine
months ended September 30, 2025, 149, 123, 152 and 114 of our suppliers submitted
such factoring application to the Factoring Services Companies, respectively.
BUSINESS
– 236 –


--- page 247 ---
As of December 31, 2022, 2023, 2024 and September 30, 2025, the amounts of
factoring financing obtained by suppliers from trade and bills payable via Factoring
Services Companies or Xiaomi Finance HK amounted to RMB672.0 million,
RMB923.6 million, RMB559.9 million and RMB373.0 million, respectively.
During the Track Record Period, our revenue from Factoring Services Companies
and Xiaomi Finance HK regarding such supplier finance arrangements amounted to
RMB56.1 million, accounting for 0.04% of our total revenue during the same period.
 Procurement Services: During the Track Record Period, we also procured certain
components, such as camera component and functional ICs, from Xiaomi Group for
the production of the smart devices primarily through the Buy & Sell model. For
details, see “— Procurement — Procurement Model.” Our purchases from Xiaomi
Group amounted to RMB6.0 million, RMB3.9 million, RMB244.4 million and
RMB443.1 million in 2022, 2023, 2024 and the nine months ended September 30,
2025, respectively. Such purchase amount increased significantly in 2024 and the
nine months ended September 30, 2025, primarily because Xiaomi Group purchased
certain chips directly from their suppliers and subsequently reselling them to our
Group for use in our manufacturing processes, in order to centralize its procurement
and better manage unit costs.
For further details of our customer concentration risk, see “Risk Factors — Risks Relating
to Our Industry and Business — We derived a substantial portion of revenue from certain major
customers during the Track Record Period and the loss of, or a significant reduction in, revenue
from such customers could materially and adversely affect our results of operations.”
Notwithstanding our business relationships with Xiaomi Group during the Track Record
Period, our Directors are of the view that we will be able to control the risk of reliance, and
our significant sales to Xiaomi Group would not adversely affect our business operation, our
financial performance and would not impact on our suitability for Listing due to the following
reasons:
 Complementary Industry Positions and Mutual Benefit . As one of the core
manufacturing modes in the consumer electronics sector, penetration rate of ODM
mode in consumer electronics products grew from 40.3% in 2020 to 46.2% in 2024,
and is expected to reach 50.8% by 2029 according to Frost & Sullivan. Xiaomi, as
a leading consumer electronics brand, have been adopting ODM model since years
ago. Our Group and Xiaomi are the respective industry key players in the upstream
(ODM manufacturers) and downstream (brand owners) positions of the smartphone
and smart device industries, which are both highly concentrated. For example, the
global shipments of the smartphone ODM market had a concentrated market share,
with the top three participants accounting for 75.1% in 2024. Among them, our
Group ranked first in the global market with a market share of 32.6%. This
complementary relationship makes the business transactions between the two parties
commercially reasonable.
BUSINESS
– 237 –


--- page 248 ---
Our business relationship with Xiaomi Group can be traced back to 2014, even
before Xiaomi Group’s investment in our Company in 2015. Our sales to and
purchases from Xiaomi Group are conducted in the ordinary course of business and
on commercial terms negotiated on an arm’s length basis.
 Win-win Collaborations and Co-growth Trajectory . We provide full-stack ODM
services to Xiaomi. In particular, over the years, we have successfully delivered
several best-selling models in the global market and the Chinese market, such as the
Redmi 9 and Redmi Note 10, with cumulative shipments of each exceeding tens of
millions of units. Our strategic collaborations with key customers, including
Xiaomi, have further amplified our co-growth trajectory. As Xiaomi has expanded
its product portfolio beyond smartphones, our partnership has evolved to encompass
new categories like tablets, smart watches/bands, and automotive segments. In
addition, by partnering with industry leaders like Xiaomi, we can quickly respond
to market demands and industry trends, while also leveraging our own industry
insights and foresight to guide market development and support our technological
innovation and product upgrades.
 Robust Internal Compliance and Transparency. As publicly listed companies, both
Xiaomi Corporation and our Company are subject to the supervision of regulatory
authorities and the public. Both companies have robust internal control systems and
high transparency, with well-regulated supply chain management and procurement
processes.
 Diversifying Customer Base Leveraging Our Past Successful Experience . During the
Track Record Period, our proportion of revenue generated from our sales to Xiaomi
Group has actually decreased throughout the years/period. The proportion of our
revenue generated from the Xiaomi Group amounted to 45.5%, 42.4%, 37.2% and
28.6% of our total revenue in 2022, 2023, 2024 and the nine months ended
September 30, 2025, respectively. In our core smartphone business, we serve a
majority of the world’s top-ranked smartphone manufacturers. Among the world’s
top 10 smartphone brands in terms of shipment in 2024 according to Frost &
Sullivan, we have established partnerships with eight of them. As of the Latest
Practicable Date, our collaborations with these eight brands have lasted an average
of over five years. We have not only achieved an outstanding track record of
maintaining major customers for a significant amount of time but also consistently
make efforts to diversify our customer base by leveraging our previous successful
experiences. We obtained one, 15, 13 and 13 new customers in 2022, 2023 and 2024
and the nine months ended September 30, 2025, respectively. We also plan to
proactively cultivate new customers, particularly American and European brands,
self-owned brands, and IoT hardware manufacturers, aiming to replicate our
successful experience with a broader and more diversified customer ecosystem.
BUSINESS
– 238 –


--- page 249 ---
 Expanding Product Categories. We will continue to expand the “1+2+X” product
portfolio and penetrate high potential segments. We believe that by duplicating our
successful experience and expertise to cover more emerging smart device categories,
we can reduce our reliance on revenue from a limited range of products. During the
Track Record Period, we have experienced a significant increase in our AIoT
business and have successfully penetrated into emerging smart device categories,
such as AI PCs and automotive electronics. This diversification strategy will not
only enhance our revenue streams but also strengthen our overall market position
and resilience.
In addition, our Directors believe that our relationship with Xiaomi Group will continue
to be mutually complementary to a large extent, and it is unlikely that there would be any
materially adverse changes to, or termination of, such relationship in the foreseeable future,
due to the following reasons:
 Steady Growth Prospects of Consumer Electronics Industry and ODM Services.
According to Frost & Sullivan, global shipments of consumer electronics are
expected to grow from 2,113.3 million units in 2024 to 2,489.6 million units in 2029.
Consumer electronics ODM providers leverage their established technological
capabilities, economies of scale, and efficient supply chain management to deliver
end-to-end solutions for the consumer electronics sector. This strategic approach
refines the global division of industrial labor, enabling highly efficient resource
integration across the industry. As a result, global ODM shipments of consumer
electronics are expected to grow from 976.9 million units in 2024 to 1,265.7 million
units in 2029. According to Canalys, in the second quarter of 2025, smartphone
shipments of Xiaomi Group ranked among the top three globally for the 20
consecutive quarters with a market share of 14.7%. As of September 30, 2025, the
number of connected IoT devices on Xiaomi Group’s AIoT platform (excluding
smartphones, tablets and laptops) increased to 1,035.5 million, representing an
increase of 20.2% comparing to the same period in the past year. Xiaomi Group’s
smart EV business is making remarkable progress. Given the Xiaomi’s dominant
position in the global consumer electronics industry and said industry demonstrating
trends of market consolidation, our Directors believe that it is likely the Xiaomi
Group will continue have a substantial demand for ODM services in the foreseeable
future.
 Competitive Edge in Open Tenders. We typically enter into supply agreements with
Xiaomi Group through open tenders or negotiations. Our deep understanding of
Xiaomi, gained through market research and years of collaboration, provides us with
a competitive edge over our competitors in these open tender processes. We have
built mutual trust with Xiaomi Group which allowed us to constantly provide the
high-quality products and services that met Xiaomi Group’s specific requirements.
Renowned brands are highly selective when choosing ODM partners, meticulously
evaluating factors such as technical expertise, production processes and
manufacturing capabilities, product quality, and delivery abilities. Once an ODM
partner has been proven capable across these key criteria, the renowned brands are
reluctant to change ODM partner and often decide to forge long-term, large-scale
business partnerships.
BUSINESS
– 239 –


--- page 250 ---
Major Terms with Our Key Customers
Set forth below is a summary of the major terms in our contracts with key customers:
Scope of Work /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The customer commissions us to design, develop,
and manufacture complete hardware products.
Duration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The duration of our contracts with customers is
generally between one to two years.
Technical Specifications /H1118/H1118/H1118/H1118/H1118/H1118/H1118Product specifications are defined in the jointly
confirmed product definition document and other
technical documents.
Deliverables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We are responsible for delivering a competitive
product solution, detailed engineering design, and
mass production readiness support.
BOM and Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118BOM pricing is pre-agreed and fixed, except where
justified by industry-wide pricing fluctuations. If
BOM cost increases due to us, we bear the excess.
If due to customer-requested design changes, the
customer bears the incremental cost.
Project Timeline and Delivery
Schedule /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The development and production period is
determined by the customer and us. Delay penalties
apply based on the number of days delayed and
cumulative project delays.
Intellectual Property /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Appearance design and all technical solutions
developed based on customer requirements are
owned by the customer. We warrant that product
designs (e.g., watch faces) are original and non-
infringing.
Product Maintenance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We provide maintenance and upgrade services for
an agreed period of time from the product launch
date. We also support customizations and provide
updates if technical improvements are made.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any defaults under the contracts with our customers that would have a material
adverse impact on our results of operations, financial performance, or growth prospects.
BUSINESS
– 240 –


--- page 251 ---
Pricing Policy
Our pricing policy is grounded in the core competitive strengths of our ODM model —
cost efficiency and operational effectiveness. As a fundamental principle, we price our
products based on a framework where the product cost, development expenses, and reasonable
margin do not exceed the total cost, expenses, and margin that would be incurred by the
customer through in-house development. This ensures our solutions remain both cost-attractive
and value-competitive. In practice, we also take into account the prevailing competitive
landscape when setting specific product pricing, allowing us to remain flexible and responsive
to market dynamics.
To mitigate the impact of raw material price fluctuations, we proactively focus on cost
optimization at the product development stage, including the adoption of new, lower-cost
materials and the streamlining of manufacturing processes. In periods of significant industry
volatility, we engage in friendly and transparent negotiations with customers, and reflect the
outcome in our pricing arrangements as appropriate.
Through our current approach to product pricing, we aim to establish long-term customer
partnerships while maintaining market competitiveness and sustainable profitability.
Third-Party Payment Arrangements
During the Track Record Period, a limited number of our customers settled payments with
us through accounts that do not belong to the contractual parties under the corresponding sales
and purchase agreements. These customers settled their payments with us through third-party
payors primarily because they operated small-scale businesses or sole proprietorships, or
preferred the convenience of settling payments through the bank accounts of third-party
payors. In 2022, 2023 and 2024 and the nine months ended September 30, 2025, the number
of customers involved in such arrangements was six, four, five and four, respectively. The
corresponding transaction amount was RMB17.7 million, RMB21.3 million, RMB17.4 million
and RMB4.6 million in 2022, 2023 and 2024 and the nine months ended September 30, 2025,
respectively, accounting for 0.06%, 0.08%, 0.04% and 0.01% of our total revenue for the same
periods.
By the end of June 2025, we had terminated all third-party payment arrangements. We
have established a management system for trade receivables to prevent the recurrence of
third-party payment arrangements. Payments from customers shall only be made directly by the
contractual parties of the sales and purchase agreements. We do not accept payments from
personal accounts, accounts of related parties, or any third-party payors. The termination of the
third-party payment arrangements did not adversely affect customers’ settlements with us.
Relevant customers have agreed to settle payments directly through their own accounts as the
contractual parties under the corresponding sales and purchase agreements.
BUSINESS
– 241 –


--- page 252 ---
After-sales Services and Customer Engagement
We are committed to delivering high-quality after-sales services and continuously
improving our customer service system to enhance satisfaction and support long-term
partnerships. By placing strong emphasis on customer audits, feedback, and communication,
we collect valuable insights on product performance and quality through multiple
communication channels. These insights serve as a foundation for ongoing product and service
enhancements.
Guided by a customer-centric philosophy, we have established a series of internal
procedures, including the Customer Issue Closed-Loop Handling Process (˒ਪᕚௐᐑஈ
೻), Product Quality Improvement Process (೻), and Production
Quality Exception Handling Process (೻), to standardize and
strengthen customer service management.
Our after-sales service framework covers five key modules: service strategy management,
service execution, service quality, warranty and repair, and issue resolution. Our
comprehensive after-sales service system enables us to respond quickly and effectively to
customer needs and maintain high service efficiency. In the event of customer complaints or
feedback, we follow a structured “2485” response mechanism:
 initial response within two hours of receiving customer complaint;
 second response within 24 hours, with emergency measures to ensure normal
production;
 third response within 48 hours with corrective action plans; and
 fourth response within five days to validate and standardize the solutions.
In support of long-term quality improvement, we have implemented a comprehensive V oice
of the Customer (“ VOC”) management system, which systematically collects, analyzes, and
categorizes customer feedback, suggestions, and complaints. The VOC process follows a
“Collect — Analyze — Improve — V alidate” cycle, transforming customer inputs into actionable
improvements that address key concerns and elevate both product and service quality.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material complaints related to product quality or customer dissatisfaction.
BUSINESS
– 242 –


--- page 253 ---
PROCUREMENT
We have established a robust procurement system to support our production and delivery
capabilities, covering the sourcing of key raw materials, supplier management, and supply
chain coordination. Our procurement strategy emphasizes quality, cost-effectiveness, and
supply stability, enabling us to maintain operational efficiency and product consistency.
Through long-term cooperation with qualified suppliers and continuous optimization of our
supply chain, we enhance our ability to respond to market changes, control procurement risks,
and ensure timely fulfillment of customer orders.
Procurement Model
We procure a wide range of materials and services essential for the R&D and
manufacturing of smart hardware. Our primary raw materials include electronic components
such as SoCs, functional ICs, memory modules, and speakers; functional modules including
screens, cameras, batteries, and PCBs; structural parts such as casings; and various packaging
materials. We source our raw materials from both within China and overseas. In addition, we
also procure outsourced manufacturing services and external R&D and testing services to
support production and innovation.
Our suppliers are primarily located in Chinese mainland, Hong Kong, Macau, Taiwan,
Singapore and South Korea. We do not limit the procurement of raw materials from suppliers
located in the same country or region as our manufacturing centers. In determining the location
of suppliers, we prioritize long-term stability and the ability to meet customer and business
needs. For certain categories, particularly bulky materials or those that are more sensitive to
quality issues, we give preference to local sourcing, provided that the quality and cost of such
local supplies meet our standards. The following table sets forth the breakdown of our purchase
amount in each year/period of the Track Record Period by the location of our suppliers.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Chinese mainland /H111820,661,479 79.8 19,638,374 77.3 29,421,404 67.7 17,877,724 61.7
Hong Kong, Macau
and Taiwan /H1118/H1118/H1118/H11183,688,828 14.2 4,023,551 15.8 9,246,486 21.3 4,483,111 15.5
Singapore /H1118/H1118/H1118/H1118/H1118/H1118414,937 1.6 956,868 3.8 3,197,554 7.4 5,516,490 19.0
South Korea /H1118/H1118/H1118/H1118897,226 3.5 373,693 1.5 1,174,456 2.7 502,837 1.7
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118241,124 0.9 415,483 1.6 410,630 0.9 594,208 2.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,903,594 100.0 25,407,969 100.0 43,450,530 100.0 28,974,370 100.0
Note:
(1) Primarily including India and the U.S.
BUSINESS
– 243 –


--- page 254 ---
We primarily operate under two main procurement models: the independent procurement
model and the Buy & Sell model.
 Independent Procurement Model. Under the independent procurement model, we
directly source materials from suppliers, conduct quality inspections, and manage
warehousing internally.
 Buy & Sell Model. Some of our customers adopt the Buy & Sell model, primarily
due to considerations such as material quality and timely supply. We procure certain
materials and components from the customers for our production. According to Frost
& Sullivan, this model is widely adopted in the electronics manufacturing industry
— particularly in the ODM sector — and is a common transaction structure used by
major international smart device brands.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, (i) our purchase
amount under the independent procurement model amounted to RMB23,927.6 million,
RMB23,319.1 million, RMB35,873.3 million and RMB23,176.2 million, respectively,
accounting for 92.4%, 91.8%, 82.6%, 80.0% of our total purchase amount in the respective
year/period; and (ii) our purchase amount under the Buy and Sell model amounted to
RMB1,976.0 million, RMB2,088.9 million, RMB7,577.2 million and RMB5,798.1 million,
respectively, accounting for 7.6%, 8.2%, 17.4%, 20.0% of our total purchase amount in the
respective year/period. The gross profit margin under the independent procurement model and
the Buy & Sell model may vary depending on the relative direct material costs specified by
brand customers after discussing with us compared to those sourced through our own supply
chain. As such, gross profit margin differences between the two models are project-specific and
not comparable.
Procurement Process
We have established a well-structured and systematic procurement process to ensure
timely, efficient, and quality-controlled sourcing of raw materials and services in support of
our manufacturing operations.
At the planning level, our procurement department formulates procurement plans based
on the production schedule and adjusts it dynamically in response to actual production needs.
We also conduct weekly rolling reviews of production and inventory status to determine safety
stock levels. When inventory for specific materials falls below threshold levels, the production
team submits updated production plans, which are reviewed by material control personnel to
generate procurement requests. These are subsequently executed by the procurement
department.
Our supplier sourcing process is governed by strict internal controls. New suppliers are
introduced by the resource development team and must undergo review and approval by the
procurement committee before being added to our qualified supplier pool. Once a project is
initiated, the procurement team issues internal notifications to launch the tendering process,
BUSINESS
– 244 –


--- page 255 ---
followed by bid evaluation and final selection by a dedicated procurement committee, which
includes the CEO and relevant department heads. Upon vendor selection, the planning
department prepares and implements the procurement plan based on customer orders or market
forecasts.
Upon completion of procurement, materials undergo a two-step verification process,
including (i) initial verification of quantity, and (ii) specifications and quality inspection by the
quality control team to classify materials as qualified, defective, or disputed. Defective items
are returned to the supplier, and only qualified materials are transferred to the warehouse.
The following chart illustrates the key stages through our typical procurement process:
Resource Development
Procurement
Representative
Material Controller in
the Planning Department
Procurement
Committee
Tendering Specialist
New supplier
introduction to
expand the
resource pool
Initiate bidding
and evaluation
Full life cycle cost
reduction tracking
Formulate
procurement plan
Bid awarding
To approve tender
applications and
summarize
quotations
Notify
procurement to
initiate tendering
Submit online
tender application
Supply Chain Management
We have established a comprehensive supplier management system that covers the full
lifecycle of supplier engagement, including onboarding, daily oversight, performance
evaluation, and elimination mechanisms, to ensure the stability, quality, and compliance of our
supply chain. The details of this supplier management system are set forth as below:
 Supplier Onboarding . We have implemented clear criteria and approval procedures
for the selection of new suppliers. A cross-functional evaluation team, led by the
procurement department, conducts on-site inspections and risk assessments of
potential suppliers. Only those meeting our standards for quality, capability, and
compliance are added to our approved supplier list. We evaluate the financial
condition, cash flow, profitability and overall operational performance of all
supplier candidates. If we intend to use a prepayment settlement method with a
specific supplier, it must undergo a multi-layered review requiring sequential
approvals by multiple levels of procurement management and a senior capital
manager from the finance department, followed by final approval from the head of
procurement.
BUSINESS
– 245 –


--- page 256 ---
 Ongoing Supplier Management . As part of our routine supplier oversight, we have
developed detailed standards, including component-level reliability testing
specifications for critical parts. We also conduct stringent reviews of suppliers’
manufacturing environments to ensure their processes meet the quality and
regulatory requirements of both domestic and international markets.
 Supplier Performance Evaluation . We implement a semi-annual performance review
of all approved suppliers in our directory. Evaluation criteria include product
pricing, quality, delivery performance, and service collaboration. Suppliers receive
composite scores based on these metrics and are assigned tiered ratings accordingly.
We also conduct financial statement reviews to assess their operational status.
Leveraging this dynamic assessment framework, we are able to continuously
optimize our supplier base, reward high-performing partners, and phase out
underperforming ones.
Suppliers
Our suppliers primarily include providers for raw materials, equipment, production
consumables, and packaging materials, as well as outsourced manufacturing service providers
and external R&D and testing partners. The credit period granted by our suppliers was
generally between 60 to 90 days during the Track Record Period.
During the Track Record Period, purchases from the five largest suppliers in each
year/period amounted to RMB6,340.4 million, RMB4,209.8 million, RMB13,996.8 million and
RMB9,828.4 million in 2022, 2023 and 2024 and the nine months ended September 30, 2025,
respectively, which accounted for approximately 24.5%, 16.5%, 32.2% and 33.9% of our total
purchases in the respective year/period. Our purchases from our largest supplier in each year
during the Track Record Period amounted to RMB2,025.3 million, RMB948.1 million,
RMB5,020.0 million and RMB3,718.1 million in 2022, 2023 and 2024 and the nine months
ended September 30, 2025, respectively, which accounted for approximately 7.8%, 3.7%,
11.6% and 12.8% of our total purchases in the respective year/period. The following table sets
forth details of our five largest suppliers in each year/period during the Track Record Period:
Supplier
Type of Products/
Services Provided Background
Y ear of
Commencement
of Business
Relationship Purchase Amount
% of Total
Purchase
(RMB’000)
For the nine months ended September 30, 2025
Supplier A /H1118/H1118/H1118/H1118/H1118/H1118Memories, screens, and
cameras
Affiliates of a technology group
specializing in smart devices,
software platforms, and
internet services.
2019 3,718,077 12.8
BUSINESS
– 246 –


--- page 257 ---
Supplier
Type of Products/
Services Provided Background
Y ear of
Commencement
of Business
Relationship Purchase Amount
% of Total
Purchase
(RMB’000)
Supplier C /H1118/H1118/H1118/H1118/H1118/H1118SoCs and chipsets A company engaged in the
development, manufacture, and
sales of chips.
2006 1,835,746 6.3
Supplier B /H1118/H1118/H1118/H1118/H1118/H1118Screens, cameras, and
fingerprint recognition
instruments
Affiliates of a company
principally engaged in design
and manufacture of automation
instruments and electronic
devices.
2008 1,736,916 6.0
Supplier G /H1118/H1118/H1118/H1118/H1118/H1118Batteries, casings,
screens, and memories
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2007 1,641,422 5.7
Supplier K /H1118/H1118/H1118/H1118/H1118/H1118Master chips and
chipsets
Affiliates of a group dedicated to
providing solutions for
industries such as
telecommunications,
automotive, computing, IoT,
consumer electronics, and
industrial control
2017 896,282 3.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 9,828,443 33.9
For the year ended December 31, 2024
Supplier A /H1118/H1118/H1118/H1118/H1118/H1118Memories, screens, and
cameras
Affiliates of a technology group
specializing in smart devices,
software platforms, and
internet services.
2019 5,020,002 11.6
Supplier B /H1118/H1118/H1118/H1118/H1118/H1118Screens, cameras, and
fingerprint recognition
instruments
Affiliates of a company
principally engaged in design
and manufacture of automation
instruments and electronic
devices.
2008 3,581,957 8.2
Supplier C /H1118/H1118/H1118/H1118/H1118/H1118SoCs and chipsets A company engaged in the
development, manufacture, and
sales of chips.
2006 3,136,000 7.2
BUSINESS
– 247 –


--- page 258 ---
Supplier
Type of Products/
Services Provided Background
Y ear of
Commencement
of Business
Relationship Purchase Amount
% of Total
Purchase
(RMB’000)
Supplier D /H1118/H1118/H1118/H1118/H1118/H1118Memories Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2008 1,174,455 2.7
Supplier E /H1118/H1118/H1118/H1118/H1118/H1118Screens A Chinese company specialized
in the research, development,
and manufacturing of advanced
display technologies and
devices.
2021 1,084,396 2.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
13,996,810 32.2
For the year ended December 31, 2023
Supplier B /H1118/H1118/H1118/H1118/H1118/H1118Screens, cameras, and
fingerprint recognition
instruments
Affiliates of a company
principally engaged in design
and manufacture of automation
instruments and electronic
devices.
2008 948,125 3.7
Supplier C /H1118/H1118/H1118/H1118/H1118/H1118SoCs and chipsets A company engaged in the
development, manufacture, and
sales of chips.
2006 944,761 3.7
Supplier F /H1118/H1118/H1118/H1118/H1118/H1118Memories A public multinational
corporation that designs,
develops, and manufactures
smartphones, smart hardware,
and AI-driven ecosystem
products.
2020 914,316 3.6
Supplier G /H1118/H1118/H1118/H1118/H1118/H1118Batteries, casings,
screens, and memories
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2007 796,936 3.1
BUSINESS
– 248 –


--- page 259 ---
Supplier
Type of Products/
Services Provided Background
Y ear of
Commencement
of Business
Relationship Purchase Amount
% of Total
Purchase
(RMB’000)
Supplier H /H1118/H1118/H1118/H1118/H1118/H1118SoCs and screens A company engaged in the
manufacturing and sales of
batteries.
2004 605,689 2.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
4,209,827 16.5
For the year ended December 31, 2022
Supplier I /H1118/H1118/H1118/H1118/H1118/H1118Screens and cameras Affiliates of a group principally
engaged in the design and
manufacturing of screens.
2015 2,025,250 7.8
Supplier J /H1118/H1118/H1118/H1118/H1118/H1118SoCs and functional ICs A company engaged in the
manufacture and sales of
chips.
2007 1,285,602 5.0
Supplier G /H1118/H1118/H1118/H1118/H1118/H1118Batteries, casings,
screens, and memories
Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2007 1,072,791 4.1
Supplier B /H1118/H1118/H1118/H1118/H1118/H1118Screens, cameras, and
fingerprint recognition
instruments
Affiliates of a company
principally engaged in design
and manufacture of automation
instruments and electronic
devices.
2008 1,059,566 4.1
Supplier D /H1118/H1118/H1118/H1118/H1118/H1118Memories Affiliates of a multinational
corporation that designs,
manufactures, and markets
electronics, heavy industrial
equipment (including
shipbuilding and construction),
financial services, and
biotechnology products.
2008 897,226 3.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
6,340,435 24.5
To the best knowledge of our Directors or none of our Directors, their respective close
associates, and none of our Shareholders who own more than 5% of the Shares in issue, had
any interest in any of our five largest suppliers in each year during the Track Record Period.
BUSINESS
– 249 –


--- page 260 ---
Major Terms with Our Key Suppliers
Set forth below is a summary of the major terms in our contracts with key suppliers:
Scope of Supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The supplier agrees to manufacture and supply, and
we agree to purchase, certain agreed products or
special/customized products as specified in
individual purchase orders. We generally do not
include minimum purchase commitments in our
contracts with suppliers.
Duration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our contracts with suppliers generally do not
contain a fixed contractual period.
Delivery and Performance
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Suppliers are required to set up a dedicated delivery
team and internal systems to ensure timely
fulfillment, deliver goods on time, and cooperate
with our delivery audits.
Penalties for Delivery
Non-Compliance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Liquidated damages apply for delivery delays,
incorrect shipments, or packaging violations.
Specific fines vary per incident, depending on the
severity. Repeated delivery issues may lead to
deduction of payments or contract termination.
Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Suppliers are generally required to offer us their
most favorable pricing terms, not higher than prices
offered to any other customer. If the market price
drops, suppliers must adjust prices accordingly for
unpaid products.
Quality Control /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Products must meet national, industry, and our
specific quality standards. Quality inspection is
conducted within certain days of delivery and
rejection results in return or replacement.
Payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Payments are made upon successful delivery and
acceptance, against valid invoices. We reserve the
right to offset any liquidated damages or
compensation amounts against payments due.
Breach and Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118In case of product non-conformance, we may
demand re-supply or terminate the contract. In case
of IP disputes, confidentiality breaches, or
unilateral termination by the supplier, we may
impose contractual penalties based on a certain
proportion of order value.
BUSINESS
– 250 –


--- page 261 ---
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any defaults under the contracts with our suppliers that would have a material
adverse impact on our results of operations, financial performance, or growth prospects.
OVERLAP BETWEEN CUSTOMERS AND SUPPLIERS
During the Track Record Period, certain of our five largest customers in each year were
also our suppliers, and certain of our five largest suppliers in each year were also our
customers. This overlap primarily arose from our adoption of the Buy & Sell model, under
which we procure certain materials components from our customers for our production.
According to Frost & Sullivan, this model is widely adopted in the electronics manufacturing
industry — particularly in the ODM sector — and is a common transaction structure used by
major international smart device brands. Our sales to and purchases from such customers were
conducted in the ordinary course of business and on commercial terms negotiated on an arm’s
length basis, with pricing determined through written statements of work or purchase orders,
standardized delivery and payment terms, and market-benchmarking provisions that ensure the
transaction prices are in line with prevailing market levels. For further details on the Buy &
Sell model, see “— Procurement Model.”
Specifically, Customer A, Customer B (or Supplier A), Customer C (or Supplier D),
Customer D (or Supplier G), Customer E and Customer F (or Supplier F) were also our
suppliers. While these customers purchased items as detailed in “— Sales and Marketing —
Customers” from us, we purchased (i) cameras and after-sales repair services from Customer
A, (ii) memories, screens, and cameras from Customer B (or Supplier A), (iii) memories from
Customer C (or Supplier D), (iv) batteries, casings, screens, and memories from Customer D
(or Supplier G), (v) technology development, excess and obsolete inventory, and training
services from Customer E, and (vi) memories from Customer F (or Supplier F). Except for
Customer B (or Supplier A) and Customer D (or Supplier G), the purchase amounts from each
of these customers who were also our suppliers accounted for less than 5% of our total
purchase amount in each year during the Track Record Period. For details of our purchases
from Customer B (or Supplier A) during the Track Record Period, see “— Procurement —
Suppliers.”
In addition, Supplier A (or Customer B), Supplier B, Supplier D (or Customer C),
Supplier E, Supplier F (or Customer F), Supplier G (or Customer D) and Supplier I were also
our customers. While these suppliers provided us with the products as detailed in “—
Procurement — Suppliers,” we sold (i) AIoT devices, smartphones, and tablets to Supplier A
(or Customer B), (ii) main components to Supplier B, (iii) smartphones and smart watches to
Supplier D (or Customer D), (iv) materials for tablets to Supplier E, (v) AIoT devices,
smartphones, and tablets to Supplier F (or Customer F), (vi) tablets and smartphones to
Supplier G (or Customer D), and (vii) main components and parts to Supplier I. Except for
Supplier A (or Customer B), Supplier D (or Customer C), Supplier F (or Customer F) and
Supplier G (or Customer D), the revenue generated from each of these suppliers who were also
our customers accounted for less than 5% of our total revenue in each year during the Track
BUSINESS
– 251 –


--- page 262 ---
Record Period. For details of our revenue generated from Supplier A (or Customer B), Supplier
D (or Customer C), Supplier F (or Customer F) and Supplier G (or Customer D) during the
Track Record Period, see “— Sales and Marketing — Customers.”
In 2022, 2023, 2024 and the nine months ended September 30, 2025, the aggregate gross
profit we derived from these overlapping customers and suppliers, consisting of Customer A,
Customer B (or Supplier A), Customer C (or Supplier D), Customer D (or Supplier G),
Customer E, Customer F (or Supplier F), Supplier B, Supplier E and Supplier I, amounted to
RMB1,844.0 million, RMB1,980.1 million, RMB2,040.0 million and RMB2,004.5 million,
respectively, accounting for 78.0%, 76.4%, 75.4% and 76.9% of our total gross profit in the
corresponding period.
W AREHOUSING AND LOGISTICS
We have established an integrated warehousing and logistics system to support the
efficient storage, management, and distribution of materials and finished products across our
production and supply chain operations.
Warehousing
To support efficient material flow and production needs, we have established a
comprehensive warehousing network that included approximately 15 warehouses across key
locations, such as Huizhou, Nanchang, Hong Kong and Vietnam, as of the Latest Practicable
Date. These facilities are categorized into seven main types: central warehouses, factory
warehouses, co-managed warehouses, knock down warehouses, Hong Kong material
warehouse, direct shipment warehouses, and vendor managed inventory (“ VMI”) warehouses.
As of the Latest Practicable Date, our warehousing footprint covered approximately
102,200 square meters, with around 54,500 square meters operated under lease. We owned our
factory warehouses in Huizhou, Nanchang and Vietnam, which directly support production
operations. We also have major leased facilities including our central warehouse in Huizhou,
Nanchang warehouse, direct shipment warehouses, VMI facilities, and the Hong Kong material
warehouse.
The deployment of our warehouses is strategically aligned with factory locations and
logistics routes, ensuring timely material delivery and cost efficiency. Each warehouse is
designed and managed in accordance with industry standards, with storage environments
tailored to different material characteristics, including dedicated zones for electrostatic-
sensitive materials, general components, and finished goods.
Logistics
We are generally responsible for delivering the products to our customers, unless the
customers request to pick up the products themselves. As our products are primarily smart
devices with relatively high value and requiring efficient delivery, we maintain strict
BUSINESS
– 252 –


--- page 263 ---
requirements and management over our logistics operations. To support our global operations,
we engage third-party logistics providers for our delivery across the globe. As of the Latest
Practicable Date, we maintained a diversified logistics network through partnerships with
nearly 20 external logistics service providers to support our global and regional business needs.
We adopt a dual-layer cooperation strategy, establishing both strategic and general partnerships
with logistics providers based on their service capabilities, cost efficiency, and alignment with
our business characteristics.
INVENTORY CONTROL
Our inventory management system is designed to support stable production, efficient
resource utilization, and optimized working capital. We maintain close control over the entire
inventory lifecycle, covering raw materials, semi-finished products, and finished goods.
Inventory is categorized by quality status into qualified stock, items pending inspection,
defective stock, on hold stock, and scrap, with dedicated management standards for each
category.
We adopt a target-driven inventory strategy, tailored to the characteristics of different
product categories, customers, and business models. Inventory turnover targets are first set at
the customer-line level, then broken down to each project, and further refined to category-level
safety stock targets based on material type and production lead time. By applying this
methodology, we enhance our control of stock levels while meeting production and delivery
requirements.
In practice, we conduct weekly rolling reviews of inventory and production status to
monitor material availability and ensure sufficient safety stock. When inventory for specific
items falls below target levels, our “One Plan” MRP system will initiate the replenishment of
raw materials stock in a timely manner.
COMPETITION
According to Frost & Sullivan, the global smart device industry is undergoing a period
of recovery and transformation. In 2024, the global smartphone and tablet markets rebounded
strongly, with Chinese brands gaining market share globally. Meanwhile, AIoT devices,
including smart watches/bands, TWS earphones, and smart eyewear, have shown varied
performance, with rapid growth in China’s wearable and audio device markets and increasing
adoption of smart eyewear as a next-generation interactive terminals. In emerging areas such
as AI smartphones, AI PCs and automotive electronics, technological innovation is driving new
demand.
While the continued growth of the global smart device industry presents favorable
opportunities for the smart device ODM industry, particularly for leading players like us, the
competitive landscape is rapidly evolving. In addition to traditional ODM companies, we are
increasingly facing competition from top-tier precision component manufacturers that are
expanding into system-level integration and product development. If we are unable to maintain
BUSINESS
– 253 –


--- page 264 ---
strong capabilities in hardware and software R&D, supply chain integration and management,
quality control, and production and delivery, or if we fail to retain our core technical teams,
our business performance and market position could be adversely affected in this highly
competitive environment.
Amid this dynamic environment, we have built strong competitive advantages across
technology, operations, and partnerships. We maintain close collaboration with leading global
smart device brands and provide customized, full-process product solutions tailored to their
needs. Backed by our strong R&D capabilities, we offer end-to-end design and engineering
services across a broad scope of smart devices. Our strengths in wireless communication,
optics, display, and system-level integration enable us to deliver cutting-edge, cross-category
smart hardware solutions. Furthermore, our manufacturing footprint across Asia, with centers
in China, Vietnam, and India, allows us to serve customers with flexibility and scale. Through
intelligent manufacturing, digitalized operations, AI-enabled process management, and a
competitive upstream ecosystem of component suppliers, we continuously improve efficiency,
accelerate innovation, and support long-term growth for our customers and stakeholders.
INTELLECTUAL PROPERTY
We place strong emphasis on the transformation of innovation into proprietary assets and
the protection of intellectual property rights. In the course of our business operations, we
strictly comply with relevant laws and regulations, including the Patent Law, the Copyright
Law, and Trademark Law of the PRC. We have established a robust intellectual property risk
management system to mitigate potential infringement risks and ensure effective protection of
our proprietary rights.
We have obtained certification under the national standard GB/T 29490-2023 for
intellectual property compliance management. We have formulated internal guidelines, such as
the Patent Evaluation and Maintenance Implementation Rules (),
to standardize IP management practices and protect our core high-value patent assets. During
the R&D process, we conduct patent clearance investigations, market-related patent research,
and patent literature searches to avoid potential infringement risks and proactively develop
avoidance strategies or pursue independent IP filings.
We also embed intellectual property compliance into our supply chain management. Our
procurement agreements clearly define IP protection requirements, and we incorporate IP due
diligence into supplier onboarding. We sign non-disclosure agreements with suppliers to
protect confidential technologies and ensure that third-party rights are not infringed.
To strengthen internal awareness, we provide regular IP training to employees and offer
specialized patent information security training to R&D personnel to enhance their awareness
of technical confidentiality and ensure compliance throughout the product development cycle.
We continue to optimize our patent application processes and conduct internal information
BUSINESS
– 254 –


--- page 265 ---
security reviews to prevent the leakage of technical secrets. For new employees, we offer
onboarding training focused on intellectual property protection to reduce the risk of disputes
over the ownership of service inventions and avoid unintentional disclosure of proprietary
information.
As of September 30, 2025, we owned 755 patents, 456 copyrights, 42 trademarks and 13
domain names in Chinese mainland and were applying for 402 patents in Chinese mainland. In
addition, as of September 30, 2025, we had filed five patent applications in overseas
jurisdictions. We also owned two registered trademarks in overseas jurisdictions to support our
global business development and protect our intellectual property rights worldwide. Our
portfolio of patents and patent applications primarily relate to innovative hardware designs,
smart device functionalities, and manufacturing methods across a wide range of smart devices.
For detailed information about our material intellectual property, see “Appendix VI —
Statutory and General Information — B. Further Information about Our Business — 2.
Intellectual Property Rights.”
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any material disputes or litigations related to intellectual property rights.
DATA PROTECTION AND INFORMATION SECURITY
We are committed to safeguarding both data privacy and information security across our
operations. As a smart device ODM, we adhere to applicable data protection regulations and
enforce strict internal policies to ensure responsible data handling. At the same time, we
implement robust information security measures to protect sensitive information and maintain
the integrity and confidentiality of our systems and customer data.
Data Protection
As a smart device ODM primarily serving corporate customers, we collect and utilize a
variety of data in the course of our daily operations to support product development,
manufacturing, supply chain management, and customer collaboration. The types of data we
collect may include:
 product performance and testing data generated during design validation and
production processes;
 operational and supply chain data, such as materials usage, production schedules,
and logistics tracking information;
 specifications and technical documentation provided by customers, strictly limited
to project execution purposes; and
 internal system usage data, including workflow logs and system access records, used
to support IT operations, improve efficiency, and ensure system security.
BUSINESS
– 255 –


--- page 266 ---
We use such data solely for legitimate business purposes, including product quality
assurance, process optimization, compliance monitoring, and the enhancement of customer
service and operational efficiency.
We place great importance on data security and privacy protection. We strictly comply
with applicable laws and regulations, including the Cybersecurity Law of the People’s
Republic of China, and have established a comprehensive data governance framework. In terms
of cross-border data transfer, although we can remotely access information stored outside of
Chinese mainland and we may transfer the personal information collected and generated
outside of Chinese mainland to Chinese mainland for business analysis, we do not transfer
personal information or important data collected and generated during operations within
Chinese mainland to outside of Chinese mainland. We also do not allow foreign institutions,
organizations or individuals to access, retrieve, download or export data stored within Chinese
mainland.
During the Track Record Period and up to the Latest Practicable Date, we complied with
all relevant laws and regulations in relation to data privacy and security in the jurisdictions in
which we operate in all material respects. Our Directors confirm, as advised by our PRC Legal
Advisors, we had not been subject to any significant administrative penalties, nor had us been
involved in any unresolved material litigation or arbitration related to data compliance.
Information Security
We are committed to building a comprehensive information security management system
based on the principle of “proactive prevention, timely detection, rapid response, and ensuring
security.” Our Information Security Management Committee, chaired by the General Manager
and comprising leaders from key departments and technical experts, oversees the planning,
implementation, supervision, and continual improvement of our information security
framework. The Chief Information Security Officer is responsible for the system’s day-to-day
operation, while designated Information Security Officers in each department manage asset
protection, risk assessment, and compliance.
We have implemented formal policies, including the Employee Information Security Guide
(ˏ), Risk Assessment Management Standards (ᎈ൙П၍ଣ஝
ᇍ), and Personal Information Protection Guidelines (ᚐ၍ଣ஝ᇍ), which
clearly define roles, responsibilities, and enforcement mechanisms. We conduct at least one
formal risk assessment meeting every year, applying a structured methodology to evaluate data
value, vulnerabilities, and threats. For medium-to-high risks, we formulate mitigation plans, such
as risk reduction, transfer, or acceptance with approval. To strengthen awareness, we provide
mandatory training for all new employees and conduct regular information security sessions. We
also maintain open feedback channels to promptly address security-related concerns.
BUSINESS
– 256 –


--- page 267 ---
EMPLOYEES
As of September 30, 2025, we had 17,868 full-time employees, among which (i) 17,085
were based in Chinese mainland, (ii) 728 were based in Vietnam, (iii) 11 were based in India,
and (iv) 44 were based in other countries and regions. The following table sets forth the number
of our full-time employees by geography and function as of September 30, 2025.
Chinese Mainland Vietnam India
Other Countries
and Regions Total
Function
Number of
Employees %
Number of
Employees %
Number of
Employees %
Number of
Employees %
Number of
Employees %
Production /H1118/H1118/H1118/H1118/H1118/H1118/H111810,584 61.9 676 92.8 – – – – 11,260 63.0
R&D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,159 30.2 7 1.0 3 27.3 29 65.9 5,198 29.1
General administration /H1118 1,110 6.5 42 5.8 7 63.6 5 11.4 1,164 6.5
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120 0.7 3 0.4 1 9.1 1 2.3 125 0.7
Sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112 0.7 – – – – 9 20.4 121 0.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,085 100.0 728 100.0 11 100.0 44 100.0 17,868 100.0
Our success depends on our ability to attract, retain, and motivate qualified employees. We
offer a dynamic work environment, competitive compensation aligned with our job grading
system and market benchmarks, and performance-based salary adjustments. In compliance with
applicable laws, we provide statutory benefits such as social insurance and housing fund
contributions, along with various types of paid leave. We also offer cash allowances including
transportation, meal, travel, and relocation subsidies, as well as talent apartment housing for
eligible employees. To support employee health and well-being, we provide annual health
checkups, supplementary medical and accident insurance, wellness programs, and overseas travel
coverage. In addition, we offer holiday gifts, birthday vouchers, and recognition benefits for
outstanding employees. Through these measures, along with performance-based bonuses and
equity incentive plans, we foster a stable, capable, and motivated workforce. See “Appendix IV
— Statutory and General Information” for further details of our equity incentive plan.
We have established a structured and diversified recruitment system to attract and retain
talent that aligns with our business development needs. Our recruitment channels include social
recruitment (through direct sourcing, online platforms, and third-party headhunters), campus
recruitment, and internal employee referrals. For social recruitment, we follow a standardized
process that includes position requisition, sourcing, qualification screening, professional and
decision interviews, compensation discussion, background checks, offer approval, issuance and
confirmation of the offer, and documentation of hiring approvals. For campus recruitment, the
process includes requisition submission, planning, on-campus activities, successive rounds of
interviews (professional, qualification, and comprehensive), offer issuance and agreement
signing, internship arrangements, and onboarding and training for new graduates.
BUSINESS
– 257 –


--- page 268 ---
All of our employees are required to sign a confidentiality agreement, and selected
employees, based on role and risk assessment, also sign a non-compete agreement. The
confidentiality agreement imposes a perpetual obligation to protect our confidential
information, including technical data (e.g., patents and software code), business information
(e.g., customer lists and financial data), and other sensitive materials. It also clarifies that any
work-related intellectual property, including inventions created within one year after departure
if related to prior duties, belongs to us. Breaches may result in immediate termination without
severance, substantial contractual penalties, and legal liability. The non-compete agreement
generally applies for 12 months following termination of employment, during which the
employee is prohibited from working for or providing services to the designated competitors.
Breaches may result in pecuniary obligations and further legal action to recover direct losses
or unjust gains.
We did not have an established labor union as of the Latest Practicable Date. We believe
that we maintain good working relationships with our employees, and we had not experienced
any material labor disputes or any difficulty in recruiting qualified staff for our operations
during the Track Record Period and as of the Latest Practicable Date.
Labor Dispatch
We employ some of our workforce through labor dispatch arrangements, wherein workers
are hired by third-party staffing agencies but perform services for us. Pursuant to the Interim
Provisions on Labor Dispatch () which has become effective since
March 1, 2014, an employer shall strictly control the number of dispatched workers engaged,
which shall not exceed 10% of the total number of its workers (the “ Limit ”). As of December
31, 2024, the number of dispatched workers engaged by us exceeded the Limit, primarily
because with the customers’ order demand growth, we need additional workers to deliver
customer orders in short term, resulting in the number of dispatched workers exceeding the
stipulated Limit in relevant periods. The dispatched workers were primarily engaged in
auxiliary and temporary work such as assembly, packaging, boxing and labeling. Our PRC
Legal Advisors have advised us that, pursuant to relevant PRC laws and regulations, if the
number of dispatched workers exceeds the Limit, the employer may be ordered to make
corrections within a time limit by labor administrative authorities, and failure to make such
corrections may lead to a fine ranging from RMB5,000 to RMB10,000 per dispatched worker
imposed by labor administrative authorities. During the Track Record Period, the maximum
number of the dispatched contract workers hired by us that exceed the Limit was 110, which
may result in us being subject to a maximum penalty of RMB1.1 million if we are ordered to
make corrections within a time limit by labor administrative authorities, and failure to make
such corrections. During the Track Record Period and up to the Latest Practicable Date, we and
our subsidiaries had not been subject to any administrative penalties or other disciplinary
actions relating to labor dispatch by relevant government authorities. By the end of May 2025,
we had enhanced our dispatched worker arrangements to ensure the number of dispatched
workers engaged by us was within the Limit. We have set a 10% threshold for the utilization
of dispatched employees, which is allocated to each department and incorporated into the
performance evaluations of department heads. Departments must provide a clear rationale for
BUSINESS
– 258 –


--- page 269 ---
employing dispatched staff, and we utilize our human resource information system to monitor
workforce data and the ratios of dispatched employees in real time across the organization. See
also “Risk Factors — Risks Relating to Government Regulations — Failure to comply with
labor laws and regulations in jurisdictions where we operate, including regulations in relation
to labor dispatch and social insurance and housing fund contributions for our employees, could
subject us to legal liabilities, fines and other legal or administrative sanctions, and reputational
harm.”
Social Insurance and Housing Provident Funds
As required by PRC laws and regulations, we participate in housing funds and various
employee social insurance plans that are organized by applicable local municipal and
provincial governments, including housing, pension, medical, work-related injury, and
unemployment benefit plans. We are required under applicable PRC laws to contribute to
statutory employee benefit plans at certain percentages of the salaries of our employees up to
a maximum amount specified by the local government from time to time. During the Track
Record Period, we did not make full contributions to social insurance and housing provident
funds for our employees as required under the relevant PRC laws and regulations. In addition,
we paid the social insurance or housing provident funds through third-party human resources
agencies for certain of our employees, primarily because they prefer their social insurance and
housing provident funds to be paid at their respective places of residence for the convenience
of utilizing such benefits locally during the Track Record Period. In 2022, 2023, 2024 and the
nine months ended September 30, 2025, the shortfall of our social insurance contribution was
RMB1.0 million, RMB0.6 million, RMB3.3 million and RMB0.3 million, respectively; the
shortfall of our housing provident fund contribution was RMB1.2 million, RMB1.6 million,
RMB2.0 million and RMB1.7 million, respectively. Any shortfall in social insurance and
housing provident fund contributions, regardless of the reason, has been included in our
shortfall calculation.
Pursuant to relevant PRC laws and regulations, an employer that has not made social
insurance contributions at a rate and based on an amount prescribed by the law, or at all, may
be ordered to rectify the non-compliance and pay the required contributions within a stipulated
deadline and be subject to a late fee of up to 0.05% of the outstanding amount for each day of
delay. If the employer still fails to rectify the failure to make social insurance contributions
within the stipulated deadline, it may be subject to a fine ranging from one to three times the
amount overdue. Additionally, if there is a failure to pay the full amount of the housing
provident fund as required, the housing provident fund management center may require
payment of the outstanding amount within a prescribed period. If the payment is not made
within such time limit, an application may be made to the PRC courts for compulsory
enforcement. As advised by our PRC Legal Advisors, the potential maximum penalty with
respect to fines that we may be exposed to due to shortfall of social insurance during the Track
Record Period would be RMB3.0 million, RMB1.9 million, RMB9.9 million and RMB0.8
million in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
BUSINESS
– 259 –


--- page 270 ---
During the Track Record Period and up to the Latest Practicable Date, no administrative
action or penalty had been imposed by the relevant regulatory authorities with respect to our
social insurance and housing provident fund contributions, nor had we received any order to
settle the shortfall amount. Moreover, as of the Latest Practicable Date, we were not aware of
any material complaint filed by any of our employees regarding our social insurance and
housing provident fund policy. In addition, pursuant to the Urgent Notice on Enforcing the
Requirement of the Executive Meeting of the State Council and Stabilizing the Levy of Social
Insurance Payment (ܢ
ٝpromulgated on September 21, 2018 by the Ministry of Human Resources and Social
Security, administrative authorities are prohibited from collectively recovering enterprises’
historical social insurance arrears. The above-mentioned maximum potential penalties refer to
the scenario where we fail to make full payment or settle any shortfall within the specified time
limit if and when requested by the relevant authorities. Considering that we will make
contribution within the specified time limit if and when requested by the relevant authorities,
our PRC Legal Advisors are of the view that the likelihood we will be subject to the maximum
potential penalties is remote. Further, with respect to the provisions stipulated in the
Interpretation II of the Supreme People’s Court on Issues Concerning the Application of Law
in the Trial of Labor Dispute Cases (༆
ᙑ(ɚ)), our PRC Legal Advisors are of the view that this judicial interpretation merely
clarifies existing laws and regulations, without imposing any additional obligations or
liabilities on us, nor does it repeal the current laws and regulations regarding social insurance
and housing provident fund contributions. Therefore, it would not cause us to be subject to
additional social insurance exposure. As a result, we had not made any provision for the
shortfall in our social insurance and housing provident fund contributions during the Track
Record Period and up to the Latest Practicable Date. For details, see “Risk Factors — Risks
Relating to Government Regulations — Failure to comply with labor laws and regulations in
jurisdictions where we operate, including regulations in relation to labor dispatch and social
insurance and housing fund contributions for our employees, could subject us to legal
liabilities, fines and other legal or administrative sanctions, and reputational harm.”
INSURANCE
We maintain a comprehensive insurance framework to support both employee welfare and
business risk management. In accordance with applicable laws, we contribute to statutory
social insurance programs for our employees, including pension, medical, unemployment,
work-related injury, and maternity insurance. In addition, we provide supplementary
commercial insurance coverage, such as group accident insurance, group medical insurance,
and critical illness insurance, and have also purchased employer liability insurance. From an
operational risk perspective, we have procured various commercial insurance policies,
including property all-risk insurance, cargo transportation insurance, and commercial general
liability insurance covering product liability, completed operations, and premises liability. To
mitigate trade-related risks, we have also secured domestic and short-term export credit
insurance, with coverage tailored based on specific customer profiles and transaction terms. We
BUSINESS
– 260 –


--- page 271 ---
do not maintain key man life insurance. We believe our insurance policy complies with the
relevant rules and regulations in China. See “Risks Factors — Risks Relating to Our Operations
— Our limited insurance coverage may not cover all losses, which may increase our
operational costs” for details.
During the Track Record Period and up to the Latest Practicable Date, we did not submit
any material insurance claims, nor did we experience any material difficulties in renewing our
insurance policies.
PROPERTIES
Our corporate headquarters are located in Shanghai, China. As of September 30, 2025, we
owned land use rights of five parcels of land, with an aggregate site area of approximately
297,800 square meters. All of these land parcels have been granted land use right certificates.
We also own or lease certain properties in Chinese mainland and overseas. As of
September 30, 2025, we owned three properties with an aggregate site area of approximately
299,600 square meters. As of September 30, 2025, we leased 47 properties with an aggregate
site area of approximately 239,300 square meters. The properties we own and lease are
primarily used for office, manufacturing, warehousing, and staff dormitory functions. As of the
Latest Practicable Date, we had not received any claims from third parties disputing the
ownership of our properties.
As of September 30, 2025, we leased 23 properties in Chinese mainland. As of the Latest
Practicable Date, certain of our lease agreements in Chinese mainland had not been registered.
We have taken proactive steps to register these lease agreements. As of the Latest Practicable
Date, we completed the registration of three lease agreements for our leased properties. As the
registration of a lease agreement requires the cooperation between the lessor and lessee, and
lessors are typically unwilling to undertake the administrative burden, we were not able to
complete the registration of the remaining lease agreements. As of the Latest Practicable Date,
we were in active communication with our lessors and will take all practicable and reasonable
steps to complete the registration of the lease agreements. For details, see “Risk Factors —
Risks Relating to Our Operations — Our leased properties may be subject to non-compliances
or challenges that could expose us to penalties and incremental costs.”
As of September 30, 2025, we did not have any single property with a book value
accounting for 15% or more of our total assets. According to Chapter 5 of the Hong Kong
Listing Rules and section 6(2) of the Companies Ordinance (Exemption of Companies and
Prospectuses from Compliance with Provisions) Notice, this prospectus is exempt from the
requirements of section 342(1)(b) of the Companies (Winding up and Miscellaneous
Provisions) Ordinance to include all interests in land or buildings in a valuation report as
described under paragraph 34(2) of the Third Schedule to the Companies (Winding up and
Miscellaneous Provisions) Ordinance.
BUSINESS
– 261 –


--- page 272 ---
LEGAL PROCEEDINGS AND NON-COMPLIANCE
Legal Proceedings
During the Track Record Period and up to the Latest Practicable Date, neither we nor our
Directors and executive officers had been involved in any actual or pending legal, arbitration
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 and prospects or reputation and compliance.
Non-compliance
During the Track Record Period and up to the Latest Practicable Date, we did not have
non-compliance incidents that our Directors believe would, individually or in the aggregate,
have a material adverse effect on our business, financial condition or results of operations.
COMPLIANCE WITH INTERNATIONAL SANCTIONS LA WS AND REGULATIONS
Business Activities in relation to Products subject to U.S. Export Controls
During the Track Record Period, certain components we procured (“ Procured Items ”),
mainly consisting of integrated circuits, electronic sensors, display controllers, MOS
components, voltage regulators, crystals, and interface modules, are subject to the United
States Export Administration Regulations, 15 C.F.R. Parts 730-774 (“ EAR”). These Procured
Items are classified under the Export Controls Classification Numbers (“ ECCNs ”) as 3A991,
4A994, 5A991, 5A992.c, or EAR99. Save for the Procured Items, we have not procured other
components subject to the EAR. Our supply chain remained stable and operated without
material constraint and the total tariff rates we paid for these Procured Items did not experience
significant increase during the Track Record Period.
These Procured Items, other than those classified as EAR99, are controlled for
anti-terrorism reasons, and are only subject to a license requirement for export, re-exports or
transfers (in-country) to entities designated on the BIS’ Entity List, Denied Persons List or
Unverified List (the “ BIS Lists Entities ”) and Crimea region, Cuba, Iran, Luhansk People’s
Republic and Donetsk People’s Republic regions, North Korea and Syria, as well as Russia and
Belarus (collectively, the “ AT Sanctioned Countries ”), or restricted under the U.S. Chip
Export Restrictions if intended for use in Chinese Mainland, Hong Kong SAR, or Macau SAR
for certain prohibited end-uses set forth in section 744.23 of the EAR. Those classified as
EAR99 are generally low-technology consumer goods that do not require a license in most
situations. As advised by our International Sanctions Legal Advisors, on the basis that, we are
not BIS Lists Entities or located in any A T Sanctioned Countries, export licenses are not
required for our procurement of such Procured Items.
BUSINESS
– 262 –


--- page 273 ---
As advised by our International Sanctions Legal Advisors, given that during the Track
Record Period, (i) we did not purchase any items subject to the EAR which require a license
for us to procured; (ii) we did not have sales of Procured Items to any entities headquartered
in or ordinarily resided in, or owned or controlled by a government of any A T Sanctioned
Countries, and we did not have sales of any products subject to the EAR to any BIS Lists
Entities (for details, see “— Business Activities in relation to a Relevant Entity subject to U.S.
Export Controls” below); (iii) we have not engaged in transactions that involve or benefit any
“military end-users” or “military end-use;” and (iv) our activities did not involve certain
prohibited end-uses set forth in section 744.23 of the EAR, our procurements (and subsequent
use in our products) of such Procured Items during the Track Record Period did not represent
a violation of the applicable U.S. export controls. If any further sanctions or restrictions are
imposed regarding these Procured Items, we believe our business operations will not be
materially adversely affected, as we will actively explore alternative components if needed.
Business Activities in relation to a Relevant Entity subject to U.S. Export Controls
During the Track Record Period, we have sold our ODM products to a customer listed on
the Entity List (“ Entity List Customer ”), which is identified as Customer E in “— Sales and
Marketing — Customers” section above, and generated revenue of RMB2,166.8 million,
RMB1,780.1 million, RMB2,609.7 million and RMB1,838.0 million in 2022, 2023, 2024, and
the nine months ended September 30, 2025. All such transactions were denominated in RMB
and did not involve exports. The Entity List Customer was designated by the BIS on the Entity
List effective from May 21, 2019. Provision of items subject to the EAR without a licence from
BIS to the Entity List Customer is prohibited. License application is subject to a presumption
of denial.
For the nature of the transactions involving the Entity List Customer, as advised by our
International Sanctions Legal Advisors, we were not engaged in any exports or transactions of
any products subject to the EAR to the Entity List Customer; in particular, the U.S. origin
content, including any Procured Items (mainly consisting of integrated circuits, electronic
sensors, display controllers, MOS components, voltage regulators, crystals, and interface
modules), contained in the products transported by us to this Entity List Customer does not
exceed de minimis threshold (in particular the U.S.-origin content incorporated does not exceed
10% of the value of the products) and the products are not otherwise subject to the EAR
because of foreign direct product rules as the products sold are not “direct product” of specified
technology or software. As advised by our International Sanctions Legal Advisors, given the
aforementioned nature of our transactions with such Entity List Customer, these transactions
did not involve any exports or transactions of any items subject to the EAR, and hence did not
represent a violation of the International Sanctions. As we also have not conducted transactions
with persons on the SDN List, our Directors are therefore of the view that our business
activities, are not currently and will not materially adversely affected by the current U.S.
export controls or U.S. sanctions restrictions. Having considered the above view from the
Directors and based on the due diligence work performed by the Joint Sponsors, nothing has
come to the attention of the Joint Sponsors that would reasonably cause them to cast doubt on
the Directors’ view in any material respect.
BUSINESS
– 263 –


--- page 274 ---
Our Undertaking and Internal Control Measures
We have undertaken to the Stock Exchange that we will not use the proceeds from the
Global Offering, as well as any other funds raised through the Stock Exchange, to finance or
facilitate, directly or indirectly, activities or business with, or for the benefit of, any
Comprehensively Sanctioned Countries
1 or any other government, individual or entity
sanctioned by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories or
Australia, including, without limitation, any government, individual or entity that is
specifically identified on the SDN List maintained by OFAC or other restricted parties lists
maintained by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories and
Australia that would cause us to violate International Sanctions. Further, we have undertaken
not to use the proceeds from the Global Offering to pay any damages for terminating or
transferring any contract that violates International Sanctions. In addition, we have undertaken
not to enter into any future business that would cause us, the Stock Exchange, HKSCC,
HKSCC Nominees or our Shareholders and investors to violate or become a target of
international sanctions laws by the U.S., the EU, the UN, the U.K., the United Kingdom
overseas territories or Australia. We will also disclose on the respective websites of the Stock
Exchange and our Group if we believe that the transactions our Group entered into in Countries
subject to International Sanctions or with Sanctioned Targets
2 would put our Group or our
Shareholders and investors to risks of being sanctioned, and in our annual reports or interim
reports (i) details of any new activities in Countries subject to International Sanctions or with
Sanctioned Targets; (ii) our efforts on monitoring our business exposure to sanctions risks; and
(iii) the status of, and the anticipated plans for any new activities in Countries subject to
International Sanctions and with Targets. If we were in breach of such undertakings to the
Stock Exchange, we would be subject to the risk of possible delisting of our Shares on the
Stock Exchange.
In addition, we will adopt enhanced internal control and risk management measures which
we believe enable us to monitor and evaluate our business to address economic sanction risks.
1 “Comprehensively Sanctioned Countries” refers to any country or territory subject to a general and
comprehensive export, import, financial or investment embargo under sanctions related law or
regulation of the Relevant Jurisdiction, currently Cuba, Iran, North Korea, Syria, the Crimea Region of
Russia/Ukraine, the self-proclaimed Luhansk People’s Republic (LPR) and Donetsk People’s Republic
(DPR) regions and Zaporizhzhia and Kherson regions. “Relevant Jurisdiction” refers to 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 or certain countries,
governments, person or entities targeted by such law or regulation. For the purpose of this prospectus,
Relevant Jurisdictions include the U.S., UK, EU, UN and Australia.
2 “Sanctioned Target” refers to 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 Countries; 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).
BUSINESS
– 264 –


--- page 275 ---
 to further enhance our existing internal risk management functions, our Legal
Department is responsible for monitoring our exposure to sanctions risks and our
implementation of the related internal control procedures. Going forward, our Legal
Department plan to hold a meeting at least every six months 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 subject to International Sanctions or
Sanctions Targets. According to our internal control procedures, our Legal
Department needs to review and approve all relevant business transaction
documentation from customers or potential customers from Countries subject to
International Sanctions or Sanctions Targets. 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
Australia, including, without limitation, any government, individual or entity that is
the subject of any OFAC-administered sanctions which lists are publicly available.
The transactions that fail the internal review will not be proceed. At the same time,
our Legal Department should, periodically review the existing customers and
suppliers lists to ensure that the Group does not engage in transactions with
countries, regions, entities or individuals on the sanction lists. If any potential
sanctions risk or suspicious transaction is identified, we may seek advice from
reputable external legal counsel with necessary expertise and experience 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 Department will periodically review our internal control policies and
procedures with respect to sanctions matters. 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
BUSINESS
– 265 –


--- page 276 ---
 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.
To mitigate the risks from the changing tariff and international trade landscape, we also
plan to actively diversify our supply chain. The equipment and raw materials critical to our
production are not primarily sourced from the United States and are available from alternative
suppliers. Therefore, we do not expect to encounter material difficulties or incur prohibitive
costs in sourcing these inputs from other regions should the need arise.
LICENSES AND APPROV ALS
We are required by laws and regulations to obtain and maintain various licenses,
approvals and permits in order to operate our business. Our legal department is responsible for
monitoring the validity status of our licenses, approvals, and permits and making timely
applications for renewal to relevant government authorities.
Our Directors confirm, as advised by our legal advisers insofar as the relevant
jurisdictions where we have substantial operations are concerned, that we had complied with
the applicable laws and regulations in the jurisdictions where we operate in all material
respects and had obtained all requisite licenses, approvals and permits from relevant authorities
except those that would not have a material adverse effect on our operations during the Track
Record Period and up to the Latest Practicable Date.
BUSINESS
– 266 –


--- page 277 ---
The table below sets forth a summary of the material licenses and regulatory approvals
that we had obtained for our business operations as of the Latest Practicable Date:
Types of Licenses
Number of
Licenses Issuing Authority Time of Expiry
Customs Declaration Entity
Registration Certificate /H1118/H1118/H1118/H1118
Five Local customs authorities in
the PRC
Long term
Registration Form for Foreign
Trade Operators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Four Local registration authorities
for foreign trade operators
in the PRC
Long term
Entry-Exit Inspection and
Quarantine Declaration
Enterprise Filing Form /H1118/H1118/H1118/H1118
One Jiangxi Entry-Exit Inspection
and Quarantine Bureau
Long term
Radiation Safety License /H1118/H1118/H1118/H1118Two Local bureaus of ecology
and environment
February 2027/
June 2030
Radio Transmission Equipment
Type Approval Certificate /H1118/H1118
Two MIIT January 2030
Medical Device Business
License
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
One Huizhou Municipal
Administration for Market
Regulation
September 2028
Medical Device Manufacturing
License
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
One Guangdong Provincial
Medical Products
Administration
August 2028
Note:
(1) Some of the products we manufacture and sell, such as smart watches/bands, include health monitoring
features like blood pressure measurement. As such, we are required to obtain the Medical Device
Business License and Medical Device Manufacturing License to ensure compliance with relevant laws
and standards.
As advised by our PRC Legal Advisors, as of the Latest Practicable Date, there was no
legal impediment for us to renew these licenses, permits and certificates as long as we comply
with the relevant legal requirements.
BUSINESS
– 267 –


--- page 278 ---
A W ARDS AND RECOGNITIONS
We have received recognition for our brand and the quality and popularity of our
products. The following table sets forth major awards and recognitions we received during the
Track Record Period and up to the Latest Practicable Date:
Award/Recognition Y ear Granted Granting Authority
Top 100 Manufacturing
Enterprises, Top 100
Private Enterprises and Top
100 Private Manufacturing
Enterprises in the Y angtze
River Delta Region /H1118/H1118/H1118/H1118/H1118/H1118
2025 Shanghai Enterprise Confederation,
Jiangsu Enterprise Confederation,
Zhejiang Enterprise Confederation
and Anhui Enterprise Confederation.
National Green Factory /H1118/H1118/H1118/H1118/H11182025 MIIT
Shanghai Design Innovation
Center /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2025 Shanghai Municipal Commission of
Economy and Informatization
Top 100 Most Competitive
Electronic Information
Enterprises /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2025 China Federation of Electronics and
Information Industry
vivo Good Quality Award /H1118/H1118/H11182024 vivo
Xiaomi Best Partner Award /H11182024 Xiaomi
IPC China ESG Benchmark
Enterprise /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 IPC CEMAC
China’s Top 500 Private
Enterprises /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024, 2023 All-China Federation of Industry and
Commerce
China’s Top 500
Manufacturing Enterprises /H1118
2025, 2024,
2023
China Enterprise Confederation and
China Enterprise Directors
Association
Shanghai’s Top 100
Enterprises /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2025, 2024,
2023,
2022
Shanghai Enterprise Confederation and
Shanghai Enterprise Directors
Association, Shanghai Federation of
Economic Organizations, and
Jiefang Daily Press Group
Fortune China 500 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182025, 2024 Fortune
Lenovo Best Quality Award /H1118/H11182024 Lenovo
Samsung S&OP Delivery
Outstanding Contribution
Award /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 Samsung Electronics
OPPO Annual Project Award /H11182023 OPPO
Lenovo Quality excellence
Award /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023, 2022 Lenovo
BUSINESS
– 268 –


--- page 279 ---
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We are committed to integrating Environmental, Social and Governance (“ ESG”)
principles into every aspect of our operations. Guided by a long-term vision of sustainable
development, we actively promote green manufacturing, responsible supply chain
management, employee well-being, and sound corporate governance. ESG considerations are
embedded in our business strategy and daily decision-making processes, enabling us to create
long-term value for our stakeholders while fulfilling our environmental and social
responsibilities. We continuously enhance our ESG practices through internal policies,
performance monitoring, and stakeholder engagement, aiming to contribute positively to
society and the environment while driving high-quality, sustainable growth.
ESG Governance Structure
We have established a comprehensive ESG governance framework to ensure effective
oversight, implementation, and continuous improvement of our sustainability initiatives. The
Board serves as the highest decision-making body for ESG matters, setting strategic direction
and overseeing the allocation of key resources to support our sustainable development goals.
Our Directors bring diverse ESG experience, with involvement across various domains
including environmental initiatives, corporate governance, community philanthropy, ethical
labor practices, and supply chain sustainability. The Strategy and ESG Committee, chaired by
the Chairman of the Board, is a dedicated board-level committee responsible for monitoring the
execution of major ESG initiatives and reporting to the Board.
At the decision-making level, the ESG Executive Committee plays a pivotal role in
bridging strategy and implementation. Chaired by the General Manager, and composed of
senior management from departments including quality, human resources, manufacturing,
procurement, and operations, the committee provides guidance, resources, and oversight for
our ESG projects and is accountable for ESG outcomes within their respective areas.
At the operational level, the ESG Office functions as a permanent body responsible for
coordinating and driving the execution of ESG initiatives. Under the authorization of the ESG
Executive Committee, it oversees department-led ESG projects, allocates internal resources,
and ensures progress toward our ESG targets. The ESG Office regularly reports to the ESG
Executive Committee and organizes periodic meetings across all governance levels, including
the Board, Strategy and ESG Committee, and ESG Executive Committee, to ensure effective
governance and accountability.
In addition, ESG Working Groups, composed of representatives from various functional
departments and manufacturing sites, are responsible for executing ESG tasks within their
domains. For cross-functional initiatives, special project teams are established and led by the
ESG Office or the relevant leading departments to ensure coordinated and efficient
implementation.
BUSINESS
– 269 –


--- page 280 ---
Materiality Assessment
We have established a structured dual materiality assessment framework to identify ESG
topics that are most relevant to our business operations and stakeholders. This approach
evaluates both the financial impact of ESG issues on us and their broader environmental and
social implications. In 2024, we introduced a materiality assessment based on internationally
recognized standards, using a four-step methodology that includes value chain and stakeholder
identification, sustainable development issue list construction, double materiality assessment,
and reporting and strategic integration.
To assess the materiality of ESG issue, we conduct a dual materiality assessment based
on a comprehensive sustainable development issue list. In doing so, we distribute dual
materiality surveys to all key stakeholders to gather their perspectives, which assess the
significance of each topic in terms of its impact on economic, environmental, and social
factors, as well as its influence on our financial performance. The results are analyzed to
determine the importance of each topic, forming the basis for our dual materiality assessment.
Through this methodology, we are enabled to focus on ESG issues that are closely aligned with
our strategic priorities, improve risk responsiveness, and enhance long-term value creation
capabilities.
The materiality matrix was reviewed and approved by our Strategy and ESG Committee,
ensuring that the selected material topics are consistent with our business objectives and
stakeholder expectations. High-priority issues are addressed through targeted action plans,
dedicated resources, and ongoing performance monitoring to ensure timely and effective
implementation. This enables us to focus on the ESG areas that are most critical to driving
sustainable growth and managing risks across the value chain. Relevant departments are
responsible for the systematic management of these material topics, extending from internal
operations to the broader value chain. In terms of disclosure, we focus on the year’s key ESG
priorities, actions, and outcomes to ensure transparency and relevance. In terms of execution,
we rely on a robust internal control and risk management system to implement ESG measures
across our Group. We also maintain open and proactive communication with stakeholders to
understand and respond to their evolving needs and concerns.
Environmental
We are committed to sustainable development and environmental stewardship across all
aspects of our operations. Through systematic planning, technological innovation, and
integrated green management practices, we strive to minimize our environmental footprint
while supporting long-term business growth.
Environmental Management System
We have obtained full certification under the ISO 14001 Environmental Management
System, covering 100% of our operations. In 2024, our Huizhou and Nanchang manufacturing
centers were also certified under the ISO 50001 Energy Management System, further
BUSINESS
– 270 –


--- page 281 ---
strengthening our energy efficiency and environmental governance. We have established
dedicated environmental management procedures, designated responsible personnel, conducted
regular inspections and training, and ensured that all environmental monitoring and waste
disposal activities are compliant with applicable regulations.
Carbon Emissions and Energy Use
Climate change poses several risks to our business and financial performance. Sudden
extreme climate events, such as heavy rain, typhoons, and floods, may cause delays in product
delivery and interruptions in production operations, negatively impacting revenue. These
events also threaten employee health, damage company assets, including buildings, equipment,
and inventory, and increase operating costs. In addition, climate change contributes to resource
scarcity, potentially disrupting energy supply and affecting production continuity. Furthermore,
evolving policy requirements, such as the mandated proportion of recycled materials in
plastics, influence product design and material procurement processes, adding complexity to
our operations.
In response to global climate change and China’s dual carbon goals, we have launched a
structured carbon reduction roadmap, targeting peak carbon emissions by 2030 and carbon
neutrality in our operations by 2050. In 2024, our total greenhouse gas emissions reached
106,979.7 tons of CO
2 equivalent emissions, comprising 3,975.8 tons of CO 2 equivalent
emissions in Scope 1, representing direct emissions from sources owned or controlled by us,
and 103,003.9 tons of CO
2 equivalent emissions in Scope 2, representing indirect emissions
from purchased energy. In the nine months ended September 30, 2025, our total greenhouse gas
emissions reached 76,341.3 tons of CO
2 equivalent emissions, comprising 2,351.2 tons of CO 2
equivalent emissions in Scope 1, 72,544.8 tons of CO 2 equivalent emissions in Scope 2 and
1,445.3 tons of CO 2 equivalent emissions in Scope 3, representing all our other indirect
emissions occur from sources not owned or controlled by us. In pursuit of green operations, we
are committed to reducing our annual emissions by 3% based on 2023 levels. We implement
measures to reduce greenhouse gas emissions by a series of measures, such as promoting
energy-saving technologies, improving energy efficiency, developing renewable material
suppliers, purchasing green electricity, upgrading to high-efficiency production equipment,
formulating climate adaptation strategies to enhance supply chain resilience, and advancing
low-carbon product development.
In addition, in 2024 and the nine months ended September 30, 2025, our electricity
consumption amounted to approximately 178.1 million kWh and 123.9 million kWh,
respectively. During the same year/period, we generated 1,423.2 thousand kWh and 3,047.4
thousand kWh of solar power, contributing to our renewable energy transition. We have set
annual energy intensity reduction targets of 3% to 5%. In formulating such reduction targets,
we referred to a range of assumptions, such as projected business growth, technological
advancements, improvements in energy efficiency, and the availability of renewable energy
sources. We have implemented electricity-saving measures such as converting laboratory
standard air conditioning systems to water-based cooling systems, waste heat recovery projects
for air compressors, and distributed photovoltaic projects. We issued multiple internal
BUSINESS
– 271 –


--- page 282 ---
guidelines such as the Energy Management System Manual ( ঐ๕၍ଣ᜗ӻ˓̅) and
Energy Monitoring, Measurement, Analysis and Control Procedures (છՓ
೻ҏ) to standardize energy management practices.
Water Resource Management
We manage water resources in strict accordance with national laws and regulations. All
water is sourced from municipal supply systems, and our operations do not involve significant
impact on water resources through extraction, consumption, or discharge. Based on 2023 as a
baseline, we have set a five-year water-saving target, aiming to reduce water usage by 3% per
10,000 units annually. In 2024 and the nine months ended September 30, 2025, our water
consumption was approximately 1.5 million tons and 1.2 million tons, respectively. Our
Huizhou manufacturing center has established a water conservation task force, launched a
water balance testing platform, and implemented awareness and inspection programs.
Wastewater is treated through sedimentation and discharged to municipal treatment facilities,
with regular inspections to prevent leakage and inefficiency.
Pollution Control and Waste Management
In 2024 and the nine months ended September 30, 2025, we generated approximately 18.8
thousand tons and 1.5 thousand tons of domestic waste, respectively. We maintained a 100%
compliance rate in pollutant discharge, with no violations reported in 2024. Set forth below are
our handling measures for major categories of pollutants:
 Air pollutants such as non-methane hydrocarbons and volatile organic compounds
are treated through closed-pipe collection and activated carbon adsorption systems.
 Wastewater is generated primarily from domestic and cooling water use and is
properly filtered and discharged to municipal facilities.
 Solid waste is categorized as general or hazardous and disposed of in partnership
with licensed third-party recyclers, ensuring full legal compliance.
 Noise pollution is mitigated through equipment isolation and strategic placement of
large machinery away from residential and operational areas.
According to Frost & Sullivan, our above-mentioned historical performance in resource
consumption and pollutant emission has been generally consistent with the industry’s average
performance.
BUSINESS
– 272 –


--- page 283 ---
Green Manufacturing and Circular Economy
We actively promote clean production and circular economy practices. In green materials
sourcing, we prioritize vendors and substitutes that meet environmental standards. During
product design and development, we incorporate environmental impact assessments, select
eco-friendly materials, and ensure traceability through Hazardous Substance Free product
labeling. In manufacturing, all tools and materials used on the production line must meet
environmental requirements. We also require all suppliers to sign environmental compliance
agreements and undergo audits focused on hazardous substance control. Environmental
documentation is managed digitally, ensuring traceability from raw material selection to final
product labeling.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, our environmental
protection expenditures, including both capitalized and expensed items related to
environmental protection, amounted to RMB4.4 million, RMB2.7 million, RMB9.4 million and
RMB426 thousand, respectively. The fluctuations in our environmental protection expenditures
during the Track Record Period were primarily attributable to changes in capital expenditures
related to environmental projects. These capitalized investments varied by year and mainly
included rooftop photovoltaic systems, environmental protection infrastructure, emission
control upgrades, and other facility renovation projects. In comparison, only limited capital
spending was incurred in the first half of 2025. Going forward, we expect to incur
environmental protection expenditures that align with our projected business growth, resource
consumption and pollutant emission targets, and evolving regulatory environments.
Social
We are committed to building a responsible and inclusive enterprise that prioritizes
employee well-being, diversity and inclusion, supply chain responsibility, and broader
contributions to social and community development. Our social responsibility strategy is
deeply embedded in our corporate values and operational practices, supporting both sustainable
growth and shared value creation.
Employee Rights and Workforce Diversity
We regard employee well-being, rights protection, and professional growth as integral to
our sustainable development. We strictly comply with applicable labor laws and uphold
international human rights standards. In 2024, we strengthened our labor and human rights
policies to ensure fair treatment, non-discrimination, and the protection of lawful rights across
the workforce.
BUSINESS
– 273 –


--- page 284 ---
We are committed to supporting freedom of association, collective bargaining, equal pay,
and gender equality. In our hiring, promotions, compensation, and daily management, we
strictly prohibit any discrimination or unfair treatment based on factors like race, color,
religion, gender, age, nationality, genetics or disability. We also have a zero-tolerance policy
against sexual harassment, inappropriate comments, or other misconduct. Notably, we did not
have any related incidents reported in 2024.
We provide equal opportunities for our female employees, including legal protections
during maternity leave and wellness programs to support their health. Internally, we have
established the “Management Regulations relating to Three Periods Female Worker” to
safeguard the lawful rights and interests of female employees throughout pregnancy, childbirth
and breastfeeding. Additionally, we regularly organize employee care activities and female
health seminars, ensuring our female staff receive the necessary legal and compliant maternity
benefits to support their personal development and well-being.
To cultivate an inclusive workplace, we provide training for all employees on labor rights,
anti-discrimination, and ethical conduct. Our staff can raise concerns through multiple
confidential channels, such as email, suggestion boxes, a liaison center, our WeChat public
account, and a 24-hour care hotline. All complaints are addressed through formal, established
procedures.
We support employee development through structured training programs, transparent
promotion systems, and performance-based compensation. Our Position-Matching
Management Policy () ensures merit-based career advancement. In
addition, we continue to enhance workplace safety through comprehensive risk management
and a systemic safety culture.
Responsible Supply Chain Management
We follow a high-standard, systematic supply chain management strategy to ensure
continuity, compliance, and sustainability. Our supply chain operations are divided into
specialized modules for different material categories, with end-to-end quality control. In 2024,
we completed audits for 117 new suppliers and 92 existing suppliers. In the nine months ended
September 30, 2025, we completed audits for 42 new suppliers and 89 existing suppliers. These
audits assessed supplier performance in quality, delivery, cost, labor rights, environmental
protection, workplace safety, and business ethics.
We require all suppliers to sign a Supplier Corporate Social Responsibility Agreement,
committing to compliance with national laws and corporate social responsibility standards.
Such environmental agreements are explicitly incorporated into purchase documentation,
clearly specifying environmental expectations. ESG self-assessments and on-site inspections
are mandatory, and corrective actions are enforced through a closed-loop verification process.
As part of our green supply chain management, we conduct audits or assessments of suppliers’
hazardous substance systems, require the submission of material composition disclosures and
environmental test reports, and promptly identify changes in the supply chain to ensure
BUSINESS
– 274 –


--- page 285 ---
compliance with environmental standards. In addition, our quarterly performance evaluation
system incorporates environmental and social responsibility metrics, enabling differentiated
management and continuous improvement across the supply chain.
Community Engagement and Social Impact
We are committed to creating long-term social value through inclusive, technology-driven
initiatives. In 2024, we focused on rural revitalization, educational equity, digital inclusion,
and public welfare. We established the Longcheer Scholarship in six universities, provided
RMB290,000 in funding, and launched ten “e-Cheer Reading Corners” in rural schools to
support youth education. In addition, our “Green Love Computer” program donated 210
refurbished computers to rural schools, promoting both digital access and green practices.
We also partnered with the Hongmei Street in Shanghai to establish the “Hongmei
Teaching Excellence Award” and supported underprivileged families through the “Rainbow
Charity” initiative. In healthcare, we joined with the Jiangxi Red Cross Foundation to fund
medical aid for patients with serious illnesses. Moreover, to support ecological restoration, we
contributed RMB100,000 to the “Hundred Million Haloxylon Trees” project, planting trees in
Inner Mongolia to combat desertification and boost local livelihoods.
Governance
We are committed to embedding a culture of integrity and compliance throughout the
organization, and to building a comprehensive, full-process compliance management system
that supports long-term business resilience and corporate governance excellence.
Compliance
Compliance is the bedrock of our sustainable growth and high-quality development. We
have embedded a compliance-first culture across all levels of the organization, integrating
ethical standards and regulatory requirements into our day-to-day operations, corporate
governance, and strategic decision-making. Our end-to-end compliance management system
covers the full business lifecycle — from procurement and R&D to sales and after-service —
ensuring that all departments operate within a consistent framework of legal and ethical
accountability. Leveraging this compliance management system, we not only mitigate
operational and reputational risks but also reinforce trust with stakeholders, regulators, and
partners, laying a strong foundation for our long-term stability and success.
Anti-corruption
We have established a dedicated anti-corruption governance structure to ensure full
oversight and effective implementation. Our audit and supervision department, reporting
directly to the Audit Committee, is responsible for preventive audits, fraud investigations,
project reviews, and exit audits. This function is supported by our process and IT systems
teams, enabling systematic enforcement of anti-corruption measures. Internal regulations, such
BUSINESS
– 275 –


--- page 286 ---
as the Employee Code of Commercial Conduct () and Gift
Management Policy (), establish clear expectations for ethical behavior.
Violations are met with firm disciplinary actions, including termination, legal consequences, or
blacklisting under the Sunshine Integrity Alliance, reinforcing our zero-tolerance stance on
corruption and bribery.
Our Directors confirm, as advised by our legal advisers insofar as the relevant
jurisdictions where we have substantial operations are concerned, that we had complied with
applicable health, work safety and environmental laws and regulations in all material respects
during the Track Record Period and up to the Latest Practicable Date.
RISK MANAGEMENT AND INTERNAL CONTROL
We have developed and implemented risk management policies and internal control
measures in relation to our business operations, financial reporting, and general compliance.
Risk Management
Effective risk management is essential to our sustainable and stable development. We
have established a comprehensive, multi-layered risk control framework that integrates internal
controls into all aspects of our operations. This framework is designed around a three lines of
defense model to ensure thorough and effective risk identification, analysis, and response
across the enterprise.
 The first line of defense is composed of business management teams and process
owners, who are responsible for resolving the vast majority of day-to-day
operational issues and for ensuring strict adherence to processes and accountability
at the operational level.
 The second line of defense includes the internal control department and the process
management department, which oversee cross-functional and high-risk matters,
promote risk management methodologies, and empower business units with tools
and knowledge for risk mitigation.
 The third line of defense is formed by the Audit Committee and the audit and
supervision department, which conduct independent audits and investigations. This
layer provides objective evaluations of risk control effectiveness and serves as a
deterrent against misconduct through rigorous oversight.
To support this structure, we have implemented a robust risk identification and
monitoring system guided by its Internal Control Manual ( ʫ௅છՓ˓̅). This system
focuses on both internal and external risks and is embedded into routine management activities.
BUSINESS
– 276 –


--- page 287 ---
We apply a combination of qualitative and quantitative risk analysis methods to assess
potential risks based on likelihood, impact, speed of onset, and duration. Qualitative methods,
including surveys and expert consultations, are used for early-stage assessments and
lower-impact risks, while quantitative methods, such as statistical modeling and computer
simulations, are applied to financial and market-related risks. We actively involve domain
experts in the risk assessment process to ensure accuracy and depth.
In terms of risk response, we adopt tailored strategies based on the nature of the risk and
our risk tolerance. These strategies include risk avoidance, mitigation, transfer, and acceptance.
We regularly adjust these responses in line with our development stage and business priorities.
In addition, we evaluate the risk preferences of senior management and key personnel to
prevent personal biases from influencing business decisions.
In 2024, we further enhanced our risk assessment mechanisms and integrated risk
management into all stages of corporate operations, forming a closed-loop risk control cycle
of prevention, control, and post-event evaluation. This full-process approach ensures the
systematic, dynamic, and effective management of risks across our Group.
To monitor the ongoing implementation of our risk management policies and corporate
governance measures after the Listing, we have adopted and will adopt, among other things,
the following risk management measures.
 We design a comprehensive set of policies to identify, analyze, manage and monitor
various risks. We periodically assess and update our risk management policies.
 Our Board is responsible for overseeing the overall risk management and internal
control. Our Audit Committee is authorized to review and evaluate our financial
control, risk management and internal control system. See “Directors and Senior
Management — Board Committees — Audit Committee” for the composition of the
Audit Committee and the qualifications and experience of them.
 We will adopt various policies to ensure compliance with the Listing Rules,
including but not limited to aspects related to conflict of interest management,
connected transactions and information disclosure.
 We will continue to organize training sessions for our Directors and senior
management with respect to the relevant requirements of the Listing Rules and
duties of directors of companies listed in Hong Kong.
BUSINESS
– 277 –


--- page 288 ---
Internal Control
We engaged an independent internal control consultant to perform an assessment on the
effectiveness of our internal controls, to identify deficiencies in our internal control system and
to furnish recommendations on enhanced internal control measures. The work scope of our
internal control consultant covered both company-level and process-level internal control
assessments, including control environment, risk assessment, control activities, information
and communication, monitoring, sales and accounts receivable management, procurement and
accounts payable management, inventory management, production and cost control, human
resources and compensation, fixed assets and intangible assets management, cash and treasury
management, financial reporting and disclosure, insurance management, tax management,
R&D management, and general IT controls.
During the independent internal control consultant’s review, certain deficiencies were
identified, including deficiencies in relation to certain of our corporate governance policies,
and we have revised such corporate governance policies in conformity with the requirements
of the Listing Rules. We had adopted substantially all of the recommendations made by the
independent internal control consultant and had improved our internal control system to
comply with the Listing Rules. By the end of June 2025, the independent internal control
consultant noted that we had completed the recommended enhancements to the internal control
system, and concluded that our enhanced internal control measures are effective, including
among others those related to the establishment of the unauthorized software management
system. We remain committed to continuously strengthening our internal control system and
ensuring full compliance with the Listing Rules.
Having considered the internal control measures adopted by us, our Directors are of the
view that our enhanced internal control measures are adequate and effective having regard to
the obligations of our Company and our Directors under the Listing Rules and other relevant
legal and regulatory requirements.
BUSINESS
– 278 –


--- page 289 ---
BOARD OF DIRECTORS
Our Board consists of seven Directors, comprising four executive Directors and three
independent non-executive Directors. The following table sets forth the key information about
our Directors as of the Latest Practicable Date.
Name Age Positions Roles and responsibilities
Date of first joining
our Group
Date of first
appointment as a
Director
Mr. DU Junhong
(ߎࠏ)H1118/H1118/H1118/H1118/H1118
52 Chairman of the Board and
executive Director
Leading the operation
of the Board,
ensuring corporate
governance
compliance,
formulating overall
corporate strategy,
and major
decision-making of
our Group
Founder of our
Group
October 27, 2004
Mr. GE Zhengang
(ၤ) /H1118/H1118/H1118/H1118
48 Executive Director and
general manager
Formulating overall
strategy and
overseeing business
operations and
daily management
of our Group
October 8, 2005 May 17, 2018
Mr. GUAN
Y adong
(؇)H1118/H1118/H1118/H1118
52 Executive Director and
deputy general manager
Formulating and
implementing
investment strategy
of our Group and
supervising risk
assessment and
compliance of
investment team
October 27, 2004 March 25, 2015
DIRECTORS AND SENIOR MANAGEMENT
– 279 –


--- page 290 ---
Name Age Positions Roles and responsibilities
Date of first joining
our Group
Date of first
appointment as a
Director
Ms. QIN Y anling
(ޛ)H1118/H1118/H1118/H1118/H1118
52 Executive Director
(employee representative
Director)
Establishing internal
control and risk
management
systems and
supervising the
compliance of
business process of
our Group
October 27, 2004 June 9, 2025
Dr. SHEN Jianxin
(อ) /H1118/H1118/H1118/H1118
55 Independent non-executive
Director
Supervising and
providing
independent
opinion and
judgment to our
Board
January 26, 2022 January 26, 2022
Mr. Y ANG Chuan
(เʇ) /H1118/H1118/H1118/H1118/H1118/H1118
56 Independent non-executive
Director
Supervising and
providing
independent
opinion and
judgment to our
Board
January 26, 2022 January 26, 2022
Dr. NIU
Shuangxia
(ˬ㢶ᒳ) /H1118/H1118/H1118/H1118
43 Independent non-executive
Director
Supervising and
providing
independent
opinion and
judgment to our
Board
June 9, 2025 June 9, 2025
DIRECTORS AND SENIOR MANAGEMENT
– 280 –


--- page 291 ---
Executive Directors
Mr. Du Junhong (ߎࠏ)aged 52, is our founder, chairman of our Board, an executive
Director and one of our Controlling Shareholders. Mr. Du is primarily responsible for leading
the operation of the Board, ensuring corporate governance compliance, formulating overall
corporate strategy, and major decision-making of our Group.
Mr. Du has over two decades of robust experience in consumer electronics technologies
and business management. Mr. Du founded our Company in October 2004 and has since led our
development, assuming pivotal roles as directors and senior management across our Group.
Mr. Du has been serving as our Director since the company’s inception. He has been the
chairman of our Board since September 2014. He currently holds directorships in a number of
subsidiaries of our Group.
Mr. Du obtained a bachelor’s degree in industrial automation from Zhejiang University
(एϪɽኪ) in China in June 1994 and a Ph.D. in electrical machines and appliances from
Zhejiang University ( एϪɽኪ) in June 1999.
Mr. GE Zhengang (ၤ), aged 48, is an executive Director, our general manager and
one of our Controlling Shareholders. He is primarily responsible for formulating overall
strategy and overseeing business operations and daily management of our Group.
Mr. Ge has over two decades of extensive experience in business and operations
management. Mr. Ge joined our Group in October 2005 and successively served as assistant to
president and the general manager of supply chain management center and operations center
from October 2005 to May 2015. Since May 2015, Mr. Ge has successively served as our
deputy general manager and general manager. He has been serving as our Director since May
2018. He currently holds directorships in a number of subsidiaries of our Group. Prior to
joining our Group, Mr. Ge worked at Xiehe Petrochemical Group (China) Co., Ltd. (ذ
ʷʈණྠ(ʕ਷)ʮ̡).
Mr. Ge obtained a bachelor’s degree in chemistry and chemical engineering from Nanjing
University (ԯɽኪ) in July 1998.
Mr. GUAN Y adong (؇)aged 52, is an executive Director and a deputy general
manager of our Company. Mr. Guan is primarily responsible for formulating and implementing
investment strategy of our Group and supervising risk assessment and compliance of
investment team.
Mr. Guan has over 21 years of experience in consumer electronics technologies. Mr. Guan
joined our Group since our inception. From October 2004 to May 2015, Mr. Guan has
successively served as our technical director and a deputy general manager. Since May 2015,
he has been serving as our Director and a deputy general manager. He currently holds
directorships in a number of subsidiaries of our Group.
DIRECTORS AND SENIOR MANAGEMENT
– 281 –


--- page 292 ---
Mr. Guan obtained a bachelor’s degree in electronic engineering in June 1995 and a
master’s degree in communication and information systems in March 2001 from Nanjing
University of Science and Technology (ԯଣʈɽኪ).
Ms. QIN Y anling (ޛ,)aged 52, is the employee representative Director of our
Company. She is primarily responsible for internal control and risk management and
supervising the compliance of business process of our Group.
Ms. Qin has over 21 years of experience in internal control and risk management. She
joined our Group since our inception and has been serving as the deputy general manager of
our finance system. From May 2015 to June 2025, Ms. Qin served as a supervisor of our
Company. Prior to joining our Group, Ms. Qin successively served as a lecturer at the Finance
and Economics Department of Hubei Minzu University ( ಳ̏͏ૄኪ৫), and worked in an
accounting role at ZTE Corporation.
Ms. Qin obtained a bachelor’s degree in mathematics from Hubei Minzu University ( ಳ
̏͏ૄኪ৫) in China in July 1993 and a master’s degree in accounting from Zhongnan
University of Economics and Law (ৌ຾ɽኪ) in China in July 1999. She is a certified
intermediate accountant in the PRC.
Independent Non-executive Directors
Dr. SHEN Jianxin (อ), aged 55, is an independent non-executive Director of our
Company. Dr. Shen is primarily responsible for supervising and providing independent opinion
and judgment to our Board.
Dr. Shen has over 28 years of experience in electrical engineering and academia. From
December 1997 to June 1999, he served as a postdoctoral researcher at the School of Electrical
and Electronic Engineering, Nanyang Technological University in Singapore. From June 1999
to April 2002, he served as a research assistant at the Department of Electronic and Electrical
Engineering, University of Sheffield in the United Kingdom. From April 2002 to April 2004,
he served as a research engineer in the electrical department at the UK Research Center of
Aisin Seiki Co., Ltd., Toyota Group (ٟa company listed on the
Tokyo Stock Exchange (stock code: 7259). Since May 2004, Dr. Shen has been serving as a
professor at the College of Electrical Engineering, Zhejiang University ( एϪɽኪ). Dr. Shen
has also been serving as an independent director at (i) Hangzhou Micro-Light Electronic Co.,
Ltd. (ʮ̡), a company listed on the Shenzhen Stock Exchange (stock
code: 002801), since December 2021; and (ii) Zhejiang EV-Tech Co., Ltd. (΅
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 301607), since July
2022.
Dr. Shen obtained a bachelor’s degree in electrical machinery in July 1991 and a master’s
degree in electrical machinery in June 1994 from Xi’an Jiaotong University ( Гτʹஷɽኪ).
In October 1997, he obtained a Ph.D. degree in electrical machinery from Zhejiang University
(एϪɽኪ).
DIRECTORS AND SENIOR MANAGEMENT
– 282 –


--- page 293 ---
Mr. YANG Chuan ( เʇ), aged 56, is an independent non-executive Director of our
Company. Mr. Y ang is primarily responsible for supervising and providing independent opinion
and judgment to our Board.
Mr. Y ang has robust experience in finance and business management. He formerly worked
at Delphi Automotive Systems Corporation, a company currently known as Aptiv PLC and
listed on the New Y ork Stock Exchange (ticker symbol: APTV), where he departed in
December 2009. From January 2010 to October 2012, he served as the finance director at
Bosch Rexroth. From October 2012 to November 2024, he served as the vice president at
Bosch (China) Investment Ltd. ( ௹˰(ʕ਷)ʮ̡), where he was recognized as the
“2018 Gold Medal CFO of China (2018೐CFO)” by the panel of judges at the 14th
China CFO Conference organized by New Fortune magazine ( อଣৌᕏႦin April 2019.
From December 2024 to November 2025, Mr. Y ang served as a senior director of Y uanjing
Energy Co., Ltd. (ʮ̡). Since December 2025, Mr. Y ang has been serving as the
chief financial officer of Shanghai Aiko Solar Energy Co., Ltd. (ʮ
̡), a company whose shares are listed on the Shanghai Stock Exchange (stock code: 600732).
Mr. Y ang has been serving as an independent director of Shanghai Huapei Power Technology
(Group) Co., Ltd. (Ҧ(ණྠ)ʮ̡), a company listed on the Shanghai
Stock Exchange (stock code: 603121), since November 2019; and an independent director of
Hansun (Shanghai) Marine Technology Co., Ltd. ( ဏସ(ɪऎ)ʮ̡), a
company whose shares are quoted on the National Equities Exchange and Quotations (stock
code: 837291), since June 2025.
Mr. Y ang obtained a bachelor’s degree in financial accounting from Capital University of
Economics and Business (ɽኪ) in July 1992, a master’s degree in business
administration from Guanghua School of Management, Peking University ( ̏ԯɽኪΈശ၍ଣ
ኪ৫) in July 1999 and a master’s degree in executive business administration from China
Europe International Business School ( ʕᆄ਷ყʈਠኪ৫) in September 2010. Mr. Y ang holds
the certificate of Certified Public Accountant (ࣣgranted by the Ministry of
Finance.
Dr. NIU Shuangxia ( ˬ㢶ᒳ), aged 43, is an independent non-executive Director of our
Company since June 2025. Dr. Niu is primarily responsible for supervising and providing
independent opinion and judgment to our Board.
Dr. Niu has over 13 years of experience in engineering research. Since July 2012, she
successively held positions as research assistant professor, assistant professor, associate
professor and professor at the Faculty of Engineering, The Hong Kong Polytechnic University.
She has also been serving as an independent director of Fortior Technology (Shenzhen) Co.,
Ltd. (ࢤ
Ҧ(ଉέ)ʮ̡), a company listed on the Shanghai Stock Exchange (stock
code: 688279), since August 2024.
Dr. Niu obtained a bachelor’s degree in automation in June 2002 and a master’s degree
in control theory and control engineering in March 2005 from Tianjin University (ɽኪ).
In December 2009, Dr, Niu obtained a Ph.D. degree in electrical engineering from The
University of Hong Kong.
DIRECTORS AND SENIOR MANAGEMENT
– 283 –


--- page 294 ---
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The following table sets forth the key information about our senior management as of the
Latest Practicable Date.
Name Age Positions Roles and Responsibilities
Date of first
joining our Group
Date of first
appointment as
a senior
management
Mr. GE Zhengang
(ၤ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
48 Executive Director
and general
manager
Formulating overall
strategy and
overseeing business
operations and
daily management
of our Group
October 8,
2005
May 18, 2015
Mr. GUAN Y adong
(؇)H1118/H1118/H1118/H1118/H1118/H1118/H1118
52 Executive Director
and deputy general
manager
Formulating and
implementing
investment strategy
of our Group and
supervising risk
assessment and
compliance of
investment team
October 27,
2004
December 1,
2009
Mr. W ANG Boliang
(ˮЬԄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
48 Deputy general
manager
Overseeing daily
operation and
management of our
Group
February 17,
2005
May 22, 2018
Mr. CHENG Lihui
(೻ኇሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
44 Deputy general
manager
R&D management
and technological
innovation
October 27,
2004
May 22, 2018
Mr. ZHENG Qi’ang
(׻)H1118/H1118/H1118/H1118/H1118/H1118/H1118
38 Deputy general
manager
Formulating and
implementing our
Group’s marketing
strategies and
managing
international
business division
January 4,
2017
February 17,
2025
Mr. ZHANG Zhijiong
(ތ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
45 Chief financial
officer
Overall financial
matters of our
Group
November 2,
2020
November 3,
2020
Mr. ZHOU Liangliang
(մԄ૑) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
44 Board secretary and
Deputy general
manager
Overseeing the
Board-related
matters, capital
market matters,
legal affairs and
compliance matters
of our Group
October 14,
2019
November 13,
2019
DIRECTORS AND SENIOR MANAGEMENT
– 284 –


--- page 295 ---
Mr. GE Zhengang (ၤ), aged 48, is our general manager. For his biography, see “—
Board of Directors — Executive Directors” in this section.
Mr. GUAN Y adong (؇,)aged 52, is our deputy general manager. For his biography,
see “— Board of Directors — Executive Directors” in this section.
Mr. W ANG Boliang ( ˮЬԄ), aged 48, is a deputy general manager of our Company. Mr.
Wang is primarily responsible for overseeing daily operation and management of our Group.
Mr. Wang has over two decades of solid experience in sales and marketing. Mr. Wang
joined our Group in February 2005 as the deputy general manager of the marketing center and
was later promoted to general manager of the business division until May 2015. He has been
successively serving as the general manager of our marketing center and the deputy general
manager of our strategy and marketing department since May 2015 and a deputy general
manager since May 2018. Mr. Wang also served as our Director from May 2018 to January
2022, and was reappointed as a Director from November 2022 to June 2025. Mr. Wang resigned
as a Director in June 2025 in order to focus on his management commitment as the Company’s
deputy general manager. Prior to joining our Group, he served as the strategic research manager
at Shanghai Dibit Industry Co., Ltd. (ʮ̡).
Mr. Wang obtained a bachelor’s degree in statistics and probability from East China
Normal University (ᇍɽኪ) in July 2000.
Mr. CHENG Lihui ( ೻ኇሾ), aged 44, is a deputy general manager of our Company. He
is primarily responsible for the R&D management and technological innovation of our Group.
Mr. Cheng has over two decades of robust experience in R&D of consumer electronics
technologies. Mr. Cheng joined our Group in July 2004 and has successively served as the
hardware department manager, R&D director, general manager of the R&D engineering center,
general manager of the business unit and deputy general manager of our Company.
Mr. Cheng obtained a bachelor’s degree in communication engineering from Xiamen
University (ɽኪ) in July 2002.
Mr. ZHENG Qi’ang (׻)aged 38, is a deputy general manager of our Company. Mr.
Zheng is primarily responsible for formulating and implementing our Group’s marketing
strategies and managing the international business division.
Mr. Zheng has over 15 years of experience in operations management. He joined our
Company in January 2017 and has successively served as senior director of the procurement
system, general manager of the procurement system and general manager of the marketing
system. In February 2025, he was appointed as a deputy general manager of our Company.
Prior to joining our Group, Mr. Zheng formerly worked at HP (Shanghai) Co., Ltd. ( ౉౷(ɪ
ऎ)ʮ̡). From September 2011 to December 2016, he served as procurement manager at
Lenovo Group Limited (ʮ̡), a company listed on the Stock Exchange (stock
code: 992).
DIRECTORS AND SENIOR MANAGEMENT
– 285 –


--- page 296 ---
Mr. Zheng obtained a bachelor’s degree in logistics management from East China
University of Science and Technology (ଣʈɽኪ) in July 2008 and a master’s degree in
supply engineering and logistics from the University of Warwick in the United Kingdom in
November 2009.
Mr. ZHANG Zhijiong (ތ)aged 45, is the chief financial officer of our Company.
He is primarily responsible for overall financial matters of our Group.
Mr. Zhang has over 23 years of experience in financial management. He joined our
Company in November 2020 and has been serving as our chief financial officer since then.
Prior to joining our Group, he worked at Unicharm (China) Investment Co., Ltd. ( ˈ֋Գ(ʕ
਷)ʮ̡), a subsidiary of a company listed on the Tokyo Stock Exchange (stock code:
8113), from 2002 to 2007. From 2007 to 2009, he worked at Johnson Controls International
Battery Co., Ltd. (ʮ̡). From May 2009 to October 2015, he worked
at Bosch (China) Investment Co., Ltd. ( ௹˰(ʕ਷)ʮ̡). From November 2015 to
November 2020, he served as a deputy general manager and chief financial officer at Shanghai
Huapei Power Technology (Group) Co., Ltd. (Ҧ(ණྠ)ʮ̡), a
company listed on the Shanghai Stock Exchange (stock code: 603121).
Mr. Zhang obtained dual bachelor’s degrees in asset valuation and accounting from
Shanghai University of Finance and Economics ( ɪऎৌ຾ɽኪ) in July 2002, a master’s degree
in business administration from Fudan University ( ూ͇ɽኪ) in December 2012 and a master’s
degree in executive business administration from China Europe International Business School
(ʕᆄ਷ყʈਠኪ৫) in August 2021. He is a certified public accountant in the PRC.
Mr. ZHOU Liangliang ( մԄ૑), aged 44, is the Board secretary and a deputy general
manager of our Company. Mr. Zhou is primarily responsible for overseeing Board-related
matters, capital market matters, legal affairs and compliance matters of our Group.
Mr. Zhou has over 20 years of experience in investment management and board affairs.
Mr. Zhou joined our Group in October 2019 as our Board secretary and has been serving as our
deputy general manager since January 2020. Prior to joining our Group, he served as an
investment supervisor at Baida Group Co., Ltd. (ʮ̡), a company listed on
the Shanghai Stock Exchange (stock code: 600865), from February 2005 to September 2007.
From September 2007 to February 2011, he served as investment department manager and
securities affairs representative at Hangzhou Great Star Industrial Co., Ltd. (ٰ
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 002444). From
2011 to 2019, he served as a deputy general manager and board secretary at CGN Juner New
Materials Co., Ltd. (ʮ̡).
Mr. Zhou obtained a bachelor’s degree in finance from Zhejiang University of Finance
and Economics ( एϪৌ຾ɽኪ) in June 2004 and a master’s degree in business administration
from Zhejiang University ( एϪɽኪ) in June 2019.
DIRECTORS AND SENIOR MANAGEMENT
– 286 –


--- page 297 ---
OTHER INFORMATION IN RELATION TO OUR DIRECTORS AND SENIOR
MANAGEMENT
As of the Latest Practicable Date, save as disclosed in “Appendix IV — Statutory and
General Information — D. Further Information about Our Directors, Chief Executive and
Substantial Shareholders — 1. Disclosure of Interest,” each of our Directors did not have any
interest in the Shares within the meaning of Part XV of the SFO.
Longcheer Telecommunication Limited (“ Longcheer Telecom ”), a company incorporated
with limited liability under the laws of Labuan, Malaysia, was struck off on August 30, 2024
when Mr. Du was a sole director thereof, as Longcheer Telecom no longer carried out any
substantial business operations. Longcheer Telecom was solvent before its strike-off in August
2024. Mr. Du confirmed that (i) there is no wrongful act on Mr. Du’s part leading to the
strike-off; (ii) he has not received any notice or sanction by any relevant government
authorities against him imposing any penalty or order for rectification or alleging that he is
personally liable for the cessation of operation and the strike-off of Longcheer Telecom; (iii)
he is not aware of any actual or potential claims which have been or could potentially be made
against him as a result of the strike-off; and (iv) he has not received any notice of
disqualification by relevant authorities requiring him to cease to act as director of any private
or public companies.
Save as disclosed above, to the best knowledge, information and belief of our Directors
having made all reasonable inquiries, there are no material matters relating to their
appointment as a Director that need to be brought to the attention of our Shareholders and there
is no other information in relation to their appointment which is required to be disclosed
pursuant to Rule 13.51(2) of the Listing Rules as of the Latest Practicable Date.
Save as disclosed above, none of our Directors and senior management held any other
directorships in any other company listed in Hong Kong or overseas during the three years
immediately preceding the date of this prospectus.
Save as disclosed above, none of our Directors and senior management is related to other
Directors, senior management or substantial Shareholders of our Company.
JOINT COMPANY SECRETARIES
Mr. ZHOU Liangliang ( մԄ૑) has been appointed as one of our joint company
secretaries with effect from the Listing Date. For details of his biography, see “— Senior
Management.”
Mr. CHOW Shing Lung ( ཅ፴Ꮂ), has been appointed as one of our joint company
secretaries with effect from the Listing Date.
Mr. Chow has more than 14 years of work experience in the company secretarial and legal
fields and is currently Assistant Vice President, Entity Solutions of Computershare Hong Kong
Investor Services Limited (“ Computershare ”). Prior to joining Computershare, he was Legal
DIRECTORS AND SENIOR MANAGEMENT
– 287 –


--- page 298 ---
Counsel of the Hong Kong office of a major technology conglomerate. Mr. Chow obtained a
Graduate Diploma with Distinction in English and Hong Kong Law (Common Professional
Examination) from the Manchester Metropolitan University and a Master of Corporate
Governance degree from The Hong Kong Polytechnic University. Mr. Chow was admitted as
a solicitor of the High Court of Hong Kong. He is also an associate member of both The Hong
Kong Chartered Governance Institute (formerly known as the Hong Kong Institute of
Chartered Secretaries) and The Chartered Governance Institute in the United Kingdom.
BOARD COMMITTEES
Our Company has established four committees under the Board in accordance with the
relevant laws and regulations in Chinese mainland, the Articles of Association and the
Corporate Governance Code under the Listing Rules, including the Audit Committee,
Nomination Committee, Remuneration and Assessment Committee and Strategy and ESG
Committee.
Audit Committee
We have established an Audit Committee in compliance with Rule 3.21 of the Listing
Rules and the Corporate Governance Code set out in Appendix C1 to the Listing Rules. The
primary duties of the Audit Committee are to review and supervise our financial information
disclosure, internal and external audit work and internal control system of our Group; and
provide advice and comments to our Board. The Audit Committee comprises three independent
non-executive Directors, namely, Mr. Y ANG Chuan, Dr. SHEN Jianxin and Dr. NIU
Shuangxia. Mr. Y ANG Chuan is the chairperson of the Audit Committee. He holds the
appropriate professional qualifications as required under Rules 3.10(2) and 3.21 of the Listing
Rules.
Nomination Committee
We have established a Nomination Committee in compliance with Rule 3.27A of the
Listing Rules and the Corporate Governance Code set out in Appendix C1 to the Listing Rules.
The primary duties of the Nomination Committee are to assess the candidates and review
selection criteria and procedures for Directors and senior management, and to make
recommendations to our Board. The Nomination Committee comprises one executive Director
and two independent non-executive Directors, namely, Dr. SHEN Jianxin, Mr. DU Junhong and
Dr. NIU Shuangxia. Dr. SHEN Jianxin is the chairperson of the Nomination Committee.
Remuneration and Assessment Committee
We have established a Remuneration and Assessment Committee in compliance with Rule
3.25 of the Listing Rules and the Corporate Governance Code set out in Appendix C1 to the
Listing Rules. The primary duties of the Remuneration and Assessment Committee are to
review and make recommendations to our Board regarding the terms of remuneration packages,
bonuses and other compensation payable to our Directors and senior management. The
DIRECTORS AND SENIOR MANAGEMENT
– 288 –


--- page 299 ---
Remuneration and Assessment Committee comprises three independent non-executive
Directors, namely, Dr. NIU Shuangxia, Mr. Y ANG Chuan and Dr. SHEN Jianxin. Dr. NIU
Shuangxia is the chairperson of the Remuneration and Assessment Committee.
Strategy and ESG Committee
We have established a Strategy and ESG Committee under the Board. The primary duties
of the Strategy and ESG Committee are to make recommendations to our Board on the
long-term development strategy and major investments and projects of our Company, and to
review our sustainable development and ESG strategy and goals, our ESG related reports. The
Strategy and ESG Committee comprises two executive Directors and one independent
non-executive Director, namely, Mr. DU Junhong, Mr. GE Zhengang and Dr. SHEN Jianxin.
Mr. DU Junhong is the chairperson of the Strategy and ESG Committee.
CORPORATE GOVERNANCE
We recognize the importance of incorporating elements of good corporate governance in
our management structure and internal control procedures so as to achieve effective
accountability. We intend to comply with all code provisions in Part 2 of the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules after the Listing.
BOARD DIVERSITY POLICY
Our Company has adopted a board diversity policy which sets out the approach to achieve
diversity of the Board. We recognize and embrace the benefits of having a diverse Board and
see increasing diversity at the Board level as an essential element in supporting the attainment
of our Company’s strategic objectives and sustainable development. Pursuant to the board
diversity policy, in reviewing and assessing suitable candidates to serve as a director of our
Company, the Nomination Committee will consider a number of factors, including but not
limited to talent, skills, gender, age, cultural and educational background, ethnicity,
professional experience, independence, knowledge and length of service. In particular, our
Company currently has two female Directors in the Board and will continue to work towards
enhancing the gender diversity of the Board. Our Directors have a balanced mix of knowledge
and skills, and we have three independent non-executive Directors, with different industry
backgrounds. Taking into account our existing business model and specific needs as well as the
different background of our Directors, the composition of our Board satisfies our Board
diversity policy. Pursuant to the board diversity policy, after the Listing, the Nomination
Committee will discuss periodically and when necessary, agree on the measurable objectives
for achieving diversity, including gender diversity, on the Board and recommend them to the
Board for formal adoption.
DIRECTORS AND SENIOR MANAGEMENT
– 289 –


--- page 300 ---
MANAGEMENT PRESENCE IN HONG KONG
According to Rules 8.12 and 19A.15 of the Listing Rules, we must have sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong. Since the principal business operations of
our Group are conducted outside of Hong Kong, our Company does not and for the foreseeable
future will not have a sufficient management presence in Hong Kong. We have applied for, and
the Stock Exchange has granted us, a waiver from compliance with Rules 8.12 and 19A.15 of
the Listing Rules. For details, see “Waivers and Exemptions — Management Presence in Hong
Kong.”
REMUNERATION
Our Directors and senior management receive remuneration, including basic payments
and performance-related payments, including fees, salaries, allowances and bonuses, share-
based payment expenses, pension scheme contributions and social welfare. When reviewing
and determining the specific remuneration packages for our Directors and members of the
senior management of our Company, the Shareholders’ meetings and the Board of Directors
take into account factors such as salaries paid by comparable companies, time commitment,
level of responsibilities, employment elsewhere in our Group and desirability of performance-
based remuneration. As required by the relevant PRC laws and regulations, our Company also
participates in various defined contribution plans organized by relevant provincial and
municipal government authorities and welfare schemes for employees of our Company,
including medical insurance, injury insurance, unemployment insurance, pension insurance,
maternity insurance and housing provident fund.
For the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the aggregate remuneration paid by us to our Directors amounted to
RMB6.8 million, RMB7.0 million, RMB6.7 million, and RMB6.3 million, respectively.
For the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the aggregate remuneration paid by us to our five highest paid individuals
(none of whom during the Track Record Period were Directors) amounted to RMB30.9 million,
RMB33.6 million, RMB33.2 million, and RMB31.7 million, respectively.
According to existing effective arrangements, the total aggregate remuneration
(excluding any possible payment of discretionary bonus) to paid by us to our Directors for the
financial year ended December 31, 2025 is expected to be RMB9.2 million.
During the Track Record Period, (i) no remuneration was paid to our Directors 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 or the five highest
paid individuals for the loss of office as 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 waived any remuneration.
DIRECTORS AND SENIOR MANAGEMENT
– 290 –


--- page 301 ---
Save as disclosed above and in Appendix I to this prospectus, during the Track Record
Period, no other payments have been made or are payable by our Group to our Directors and
the five highest paid individuals.
For more details on remuneration paid to our Directors and, on an aggregate basis, the
five highest paid individuals of our Group during the Track Record Period, see Notes 8 and 9
to the Accountants’ Report as set out in Appendix I to this prospectus; and for details regarding
the Share incentives granted to our Directors and senior management, see “Appendix VI —
Statutory and General Information — C. Employee Incentive Schemes” to this prospectus.
CONFIRMATIONS FROM OUR DIRECTORS
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules on June 20, 2025 and (ii) understands his or her
obligations as a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his or her
independence as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing
Rules, (ii) that he or she has no past or present financial or other interest in the business of our
Company or its subsidiaries or any connection with any core connected person of our Company
under the Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors
that may affect his or her independence at the time of his or her appointments.
Rule 8.10 of the Listing Rules
Each of our Directors (other than our independent non-executive Directors) confirms that
as of the Latest Practicable Date, he or she did not have any interest in a business which
competes or is likely to compete, directly or indirectly, with our business and requires
disclosure under Rule 8.10 of the Listing Rules.
DIRECTORS AND SENIOR MANAGEMENT
– 291 –


--- page 302 ---
COMPLIANCE ADVISOR
We have appointed Guotai Junan Capital Limited as our Compliance Advisor pursuant to
Rule 3A.19 of the Listing Rules. Our Compliance Advisor will provide us with guidance and
advice as to compliance with the Listing Rules and applicable Hong Kong laws. Pursuant to
Rule 3A.23 of the Listing Rules, our Compliance Advisor will advise our Company in certain
circumstances including:
(a) before the publication of any regulatory announcement, circular, or financial report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases; and
(c) where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where the business activities, development
or results of our Group deviate from any forecast, estimate or other information in
this prospectus; and where the Stock Exchange makes an inquiry to our Company
regarding unusual movements in the price or trading volume of its listed securities
or any other matters in accordance with Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 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
announced by the Stock Exchange. 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 applicable requirements under the Listing Rules and laws and regulations.
The term of appointment of our Compliance Advisor shall commence on the Listing Date
and is expected to end on the date on which we comply with Rule 13.46 of the Listing Rules
in respect of our financial results for the first full financial year commencing after the Listing
Date.
DIRECTORS AND SENIOR MANAGEMENT
– 292 –


--- page 303 ---
OVERVIEW
As of the Latest Practicable Date, Mr. Du (a) was the general partner of Chengmai Qihe
and was therefore entitled to exercise the voting rights attaching to 9.91% of our total issued
Shares (excluding the Non-voting Shares) held by Chengmai Qihe; and (b) controlled 51%
equity interest of Shanghai Xinhe, the general partner of Kunshan Longcheer, and was
therefore entitled to exercise the voting rights attaching to 20.70% of our total issued Shares
(excluding the Non-voting Shares) held by Kunshan Longcheer.
As of the Latest Practicable Date, Mr. Ge (a) directly held 4.63% of our total issued
Shares (excluding the Non-voting Shares); and (b) was the executive general partner of
Kunshan Qiyun and was therefore entitled to exercise the voting rights attaching to 3.45% of
our total issued Shares (excluding the Non-voting Shares) held by Kunshan Qiyun.
Mr. Du and Mr. Ge were parties acting in concert to vote unanimously at our
shareholders’ meeting pursuant to the concert party agreement dated November 1, 2021 entered
into between them. It is further agreed that such acting-in-concert arrangements will continue
for sixty months following the listing of our A Shares on the Shanghai Stock Exchange. For
further details, see “History and Corporate Structure — Concert Party Arrangement.”
Therefore, Mr. Du, Mr. Ge, Shanghai Xinhe, Kunshan Longcheer, Chengmai Qihe, and
Kunshan Qiyun are presumed to be a group of Shareholders of our Company by virtue of the
acting-in-concert arrangement between Mr. Du and Mr. Ge and are therefore considered to be
our Controlling Shareholders, who collectively were entitled to exercise, or control the
exercise of, the voting rights attaching to approximately 38.69% of our total issued Shares
(excluding the Non-voting Shares) as of the Latest Practicable Date.
Insofar as our Directors are aware, immediately following completion of the Global
Offering (assuming the Over-allotment Option is not exercised), our Controlling Shareholders
will be collectively entitled to exercise or control the exercise of the voting rights attaching to
approximately 34.76% of our total issued Shares (excluding the Non-voting Shares). Therefore,
Mr. Du, Mr. Ge, Shanghai Xinhe, Kunshan Longcheer, Chengmai Qihe, and Kunshan Qiyun
will remain as our Controlling Shareholders upon completion of the Global Offering. For the
shareholding and corporate structure of our Group, see “History and Corporate Structure.”
Mr. Du is our founder, the chairman of our Board and an executive Director. Mr. Ge is
an executive Director and our general manager. For further backgrounds of Mr. Du and Mr. Ge,
see “Directors and Senior Management.”
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 293 –


--- page 304 ---
NON-COMPETITION UNDERTAKINGS
In connection with the A-Share Listing, each of Mr. Du, Mr. Ge, Kunshan Longcheer,
Chengmai Qihe and Kunshan Qiyun provided a non-compete undertaking (the “ Undertaking ”)
to our Company on February 24, 2023, pursuant to which he/it undertakes, among others, that:
(a) he/it and the entities directly or indirectly controlled by him/it have not directly or
indirectly engaged in any business that competes with the Group;
(b) from the date of signing the Undertaking, he/it and the entities directly or indirectly
controlled by him/it will not directly or indirectly engage or participate in any
business in the same industry that competes with the Group, either within or outside
the PRC;
(c) he/it will, by way of authorizing relevant personnel (including without limitation the
directors and managers of the entities) of such entities, ensure that the entities
directly or indirectly controlled by him/it comply with the obligations under the
Undertaking;
(d) from the date of signing the Undertaking, should the Group expand its scope
business and products, he/it and the entities controlled by him/it will not compete
with the Group in such expanded business or products. If any existing business
under his/its control becomes competing business due to such expansion, he/it shall
withdraw from the competition by way of: (i) ceasing production of the competing
products or operation of the competing business; (ii) injecting the competing
business into the Group; or (iii) transferring the competing business to an unrelated
third party; and
(e) the Undertaking shall become effective and binding upon signing and remain valid
for so long as he/it remains as the controlling shareholder, actual controller of the
Company or a party acting in concert with the actual controller. He/it will be liable
for any losses incurred by the Group due to any breach of the Undertaking.
Each of Mr. Du and Mr. Ge, as an individual, also undertakes in the Undertaking that, he
or his close relatives will not seek any business opportunity belonging to the Group, nor will
he engage in, for himself or on behalf of any third party, any business similar to those of the
Group. If any business opportunity obtained by him or his close relatives from a third party
competes or is likely to compete with the Group’s business, he shall promptly notify the Group
and facilitate the transfer of such opportunity to the Group or adopt any other regulatory-
compliant solution to eliminate his actual management or operational rights over the relevant
assets, equity and/or business, to avoid competing with the Group.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 294 –


--- page 305 ---
DISCLOSURE UNDER RULE 8.10 OF THE LISTING RULES
Each of our Controlling Shareholders has confirmed that he/it does not have any interests
in any business (apart from the business of the Group) that competes or is likely to compete,
directly or indirectly, with our principal business, which is required to be disclosed under Rule
8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors believe that we are capable of
carrying on our business independently from the Controlling Shareholders and/or their
respective close associates after the Global Offering.
Management Independence
Our business is managed and conducted by our Board and senior management. Our Board
consists of seven Directors, comprising four executive Directors and three independent
non-executive Directors, and we also have seven senior management members (of which two
are executive Directors). Each of our Directors and senior management possesses relevant
management, financial or industry-related experience to contribute to the management of our
business. For more information, please see the section headed “Directors and Senior
Management.”
Mr. Du, one of our Controlling Shareholders, is the chairman of our Board and an
executive Director. Mr. Ge, one of our Controlling Shareholders, is an executive Director and
our general manager. Notwithstanding the roles of Mr. Du and Mr. Ge in our Board and/or our
senior management team, our Directors believe that our Company is capable of maintaining
management independence due to the following reasons:
(a) our daily management and operations are carried out by the executive Directors and
the senior management team, all of whom have substantial experience in the
industry in which our Company is engaged, and will therefore be able to make
business decisions that are in the best interests of our Group;
(b) save for Mr. Du and Mr. Ge, our executive Directors and senior management
members do not hold any role as an executive director or member of senior
management in any associates of our Controlling Shareholders;
(c) each of our Directors is fully aware of his/her fiduciary duties as a Director, which
require, among other things, that he/she acts for the benefit and in the best interests
of our Company and all our Shareholders as a whole and does not allow any conflict
between his/her duties as a Director and his/her personal interest to exist;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 295 –


--- page 306 ---
(d) we have three independent non-executive Directors all of whom are independent of
the Controlling Shareholders and have extensive experience in their respective areas
of expertise. All our independent non-executive Directors are appointed in
accordance with the requirements under the Listing Rules and certain matters of our
Company must always be referred to the independent non-executive Directors for
review, ensuring the decisions of our Board are made only after due consideration
of independent and impartial opinions;
(e) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between the Group and the Directors or their respective associates,
the interested Director(s) is required to declare the nature of such interest before
voting at the relevant Board meetings of our Company in respect of such
transactions and shall abstain from voting at the relevant meeting and shall not be
counted towards the quorum; and
(f) as an A-share listed company, we have adopted a comprehensive internal control and
management system in compliance with the relevant requirements of the rules of the
Shanghai Stock Exchange to manage conflicts of interest, if any, between our Group
and the Controlling Shareholders, which would support our independent
management. For details, see “— Corporate Governance Measures.”
Based on the above, our Directors believe that our Company has sufficient and effective
control mechanisms to ensure that the Directors perform their respective duties properly and
safeguard the interests of our Company and our Shareholders as a whole. Our Board together
with our senior management team, therefore, are able to perform the managerial role in our
Group independently.
Operational Independence
We will continue to operate independently from our Controlling Shareholders after the
Listing. We are in possession of all production and operating facilities and technology relating
to our Group’s business and have obtained relevant requisite qualifications and approvals for
conducting all our business.
We have independent access to customers and suppliers and, therefore, are not dependent
on our Controlling Shareholders for any significant amount of our revenue, R&D, staffing or
marketing and sales activities, and we have sufficient capital, equipment and employees to
operate our business independently from our Controlling Shareholders. We have an established
and complete organizational structure comprising various separate departments, each charged
with specific responsibilities, such as staffing, administration, finance, internal audit, R&D,
sales and marketing, or company secretarial functions. These departments have been in
operation and are expected to continue to operate separately and independently from our
Controlling Shareholders and their close associates. We also maintain a set of comprehensive
internal control procedures to facilitate the effective operation of our business.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 296 –


--- page 307 ---
Based on the above, our Directors believe that we are able to operate independently of our
Controlling Shareholders or any of their close associates.
Financial Independence
Our Company has established its own finance department with a team of independent
financial staff responsible for discharging treasury, accounting, reporting, group credit, and
internal control functions independent from our Controlling Shareholders and their close
associates, as well as a sound and independent financial system, and makes independent
financial decisions according to our own business needs. Our Company maintains bank
accounts independently and does not share any bank account with our Controlling
Shareholders. Our Company makes tax registration and pays tax independently with its own
funds. As such, our Company’s financial functions, such as cash and accounting management,
invoices and bills, operate independently of our Controlling Shareholders and their close
associates.
As of the Latest Practicable Date, there was no outstanding loan, advance, balance of
non-trade nature due to or from, or pledge or guarantee provided by our Controlling
Shareholders or their respective close associates. We do not expect to rely on our Controlling
Shareholders and/or their close associates for financing after the Global Offering as we expect
that our working capital will be funded by cash flows generated from operating activities, bank
loans as well as the proceeds from the Global Offering.
Based on the above, our Directors are of the view that they and our senior management
are capable of carrying on our business independently of, and do not place undue reliance on,
our Controlling Shareholders and their respective close associates.
CORPORATE GOVERNANCE MEASURES
Our Company and our Directors are committed to upholding and implementing the
highest standards of corporate governance and recognize the importance of protecting the
rights and interests of all Shareholders, including the rights and interests of our minority
Shareholders.
We have adopted the following measures to ensure good corporate governance standards
and to avoid potential conflicts of interest between our Group and our Controlling
Shareholders:
(a) as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules, and in particular, where any Director
or Shareholder(s) with more than 10% of voting rights has a material interest in any
matter to be resolved by the Board, such matter must be resolved by way of a Board
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 297 –


--- page 308 ---
meeting (rather than by way of written resolutions) and such Director(s) or
Shareholder(s) shall abstain from voting on the relevant matter. The independent
non-executive Directors who do not have material interest therein shall attend the
relevant Board meeting;
(b) we have formulated and adopted policies and mechanisms in relation to (i) internal
controls and decision-making procedures for related party transactions and
connected transactions, (ii) the prevention of appropriation of funds by Controlling
Shareholders, actual controllers and other related parties, (iii) provision of external
guarantee, and (iv) internal audit. Upon the Listing, if our Group enters into
connected transactions with our Controlling Shareholders or any of their associates,
our Group will comply with the applicable Listing Rules;
(c) we will keep a balanced composition of executive and independent non-executive
Directors on the Board. We have appointed three independent non-executive
Directors and we believe our independent non-executive Directors possess sufficient
experience and are free of any business or other relationship that could interfere in
any material manner with the exercise of their independent judgment. We also
believe that our independent non-executive Directors are able to provide impartial
opinions to safeguard the interests of our Shareholders as a whole;
(d) where our independent non-executive Directors request or are request to review any
conflicts of interests between our Group and our Controlling Shareholders and
provide impartial and professional advice to protect the interests of our minority
Shareholders, our Controlling Shareholders shall provide all information necessary
for consideration and our independent non-executive Directors shall be provided
with access to independent advisers, such as financial advisors at the expense of our
Company;
(e) we have appointed Guotai Junan Capital Limited as our Compliance Advisor to
provide advice and guidance to us in respect of compliance with the applicable laws
and regulations, as well as the Listing Rules, including various requirements relating
to corporate governance.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 298 –


--- page 309 ---
FULLY-EXEMPT CONNECTED TRANSACTIONS
Procurement of Agricultural Products and Hospitality Services
During the Track Record Period, our Group from time to time procured agricultural
products and hospitality services for employee benefits and business hospitality needs from
Shanghai Donghe Jiugu Happy Farm Co., Ltd. (ʮ̡) and Shanghai
Donghe V egetable and Fruit Planting Professional Cooperative (၇ಔਖ਼ุΥЪ
ٟtogether, “ Donghe ”), each of which is controlled by Mr. DU Junqi (࿩), the brother
of Mr. Du, and thus a connected person of our Group upon the Listing. We plan to continue
these transactions after the Listing. Such transactions were entered into (i) on arm’s length
basis, and (ii) on normal commercial terms with the fees being determined with reference to,
among others, the prevailing market price of similar agricultural products and hospitality
services and the quantity of products or amount of services procured.
Our Directors currently expect the total amount payable to Donghe by our Group in
respect of the aforesaid transactions in aggregate per annum will be less than HK$3,000,000
and the highest applicable percentage ratios for the purpose of Chapter 14A of the Listing
Rules will be less than 0.1% on an annual basis. Accordingly, such transactions will be fully
exempt from all of the reporting, annual review, announcement, circular and independent
shareholders’ approval requirements under Chapter 14A of the Listing Rules pursuant to Rule
14A.76(1) of the Listing Rules.
CONNECTED TRANSACTIONS
– 299 –


--- page 310 ---
So far as our Directors are aware, immediately following completion of the Global
Offering (assuming the Over-allotment Option is not exercised), the following persons are
expected to have an interest and/or short positions in our Shares or underlying Shares of our
Company which would be disclosed to our Company and the Stock Exchange pursuant to the
provisions of Divisions 2 and 3 of Part XV of the SFO, or be interested, directly or indirectly,
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 substantial Shareholder Nature of interest
Description of
Shares Number of Shares
Approximate % of
shareholding in
our total issued
share capital as of
the Latest
Practicable Date
Immediately following completion
of the Global Offering
Approximate % of
shareholding in
our A Shares
Approximate
percentage of
interest in the
total issued share
capital
Mr. Du /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (1)(2)
A Shares 141,638,563 30.11% 30.11% 27.10%
Interest of a party to
an agreement (3)
A Shares 37,415,450 7.96% 7.96% 7.16%
Interest in treasury
Shares (4)
A Shares 1,229,937 0.26% 0.26% 0.24%
Shanghai Xinhe /H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (1)
A Shares 95,793,544 20.37% 20.37% 18.33%
Kunshan Longcheer /H1118/H1118/H1118Beneficial owner (1) A Shares 95,793,544 20.37% 20.37% 18.33%
Chengmai Qihe /H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner (2) A Shares 45,845,019 9.75% 9.75% 8.77%
Mr. Ge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner A Shares 21,443,635 4.56% 4.56% 4.10%
Interest in controlled
corporation (1)(5)
A Shares 111,765,359 23.76% 23.76% 21.39%
Interest of a party to
an agreement (3)
A Shares 45,845,019 9.75% 9.75% 8.77%
Interest in treasury
Shares (4)
A Shares 1,229,937 0.26% 0.26% 0.24%
Notes:
(1) As of Latest Practicable Date, Kunshan Longcheer was managed by its general partner, Shanghai Xinhe, which
in turn was controlled by Mr. Du as to 51.00% and Mr. Ge as to 49.00%. Save for Mr. Du who also held 52.95%
of the partnership interest in Kunshan Longcheer, none of the limited partners held over one third of the
partnership interest in Kunshan Longcheer. Therefore, each of Mr. Du, Mr. Ge and Shanghai Xinhe is deemed
to be interested in the 95,793,544 Shares held by Kunshan Longcheer under the SFO.
(2) As of Latest Practicable Date, Mr. Du was the general partner of Chengmai Qihe. Therefore, Mr. Du is deemed
to be interested in the 45,845,019 Shares held by Chengmai Qihe under the SFO.
SUBSTANTIAL SHAREHOLDERS
– 300 –


--- page 311 ---
(3) As of the Latest Practicable Date, pursuant to a concert party agreement dated November 1, 2021, Mr. Du and
Mr. Ge agreed to act in concert by aligning the voting rights controlled by them at the Shareholders’ meetings
of the Company. Therefore, they are deemed to be jointly interested in the aggregate number of Shares held
by each other under the SFO. For further details, see “History and Corporate Structure — Concert Party
Arrangement.”
(4) As of the Latest Practicable Date, there were 1,229,937 A Shares repurchased and held in our Company’s stock
repurchase account. Our Controlling Shareholders who control more than one-third of the voting power at the
general meetings of our Company would be taken to have an interest in such repurchased A Shares held by our
Company.
(5) As of Latest Practicable Date, Mr. Ge was the executive general partner of Kunshan Qiyun. Save for Mr. Ge,
none of the other partners held over one third of the partnership interest in Kunshan Qiyun. Therefore, Mr. Ge
is also deemed to be interested in the 15,971,815 Shares held by Kunshan Qiyun under the SFO.
Except as disclosed above, 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), have any interests and/or short positions in the Shares or underlying Shares
of our Company which would fall to be disclosed to our Company and the 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.
SUBSTANTIAL SHAREHOLDERS
– 301 –


--- page 312 ---
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the total issued share capital of our Company was
RMB470,331,544, comprising 470,331,544 A Shares of nominal value of RMB1.00 each, all
of which are listed on the Shanghai Stock Exchange.
Description of Shares
Number
of Shares
Approximate %
of total issued
share capital of
our Company
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118470,331,544 (1) 100.0
Note:
(1) Including 7,499,937 A Shares repurchased by our Company pursuant to repurchase mandates approved
by our Board, in which 1,229,937 A Shares were held in our Company’s stock repurchase account as
treasury Shares, and 6,270,000 A Shares were transferred to and held in the designated securities
account of our Employee Stock Ownership Scheme.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Global Offering assuming the Over-allotment
Option is not exercised and no other changes are made to the issued share capital of our
Company between the Latest Practicable Date and the Listing, the share capital of our
Company will be as follows.
Description of Shares
Number
of Shares
Approximate
percentage of
issued share
capital
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118470,331,544 90.00%
H Shares to be issued under the Global Offering /H1118/H111852,259,100 10.00%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118522,590,644 100.0
SHARE CAPITAL
– 302 –


--- page 313 ---
Immediately following completion of the Global Offering assuming the Over-allotment
Option is fully exercised and no other changes are made to the issued share capital of our
Company between the Latest Practicable Date and the Listing, the share capital of our
Company will be as follows.
Description of Shares
Number
of Shares
Approximate
percentage of
issued share
capital
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118470,331,544 88.67%
H Shares to be issued under the Global Offering /H1118/H111860,097,900 11.33%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118530,429,444 100.0
OUR SHARES
Our H Shares in issue upon completion of the Global Offering, and our A Shares, are
ordinary Shares in the share capital of our Company and are considered as one class of Shares.
However, apart from certain qualified domestic institutional investors in Chinese mainland, the
qualified investors in Chinese mainland under the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect (if our H Shares are eligible securities for that purpose)
and other persons who are entitled to hold our H Shares pursuant to relevant PRC law or upon
approvals of any competent authorities, H Shares generally cannot be subscribed for by, or
traded between, legal or natural persons in Chinese mainland.
Shanghai-Hong Kong Stock Connect has established a stock connect mechanism between
Chinese mainland and Hong Kong. Our A Shares can be subscribed for and traded by investors
in Chinese mainland, qualified foreign institutional investors or qualified foreign strategic
investors and must be traded in Renminbi. As our A Shares are eligible securities under the
Northbound Trading Link, they can also be subscribed for and traded by Hong Kong and other
overseas investors pursuant to the rules and limits of Shanghai-Hong Kong Stock Connect. If
our H Shares are eligible securities under the Southbound Trading Link, they can also be
subscribed for and traded by investors in Chinese mainland in accordance with the rules and
limits of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect.
RANKING
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all other respects and, in particular, will
rank equally for all dividends or distributions declared, paid or made after the date of this
prospectus. All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars
whereas all dividends in respect of our A Shares are to be paid by us in Renminbi. In addition
to cash, dividends may also be distributed in the form of Shares or other forms. Holders of our
H Shares will receive share dividends in the form of H Shares, and holders of our A Shares will
receive share dividends in the form of A Shares.
SHARE CAPITAL
– 303 –


--- page 314 ---
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND
TRADING ON THE HONG KONG STOCK EXCHANGE
Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share
Companies ( H΅͡ሗ“ஷ”ˏ) announced by the CSRC are
not applicable to companies dual listed on the stock exchanges in Chinese mainland and on the
Hong Kong Stock Exchange. As of the Latest Practicable Date, there were no relevant rules or
guidelines from the CSRC providing that holders of our A Shares may convert the A Shares
held by them into H Shares for listing and trading on the Hong Kong Stock Exchange.
APPROV AL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL
OFFERING
We have obtained approval from our holders of A Shares to issue H Shares and seek the
listing of H Shares on the Hong Kong Stock Exchange. Such approval was obtained by us at
the Shareholders’ general meeting of our Company held on June 9, 2025 and is subject to the
following major conditions:
(a) Size of the offer . The proposed number of H Shares to be offered shall not exceed
15% of the total issued share capital enlarged by the H Shares to be issued pursuant
to the Global Offering (before the exercise of the Over-allotment Option). The
number of H Shares to be issued pursuant to the full exercise of the Over-allotment
Option shall not exceed 15% of the total number of H Shares to be offered initially
under the Global Offering.
(b) Method of offering. The method of offering shall be by way of a public offer for
subscription in Hong Kong and an international offering to institutional investors.
(c) Target investors. The H Shares shall be issued to overseas institutional investors,
qualified domestic institutional investors and other investors who are approved by
mainland Chinese regulatory bodies to invest abroad.
(d) Price determination basis. The Offer Price of the H Shares will be determined by the
Board and/or its authorized person with the authorization of the Shareholders’
general meetings, together with the Overall Coordinators, after full consideration of
the interests of existing Shareholders, the acceptance of investors and the risks
relating to the Global Offering, with reference to the international practices and the
prevailing conditions of domestic and international capital markets and through
book-building process and cumulative bidding.
SHARE CAPITAL
– 304 –


--- page 315 ---
(e) V alidity period. The issue and listing of H Shares on the Hong Kong Stock Exchange
shall be completed within 24 months from the date on which such matters were
approved at the Shareholders’ meeting held on June 9, 2025. If the Company has
obtained approval or filing from relevant regulatory bodies for the issue and listing
of the H Shares within such validity period, the validity period of the resolution will
automatically be extended to completion of the issuance and listing of the H Shares.
There are no other approved offering plans for our Shares except the Global Offering.
SHAREHOLDERS’ MEETINGS
For details of the circumstance under which our Shareholders’ general meeting is
required, see “Appendix V — Summary of the Articles of Association — Shareholders and
General Meeting” to this prospectus.
EMPLOYEE INCENTIVE SCHEMES
During our development, we established several employee shareholding platforms to
holding employee incentive shares. As of the Latest Practicable Date, 128,293,401 A Shares
were held by these employee shareholding platforms.
As of the Latest Practice Date, we have two employee incentive schemes that were in
effect, namely the Restricted Share Scheme and the Employee Stock Ownership Scheme, see
“Appendix VI — Statutory and General Information — C. Employee Incentive Schemes” to
this prospectus for details.
SHARE CAPITAL
– 305 –


--- page 316 ---
The following discussion and our analysis should be read in conjunction with our
consolidated financial statements included in “Appendix I — Accountants’ Report,”
together with the accompanying notes. Our consolidated financial statements have been
prepared in accordance with IFRS Accounting Standards (“ IFRSs ”).
The following discussion and analysis contain forward-looking statements that
involve risks and uncertainties. These statements are based on assumptions and analysis
that we make in light of our experience and perception of historical trends, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. However , our actual results may differ significantly
from those projected in the forward-looking statements. Factors that might cause future
results to differ significantly from those projected in the forward-looking statements
include, but are not limited to, those discussed in “Risk Factors” and “Forward-Looking
Statements” and elsewhere in this prospectus.
OVERVIEW
We are a leading global provider of smart devices and services, offering solutions —
including product research, design, manufacturing, and support — for renowned smart device
brands and leading technology companies worldwide. According to Frost & Sullivan, we are
the world’s second largest consumer electronics ODM company by consumer electronics ODM
shipments in 2024, and the world’s largest smartphone ODM company by smartphone ODM
shipments in 2024.
Founded in 2004, we have consistently upheld our core values of “customer centric,
inspiring dedication, and long-term driven.” Over the past two decades, we have developed
industry-leading capabilities across smart devices and formed a solution matrix, including
prototype design, hardware innovation, system-level software platform development, lean
production, supply chain integration, and quality control. Leveraging this sophisticated value
chain expertise, we have built a diverse product portfolio that includes smartphones, AI PCs,
automotive electronics, tablets, smart watches/bands, and smart eyewear. We have also
established an extensive core customer base, including leading brands such as Xiaomi,
Samsung Electronics, Lenovo, Honor, OPPO, and vivo.
In 2022, 2023 and 2024 and the nine months ended September 30, 2024 and 2025, our
revenue amounted to RMB29,343.2 million, RMB27,185.1 million, RMB46,382.5 million,
RMB34,920.9 million and RMB31,331.6 million, respectively. During the same periods, our
profit for the year/period amounted to RMB561.5 million, RMB602.7 million, RMB493.4
million, RMB425.4 million and RMB514.5 million, respectively.
FINANCIAL INFORMATION
– 306 –


--- page 317 ---
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations are affected by a number of factors, including but not limited
to the following.
Growth in Smart Device Market Demand
During the Track Record Period, we primarily generated revenue from full-stack ODM
solutions and value-added professional services related to our smart devices, including the
manufacturing and sales of smartphones, AIoT devices, tablets and other smart devices. As
such, our results of operations are affected by the market demand for smart devices in general,
and our brand customers’ smart devices in particular. According to Frost & Sullivan, the global
consumer electronics market – which constitutes the largest part of the smart device market –
is experiencing rapid growth. The global shipments of consumer electronics are expected to
increase from 2,113.3 million units in 2024 to 2,489.6 million units in 2029, representing a
CAGR of 3.3%. In particular, the global shipments of smartphones reached 1,238.8 million
units in 2024 and is expected to further increase to 1,405.2 million units in 2029 with a CAGR
of 2.6%. Our results of operations will be affected by the future growth of the global smart
device market and our ability to keep pace with market demand and maintain or increase our
market share.
In addition, our business and results of operations are also affected by the general market
demand for our new products. Beyond smartphones and other traditional product types, we are
actively capitalizing on opportunities in other emerging business areas, including smart
eyewear, AI PCs and automotive electronics. As we seek to expand into emerging technology
domains to further support our future revenue growth and profitability, our financial
performance and results of operations will be affected by the market demand for these products
and our ability to successfully expand into these markets.
Ability to Continuously Develop New Products and Secure Purchase Orders
We are a leading global provider of smart devices and services, and our products and
services compete in highly competitive markets that include intense price competition,
frequent introduction of new products, frequent consumer demands for product replacement or
upgrade, rapid commercial adoption of technological advancements and diverse preferences of
consumers. Our ability to continuously develop new products through advancement of our
R&D activities is crucial to our sustained business growth. Our financial performance and
future growth are also affected by our ability to maintain close collaboration with industry
leaders. By partnering with industry leaders, we can quickly respond to market demands and
industry trends. Combined with our own industry insights and foresight, this enables us to
effectively guide market development and support our technological innovation and product
upgrades.
FINANCIAL INFORMATION
– 307 –


--- page 318 ---
Our results of operations will be impacted by the timely development of new products and
the successful adaptation to our customers’ needs. We have built a diverse product portfolio
that includes smartphones, AI PCs, automotive electronics, tablets, smart watches/bands, and
smart eyewear. We plan to continuing to expand the “ 1+2+X ” product portfolio and penetrate
high potential segments. Smartphones are the core category of consumer electronics ODM
industry, accounting for 54.3% of overall ODM shipments in 2024. For example, we will
further concentrate on developing smartphone models with commanding market share,
solidifying our global leadership position as a smartphone ODM, while closely aligning with
technology trends like 5G and AI to deliver highly competitive products for our valued
customers. We will also proactively explore and continuously develop new high-potential
smart product lines, building a diversified and dynamic smart device ecosystem. In particular,
we will maintain our steadfast strategic focus on the smart eyewear segment, which represents
the most promising growth opportunity within the consumer electronics market. From 2020 to
2024, smart eyewear achieved the highest CAGR among all sub-segments, at 9.0%, compared
to the industry average of -0.1%. Looking ahead, smart eyewear segment is expected to
maintain exceptional growth, with a CAGR of 45.4% from 2024 to 2029, far surpassing the
industry average of 3.3%. We also plan to pursue opportunities to explore in the field of
robotics, focusing on advancing cutting-edge technologies to drive innovation in next-
generation smart devices. Our historical and future business growth will be supported by our
continuous development of new products and receipt of confirmed customer orders.
In addition, our gross profit margin varies across product types and collaboration models,
due to a variety of factors including manufacturing costs, cost structures for raw materials,
technological advancement, pricing power, market demand, and availability of competing
products, among others. We need to continuously introduce new products that offer high values
in order to charge premium prices and generate a higher gross margin in order to improve our
overall results of operations. For example, our AIoT devices have a relatively higher gross
profit margin and may experience more rapid growth, affecting our revenue mix. Changes in
our product mix and revenue mix in the future, as well as our ability to develop products with
higher technological advancement and penetrate high potential segments, may also affect our
overall gross profit margin and subsequently other aspects of our business performance.
Ability to Deepen Relationships with Existing Customers and Expand Customer Base
Our financial performance and future growth are affected by our ability to maintain and
deepen relationships with our existing customers and to further expand our customer base. Our
customers primarily consist of leading global smart device brands and top-tier technology
companies, many of which maintain stringent supplier qualification standards. We have also
established an extensive core customer base, including leading brands such as Xiaomi,
Samsung Electronics, Lenovo, Honor, OPPO, and vivo.
FINANCIAL INFORMATION
– 308 –


--- page 319 ---
We are committed to expanding our cooperation with existing customers, including
enhancing industry insights, developing technologies to improve our product performance, and
providing more innovative products that adapt to evolving customer needs. Our long-term and
deepened relationships with our existing customers, especially our major customers, may
materially affect our results of operation and financial condition. See “Risk Factors — Risks
Relating to Our Industry and Business — We derived a substantial portion of revenue from
certain major customers during the Track Record Period and the loss of, or a significant
reduction in, revenue from such customers could materially and adversely affect our results of
operations.”
We are dedicated to identifying, engaging and retaining new customers to expand our
customer base. Leveraging our deep insights and strong capabilities in delivering professional
full-stack research, design, manufacturing, and comprehensive services, we are committed to
attracting renowned smart device brands and leading technology companies worldwide. For
example, for our smartphone business, we have strategically expanded into emerging regions
and continuously optimized our customer base to ensure the ongoing success of our smartphone
business. For tablet business, we have successfully become a major ODM supplier for three top
domestic tablet brands. As we continue to develop and launch products with market
competitiveness, promote our brand, expand our production capacity and enhance our global
presence, we expect to attract more customers and achieve sustainable revenue growth in the
future.
Cost Control and Operational Efficiency
Our ability to achieve and maintain profitability partially depends on our ability to control
our costs and expenses and enhance our operating efficiency. In 2022, 2023 and 2024 and the
nine months ended September 30, 2024 and 2025, our cost of sales primarily consisted of direct
material costs, which amounted to RMB23,691.7 million, RMB21,720.3 million,
RMB38,538.3 million, RMB29,267.9 million and RMB24,998.8 million, respectively,
representing 80.7%, 79.9%, 83.1%, 83.8% and 79.8% of our revenue for the respective periods.
Our primary raw materials include electronic components, functional modules, structural parts
and packaging materials. We optimize raw material costs through lean production and bulk
procurement strategies to maintain profitability. Our ability to effectively control direct raw
material costs as we continue to ramp up our production volume has affected and will continue
to affect our financial results significantly.
In addition, our operating expenses include sales and marketing expenses, administrative
expenses and research and development expenses. In 2022, 2023 and 2024 and the nine months
ended September 30, 2024 and 2025, our operating expenses as a percentage of revenue
amounted to 6.7%, 8.1%, 5.8%, 5.4% and 8.1%, respectively. Our ability to improve
operational efficiency and maintain effective cost control will also affect our results of
operations.
FINANCIAL INFORMATION
– 309 –


--- page 320 ---
BASIS OF PREPARATION
Our historical financial information has been prepared in accordance with IFRSs, which
comprise all standards and interpretations approved by the International Accounting Standards
Board. All IFRSs effective for the accounting period commencing from January 1, 2025,
together with the relevant transitional provisions, have been early adopted by us in the
preparation of the historical financial information throughout the Track Record Period. The
historical financial information has been prepared under the historical cost convention, except
for investments measured at fair value through profit or loss (“ FVTPL ”), and derivative
financial instruments which have been measured at fair value.
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
Revenue Recognition
Revenue from Contracts with Customers
Revenue from contracts with customers is recognised when control of goods or services
is transferred to the customers at an amount that reflects the consideration to which 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 consideration is estimated at contract inception and
constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognised will not occur when the associated uncertainty with the variable
consideration is subsequently resolved.
(a) Sales of smartphones, tablets, AIoT devices and other electronic equipment
We sell smartphones, tablets, AIoT devices and other electronic equipment to customers.
Revenue from the sale of products is recognised at the point in time when control of the
products is transferred to the customer, generally when the products are delivered to the
customer, and there is no unfulfilled obligation that could affect the customer’s acceptance of
the products. Delivery occurs when the products have been shipped to the specific location, the
risks of obsolescence and loss have been transferred to the customer, and either the customer
has accepted the products in accordance with the sales contract, the acceptance provisions have
lapsed, or we have objective evidence that all criteria for acceptance have been satisfied.
We sell products to a customer who is also the supplier of key materials used in the
manufacturing of products. We obtain the control of the materials purchased from the customer
and provide significant services to integrate materials with other goods and services into a
portfolio of outputs. We considered ourselves as a principal in the arrangement and accordingly
recognises revenue on a gross basis.
FINANCIAL INFORMATION
– 310 –


--- page 321 ---
(b) Provision of R&D and technical services
We recognize revenue from the R&D and technical services at a point in time when the
relevant services are rendered and acknowledged for receipt by the customers.
(c) Contract manufacturing services
We provide processing services and charges processing fees exclusively. Revenue is
recognized when the relevant services are rendered and the finished products are transferred
and acknowledged by the customers.
Revenue from Other Sources
Rental income is recognized on a time proportion basis over the lease terms. V ariable
lease payments that do not depend on an index or a rate are recognized as income in the
accounting period in which they are incurred.
Other Income
Interest income is recognised on an accrual basis using the effective interest 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.
Dividend Income
Dividend income is recognized when the shareholders’ right to receive payment has been
established, it is probable that the economic benefits associated with the dividend will flow to
us and the amount of the dividend can be measured reliably.
Share-based Payments
Several employee incentive schemes are operated for the purpose of providing incentives
and rewards to eligible participants who contribute to the success of our operations. Our
employees (including directors) 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 is measured by
reference to the fair value at the date at which they are granted. The fair value is determined
by an external valuer based on a recent transaction price, further details of which are given in
Note 32 to the Accountants’ Report as set out in Appendix I to this prospectus.
The cost of equity-settled transactions is recognised in employee benefit expense,
together with a corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled
transactions at the end of each year of the Track Record Period until the vesting date reflects
FINANCIAL INFORMATION
–3 1 1–


--- page 322 ---
the extent to which the vesting period has expired and our best estimate of the number of equity
instruments that will ultimately vest. The charge or credit to the statement of profit or loss for
a period represents the movement in the cumulative expense recognised as at the beginning and
end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of our best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service requirement, 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 because non-market performance and/or service
conditions have not been met, no expense is recognised. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the market
or non-vesting condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified, if the original terms of the award are met.
In addition, an expense is recognised for any modification that increases the total fair value of
the share-based payments, or is otherwise beneficial to the employee as measured at the date
of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any expense not yet recognised for the award is recognised
immediately.
Fair Value Measurement
We measure our structured deposits, wealth management product, derivative financial
instrument and equity investments at fair value at the end of each year of the Track Record
Period. Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The
fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either in the principal market for the asset or liability, or in the
absence of a principal market, in the most advantageous market for the asset or liability. The
principal or the most advantageous market must be accessible by us. The fair value of an asset
or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best use.
FINANCIAL INFORMATION
– 312 –


--- page 323 ---
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.
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets
or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is observable, either directly or
indirectly
Level 3 – based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring
basis, we determine whether transfers have occurred between levels in the hierarchy by
reassessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each year of the Track Record Period.
Provision for Expected Credit Losses on Trade Receivables
We use a provision matrix to calculate expected credit losses (“ ECLs ”) for trade
receivables. The provision rates are based on days past due for groupings of various customer
segments that have similar loss patterns, such as by geography, product type, customer type and
rating.
The provision matrix is initially based on our historical observed default rates. We will
calibrate the matrix to adjust the historical credit loss experience with forward-looking
information. For instance, if forecast economic conditions, such as gross domestic product, are
expected to deteriorate over the next year which can lead to an increased number of defaults
in the manufacturing sector, the historical default rates are adjusted. At the end of each year
during the Track Record Period, the historical observed default rates are updated and changes
in the forward-looking estimates are analyzed.
The assessment of the correlation among historical observed default rates, forecast
economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to
changes in circumstances and forecast economic conditions. Our historical credit loss
experience and forecast of economic conditions may also not be representative of a customer’s
actual default in the future.
FINANCIAL INFORMATION
– 313 –


--- page 324 ---
Impairment of Inventories
We periodically assess the net realizable value of its inventories and provides for
inventory impairment based on the difference between the cost of the inventory and the net
realizable value. When estimating the net realizable value of inventories, management
considers the purpose for which the inventories are held, as well as future use or sales as the
basis for estimation. Where the expectation is different from the original estimate, such
difference will impact on the carrying value of the inventories and write-down of inventories
in the period in which such estimates have been changed.
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. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset
to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into
operation, such as repairs and maintenance, is normally charged to 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 capitalized 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-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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189% to 30%
Office equipment and electronic devices /H1118/H1118/H1118/H1118 18% to 30%
V ehicles/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818% to 30%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shorter of the remaining lease terms
and estimated useful lives
FINANCIAL INFORMATION
– 314 –


--- page 325 ---
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 including any significant part initially
recognised 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 recognised 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 any impairment losses, and is not
depreciated. It is reclassified to the appropriate category of property, plant and equipment when
completed and ready for use.
Investment Properties
Investment properties are interests in land and buildings (including the leasehold property
held as a right-of-use asset which would otherwise meet the definition of an investment
property) held to earn rental income and/or for capital appreciation, rather than for use in the
production or supply of goods or services or for administrative purposes; or for sale in the
ordinary course of business. Such properties are measured initially at cost, including
transaction costs. Subsequent to initial recognition, investment properties are stated at cost less
any impairment loss and are depreciated on the straight-line basis over their estimated useful
lives. Any gains or losses on the retirement or disposal of an investment property are
recognised in the statement of profit or loss in the year of the retirement or disposal.
FINANCIAL INFORMATION
– 315 –


--- page 326 ---
DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS
The following table sets forth a summary of our consolidated statements of profit or loss
for the years/periods indicated. Our historical results presented below are not necessarily
indicative of the results that may be expected for any future period.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118(26,978,031) (91.9) (24,594,908) (90.5) (43,676,093) (94.2) (32,887,922) (94.2) (28,725,221) (91.7)
Gross profit /H1118/H1118/H1118/H1118/H1118/H11182,365,121 8.1 2,590,156 9.5 2,706,379 5.8 2,032,938 5.8 2,606,382 8.3
Other income and gains /H1118 251,084 0.9 309,652 1.1 578,647 1.2 441,375 1.3 536,020 1.7
Sales and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,880) (0.2) (79,922) (0.3) (89,840) (0.2) (58,865) (0.2) (69,151) (0.2)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(392,774) (1.3) (437,328) (1.6) (506,081) (1.1) (361,794) (1.0) (506,135) (1.6)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,507,834) (5.1) (1,687,762) (6.2) (2,080,172) (4.5) (1,472,924) (4.2) (1,951,106) (6.2)
Reversal of impairment
losses/(impairment
losses) on financial
assets, net /H1118/H1118/H1118/H1118/H1118/H11182,700 0.0 (842) (0.0) (1,343) (0.0) 125 0.0 (560) (0.0)
Other expenses /H1118/H1118/H1118/H1118/H1118(58,739) (0.2) (46,132) (0.2) (56,103) (0.1) (84,489) (0.2) (29,154) (0.1)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118(37,948) (0.1) (39,896) (0.1) (67,525) (0.1) (56,280) (0.2) (43,022) (0.1)
Share of profits of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H111823,588 0.1 43,154 0.2 30,042 0.1 15,976 0.0 6,614 0.0
Profit before tax /H1118/H1118/H1118/H1118588,318 2.0 651,080 2.4 514,004 1.1 456,062 1.3 549,888 1.8
Income tax expense /H1118/H1118/H1118(26,805) (0.1) (48,369) (0.2) (20,654) (0.0) (30,634) (0.1) (35,404) (0.1)
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118561,513 1.9 602,711 2.2 493,350 1.1 425,428 1.2 514,484 1.6
Attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118/H1118/H1118561,301 1.9 605,316 2.2 501,132 1.1 430,855 1.2 507,275 1.6
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118212 0.0 (2,605) (0.0) (7,782) (0.0) (5,427) (0.0) 7,209 0.0
FINANCIAL INFORMATION
– 316 –


--- page 327 ---
Non-IFRS Measures
To supplement our consolidated financial statements which are presented in accordance
with IFRS, we also use certain non-IFRS measures, namely, adjusted net profit (non-IFRS
measure) and adjusted EBITDA (non-IFRS measure), as additional financial metrics. These
non-IFRS measures are not required by or presented in accordance with IFRS. We believe that
these non-IFRS measures facilitate comparisons of our operating performance by eliminating
potential impacts of certain items listed below. We also believe that such non-IFRS measures
present useful information in understanding and evaluating our consolidated results of
operations in the same manner as they help our management. However, our presentation of
such non-IFRS measures may not be comparable to similarly titled measures presented by other
companies. The use of these non-IFRS measures has limitations as an analytical tool, and you
should not consider it in isolation from, or as substitute for analysis of, our results of operations
or financial condition as reported under IFRS.
We define adjusted net profit (non-IFRS measure) as profit for the year adding back
share-based payments and listing expenses. Share-based payments are non-cash in nature and
do not result in cash outflows. We define adjusted EBITDA (non-IFRS measure) as adjusted net
profit (non-IFRS measure) adding back income tax expenses, finance costs, and depreciation
and amortization, and less interest income under other income and gains.
The following table reconciles adjusted net profit (non-IFRS measure) and adjusted
EBITDA (non-IFRS measure) to our profit for the year/period, presented in accordance with
IFRS, for the years/periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Reconciliation of profit for the
year/period to adjusted net
profit (non-IFRS measure) and
adjusted EBITDA (non-IFRS
measure)
Profit for the years/periods /H1118/H1118/H1118/H1118/H1118561,513 602,711 493,350 425,428 514,484
Add:
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,239 69,629 71,634 56,294 88,593
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 7 7 9
Adjusted net profit
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118619,752 672,340 564,984 481,722 603,856
Add:
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,805 48,369 20,654 30,634 35,404
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,948 39,896 67,525 56,280 43,022
Depreciation and amortization /H1118/H1118/H1118/H1118321,397 369,625 446,413 342,694 382,375
Less:
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,502 139,912 160,361 105,311 96,866
Adjusted EBITDA
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118903,400 990,318 939,215 806,019 967,791
FINANCIAL INFORMATION
– 317 –


--- page 328 ---
Revenue
Revenue by Product Type
During the Track Record Period, we primarily generated revenue from full-stack ODM
solutions and value-added professional services related to our smart devices, including the
manufacturing and sales of smartphones, AIoT devices, tablets and other smart devices. The
following table sets forth the breakdown of our revenue by product type, both in absolute
amounts and as percentages of total revenue, for the years/periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H111824,265,640 82.7 21,821,620 80.3 36,132,747 77.9 27,885,130 79.9 21,704,132 69.3
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H11181,887,127 6.5 2,510,561 9.2 5,573,138 12.0 3,837,130 11.0 5,603,482 17.9
– Smart wearables /H1118/H1118/H11181,413,365 4.8 1,798,583 6.6 3,643,370 7.9 2,576,022 7.4 2,861,052 9.1
– Smart eyewear /H1118/H1118/H1118/H111832,167 0.1 387,988 1.4 1,387,622 3.0 865,448 2.5 1,974,528 6.3
– AI PCs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 3,171 0.0 1,938 0.0 196,393 0.6
– Automotive
electronics /H1118/H1118/H1118/H1118/H1118/H1118– – 704 0.0 20,716 0.0 15,284 0.0 95,633 0.3
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118441,595 1.6 323,286 1.2 518,259 1.1 378,438 1.1 475,876 1.6
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,798,156 9.5 2,509,102 9.2 3,696,313 8.0 2,542,749 7.3 2,990,404 9.5
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,229 1.3 343,781 1.3 980,274 2.1 655,851 1.8 1,033,585 3.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas, such as
AI PCs and automotive electronics.
(2) Primarily including smart speakers, smart learning devices, smart desk lamps and various accessory products.
(3) Primarily including sales of raw materials and scrap components, and provision of factoring arrangement. For
details on the factoring arrangement, see “Business — Sales and Marketing — Relationship with Our Largest
Customer.”
Our revenue decreased by 7.4% from RMB29,343.2 million in 2022 to RMB27,185.1
million in 2023, and increased by 70.6% from RMB27,185.1 million in 2023 to RMB46,382.5
million in 2024. Our revenue decreased by 10.3% from RMB34,920.9 million in the nine
months ended September 30, 2024 to RMB31,331.6 million in the nine months ended
September 30, 2025. The fluctuations of our revenue during the Track Record Period were
primarily due to fluctuations in our ODM shipments, which was in turn affected by
end-consumer demands for smart devices.
FINANCIAL INFORMATION
– 318 –


--- page 329 ---
The following table sets forth the breakdown of the shipment and average selling price
by product type, for the years/periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price Shipment
Average
selling
price
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
(million
unit)
(RMB
per unit)
Smartphones /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125.5 187.1 125.3 168.8 172.9 204.1 127.8 211.8 117.3 181.2
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.9 226.4 14.1 162.4 33.9 155.2 22.6 161.5 29.0 184.4
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.3 438.4 7.4 330.6 12.3 285.5 9.0 269.8 9.1 321.1
Note:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas,
such as AI PCs and automotive electronics.
The ODM shipment of our smartphones slightly decreased from 125.5 million units in
2022 to 125.3 million units in 2023, and the average selling price decreased from RMB187.1
per unit in 2022 to RMB168.8 per unit in 2023, primarily due to heightened market competition
during the economic recovery from the effects of the COVID-19 pandemic. Globally, the ODM
shipment of smartphones decreased from 484.8 million units in 2022 to 455.9 million units in
2023, primarily affected by the effects of the COVID-19 pandemic, which was then recovered
to 530.0 million units in 2024. In 2024, the ODM shipment of our smartphones increased to
172.9 million units, primarily attributable to (i) our expanded deployment of 5G products, and
(ii) the increased sales of our entry-level products. In the meantime, the average selling prices
of our smartphones increased to RMB204.1 per unit in 2024, as a result of the higher unit prices
of our 5G products. The ODM shipment of our smartphones decreased from 127.8 million units
in the nine months ended September 30, 2024 to 117.3 million units in the nine months ended
September 30, 2025, primarily influenced by (i) the life cycle of certain products, as certain
models approached the end of their life cycle, resulting in lower shipments, while new models
were still in their early production stages, and (ii) weakened consumer replacement demand
due to macroeconomic fluctuations, despite the supportive policies for product replacement in
China. The average selling price decreased from RMB211.8 per unit in the nine months ended
September 30, 2024 to RMB181.2 per unit in the nine months ended September 30, 2025,
primarily due to the change in our product mix pursuant to customer demand.
The ODM shipment of our AIoT and other products, including AIoT products and our
products in emerging business areas, such as AI PCs and automotive electronics, experienced
substantial growth during the Track Record Period, from 7.9 million units in 2022 to 14.1
million in 2023 and further to 33.9 million in 2024. This growth was primarily due to our broad
market presence and strong customer recognition. The average selling price of our AIoT and
FINANCIAL INFORMATION
– 319 –


--- page 330 ---
other products decreased from RMB226.4 per unit in 2022 to RMB162.4 per unit in 2023,
primarily as a result of change in our customers’ product mix, with certain products at
relatively lower average selling prices ordered by customers contributing a larger share of our
ODM shipments in 2023. In 2024, the average selling price of our AIoT and other products
remained relatively stable at RMB155.2 per unit. In recent years, our AIoT business has grown
rapidly, with smart watch/band shipments ranking top two globally in the smart wearables
ODM market, according to Frost & Sullivan. As part of our strategy, we are expanding into
emerging categories like AI PCs and automotive electronics. With rising consumer interest and
enhanced product offerings, we expect strong growth in this segment to continue in near future.
The ODM shipment of our AIoT and other products increased from 22.6 million units in the
nine months ended September 30, 2024 to 29.0 million units in the nine months ended
September 30, 2025, primarily driven by (i) the growing consumer demand for smart eyewear
products, particularly AI glasses, (ii) strong market acceptance of a smartwatch series, which
gained popularity due to its product performance such as large display, elegant design,
Bluetooth calling feature and extended battery life, leading to higher ODM shipments, and (iii)
our expansion into niche segments of the smart wearables market, including children’s
wearables and medical wearables. The average selling price increased from RMB161.5 per unit
in the nine months ended September 30, 2024 to RMB184.4 per unit in the nine months ended
September 30, 2025, primarily due to the expansion of our product mix to include higher-priced
offerings, such as AI glasses.
The ODM shipment of our tablets increased from 6.3 million in 2022 to 7.4 million in
2023, and further to 12.3 million in 2024, primarily attributable to the continuous expansion
of our customer base to include several leading tablet brands. The average selling price of our
tablets decreased from RMB438.4 per unit in 2022 to RMB330.6 per unit in 2023, and further
to RMB285.5 per unit in 2024, primarily as a result of change in our customers’ product mix,
with certain products at relatively lower average selling prices ordered by customers
contributing a larger share of our ODM shipments. The ODM shipment of our tablets remained
relatively stable at 9.0 million units in the nine months ended September 30, 2024 and 9.1
million units in the nine months ended September 30, 2025. The average selling price increased
from RMB269.8 per unit in the nine months ended September 30, 2024 to RMB321.1 per unit
in the nine months ended September 30, 2025, primarily because we launched several high-end
flagship tablet products.
FINANCIAL INFORMATION
– 320 –


--- page 331 ---
Revenue by Geographical Location
The following table sets forth a breakdown of our revenue by geographical location,
corresponding to the registered address of our customers, in absolute amounts and as
percentages of our total revenue, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Chinese Mainland /H1118/H1118/H1118/H111822,279,637 75.9 23,392,783 86.1 31,406,597 67.7 23,041,794 66.0 19,065,646 60.9
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,063,515 24.1 3,792,281 13.9 14,975,875 32.3 11,879,066 34.0 12,265,957 39.1
Asia (excluding
Chinese
mainland)
(1) /H1118/H1118/H1118/H11185,859,813 20.0 3,068,369 11.3 14,367,107 31.1 11,390,158 32.7 11,414,180 36.4
South America /H1118/H1118/H1118/H1118818,524 2.8 306,243 1.1 518,530 1.1 434,196 1.2 218,490 0.7
North America /H1118/H1118/H1118/H1118259,332 0.9 326,006 1.2 66,491 0.1 49,897 0.1 545,280 1.7
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,828 0.4 86,452 0.3 20,920 0.0 2,527 0.0 79,337 0.3
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,211 0.0 2,827 0.0 2,288 0.0 8,670 0.0
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H11181 8 0 . 0 –– –– –– ––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 100.0 27,185,064 100.0 46,382,472 100.0 34,920,860 100.0 31,331,603 100.0
Note:
(1) Primarily including South Korea and India.
Our revenue from overseas fluctuated during the Track Record Period, primarily due to
ODM shipments to overseas customers, which were influenced by the product life cycles of our
customers. Our sales are directly linked to our customers’ production schedules, which causes
shipment volumes for any given project to vary significantly between its peak and trough
demand phases. Typically, our customers’ orders surge to meet strong consumer demand after
a product’s launch, followed by a decline as the product matures. Since our total revenue is an
aggregate of numerous customer projects, each with a different scale and at a different stage
in its life cycle, the timing and overlap of these individual peaks and troughs result in
fluctuations in our overall revenue from overseas.
FINANCIAL INFORMATION
– 321 –


--- page 332 ---
Cost of Sales
Our cost of sales primarily consisted of (i) direct material costs, (ii) staff costs,
(iii) manufacturing costs, and (iv) outsourced processing costs and others. The following table
sets forth the breakdown of our cost of sales by nature, both in absolute amounts and as
percentages of total cost of sales, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Direct material costs /H1118/H111823,691,693 87.8 21,720,256 88.3 38,538,287 88.2 29,267,871 88.9 24,998,826 87.0
Manufacturing costs /H1118/H11181,089,181 4.0 1,167,340 4.7 2,183,398 5.0 1,694,284 5.2 1,317,126 4.6
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118908,505 3.4 918,404 3.7 1,307,692 3.0 768,461 2.3 1,128,204 3.9
Outsourced processing
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118811,772 3.0 362,528 1.5 649,687 1.5 479,283 1.5 309,968 1.1
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118476,880 1.8 426,380 1.8 997,029 2.3 678,023 2.1 971,097 3.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,978,031 100.0 24,594,908 100.0 43,676,093 100.0 32,887,922 100.0 28,725,221 100.0
Note:
(1) Primarily including costs of sales for our other business, which mainly included sales of raw materials and
scrap components.
The following table sets forth the breakdown of our cost of sales by product type, both
in absolute amounts and as percentages of total cost of sales, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H111822,546,198 83.6 20,021,195 81.4 34,446,018 78.8 26,566,785 80.8 20,053,262 69.8
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H11181,489,558 5.5 1,991,948 8.1 4,958,370 11.4 3,403,361 10.3 4,985,388 17.4
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,592,749 9.6 2,269,850 9.2 3,386,974 7.8 2,333,291 7.1 2,795,313 9.7
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118349,526 1.3 311,915 1.3 884,731 2.0 584,485 1.8 891,258 3.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,978,031 100.0 24,594,908 100.0 43,676,093 100.0 32,887,922 100.0 28,725,221 100.0
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas, such as
AI PCs and automotive electronics.
(2) Representing costs of sales for our other business, which mainly included sales of raw materials and scrap
components.
FINANCIAL INFORMATION
– 322 –


--- page 333 ---
Gross Profit and Gross Profit Margin
The following table sets forth the breakdown of our gross profit and gross profit margin
by product type for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Smartphones /H1118/H1118/H1118/H1118/H1118/H11181,719,442 7.1 1,800,425 8.3 1,686,729 4.7 1,318,345 4.7 1,650,870 7.6
AIoT and other
products (1) /H1118/H1118/H1118/H1118/H1118/H1118397,569 21.1 518,613 20.7 614,768 11.0 433,769 11.3 618,094 11.0
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,407 7.3 239,252 9.5 309,339 8.4 209,458 8.2 195,091 6.5
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,703 10.9 31,866 9.3 95,543 9.7 71,366 10.9 142,327 13.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,365,121 8.1 2,590,156 9.5 2,706,379 5.8 2,032,938 5.8 2,606,382 8.3
Notes:
(1) AIoT and other products primarily refer to AIoT devices and our products in emerging business areas, such as
AI PCs and automotive electronics.
(2) Primarily including sales of raw materials and scrap components, and provision of factoring arrangement. For
details on the factoring arrangement, see “Business — Sales and Marketing — Relationship with Our Largest
Customer.”
Our gross profit increased by 9.5% from RMB2,365.1 million in 2022 to RMB2,590.2
million in 2023, and further increased by 4.5% from RMB2,590.2 million in 2023 to
RMB2,706.4 million in 2024. Our gross profit increased by 28.2% from RMB2,032.9 million
in the nine months ended September 30, 2024 to RMB2,606.4 million in the nine months ended
September 30, 2025.
FINANCIAL INFORMATION
– 323 –


--- page 334 ---
Our overall gross profit margin grew from 8.1% in 2022 to 9.5% in 2023, mainly due to
a reduction in the average procurement price of our raw materials, such as screens, casings, ICs
and other electronic components, as a result of cyclical market fluctuations in the electronic
component manufacturing industry. Our overall gross profit margin decreased from 9.5% in
2023 to 5.8% in 2024, mainly due to (i) an increase in the average procurement price of our
raw materials as a result of cyclical market fluctuations, and (ii) our strategic market expansion
initiatives in 2024 designed to strengthen our competitive positioning. Our overall gross profit
margin increased from 5.8% in the nine months ended September 30, 2024 to 8.3% in the nine
months ended September 30, 2025, primarily due to (i) our focus on higher-quality growth
during this period by concentrating on projects involving more advanced and innovative
product types that address greater market demand and offer higher gross profit potential, while
strategically foregoing certain low-margin projects, and (ii) the stabilization of raw material
prices in the market, which ended the upward trend seen in 2024.
During the Track Record Period, our procurement costs of raw materials generally
mirrored the cyclical fluctuations of raw material costs in the global consumer electronics
ODM industry, primarily driven by factors including volatility of global supply chain,
fluctuation of raw material costs, and acceleration of technological advancements. For details,
see “Industry Overview — Overview of Global Consumer Electronics ODM Industry — Raw
Material of Global Consumer Electronics ODM Industry.” The global semiconductor shortage
in 2022 and storage shortage in 2025 had a limited impact on our business operations during
the Track Record Period, primarily because SoCs and storage are primarily sourced directly by
our customers, not by us. Under this model, SoCs and storage are procured directly by our
customers and then provided to us at no consideration for use in production, and accordingly
are not recorded as our purchases. As a result, our exposure to supply risk for these materials
is limited. While certain components, such as functional ICs, that we procure did not face
severe shortages, their cost increased slightly, leading to a minor rise in our direct material
costs and average selling prices of certain products. Historically, some of our customers were
reported to be adversely impacted by global semiconductor shortage in 2022 and storage
shortage in 2025. During this period, leading brands, by virtue of their superior supply chain
management capabilities and greater bargaining power, were generally able to secure
preferential access to supplies, thereby placing them in a relatively better position to manage
production and demands. On the other hand, driven by cost-effectiveness and supply chain
optimization, more brands are outsourcing design and production of their main best-selling and
mature products to ODM providers. According to Frost & Sullivan, the global ODM
penetration rate by shipment volume for consumer electronics has shown a consistent upward
trajectory, increasing from 40.3% in 2020 to 46.2% in 2024. Thus, our operations during the
Track Record Period were not materially and adversely impacted by the global semiconductor
shortage in 2022 and storage shortage in 2025.
FINANCIAL INFORMATION
– 324 –


--- page 335 ---
Other Income and Gains
Our other income primarily consisted of (i) value-added tax additional deduction,
(ii) government grants, and (iii) interest income. Our gains primarily consisted of (i) net fair
value changes of investments measured at FVTPL, mainly in relation to wealth management
products and shares we held in listed and unlisted companies. For details of the accounting
treatment, see “— Material Accounting Policies and Estimates — Fair V alue Measurement,”
(ii) net gain on disposal of investments measured at FVTPL, (iii) gain on settlement of
derivative financial instruments, mainly in relation to our foreign exchange forward contracts.
For details, see “— Discussion of Certain Key Items of Consolidated Statements of Financial
Position — Derivative Financial Instruments,” and (iv) others. The following table sets forth
a breakdown of our other income and gains for the years/periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Other income
V alue-added tax additional
deduction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 639 214,154 168,804 96,294
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,715 135,415 179,320 146,433 216,035
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,502 139,912 160,361 105,311 96,866
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,192 2,999 12,973 7,504 5,554
243,409 278,965 566,808 428,052 414,749
Gains
Fair value changes of investments
measured at FVTPL, net /H1118/H1118/H1118/H1118/H1118/H1118– 30,687 517 – 95,204
Gain on disposal of investments
measured at FVTPL, net /H1118/H1118/H1118/H1118/H1118/H11187,675 – 6,630 13,047 5,116
Gain on settlement of derivative
financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,531 270 20,951
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 1 6 16–
7,675 30,687 11,839 13,323 121,271
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118251,084 309,652 578,647 441,375 536,020
FINANCIAL INFORMATION
– 325 –


--- page 336 ---
Sales and Marketing Expenses
Our sales and marketing expenses primarily consisted of (i) employee benefit expenses,
(ii) share-based payments, (iii) travel and communication expenses, (iv) business development
expenses, (v) depreciation and amortization expenses allocated to the sales and marketing
department, and (vi) others, including selling consultation fees, customs declaration fees and
meeting and exhibition fees. The following table sets forth the breakdown of our sales and
marketing expenses, in absolute amounts and as percentages of total sales and marketing
expenses, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111837,253 65.5 47,042 58.9 47,506 52.9 31,839 54.1 42,179 61.0
Share-based payments /H1118/H11182,945 5.2 4,559 5.7 4,694 5.2 3,512 6.0 5,270 7.6
Travel and
communication
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11187,597 13.3 10,673 13.3 17,386 19.4 10,272 17.5 7,853 11.4
Business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11186,306 11.1 13,062 16.3 12,880 14.3 8,781 14.9 9,229 13.3
Depreciation and
amortization /H1118/H1118/H1118/H1118/H11182,292 4.0 3,160 4.0 2,270 2.5 1,582 2.7 2,234 3.2
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118487 0.9 1,426 1.8 5,104 5.7 2,879 4.8 2,386 3.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,880 100.0 79,922 100.0 89,840 100.0 58,865 100.0 69,151 100.0
Our sales and marketing expenses as a percentage of our revenue remained stable during
the Track Record Period, accounting for 0.2%, 0.3%, 0.2%, 0.2% and 0.2% of our revenue in
2022, 2023 and 2024 and the nine months ended September 30, 2024 and 2025, respectively.
FINANCIAL INFORMATION
– 326 –


--- page 337 ---
Administrative Expenses
Our administrative expenses primarily consisted of (i) employee benefit expenses,
(ii) share-based payments, (iii) depreciation and amortization for offices, equipment and other
assets which were used for administrative purpose, (iv) tax and other surcharges, (v) travel and
communication expenses, (vi) consultation expenses in relation to legal and audit consultation
services and (vii) others, including leased property management fees, business development
expenses, maintenance fees, bank charges and acquisition fees. The following table sets forth
the breakdown of our administrative expenses, in absolute amounts and as percentages of total
administrative expenses, for the years/periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118196,571 50.1 217,020 49.7 230,207 45.5 165,344 45.7 270,832 53.5
Share-based payments /H1118/H111826,255 6.7 35,832 8.2 32,658 6.5 26,786 7.4 41,068 8.1
Depreciation and
amortization /H1118/H1118/H1118/H1118/H111864,594 16.4 66,384 15.2 97,676 19.3 65,961 18.2 71,232 14.1
Tax and other
surcharges /H1118/H1118/H1118/H1118/H1118/H111829,213 7.5 26,323 6.0 46,521 9.2 32,914 9.1 29,842 5.9
Travel and
communication
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111820,206 5.1 26,844 6.1 32,940 6.5 23,368 6.5 28,000 5.5
Consultation expenses /H1118/H111830,330 7.7 26,786 6.1 21,427 4.2 13,492 3.7 9,179 1.8
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,605 6.5 38,139 8.7 44,652 8.8 33,929 9.4 55,982 11.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,774 100.0 437,328 100.0 506,081 100.0 361,794 100.0 506,135 100.0
Our administrative expenses as a percentage of our revenue was 1.3%, 1.6%, 1.1%, 1.0%
and 1.6% of our revenue in 2022, 2023 and 2024 and the nine months ended September 30,
2024 and 2025, respectively.
FINANCIAL INFORMATION
– 327 –


--- page 338 ---
Research and Development Expenses
Our research and development expenses primarily consisted of (i) employee benefit
expenses, (ii) share-based payments, (iii) technical service fees, mainly in relation to testing
and software services, (iv) costs of consumables, (v) depreciation and amortization expenses
in relation to our research and development equipment and instruments as well as intangible
assets which were used for research and development purpose, (vi) travel and communication
expenses, and (vii) others, including property management fees and maintenance fees. The
following table sets forth the breakdown of our research and development expenses, in absolute
amounts and as percentages of total research and development expenses, for the years/periods
indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118965,904 64.1 1,024,230 60.7 1,208,903 58.1 888,324 60.3 1,084,243 55.6
Share-based payments /H1118/H111822,558 1.5 22,252 1.3 28,315 1.4 22,031 1.5 34,948 1.8
Technical service fees /H1118/H1118273,339 18.1 321,241 19.0 337,701 16.2 200,909 13.6 356,006 18.2
Costs of consumables /H1118/H111890,862 6.0 138,549 8.2 309,916 14.9 217,918 14.8 299,574 15.4
Depreciation and
amortization /H1118/H1118/H1118/H1118/H111859,924 4.0 78,639 4.7 80,233 3.9 56,954 3.9 70,737 3.6
Travel and
communication
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111860,976 4.0 69,228 4.1 76,625 3.7 57,984 3.9 68,028 3.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,271 2.3 33,623 2.0 38,479 1.8 28,804 2.0 37,570 1.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,507,834 100.0 1,687,762 100.0 2,080,172 100.0 1,472,924 100.0 1,951,106 100.0
Our research and development expenses as a percentage of our revenue was 5.1%, 6.2%,
4.5%, 4.2% and 6.2% in 2022, 2023 and 2024 and the nine months ended September 30, 2024
and 2025, respectively.
FINANCIAL INFORMATION
– 328 –


--- page 339 ---
Reversal of Impairment Losses/(Impairment Losses) on Financial Assets, Net
During the Track Record Period, our net reversal of impairment losses or impairment
losses on financial assets were primarily related to the impairment of our trade and other
receivables. In 2022, we recorded net reversal of impairment losses on financial assets of
RMB2.7 million. In 2023 and 2024, we recorded net impairment losses on financial assets of
RMB0.8 million and RMB1.3 million, respectively. In the nine months ended September 30,
2024, we recorded net reversal of impairment losses on financial assets of RMB0.1 million. In
the nine months ended September 30, 2025, we recorded net impairment losses on financial
assets of RMB0.6 million.
Other Expenses
Our other expenses primarily consisted of (i) impairment of prepayments, (ii) foreign
exchange losses, (iii) non-operating expenses, mainly including scrapping of long-term assets
and donations, (iv) losses from disposal of assets, (v) derecognized bills expenses, (vi) losses
on settlement of derivative financial instruments, mainly in relation to foreign exchange
forward contracts and (vii) losses from fair value changes, mainly in relation to unlisted equity
investments and listed equity investments subject to lock-up commitments. The following table
sets forth the breakdown of our other expenses for the years/periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Impairment of prepayments /H1118/H1118/H1118/H1118/H1118–– 3 9 , 1 1 1––
Foreign exchange losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,357 10,671 69,535 18,756
Non-operating expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118975 2,839 3,538 1,628 938
Losses from disposal of assets /H1118/H1118/H111812,797 12,398 2,691 2,455 8,797
Derecognized bills expenses /H1118/H1118/H1118/H1118/H11181,679 3,443 92 – 663
Losses on settlement of derivative
financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,626 20,09 5–––
Losses from fair value changes /H1118/H111837,662 – – 10,871 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,739 46,132 56,103 84,489 29,154
FINANCIAL INFORMATION
– 329 –


--- page 340 ---
Finance Costs
Our finance costs primarily consisted of (i) interest on interest-bearing bank borrowings,
and (ii) interest on lease liabilities. The following table sets forth the breakdown of our finance
costs for the years/periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Interest on interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,583 38,521 63,972 54,033 41,469
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11185,365 6,683 9,824 7,269 7,313
Less: interest capitalized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,308) (6,271) (5,022) (5,760)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,948 39,896 67,525 56,280 43,022
Share of Profits of Associates
Our share of profits of associates primarily represented our share of profits from
long-term investments in associates. We recorded share of profits of associates of RMB23.6
million, RMB43.2 million, RMB30.0 million, RMB16.0 million and RMB6.6 million in 2022,
2023 and 2024 and the nine months ended September 30, 2024 and 2025, respectively. For
details of the associates we invested in during the Track Record Period, see Note 17 to the
Accountants’ Report as set out in Appendix I to this prospectus.
Income Tax Expense
Our income tax expense primarily consisted of current income tax and deferred income
tax. In 2022, 2023 and 2024 and the nine months ended September 30, 2024 and 2025, we
recorded income tax expense of RMB26.8 million, RMB48.4 million, RMB20.7 million,
RMB30.6 million and RMB35.4 million, respectively. We are subject to different tax rates in
different jurisdictions. Our income tax expense was also affected by adjustments relating to
deferred tax expenses or credits arising from the timing differences between accounting and
taxable profits during the Track Record Period.
Pursuant to the existing legislation, interpretations and practices, the income tax
provision of some of our entities in Chinese mainland was calculated at the statutory tax rate
of 25% on the estimated assessable profits during the Track Record Period. Our Company and
several of our subsidiaries in Chinese mainland qualified as High and New Technology
Enterprises. Accordingly, they enjoyed a preferential income tax rate of 15% for the Track
Record Period.
FINANCIAL INFORMATION
– 330 –


--- page 341 ---
The provision for Hong Kong profits tax was generally calculated at 16.5% of the
estimated assessable profits. Taxation for our overseas subsidiaries was calculated at the tax
rates prevailing in the relevant jurisdictions.
For details, see Note 10 to the Accountants’ Report as set out in Appendix I to this
prospectus.
During the Track Record Period and up to the Latest Practicable Date, we did not have
any disputes or unresolved tax issues with the relevant tax authorities which may have a
material adverse impact on our business, financial position and results of operations.
Profit for the Y ear/Period
We recorded a profit of RMB561.5 million, RMB602.7 million and RMB493.4 million,
RMB425.4 million and RMB514.5 million in 2022, 2023 and 2024 and the nine months ended
September 30, 2024 and 2025, respectively.
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Revenue
Our revenue decreased by 10.3% from RMB34,920.9 million in the nine months ended
September 30, 2024 to RMB31,331.6 million in the nine months ended September 30, 2025,
primarily due to a decrease in the ODM shipments of our smart devices. In particular, ODM
shipments of our smartphones decreased by 8.2% from 127.8 million units in the nine months
ended September 30, 2024 to 117.3 million units in the nine months ended September 30, 2025.
Specifically, our revenue from sales of smartphones decreased by 22.2% from
RMB27,885.1 million in the nine months ended September 30, 2024 to RMB21,704.1 million
in the nine months ended September 30, 2025, primarily due to (i) a decrease in ODM
shipments influenced by the life cycle of certain products, as certain models approached the
end of their life cycle, resulting in lower shipments, while new models were still in their early
production stages, and (ii) weakened consumer replacement demand due to macroeconomic
fluctuations.
Our revenue from sales of AIoT and other products increased by 46.0% from RMB3,837.1
million in the nine months ended September 30, 2024 to RMB5,603.5 million in the nine
months ended September 30, 2025, mainly driven by the substantial growth of ODM shipments
of smart eyewear and smart wearables. In particular, revenue from smart eyewear increased
significantly from RMB865.4 million in the nine months ended September 30, 2024 to
RMB1,974.5 million in the nine months ended September 30, 2025, primarily driven by the
growing consumer demand for products such as AI glasses. Additionally, revenue from smart
wearables increased from RMB2,576.0 million in the nine months ended September 30, 2024
to RMB2,861.1 million in the nine months ended September 30, 2025, primarily due to (i)
strong market acceptance of a smartwatch series, which gained popularity due to its product
FINANCIAL INFORMATION
– 331 –


--- page 342 ---
performance such as large display, elegant design, Bluetooth calling feature and extended
battery life, leading to higher ODM shipments, and (ii) our expansion into niche segments of
the smart wearables market, including children’s wearables and medical wearables.
Our revenue from sales of tablets increased by 17.6% from RMB2,542.7 million in the
nine months ended September 30, 2024 to RMB2,990.4 million in the nine months ended
September 30, 2025, mainly driven by the launch of several high-end flagship tablet products,
as well as the rapid growth of the global tablet market. According to Frost & Sullivan, the
global ODM shipment of tablets is expect to grow by 6.7% from 62.4 million units in 2024 to
66.6 million units in 2025.
Cost of Sales
Our cost of sales decreased by 12.7% from RMB32,887.9 million in the nine months
ended September 30, 2024 to RMB28,725.2 million in the nine months ended September 30,
2025, primarily due to (i) a reduction in the average procurement price of our raw materials,
such as screens, casings, camera modules and other electronic components, and (ii) a decrease
in manufacturing costs achieved through our effective cost control measures.
Gross Profit and Gross Profit Margin
Our gross profit increased by 28.2% from RMB2,032.9 million in the nine months ended
September 30, 2024 to RMB2,606.4 million in the nine months ended September 30, 2025. Our
overall gross profit margin increased from 5.8% in the nine months ended September 30, 2024
to 8.3% in the nine months ended September 30, 2025, primarily due to (i) our focus on
higher-quality growth during this period by concentrating on projects involving more advanced
and innovative product types that address greater market demand and offer higher gross profit
potential, while strategically foregoing certain low-margin projects, and (ii) the stabilization of
raw material prices in the market, which ended the upward trend seen in 2024.
Our gross profit for sales of smartphones increased by 25.2% from RMB1,318.3 million
in the nine months ended September 30, 2024 to RMB1,650.9 million in the nine months ended
September 30, 2025. Similarly, our gross profit margin for sales of smartphones increased from
4.7% in the nine months ended September 30, 2024 to 7.6% in the nine months ended
September 30, 2025, primarily due to (i) our focus on higher-quality growth during this period
by actively improving project quality and strategically foregoing certain low-margin projects,
and (ii) the stabilization of raw material prices in the market, which ended the upward trend
seen in 2024. Consequently, despite a slight decrease in revenue from smartphones, both gross
profit and gross profit margin increased during the nine months ended September 30, 2025.
Our gross profit for sales of AIoT and other products increased by 42.5% from RMB433.8
million in the nine months ended September 30, 2024 to RMB618.1 million in the nine months
ended September 30, 2025, in line with its revenue growth. The gross profit margin for sales
of AIoT and other products decreased slightly from 11.3% in the nine months ended September
30, 2024 to 11.0% in the nine months ended September 30, 2025, primarily due to the change
FINANCIAL INFORMATION
– 332 –


--- page 343 ---
in our product mix. Specifically, a larger portion of our sales of AIoT and other products in this
period consisted of smart eyewear products, particularly AI glasses, which, incur increased
per-unit costs due to the need for certain components with higher technical requirements by the
customer and elevated procurement costs. Therefore, AI glasses we produced in this period had
a relatively lower gross profit margin compared to more mature and higher-margin smart
wearable products, such as smart watches and bands.
Our gross profit for sales of tablets decreased by 6.9% from RMB209.5 million in the nine
months ended September 30, 2024 to RMB195.1 million in the nine months ended September
30, 2025, with gross profit margin decreased from 8.2% in the nine months ended September
30, 2024 to 6.5% in the nine months ended September 30, 2025, primarily due to an increased
proportion of tablet products with higher per-unit costs as a percentage of our total ODM
shipments of tablet products.
Other Income and Gains
Our other income and gains increased by 21.4% from RMB441.4 million in the nine
months ended September 30, 2024 to RMB536.0 million in the nine months ended September
30, 2025, primarily due to (i) an increase in net fair value changes of investment measured at
FVTPL of RMB95.2 million, and (ii) an increase in government grants of RMB69.6 million,
partially offset by a decrease in value-added tax additional deduction of RMB72.5 million in
relation to preferential tax treatments we received under a value-added tax additional deduction
policy for advanced manufacturing enterprises issued by a local authority.
Sales and Marketing Expenses
Our sales and marketing expenses increased by 17.5% from RMB58.9 million in the nine
months ended September 30, 2024 to RMB69.2 million in the nine months ended September
30, 2025, primarily due to an increase in employee benefit expenses of RMB10.3 million as a
result of the increase in the number of our sales and marketing personnel from 98 as of
September 30, 2024 to 121 as of September 30, 2025.
Administrative Expenses
Our administrative expenses increased by 39.9% from RMB361.8 million in the nine
months ended September 30, 2024 to RMB506.1 million in the nine months ended
September 30, 2025, primarily due to an increase in employee benefit expenses of RMB105.5
million as a result of the increase in the number of our administrative personnel from 621 as
of September 30, 2024 to 1,289 as of September 30, 2025.
Research and Development Expenses
Our research and development expenses increased by 32.5% from RMB1,472.9 million in
the nine months ended September 30, 2024 to RMB1,951.1 million in the nine months ended
September 30, 2025, primarily due to (i) an increase in employee benefit expenses of
FINANCIAL INFORMATION
– 333 –


--- page 344 ---
RMB195.9 million as a result of the increase in the number of our research and development
personnel from 3,918 as of September 30, 2024 to 5,198 as of September 30, 2025, to support
our expansion into new business areas, tackle key technological challenges and drive product
iteration and optimization, and (ii) an increase in technical service fees of RMB155.1 million
which was mainly in relation to our increased demands for outsourced testing and research
services as we concurrently initiated multiple time-sensitive R&D projects which were divided
into distinct research components.
Reversal of Impairment Losses on Financial Assets, Net
We recorded net reversal of impairment losses on financial assets of RMB0.1 million in
the nine months ended September 30, 2024, and net impairment losses on financial assets of
RMB0.6 million in the nine months ended September 30, 2025, in relation to the impairment
of our trade and other receivables.
Other Expenses
Our other expenses decreased by 65.4% from RMB84.5 million in the nine months ended
September 30, 2024 to RMB29.2 million in the nine months ended September 30, 2025,
primarily due to (i) favorable foreign exchange movement, which resulted in a decrease in
foreign exchanges losses of RMB50.8 million, and (ii) a decrease in the losses from fair value
changes of RMB10.9 million in relation to our equity investment.
Finance Costs
Our finance costs decreased by 23.6% from RMB56.3 million in the nine months ended
September 30, 2024 to RMB43.0 million in the nine months ended September 30, 2025,
primarily due to a decrease in interest on interest-bearing bank borrowings of RMB12.6
million, resulting from the repayment of certain bank borrowings in the second half of 2024
and new bank borrowings secure at comparatively lower interest rates.
Share of Profits of Associates
Our share of profits of associates decreased from RMB16.0 million in the nine months
ended September 30, 2024 to RMB6.6 million in the nine months ended September 30, 2025,
primarily reflecting the decrease in the profits from certain associates.
Income Tax Expense
Our income tax expense increased from RMB30.6 million in the nine months ended
September 30, 2024 to RMB35.4 million in the nine months ended September 30, 2025, which
was attributable to an increase in our taxable profit during the period.
FINANCIAL INFORMATION
– 334 –


--- page 345 ---
Profit for the Period
As a result of the foregoing, our profit for the period increased by 20.9% from RMB425.4
million in the nine months ended September 30, 2024 to RMB514.5 million in the nine months
ended September 30, 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue increased by 70.6% from RMB27,185.1 million in 2023 to RMB46,382.5
million in 2024, primarily due to an increase in ODM shipments of our smart devices. In
particular, ODM shipments of our smartphones increased by 38.0% from 125.3 million units
in 2023 to 172.9 million units in 2024. ODM shipments of our AIoT and other products
increased by 140.4% from 14.1 million units in 2023 to 33.9 million units in 2024. ODM
shipments of our tablets increased by 66.2% from 7.4 million units in 2023 to 12.3 million units
in 2024.
Specifically, our revenue from sales of smartphones increased by 65.6% from
RMB21,821.6 million in 2023 to RMB36,132.7 million in 2024, mainly driven by (i) the
recovery and growth of global smartphone industry in 2024. In particular, our customers’
products sold to consumers from emerging markets such as Southeast Asia and Latin America
experienced substantial growth, which resulted in a growth in the orders we received from
customers. According to Frost & Sullivan, the global shipment of smartphones increased from
1,164.1 million units in 2023 to 1,238.8 million units in 2024, and (ii) the continuous
expansion and optimization of our customer base. In addition, our expanded overseas
manufacturing in 2024 enabled localized delivery and further strengthened our collaboration
with customers overseas.
Our revenue from sales of AIoT and other products increased significantly by 122.0% to
RMB5,573.1 million in 2024, mainly driven by (i) the substantial growth of ODM shipments
of smart wearables and smart eyewear, which received wide market recognition among
end-consumers for these product categories in 2024, and (ii) our deepened relationship with our
AIoT customers to capture market demands. Revenue from sales of smart wearables increased
from RMB1,798.6 million in 2023 to RMB3,643.4 million in 2024, primarily due to (i) the
increased sales to our overseas customers benefiting from the growing overseas markets, and
(ii) the optimization of our product mix. Revenue from sales of smart eyewear increased from
RMB388.0 million in 2023 to RMB1,387.6 million in 2024, primarily driven by the growth of
customer demand overseas. We started to generate revenue from automotive electronics in
2023, and gradually ramped up the sales in 2024, with revenue increasing from RMB0.7
million in 2023 to RMB20.7 million in 2024.
FINANCIAL INFORMATION
– 335 –


--- page 346 ---
Our revenue from sales of tablets increased by 47.3% from RMB2,509.1 million in 2023
to RMB3,696.3 million in 2024, mainly driven by the continuous expansion of our customer
base to include several leading tablet brands, which resulted in an increase in our ODM
shipments of tablets.
Cost of Sales
Our cost of sales increased by 77.6% from RMB24,594.9 million in 2023 to
RMB43,676.1 million in 2024, primarily due to an increase in our ODM shipments, which was
also reflected in the growth in our revenue.
Gross Profit and Gross Profit Margin
Our gross profit increased by 4.5% from RMB2,590.2 million in 2023 to RMB2,706.4
million in 2024. Our overall gross profit margin decreased from 9.5% in 2023 to 5.8% in 2024,
primarily due to (i) an increase in the average procurement price of our raw materials, such as
screens, casings, ICs and other electronic components, as a result of cyclical market
fluctuations in the electronic component manufacturing industry. For details, see “Industry
Overview — Overview of Global Consumer Electronics ODM Industry — Raw Material of
Global Consumer Electronics ODM Industry”, and (ii) our strategic market expansion
initiatives in 2024 designed to strengthen our competitive positioning.
Our gross profit for sales of smartphones decreased by 6.3% from RMB1,800.4 million
in 2023 to RMB1,686.7 million in 2024, with gross profit margin decreased from 8.3% in 2023
to 4.7% in 2024, primarily due to (i) an increase in the average procurement price of raw
materials, such as screens, casings, ICs and other electronic components, as a result of cyclical
market fluctuations in the electronic component manufacturing industry, and (ii) our strategic
market expansion initiatives in 2024 designed to strengthen our competitive positioning.
Our gross profit for sales of AIoT and other products increased by 18.5% from RMB518.6
million in 2023 to RMB614.8 million in 2024, primarily due to the growth in ODM shipments
and revenue of our AIoT and other products. The gross profit margin for sales of AIoT and
other products decreased from 20.7% in 2023 to 11.0% in 2024, primarily due to (i) an increase
in the average procurement price of raw materials, such as screens, casings, ICs and other
electronic components, as a result of cyclical market fluctuations in the electronic component
manufacturing industry, and (ii) several new projects being in the relatively early stages of
ramping up mass production with relatively lower gross profit margins.
Our gross profit for sales of tablets increased by 29.3% from RMB239.3 million in 2023
to RMB309.3 million in 2024, primarily due to the growth in ODM shipments and revenue of
our tablet. The gross profit margin for sales of tablets decreased from 9.5% in 2023 to 8.4%
in 2024, primarily due to an increase in the average procurement price of raw materials as a
result of cyclical market fluctuations.
FINANCIAL INFORMATION
– 336 –


--- page 347 ---
Other Income and Gains
Our other income and gains increased by 86.9% from RMB309.7 million in 2023 to
RMB578.6 million in 2024, primarily due to (i) an increase in value-added tax additional
deduction of RMB213.5 million in relation to preferential tax treatments we received under a
value-added tax additional deduction policy for advanced manufacturing enterprises issued by
a local authority, and (ii) an increase in government grants of RMB43.9 million; partially offset
by a decrease in net fair value changes of investment measured at FVTPL of RMB30.2 million.
Sales and Marketing Expenses
Our sales and marketing expenses increased by 12.4% from RMB79.9 million in 2023 to
RMB89.8 million in 2024, primarily due to an increase in travel and communication expenses
of RMB6.7 million to support our business expansion.
Administrative Expenses
Our administrative expenses increased by 15.7% from RMB437.3 million in 2023 to
RMB506.1 million in 2024, primarily due to (i) an increase in depreciation and amortization
of RMB31.3 million as a result of an increase in our fixed and intangible assets, including
buildings held by our subsidiaries in 2024, and (ii) an increase in tax and other surcharges of
RMB20.2 million, which was in line with our business expansion, and (iii) an increase in
employee benefit expenses of RMB13.2 million as a result of the increase in the number of our
administrative personnel, from 472 as of December 31, 2023 to 544 as of December 31, 2024,
to support our business expansion.
Research and Development Expenses
Our research and development expenses increased by 23.3% from RMB1,687.8 million in
2023 to RMB2,080.2 million in 2024, primarily due to (i) an increase in employee benefit
expenses of RMB184.7 million as a result of the increase in the number of our research and
development personnel, from 3,295 as of December 31, 2023 to 3,985 as of December 31,
2024, to support our expansion into new business areas, tackle key technological challenges
and drive product iteration and optimization, and (ii) an increase in costs of consumables of
RMB171.4 million as a result of our increased demands for consumables used in our research
and development activities.
Impairment Losses on Financial Assets, Net
Our net impairment losses on financial assets increased from RMB0.8 million in 2023 to
RMB1.3 million in 2024, primarily due to an increase in our trade and other receivables in line
with the increase in our revenue.
FINANCIAL INFORMATION
– 337 –


--- page 348 ---
Other Expenses
Our other expenses increased by 21.6% from RMB46.1 million in 2023 to RMB56.1
million in 2024, primarily due to an increase in impairment of prepayments of RMB39.1
million recorded based on our assessment of the recoverability of prepayments related to our
purchases from a supplier of structural components. We terminated our collaboration with this
supplier in 2024 due to its deteriorating financial condition, which resulted from intensified
market competition. However, we believe the termination did not materially or adversely affect
our operations, as we promptly secured alternative suppliers and this supplier was not
significant to our overall purchases. We do not have on-going business relationship with this
supplier. During the Track Record Period, we did not terminate collaboration with any other
suppliers due to their financial condition. We have implemented measures to prevent the
recurrence of similar incidents. For details, see “Business — Procurement — Supply Chain
Management.” The increase in expenses was partially offset by (i) a decrease in losses on
settlement of derivative financial instruments of RMB20.1 million in relation to foreign
exchange forward contracts, and (ii) a decrease in losses from disposal of assets of RMB9.7
million.
Finance Costs
Our finance costs increased by 69.3% from RMB39.9 million in 2023 to RMB67.5 million
in 2024, primarily due to an increase in interest on interest-bearing bank borrowings of
RMB25.5 million in line with the increase in our interest-bearing bank borrowings.
Share of Profits of Associates
Our share of profits of associates decreased by 30.4% from RMB43.2 million in 2023 to
RMB30.0 million in 2024, primarily reflecting the decrease in the profits from certain
associates.
Income Tax Expense
Our income tax expense decreased by 57.3% from RMB48.4 million in 2023 to RMB20.7
million in 2024, primarily attributable to a decrease in our taxable profit during the year and
the decrease in deferred tax expenses.
Profit for the Y ear
As a result of the foregoing, our profit for the year decreased by 18.1% from RMB602.7
million in 2023 to RMB493.4 million in 2024.
FINANCIAL INFORMATION
– 338 –


--- page 349 ---
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue decreased by 7.4% from RMB29,343.2 million in 2022 to RMB27,185.1
million in 2023, primarily due to a slight decrease in ODM shipments of our smartphones from
125.5 million units in 2022 to 125.3 million units in 2023 and a decrease in the average selling
price of our smartphones from RMB187.1 per unit in 2022 to RMB168.8 per unit in 2023,
partially offset by the increase in ODM shipments of our AIoT and other products from 7.9
million units in 2022 to 14.1 million units in 2023.
Specifically, our revenue from sales of smartphones decreased by 10.1% from
RMB24,265.6 million in 2022 to RMB21,821.6 million in 2023, primarily due to a decrease in
end-consumer demands for smartphones in 2023 as a result of general industry and
macroeconomic environment. According to Frost & Sullivan, the global ODM shipments of
smartphones decreased from 484.8 million units in 2022 to 455.9 million units in 2023,
primarily affected by the effects of the COVID-19 pandemic.
Our revenue from sales of AIoT and other products increased by 33.0% from RMB1,887.1
million in 2022 to RMB2,510.6 million in 2023, primarily driven by an increase in ODM
shipments of our smart watches/bands as a result of our successful expansion in China and
overseas markets. In particular, revenue from the sales of smart wearables increased from
RMB1,413.4 million in 2022 to RMB1,798.6 million in 2023, primarily driven by our
large-scale ODM shipments of Wear OS smartwatches. Revenue from the sales of smart
eyewear increased from RMB32.2 million in 2022 to RMB388.0 million in 2023, primarily due
to (i) the strong commercial success achieved by our second-generation AI glasses, supported
by our continued and accumulated collaboration with leading global internet companies, and
(ii) our efforts to expand into the overseas AR product market.
Our revenue from sales of tablets decreased by 10.3% from RMB2,798.2 million in 2022
to RMB2,509.1 million in 2023. Such decrease was primarily due to changes in product mix,
despite of the increase in our ODM shipments for tablets from 6.3 million units in 2022 to 7.4
million units in 2023.
Cost of Sales
Our cost of sales decreased by 8.8% from RMB26,978.0 million in 2022 to RMB24,594.9
million in 2023, primarily due to a decrease in our ODM shipments, which was in line with the
our revenue trend.
FINANCIAL INFORMATION
– 339 –


--- page 350 ---
Gross Profit and Gross Profit Margin
Our gross profit increased by 9.5% from RMB2,365.1 million in 2022 to RMB2,590.2
million in 2023. Our overall gross profit margin increased from 8.1% in 2022 to 9.5% in 2023,
primarily due to a reduction in the average procurement price of our raw materials, such as
screens, casings, ICs and other electronic components, as a result of cyclical market
fluctuations in the electronic component manufacturing industry. For details, see “Industry
Overview – Overview of Global Consumer Electronics ODM Industry – Raw Material of
Global Consumer Electronics ODM Industry.”
Our gross profit for sales of smartphones increased by 4.7% from RMB1,719.4 million in
2022 to RMB1,800.4 million in 2023, with gross profit margin increased from 7.1% in 2022
to 8.3% in 2023 as a result of (i) a reduction in the average procurement price of our raw
materials, such as screens, casings, ICs and other electronic components, as a result of cyclical
market fluctuations in the electronic component manufacturing industry, and (ii) our continued
improvement in production and operational efficiency.
Our gross profit for sales of AIoT and other products increased by 30.4% from RMB397.6
million in 2022 to RMB518.6 million in 2023 due to an increase in the ODM shipments of and
revenue from AIoT and other products, while gross profit margin remained relatively stable at
21.1% and 20.7% in 2022 and 2023, respectively.
Our gross profit for sales of tablets increased by 16.5% from RMB205.4 million in 2022
to RMB239.3 million in 2023, with gross profit margin increased from 7.3% in 2022 to 9.5%
in 2023, primarily due to a reduction in the average procurement price of our raw materials,
such as screens, casings, ICs and other electronic components, as a result of cyclical market
fluctuations in the electronic component manufacturing industry.
Other Income and Gains
Our other income and gains increased by 23.3% from RMB251.1 million in 2022 to
RMB309.7 million in 2023, primarily due to (i) an increase in interest income of RMB37.4
million as result of an increase in our cash and cash equivalents, and (ii) an increase in net fair
value changes of investment measured at FVTPL of RMB30.7 million.
Sales and Marketing Expenses
Our sales and marketing expenses increased by 40.5% from RMB56.9 million in 2022 to
RMB79.9 million in 2023, primarily due to (i) an increase in employee benefit expenses of
RMB9.8 million as a result of the increase in the number of our sales and marketing personnel,
from 64 as of December 31, 2022 to 74 as of December 31, 2023, and (ii) an increase in
business development expenses of RMB6.8 million to support our on-going expansion into new
geographical areas and to promote our products.
FINANCIAL INFORMATION
– 340 –


--- page 351 ---
Administrative Expenses
Our administrative expenses increased by 11.3% from RMB392.8 million in 2022 to
RMB437.3 million in 2023, primarily due to (i) an increase in employee benefit expenses of
RMB20.4 million as a result of the increase in the number of our administrative personnel,
from 434 as of December 31, 2022 to 472 as of December 31, 2023, and (ii) an increase in
others of RMB12.5 million, which was mainly in relation to the acquisition of our subsidiary
in Vietnam in 2023.
Research and Development Expenses
Our research and development expenses increased by 11.9% from RMB1,507.8 million in
2022 to RMB1,687.8 million in 2023, primarily due to (i) an increase in employee benefit
expenses of RMB58.3 million as a result of the increase in number of our research and
development personnel, from 3,117 as of December 31, 2022 to 3,295 as of December 31,
2023, to support our expansion into new business areas, tackle key technological challenges
and drive product iteration and optimization, (ii) an increase in technical service fees of
RMB47.9 million, which was mainly in relation to our increased demands for outsourced
testing and research services as we concurrently initiated multiple time-sensitive R&D projects
which were divided into distinct research components, and (iii) an increase in costs of
consumables of RMB47.7 million as a result of our increased demands for consumables used
in our research and development activities.
Reversal of Impairment Losses/(Impairment Losses) on Financial Assets, Net
We recorded net reversal of impairment losses on financial assets of RMB2.7 million in
2022, primarily due to the recovery of deposits paid to chip suppliers that were made to secure
their production capacity. As the suppliers fulfilled our orders, we were able to recover these
deposits. We recorded net impairment losses on financial assets of RMB0.8 million in 2023,
primarily due to an increase in our trade and other receivables in line with the increase in our
revenue.
Other Expenses
Our other expenses decreased by 21.5% from RMB58.7 million in 2022 to RMB46.1
million in 2023, primarily due to a decrease in losses from fair value changes on RMB37.7
million in relation to our equity investments, partially offset by an increase in losses on
settlement of derivative financial instruments of RMB14.5 million in relation to foreign
exchange forward contracts.
Finance Costs
Our finance costs remained relatively stable at RMB37.9 million and RMB39.9 million
in 2022 and 2023, respectively.
FINANCIAL INFORMATION
– 341 –


--- page 352 ---
Share of Profits of Associates
Our share of profits of associates increased by 82.9% from RMB23.6 million in 2022 to
RMB43.2 million in 2023, primarily reflecting the increase in profits from certain associates.
Income Tax Expense
Our income tax expense increased by 80.4% from RMB26.8 million in 2022 to RMB48.4
million in 2023, which was attributable to an increase in our taxable profit during the year.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by 7.3% from RMB561.5
million in 2022 to RMB602.7 million in 2023.
FINANCIAL INFORMATION
– 342 –


--- page 353 ---
DISCUSSION OF CERTAIN KEY ITEMS OF CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth a breakdown of our consolidated statements of financial
position as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,598,284 2,039,957 2,405,797 2,819,540
Investment properties /H1118/H1118/H1118/H1118/H11182,600 2,463 2,326 2,222
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118588,610 668,419 655,273 659,939
Other intangible assets /H1118/H1118/H1118/H1118/H111826,860 24,372 32,999 46,251
Investments in associates /H1118/H1118/H1118591,151 621,541 629,787 597,832
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118164,190 145,109 187,893 221,704
Investments measured at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,228 318,526 242,652 348,091
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,639 32,732 28,148 41,444
Total non-current assets /H1118/H11183,246,562 3,853,119 4,184,875 4,737,023
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,144,444 1,714,801 1,881,625 2,235,000
Trade and bills receivables /H11185,538,222 9,008,400 11,732,512 11,215,498
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,969 160,354 341,181 604,961
Investment measured at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,384,902 1,168,726
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 726 –
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,320 692,020 1,222,947 446,532
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 41,442 2,013
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 93,876 46,719
Cash and cash equivalents /H1118/H11183,278,958 4,406,907 5,461,528 6,850,371
Total current assets /H1118/H1118/H1118/H1118/H1118/H111811,283,913 15,985,780 22,160,739 22,569,820
FINANCIAL INFORMATION
– 343 –


--- page 354 ---
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Current liabilities
Trade and bills payables /H1118/H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,647 24,101 9,445 91,514
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118420,837 440,433 461,536 688,742
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,008 23,120 27,636 47,132
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,787 752,815 1,806,660 3,034,508
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,921 60,728 75,716 68,407
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,110 35,272 32,656 36,776
Total current liabilities /H1118/H1118/H111810,632,395 14,990,459 19,724,450 20,647,539
Non-current liabilities
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118557,217 712,430 694,717 604,357
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,813 182,570 168,998 169,906
Deferred tax liabilities /H1118/H1118/H1118/H1118/H111822,159 207 14 –
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,125 –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,807 127,836 163,180 145,211
Total non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118741,996 1,023,043 1,028,034 919,474
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156,084 3,825,397 5,593,130 5,739,830
FINANCIAL INFORMATION
– 344 –


--- page 355 ---
Property, Plant and Equipment
Our property, plant and equipment mainly consisted of machinery, buildings, construction
in progress, office equipment and electronic devices, leasehold improvements and vehicles.
The following table sets forth a breakdown of our property, plant and equipment as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,129,313 1,215,459 1,333,788 1,422,314
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,741 277,975 621,677 625,316
Construction in progress /H1118/H1118/H111867,417 430,354 300,337 602,569
Office equipment and
electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H111887,293 88,857 93,022 115,291
Leasehold improvements /H1118/H1118/H111822,903 24,273 49,926 47,002
V ehicles/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118617 3,039 7,047 7,048
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,598,284 2,039,957 2,405,797 2,819,540
Our property, plant and equipment increased from RMB1,598.3 million as of December
31, 2022 to RMB2,040.0 million as of December 31, 2023, primarily attributable to: (i) an
increase in construction in progress of RMB362.9 million in relation to our construction of
manufacturing center in Huizhou and headquarters in Shanghai, and (ii) an increase in
machinery of RMB86.1 million as a result of our investments in machinery to support
manufacturing needs.
Our property, plant and equipment increased from RMB2,040.0 million as of December
31, 2023 to RMB2,405.8 million as of December 31, 2024, primarily attributable to (i) an
increase in buildings of RMB343.7 million in relation to our manufacturing center in Huizhou
and headquarters in Shanghai, and (ii) an increase in machinery of RMB118.3 million as a
result of our investments in machinery to support manufacturing needs; partially offset by a
decrease in construction in progress of RMB130.0 million following the completion of
construction of manufacturing center in Huizhou.
Our property, plant and equipment increased from RMB2,405.8 million as of December
31, 2024 to RMB2,819.5 million as of September 30, 2025, primarily attributable to (i) an
increase in construction in progress of RMB302.2 million in relation to the continued
construction upgrade of our headquarters in Shanghai, and (ii) an increase in machinery of
RMB88.5 million as a result of equipment purchases to support our manufacturing and R&D
needs.
FINANCIAL INFORMATION
– 345 –


--- page 356 ---
Right-of-use Assets
During the Track Record Period, our right-of-use assets were primarily related to
leasehold land and buildings for our manufacturing facilities and office premises. Our
right-of-use assets increased from RMB588.6 million as of December 31, 2022 to RMB668.4
million as of December 31, 2023, primarily due to a net increase in right-of-use assets of
building of RMB88.7 million as we increased our leases for office premises to support our
business operations. Our right-of-use assets remained relatively stable at RMB668.4 million,
RMB655.3 million and RMB659.9 million as of December 31, 2023 and 2024 and September
30, 2025, respectively.
Investments in Associates
We have invested in a number of associates, primarily include companies engaged in the
assembly, processing, manufacture, export and wholesale of electronic components. As of
December 31, 2022, 2023 and 2024, our investments in associates amounted to RMB591.2
million, RMB621.5 million and RMB629.8 million, respectively. Such increases were
primarily due to increases in the share of profits of our associates. Our investments in
associates slightly decreased to RMB597.8 million as of September 30, 2025, primarily due to
the decrease in the share of the associates’ profit during the period. For details, see Note 17
to the Accountants’ Report as set out in Appendix I of this prospectus.
Investments Measured at FVTPL
Our non-current portion of investments measured at FVTPL represented our equity
investments in unlisted companies. Our current portion of investments measured at FVTPL
represented (i) our equity investments in listed companies, and (ii) structured deposits and
wealth management products.
The following table sets forth the details of our investments measured at FVTPL as of the
dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Non-current
Unlisted equity investments /H1118 269,228 318,526 242,652 348,091
269,228 318,526 242,652 348,091
FINANCIAL INFORMATION
– 346 –


--- page 357 ---
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Current
Listed equity investments /H1118/H1118 – – 13,871 5,942
Structured deposits and
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,371,031 1,162,784
– – 1,384,902 1,168,726
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,228 318,526 1,627,554 1,516,817
The non-current portion of our investments measured at FVTPL increased from
RMB269.2 million as of December 31, 2022 to RMB318.5 million as of December 31, 2023,
primarily due to (i) our new equity investments in unlisted companies, and (ii) the changes in
the fair value of our existing equity investments in unlisted companies. The non-current portion
of our investments measured at FVTPL decreased from RMB318.5 million as of December 31,
2023 to RMB242.7 million as of December 31, 2024, primarily due to the reclassification of
certain equity investments after the listing of relevant companies and the end of lock-up
periods. The non-current portion of our investments measured at FVTPL increased from
RMB242.7 million as of December 31, 2024 to RMB348.1 million as of September 30, 2025,
primarily due to our new equity investments in an unlisted company.
The current portion of our investments measured at FVTPL amounted to nil, nil,
RMB1,384.9 million and RMB1,168.7 million as of December 31, 2022, 2023 and 2024 and
September 30, 2025, respectively, primarily reflecting our equity investments in listed
companies and investments in wealth management products.
We have established management systems to oversee the investments in financial
products. Adhering to prudent investment principles, we conduct investment activities with an
aim to improve capital utilization efficiency and return. We have established a dedicated team
comprising specialists, managers and supervisors from finance department, as well as senior
management of our Company to manages our financial product portfolio, including full-
process audits, reviewing the approval, implementation, and performance of wealth
management products. Our internal control measures regarding investments in financial
products ensures timely processing and verification of accounting records, with timely
reporting to senior management. In addition, we adhere to all applicable laws, regulations, and
management policies regarding the proper disclosure of investment information.
Following the Listing, our investments in financial products will be conducted in
accordance with the provisions of Chapter 14 of the Listing Rules.
FINANCIAL INFORMATION
– 347 –


--- page 358 ---
Prepayments, Other Receivables and Other Assets
Our non-current portion of prepayments, other receivables and other assets consisted of
(i) prepayments for items of property, plant and equipment, and (ii) deposits. Our current
portion of prepayments, other receivables and other assets consisted of (i) other tax
recoverable, including input tax pending certification and deduction, (ii) prepayments to
suppliers for procurement of raw materials, (iii) deposits to our suppliers to secure their
production capacity, and (iv) others.
The following table sets forth the details of our prepayments, other receivables and other
assets as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Non-current
Prepayments for items of
property, plant and
equipment and other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,639 32,732 28,148 31,426
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,545
Impairment allowance /H1118/H1118/H1118/H1118– – – (527)
5,639 32,732 28,148 41,444
Current
Other tax recoverable /H1118/H1118/H1118/H1118/H111812,649 24,413 257,317 471,705
Prepayments to suppliers /H1118/H1118/H111835,325 91,119 79,243 95,087
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,386 33,351 22,722 22,536
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,755 7,849 – 19,803
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,383 5,290 22,587 36,768
142,498 162,022 381,869 645,899
Impairment allowance /H1118/H1118/H1118/H1118/H1118(4,529) (1,668) (40,688) (40,938)
137,969 160,354 341,181 604,961
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143,608 193,086 369,329 646,405
The non-current portion of our prepayments, other receivables and other assets increased
from RMB5.6 million as of December 31, 2022 to RMB32.7 million as of December 31, 2023,
primarily in relation to an increase in prepayments for equipment following our expansion of
production capacity. The non-current portion of our prepayments, other receivables and other
assets decreased from RMB32.7 million as of December 31, 2023 to RMB28.1 million as of
December 31, 2024, primarily due to the settlement of certain prepayments for equipment
FINANCIAL INFORMATION
– 348 –


--- page 359 ---
following the delivery of the relevant equipment. The non-current portion of our prepayments,
other receivables and other assets increased to RMB41.4 million as of September 30, 2025,
primarily due to the deposits in relation to new long-term leases.
The current portion of our prepayments, other receivables and other assets increased from
RMB138.0 million as of December 31, 2022 to RMB160.4 million as of December 31, 2023,
primarily due to (i) an increase in prepayments to suppliers of RMB55.8 million for raw
materials, partially offset by a decrease in deposits of RMB56.0 million following the recovery
of deposits paid to chip suppliers that were made to secure their production capacity, as our
orders were fulfilled in the subsequent year. The current portion of our prepayments, other
receivables and other assets increased from RMB160.4 million as of December 31, 2023 to
RMB341.2 million as of December 31, 2024, primarily due to an increase in other tax
recoverable of RMB232.9 million, reflecting the increase in retained input V A T in line with our
business expansion. The current portion of our prepayments, other receivables and other assets
increased from RMB341.2 million as of December 31, 2024 to RMB605.0 million as of
September 30, 2025, primarily due to an increase in other tax recoverable of RMB214.4
million, reflecting the increase in retained input V A T in relation to the continued construction
upgrade of our headquarters in Shanghai.
As of November 30, 2025, RMB470.4 million, or 68.4% of our prepayments, other
receivables and other assets as of September 30, 2025 had been settled.
Inventories
Our inventories primarily consisted of raw materials, outsourced processing materials,
work in progress and finished goods. The following table sets forth details of our inventories
as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118886,391 1,381,678 1,579,402 1,862,005
Outsourced processing
materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229,155 159,249 126,017 119,471
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,409 29,689 11,093 58,904
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,988 221,676 248,700 280,884
1,255,943 1,792,292 1,965,212 2,321,264
Less: provision for
impairment loss on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(111,499) (77,491) (83,587) (86,264)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,144,444 1,714,801 1,881,625 2,235,000
FINANCIAL INFORMATION
– 349 –


--- page 360 ---
Our inventories increased from RMB1,144.4 million as of December 31, 2022 to
RMB1,714.8 million as of December 31, 2023, and further to RMB1,881.6 million as of
December 31, 2024 and RMB2,235.0 million as of September 30, 2025, primarily due to an
increase in inventory level of raw materials in anticipation of our manufacturing needs. Our
outsourced processing materials decreased from RMB229.2 million as of December 31, 2022
to RMB159.2 million as of December 31, 2023, and further to RMB126.0 million as of
December 31, 2024 and RMB119.5 million as of September 30, 2025, primarily due to the
gradual ramp-up of operations at our Phase III factory in Huizhou center in 2023. As our
in-house production capacity increased, we were able to reduce the amount of work outsourced
to third-party processors.
We periodically assess impairment of inventories and typically recognize write-down of
inventories when their carrying amount is lower than their net realizable value. During the
Track Record Period, we made significant provision for impairment loss on inventories,
primarily because we prudently made full provision for inventories aged over 180 days, given
the relatively short product life cycle of consumer electronics products. Although we employ
a sales-driven production and procurement model, our production is informed by rolling sales
forecasts, current inventory levels, supplier delivery cycles and market conditions.
Consequently, any leftover inventory at the end of the product life cycle may become stagnant,
necessitating the recognition of impairment provisions. Our provision for impairment loss for
our inventories was RMB111.5 million, RMB77.5 million, RMB83.6 million and RMB86.3
million as of December 31, 2022, 2023 and 2024 and September 30, 2025, respectively. The
decreases from 2022 to 2023 was primarily due to our optimized inventory management
process. The increase from 2023 to 2024 was primarily due to the increase in the balances of
our inventories in anticipation of our manufacturing needs. Our provision for impairment loss
on inventories remained relatively stable at RMB83.6 million as of December 31, 2024 and
RMB86.3 million as of September 30, 2025, primarily due to our implementation of business
intelligence tools for analyzing key metrics such as inventory obsolescence and aging, which
strengthened inventory management. Specifically, our comprehensive business intelligence
dashboard enables multi-dimensional monitoring and analysis of inventory. In addition, we
conduct weekly reviews of obsolete and slow-moving inventory as well as purchase orders,
allowing us to promptly identify and address any issues.
FINANCIAL INFORMATION
– 350 –


--- page 361 ---
The following is an aging analysis of our inventories as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Within 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,112,011 1,702,089 1,856,579 2,196,783
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,002 39,835 56,652 74,889
180 days to 360 days /H1118/H1118/H1118/H1118/H1118/H111874,930 50,368 51,981 49,592
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,255,943 1,792,292 1,965,212 2,321,264
The following table sets forth our inventory turnover days for the years/periods indicated.
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H111819.9 20.9 14.8 19.3
Note:
(1) Inventory turnover days are calculated as the average of the beginning and ending balance of inventories
for the period divided by the cost of sales for that period and multiplied by the number of days in that
period (i.e., 360 days for a given year and 270 days for a nine-month period).
Our inventory turnover days were 19.9 days, 20.9 days, 14.8 days and 19.3 days in 2022,
2023, 2024 and the nine months ended September 30, 2025, respectively. Our inventory
turnover days remained relatively stable in 2022 and 2023. The decrease in our inventory
turnover days from 2023 to 2024 was primarily because (i) our cost of sales increased from
2023 to 2024 in line with our business expansion, and (ii) we optimized inventory management
and adopted automated systems to enhance our inventory monitoring capabilities. The increase
in our inventory turnover days from 2024 to the nine months ended September 30, 2025 was
primarily because we maintained a higher level of inventories in anticipation of the mass
production of certain products.
As of November 30, 2025, we have utilized 90.1% of our inventories, or RMB2,091.8
million, as of September 30, 2025.
FINANCIAL INFORMATION
– 351 –


--- page 362 ---
Trade and Bills Receivables
Our trade and bills receivables primarily consisted of outstanding amounts payable by
third parties. We generally granted a credit period of between 60 to 90 days to our customers
during the Track Record Period.
The following table sets forth details of our trade and bills receivables as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,524,264 9,021,218 11,643,657 11,023,477
Bank acceptance notes /H1118/H1118/H1118/H1118/H111823,570 638 96,928 199,821
Less: impairment losses /H1118/H1118/H1118/H1118(9,612) (13,456) (8,073) (7,800)
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,222 9,008,400 11,732,512 11,215,498
Our trade and bills receivables increased from RMB5,538.2 million as of December 31,
2022 to RMB9,008.4 million as of December 31, 2023 primarily because we had more
purchase orders in the fourth quarter of 2023 compared to the same period in 2022, which
resulted in an increase in the year-end balances of trade and bills receivables in 2023. Our trade
and bills receivables further increased to RMB11,732.5 million as of December 31, 2024,
generally in line with an increase in our revenue in 2024. Our trade and bills receivables
decreased from RMB11,732.5 million as of December 31, 2024 to RMB11,215.5 million as of
September 30, 2025, primarily due to the collection of trade and bills receivables upon
maturity.
The following is an aging analysis of our trade and bills receivables based on the invoice
date information and net of loss allowance, as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,215 9,003,935 11,732,510 11,215,403
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 4,465 2 95
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,222 9,008,400 11,732,512 11,215,498
FINANCIAL INFORMATION
– 352 –


--- page 363 ---
The following table sets forth our trade receivables turnover days for the years/periods
indicated.
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Trade receivables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858.4 96.2 80.1 97.6
Note:
(1) Calculated as the average of the beginning and ending balance of trade receivables for the period divided
by the revenue for that period and multiplied by the number of days in that period (i.e., 360 days for
a given year and 270 days for a nine-month period).
Our trade receivables turnover days were 58.4 days, 96.2 days, 80.1 days and 97.6 days
for the years ended December 31, 2022, 2023 and 2024 and the nine months ended September
30, 2025, respectively. The increase of our trade receivables turnover days from 2022 to 2023
was primarily because we had more purchase orders in the fourth quarter of 2023 compared to
the same period in 2022, which resulted in an increase in the year-end balances of trade
receivables in 2023 and consequent increase in the calculation of trade receivables turnover
days. As our revenue increased substantially from 2023 to 2024, our trade receivables turnover
days fall back to 80.1 days in 2024. Although the credit period we granted to our customers
remained relatively stable during this period, our trade receivables turnover days increased to
97.6 days in the nine months ended September 30, 2025, primarily due to a decrease in our
annualized revenue in the nine months ended September 30, 2025. We typically experience
peak sales in the fourth quarter of each year, where the holiday season and promotion activities
occurs, and the off-season period in the second quarter of each year.
As of November 30, 2025, RMB7,731.6 million, or 68.9% of our trade and bills
receivables as of September 30, 2025 had been settled.
Pledged Deposits
Our pledged deposits primarily represent secured or restricted deposits held in designated
bank accounts for issuance of (i) bank acceptance bills to facilitate our payment to suppliers,
and (ii) letters of guarantee for contract performance. Our pledged deposits amounted to
RMB1,184.3 million, RMB692.0 million, RMB1,222.9 million and RMB446.5 million as of
December 31, 2022, 2023 and 2024 and September 30, 2025, respectively. The fluctuations
during the Track Record Period were primarily due to changes in the pledged deposit ratios
required by different banks and changes in bank acceptance bill issued by such banks.
FINANCIAL INFORMATION
– 353 –


--- page 364 ---
Trade and Bills Payables
Our trade and bills payables primarily related to the purchase of raw materials and
equipment. The credit period granted by our suppliers was generally between 60 to 90 days
during the Track Record Period. Our trade and bills payable increased from RMB9,585.1
million as of December 31, 2022 to RMB13,654.0 million as of December 31, 2023, and
further increased to RMB17,310.8 million as of December 31, 2024, mainly due to an increase
in our procurement of raw materials. Our trade and bills payable decreased from RMB17,310.8
million as of December 31, 2024 to RMB16,680.5 million as of September 30, 2025, mainly
due to settlements made to our suppliers during the period.
The following table sets forth details of our trade and bills payables as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,087,971 9,630,348 9,285,569 8,679,913
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,497,114 4,023,642 8,025,232 8,000,547
Trade and bills payables /H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
The following is an aging analysis of our trade and bills payables based on invoice date
as of dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,560,166 13,631,722 17,281,571 16,660,206
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,984 13,720 17,595 8,089
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,483 5,460 6,256 6,097
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,452 3,088 5,379 6,068
Trade and bills payables /H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
FINANCIAL INFORMATION
– 354 –


--- page 365 ---
The following table sets forth our trade payables turnover days for the years/periods
indicated.
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
Trade payables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871.4 107.7 78.0 84.4
Note:
(1) Calculated as the average of the beginning and ending balance of trade payables for the period divided
by the cost of sales for that period and multiplied by the number of days in that period (i.e., 360 days
for a given year and 270 days for a nine-month period).
Our trade payables turnover days increased from 71.4 days in 2022 to 107.7 days in 2023,
mainly because (i) we had more purchases of raw materials in the fourth quarter of 2023 to
better support anticipated market demand in the following year, and (ii) we optimized our
supplier bases and obtained more favorable credit periods in 2023. As our cost of sales
increased substantially from 2023 to 2024 in line with our business expansion, our trade
payables turnover days fall back to 78.0 days in 2024. Our trade payables turnover days
increased to 84.4 days in the nine months ended September 30, 2025, mainly due to (i) a
decrease in our annualized cost of sales in the nine months ended September 30, 2025, and (ii)
our increased bargaining power to obtain more favorable credit periods from our suppliers.
As of November 30, 2025, RMB11,017.0 million, or 66.0% of our trade and bills payables
as of September 30, 2025 had been settled.
Contract Liabilities
Our contract liabilities are recognized when a payment is received or a payment is due
(whichever is earlier) from a customer before we transfer the related goods or services. Our
contract liabilities decreased from RMB108.6 million as of December 31, 2022 to RMB24.1
million as of December 31, 2023, and further decreased to RMB9.4 million as of December 31,
2024. The decreased were primarily due to the performance of relevant obligations and
subsequent recognition as revenue. Our contract liabilities increased from RMB9.4 million as
of December 31, 2024 to RMB91.5 million as of September 30, 2025, primarily due to an
increase in prepayment received from customers for technology development services, such as
engineering, design and production validation testing, related to non-recurring engineering
projects for their products that are subject to final delivery.
As of November 30, 2025, RMB13.5 million, or 14.7% of our contract liabilities as of
September 30, 2025 had been recognized as revenue.
FINANCIAL INFORMATION
– 355 –


--- page 366 ---
Other Payables and Accruals
The current portion of our other payables and accruals mainly included (i) payroll and
welfare payable, (ii) other tax payables, (iii) deposits, and (iv) shares repurchase obligation
recognized, representing consideration paid by payments for the Restricted Shares. The
non-current portion of our other payables and accruals included long-term payables for
equipment. The following table sets forth details of our other payables and accruals as of the
dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000
Current
Payroll and welfare payable /H1118/H1118/H1118357,804 363,726 377,267 364,658
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,538 57,582 54,318 76,640
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,080 18,124 24,644 24,515
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118– – – 1,008
Shares repurchase obligation
recognized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 216,548
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118415 1,001 5,307 5,373
420,837 440,433 461,536 688,742
Non-current
Long-term payables for
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,125 –
– – 1,125 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118420,837 440,433 462,661 688,742
Our current portion of other payables and accruals increased from RMB420.8 million as
of December 31, 2022 to RMB440.4 million as of December 31, 2023, and further increased
to RMB461.5 million as of December 31, 2024, primarily due to the continued increases in
payroll and welfare payable as a result of the increase in number of our employees. Our current
portion of other payables and accruals increased from RMB461.5 million as of December 31,
2024 to RMB688.7 million as of September 30, 2025, primarily due to the increase in shares
repurchase obligation recognized in relation to consideration paid by payments for the
Restricted Shares we received as of September 30, 2025.
We recorded non-current portion of other payables and accruals of RMB1.1 million as of
December 31, 2024 in relation to long-term payables for our equipment. We did not record
non-current portion of other payables and accruals as of December 31, 2022 and 2023 and
September 30, 2025.
As of November 30, 2025, RMB323.0 million, or 46.9% of our other payables and
accruals as of September 30, 2025 had been settled.
FINANCIAL INFORMATION
– 356 –


--- page 367 ---
Derivative Financial Instruments
Our derivative financial instruments represented foreign exchange forward contracts. We
have established a comprehensive management system for our hedging activities, which
includes the implementation of comprehensive internal control policies as the strict operational
standard for all transactions. In particular, we have established a foreign exchange management
system that outlines the principles, internal procedures, risk reporting and information
disclosure for foreign exchange hedging. The finance department oversees our hedging
activities, supported by specialists in investment, operations and risk control. To mitigate
transaction and default risks, we only consider hedging instruments with simple structure, high
liquidity and market recognition and offered by high-credit-rated commercial banks authorized
for foreign exchange derivatives. In addition, we continually analyze exchange rates and
monitor international market conditions to adjust our strategies as needed.
As of December 31, 2022, 2023 and 2024 and September 30, 2025, our derivative
financial instruments recorded as current assets amounted to nil, nil, RMB0.7 million and nil,
respectively. As of the same dates, our derivative financial instruments recorded as current
liabilities amounted to RMB3.0 million, RMB23.1 million, RMB27.6 million and RMB47.1
million, respectively.
We have established comprehensive foreign exchange hedging policies to ensure effective
control of our foreign exchange risks, covering management principles, approval authorities,
operational processes, information segregation measures, internal audit and risk reporting, and
disclosure requirements. We also conduct continuous research and analysis of currency
markets, monitoring international market changes on a real-time basis to minimize exchange
losses.
Our finance department headed by the finance manager is responsible for determining the
policies and procedures for the fair value measurement of financial instruments. The finance
manager reports directly to the chief financial officer. At the end of each year during the Track
Record Period, 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 valuation process and results are discussed
with the audit committee twice a year for interim and annual financial reporting.
FINANCIAL INFORMATION
– 357 –


--- page 368 ---
LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of cash during the Track Record Period were to fund the construction
of our manufacturing facilities, procurement of raw materials, research and development
activities, among other working capital needs. Historically, we have financed our operations
and other capital requirements primarily through cash generated from our business operations,
net proceeds from our offering of A shares and bank borrowings.
Our anticipated cash needs primarily relate to our business operations, expansion of
production capacity, and product research and development. We expect to fund our future
working capital and other cash requirements primarily with cash generated from our
operations, bank borrowings and other financing activities (including the net proceeds from the
Global Offering).
As of November 30, 2025, the latest practicable date for determining our indebtedness,
we had cash and cash equivalents of RMB5,462.7 million. As of the same date, we had
unutilized banking facilities of RMB15,434.9 million. Taking into account our internal cash
resources, our cash flow from operating activities and the estimated net proceeds from the
Global Offering, our Directors believe that the working capital available to us is sufficient at
present and for at least the next 12 months from the date of this prospectus.
FINANCIAL INFORMATION
– 358 –


--- page 369 ---
Net Current Assets
The following table sets forth a summary of our current assets and liabilities as of the
dates indicated:
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
RMB’000
(Unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,144,444 1,714,801 1,881,625 2,235,000 2,029,016
Trade and bills receivables /H1118/H11185,538,222 9,008,400 11,732,512 11,215,498 10,926,753
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,969 160,354 341,181 604,961 494,189
Investment measured at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,384,902 1,168,726 2,137,371
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 726 – –
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,320 692,020 1,222,947 446,532 255,000
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 41,442 2,013 2,013
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 93,876 46,719 46,719
Cash and cash equivalents /H1118/H1118/H11183,278,958 4,406,907 5,461,528 6,850,371 5,462,682
Total current assets /H1118/H1118/H1118/H1118/H1118/H111811,283,913 15,985,780 22,160,739 22,569,820 21,353,743
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H11189,585,085 13,653,990 17,310,801 16,680,460 14,901,641
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,647 24,101 9,445 91,514 87,606
Other payables and accruals /H1118420,837 440,433 461,536 688,742 734,499
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,008 23,120 27,636 47,132 49,394
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,787 752,815 1,806,660 3,034,508 3,581,643
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,921 60,728 75,716 68,407 59,344
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,110 35,272 32,656 36,776 31,179
Total current liabilities /H1118/H1118/H1118/H111810,632,395 14,990,459 19,724,450 20,647,539 19,445,306
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118651,518 995,321 2,436,289 1,922,281 1,908,437
FINANCIAL INFORMATION
– 359 –


--- page 370 ---
We had net current assets of RMB651.5 million, RMB995.3 million, RMB2,436.3
million, RMB1,922.3 million and RMB1,908.4 million as of December 31, 2022, 2023 and
2024, September 30, 2025 and November 30, 2025, respectively.
Our net current assets increased from RMB651.5 million as of December 31, 2022 to
RMB995.3 million as of December 31, 2023, primarily attributable to (i) an increase in trade
and bills receivables of RMB3,470.2 million, and (ii) an increase in cash and cash equivalents
of RMB1,127.9 million; partially offset by an increase in trade and bills payables of
RMB4,068.9 million as a result of an increase in our procurement of raw materials.
Our net current assets increased from RMB995.3 million as of December 31, 2023 to
RMB2,436.3 million as of December 31, 2024, primarily attributable to (i) an increase in trade
and bills receivables of RMB2,724.1 million, which was in line with the increase in our
revenue, (ii) an increase in investment measured at FVTPL of RMB1,384.9 million, which
represented our equity investments in listed companies and investments in wealth management
products, and (iii) an increase in cash and cash equivalents of RMB1,054.6 million; partially
offset by (i) an increase in trade and bills payables of RMB3,656.8 million as a result of an
increase in our procurement of raw materials, and (ii) an increase in interest-bearing bank
borrowings of RMB1,053.8 million.
Our net current assets decreased from RMB2,436.3 million as of December 31, 2024 to
RMB1,922.3 million as of September 30, 2025, primarily attributable to (i) an increase in
interest-bearing bank borrowings of RMB1,227.8 million, (ii) a decrease in pledged deposits
of RMB776.4 million, and (iii) a decrease in trade and bills receivables of RMB517.0 million
due to the collection of trade and bills receivables upon maturity; partially offset by (i) an
increase in cash and cash equivalents of RMB1,388.8 million, and (ii) a decrease in trade and
bills payables of RMB630.3 million due to settlements made to our suppliers during the period.
Our net current assets remained relatively stable at RMB1,908.4 million as of November
30, 2025.
FINANCIAL INFORMATION
– 360 –


--- page 371 ---
Summary of Consolidated Statements of Cash Flow
The following table sets forth a summary of our consolidated cash flow statements for the
years/period indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Net cash from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,470,989 1,466,228 1,026,493 919,587 915,761
Net cash from/(used in)
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H11181,064,622 (698,067) (2,066,719) (1,427,145) (289,868)
Net cash (used in)/from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(547,549) 367,144 2,105,518 1,614,991 781,536
Net increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,988,062 1,135,305 1,065,292 1,107,433 1,407,429
Cash and cash equivalents at
beginning of the year/period /H11181,289,908 3,278,958 4,406,907 4,406,907 5,461,528
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118988 (7,356) (10,671) (82,835) (18,586)
Cash and cash equivalents at
the end of the year/period /H1118/H11183,278,958 4,406,907 5,461,528 5,431,505 6,850,371
Operating Activities
Net cash generated from operating activities in the nine months ended September 30,
2025 was RMB915.8 million, primarily due to profit before tax of RMB549.9 million, adjusted
by certain non-cash and working capital items, including (i) positive adjustments, which
primarily included decrease in restricted cash and pledged deposits of RMB815.8 million,
decrease in trade and bills receivables of RMB424.4 million and increase in contract liabilities
of RMB82.1 million, and (ii) negative adjustments, which primarily included decrease in trade
and bills payables of RMB706.1 million, increase in inventories of RMB419.1 million and
increase in prepayments, other receivables and other assets of RMB242.2 million.
Net cash generated from operating activities in 2024 was RMB1,026.5 million, primarily
due to profit before tax of RMB514.0 million, adjusted by certain non-cash and working capital
items, including (i) positive adjustments, which primarily included increase in trade and bills
payables of RMB3,627.9 million and depreciation of property, plant and equipment of
RMB338.9 million, and (ii) negative adjustments, which primarily included increase in trade
and bills receivables of RMB2,764.4 million and increase in restricted cash and pledged
deposits of RMB569.1 million.
FINANCIAL INFORMATION
– 361 –


--- page 372 ---
Net cash generated from operating activities in 2023 was RMB1,466.2 million, primarily
due to profit before tax of RMB651.1 million, adjusted by certain non-cash and working capital
items, including (i) positive adjustments, which primarily included increase in trade and bills
payables of RMB4,020.8 million, decrease in restricted cash and pledged deposits of
RMB489.0 million and depreciation of property, plant and equipment of RMB270.9 million,
and (ii) negative adjustments, which primarily included increase in trade and bills receivables
of RMB3,473.9 million and increase in inventories of RMB637.3 million.
Net cash generated from operating activities in 2022 was RMB1,471.0 million, primarily
due to profit before tax of RMB588.3 million, adjusted by certain non-cash and working capital
items, including (i) positive adjustments, which primarily included decrease in trade and bills
receivables of RMB1,205.9 million, decrease in inventories of RMB586.2 million and
depreciation of property, plant and equipment of RMB236.5 million, and (ii) negative
adjustments, which primarily included increase in restricted cash and pledged deposits of
RMB907.7 million, decrease in trade and bills payables of RMB331.8 million and decrease in
other payables and accruals of RMB236.9 million.
Investing Activities
Net cash used in investing activities in the nine months ended September 30, 2025 was
RMB289.9 million, primarily due to (i) net payments for purchase of items of property, plant
and equipment (total payments for purchase of items of property, plant and equipment minus
proceeds from disposal of these assets) of RMB638.7 million, partially offset by (i) net
proceeds from disposal of investments measured at FVTPL (total proceeds from disposal of
investment measured at FVTPL minus payments for purchase of these assets) of RMB183.7
million, and (ii) dividends received of RMB143.5 million.
Net cash used in investing activities in 2024 was RMB2,066.7 million, primarily due to
(i) net payments for purchase of investment measured at FVTPL (total payments for purchase
of investment measured at FVTPL minus proceeds from disposal of these assets) of
RMB1,316.5 million, and (ii) net payments for purchase of items of property, plant and
equipment (total payments for purchase of items of property, plant and equipment minus
proceeds from disposal of these assets) of RMB672.8 million.
Net cash used in investing activities in 2023 was RMB698.1 million, primarily due to
(i) net payments for purchase of items of property, plant and equipment (total payments for
purchase of items of property, plant and equipment minus proceeds from disposal of these
assets) of RMB645.3 million, and (ii) additions to other intangible assets of RMB32.4 million.
Net cash from investing activities in 2022 was RMB1,064.6 million, primarily due to net
proceeds from disposal of investment measured at FVTPL (total proceed from disposal of
investment measured at FVTPL minus payments for purchase of these assets) of RMB1,750.5
FINANCIAL INFORMATION
– 362 –


--- page 373 ---
million, partially offset by (i) net payments for purchase of items of property, plant and
equipment (total payments for purchase of items of property, plant and equipment minus
proceeds from disposal of these assets) of RMB657.3 million and (ii) additions to leasehold
land of RMB414.5 million.
Financing Activities
Net cash from financing activities in the nine months ended September 30, 2025 was
RMB781.5 million, primarily due to new bank loans of RMB4,568.2 million, partially offset
by (i) repayment of bank loans of RMB3,331.6 million, (ii) repurchase of shares held for a
share award scheme of RMB299.9 million, and (iii) dividends paid of RMB228.8 million.
Net cash from financing activities in 2024 was RMB2,105.5 million, primarily due to
(i) new bank loans of RMB3,890.5 million and (ii) proceeds from issue of shares of
RMB1,482.0 million, partially offset by repayment of bank loans of RMB2,853.1 million.
Net cash from financing activities in 2023 was RMB367.1 million, primarily due to new
bank loans of RMB2,168.3 million, partially offset by repayment of bank loans of RMB1,690.4
million.
Net cash used in financing activities in 2022 was RMB547.5 million, primarily due to
(i) repayment of bank loans of RMB1,529.2 million and (ii) dividends paid of RMB455.1
million, partially offset by new bank loans of RMB1,536.5 million.
INDEBTEDNESS
As of December 31, 2022, 2023 and 2024, and September 30, 2025 and November 30,
2025, the most recent practicable date for determining our indebtedness, except as disclosed in
the table below, we did not have any material indebtedness.
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
RMB’000
(Unaudited)
Current
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,787 752,815 1,806,660 3,034,508 3,581,643
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,921 60,728 75,716 68,407 59,344
482,708 813,543 1,882,376 3,102,915 3,640,987
Non-current
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118557,217 712,430 694,717 604,357 690,165
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,813 182,570 168,998 169,906 165,358
655,030 895,000 863,715 774,263 855,523
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,137,738 1,708,543 2,746,091 3,877,178 4,496,510
FINANCIAL INFORMATION
– 363 –


--- page 374 ---
Interest-bearing Bank Borrowings
As of December 31, 2022, 2023 and 2024, September 30, 2025, we had total
interest-bearing bank borrowings of RMB986.0 million, RMB1,465.2 million, RMB2,501.4
million and RMB3,638.9 million, respectively. All of these interest-bearing bank borrowings
were secured. During the Track Record Period, our bank borrowings were obtained from
commercial banks. Our bank borrowings agreements contain standard terms, conditions and
covenants that are customary for commercial bank loans. For details, see Note 29 to the
Accountants’ Report in Appendix I to this prospectus.
As of November 30, 2025, we had total interest-bearing bank borrowings of RMB4,271.8
million.
Our Directors confirm that there has not been any material default on our part in the
payment of borrowings, or breaches of covenants during the Track Record Period and up to the
Latest Practicable Date. During the same year, we have not experienced any difficulties in
obtaining bank and other borrowings, default in payment of bank loans and other borrowings
or breach of covenants.
Lease Liabilities
During the Track Record Period, our lease liabilities were primarily in relation to our
lease of land use rights and buildings used in our operations. We recorded lease liabilities in
aggregate of RMB151.7 million, RMB243.3 million, RMB244.7 million, RMB238.3 million
and RMB224.7 million as of December 31, 2022, 2023 and 2024, and September 30, 2025 and
November 30, 2025, respectively.
Except as discussed above, we did not have any other material mortgages, charges,
debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabilities under acceptances (other than normal
trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or
unsecured, or guarantees or other contingent liabilities as of the Latest Practicable Date. There
was no material change in our indebtedness since November 30, 2025 and up to the Latest
Practicable Date.
CONTINGENT LIABILITIES
As of September 30, 2025, we did not have any material contingent liabilities. Our
Directors confirm that there was no material change in our contingent liabilities from
September 30, 2025 to the Latest Practicable Date.
FINANCIAL INFORMATION
– 364 –


--- page 375 ---
CAPITAL EXPENDITURE
The details of our capital expenditure during the Track Record Period are summarized as
follows.
For the year ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
RMB’000
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118547,453 303,200 367,944 310,807
Construction in progress /H1118/H1118/H111870,927 371,998 266,995 319,487
Leasehold improvement /H1118/H1118/H1118/H111825,082 12,959 32,988 16,545
Office equipment and
electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H111842,543 37,496 37,363 46,547
V ehicles/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015 3,558 5,148 1,333
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,931 551 – 13,311
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118688,951 729,762 710,438 708,030
CAPITAL COMMITMENTS
Our capital commitments at the end of each year during the Track Record Period
primarily related to contracted but not provided properties, plant and equipment. As of
December 31, 2022, 2023 and 2024 and September 30, 2025, our capital commitments
amounted to RMB215.3 million, RMB313.1 million, RMB318.3 million and RMB233.2
million, respectively.
RELATED PARTY TRANSACTIONS
We entered into certain related party transactions in trade nature during the Track Record
Period. For example, we sold certain raw materials of smartphones and tablets to DBG
Technology (India) Private Limited and DBG Technology Co., Ltd., and purchased outsourced
processing services from them during the Track Record Period. According to Frost & Sullivan,
it is common in the industry for ODM manufacturers to purchase outsourced processing
services from third-party manufacturers while supplying certain raw materials to them. For
details about our related party transactions during the Track Record Period, see Note 38 to the
Accountants’ Report in Appendix I to this prospectus.
We enter into transactions with our related parties from time to time. Our Directors are
of the view that each of the related party transactions in Note 38 to the Accountants’ Report
as set out in Appendix I to this prospectus was conducted in the ordinary course of business
on an arm’s length basis and on normal commercial terms between the relevant parties. Our
FINANCIAL INFORMATION
– 365 –


--- page 376 ---
Directors are of the view that our related party transactions during the Track Record Period
would not distort our track record results or cause our historical results to become
non-reflective of our future performance.
KEY FINANCIAL RATIOS
The following table set forth our key financial ratios as of the dates or for the
years/periods indicated.
As of/For the year ended December 31,
As of/
For the
nine months
ended
September 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H11188.1% 9.5% 5.8% 8.3%
Return on equity (ROE) (2)(6) /H1118 18.4% 17.3% 10.5% 12.1%
Return on assets (ROA) (3)(6) /H1118 3.8% 3.5% 2.1% 2.6%
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.1 1.1 1.1 1.1
Quick ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.0 1.0 1.0 1.0
Notes:
(1) Gross profit margin is calculated as gross profit divided by revenue for the respective year/period.
(2) The return on equity (ROE) is calculated as profit for the year/period divided by average of the opening
and closing balances of total equity for the respective year/period.
(3) The return on assets (ROA) is calculated as profit for the year/period divided by average of the opening
and closing balances of total assets for the respective year/period.
(4) The current ratio is calculated as current assets divided by current liabilities as of the relevant date.
(5) The quick ratio is calculated as current assets minus inventories, divided by current liabilities as of the
relevant date.
(6) The return on equity and return on assets for the nine months ended September 30, 2025 are calculated
on an annualized basis. Accordingly, the annualized return on equity and return on assets may not be
indicative of those for the full year ended December 31, 2025. Investors are cautioned not to place any
undue reliance on such data.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any material off-balance sheet
commitments and arrangements.
FINANCIAL INFORMATION
– 366 –


--- page 377 ---
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to various market risks, including interest rate risk, foreign currency risk,
credit risk and liquidity risk as set out below. We manage and monitor these exposures to
ensure appropriate measures are implemented in a timely and effective manner. For more
details, including relevant sensitivity analysis, see Note 42 to the Accountants’ Report as set
out in Appendix I of this prospectus.
Interest Rate Risk
Our exposure to the risk of changes in market interest rates relates primarily to our long
term debt obligations with a floating interest rate. Our policy is to manage its interest cost
using a mix of fixed and variable rate debts.
Foreign Currency Risk
We have transactional currency exposures. Such exposures arise from sales or purchases
by operating units in currencies other than the units’ functional currencies.
Foreign currency forward contracts are measured as hedging instruments in cash flow
hedges of forecast sales and purchases in foreign currencies. The foreign exchange forward
contract balances vary with the level of expected foreign currency sales and purchases and
changes in foreign exchange forward rates.
To measure the hedge effectiveness, we use the hypothetical derivative method and
compares the changes in the fair value of the hedging instruments against the changes in fair
value of the hedged items attributable to the hedged risks.
Credit Risk
We trade only with recognised and creditworthy third parties. 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. For transactions that are not
denominated in the functional currency of the relevant operating unit, we do not offer credit
terms without specific verification procedures.
Liquidity Risk
We monitor and maintain a level of cash and cash equivalents deemed adequate by our
management to finance the operations and mitigate the effects of fluctuations of cash flows.
Our objective is to maintain a balance between continuity of funding and flexibility
through the use of interest-bearing bank borrowings and lease liabilities.
FINANCIAL INFORMATION
– 367 –


--- page 378 ---
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
Our Directors estimate, on the bases set out in Appendix IA to this prospectus, and in the
absence of unforeseen circumstances, the estimated consolidated profit attributable to equity
shareholders of our Company for the year ended December 31, 2025 as follows:
Estimated consolidated profit attributable to equity
shareholders of our Company for the year ended
December 31, 2025
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Not less than RMB570 million
Note:
(1) The basis on which the above estimate has been prepared is set out in Appendix IA to this prospectus.
DIVIDENDS
During the Track Record Period, we declared cash dividends to our Shareholders as
follows.
For the year ended
December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000
(Unaudited)
Dividends for ordinary
shareholders of our Company
recognized as distribution
during the year/period:
Interim dividend /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293,014 – – – –
Final dividend /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,039 – 232,548 232,548 228,798
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118455,053 – 232,548 232,548 228,798
As of the Latest Practicable Date, we had paid these dividends in full.
On November 25, 2022, our general shareholders meeting passed resolutions regarding
the shareholder dividend plan for the three years following our listing on the main board of the
Shanghai Stock Exchange (the “ 2022 Shareholder Dividend Plan ”). This plan stipulates that
the total cash dividends to be distributed over this period shall be no less than 30% of the
average annual distributable profit achieved, provided that the conditions for cash dividends
are met. In addition, we will review and reaffirm our shareholder dividend plan at least every
three years, taking into account our operational performance, investment strategies and
long-term development goals.
FINANCIAL INFORMATION
– 368 –


--- page 379 ---
After the completion of the Global Offering, we may distribute dividends in the form of
cash or by other means permitted by our dividend policy as included in our Articles of
Association. A decision to declare or to pay dividends in the future and the amount of dividends
will be at the discretion of our Shareholders’ meeting and will depend on a number of factors,
including our results of operations, cash flows, financial condition, payments by our
subsidiaries of cash dividends to us, business prospects, statutory, regulatory restrictions on our
declaration and payment of dividends and other factors that our Board may consider important.
Any declaration and payment as well as the amount of dividends will be subject to our
constitutional documents and the relevant laws. Our Shareholders may approve any declaration
of dividends. Save for the distribution standard set out in the 2022 Shareholder Dividend Plan,
we had not specified any dividend payout ratio as of the Latest Practicable Date.
According to applicable PRC laws and our Articles of Association, we will pay dividends
out of our profit after tax only after we have made the following allocations: recovery of the
losses incurred in the previous year; allocations to the statutory reserve equivalent to 10% of
our profit after tax; allocations to a discretionary common reserve of certain percentage of our
profit after tax that are approved by a Shareholders’ meeting.
DISTRIBUTABLE RESERVES
As of September 30, 2025, we had RMB2,222.7 million of retained profits available for
distribution to our shareholders.
LISTING EXPENSES
Listing expenses to be borne by us are estimated to be approximately HK$100.1 million
(based on the maximum Offer Price of HK$31.00 per Share), representing approximately 6.2%
of the estimated gross proceeds from the Global Offering assuming no Shares are issued
pursuant to the Over-allotment Option. The listing expenses consist of (i) underwriting-related
expenses, including underwriting commission, of approximately HK$52.0 million, and (ii)
non-underwriting-related expenses of approximately HK$48.1 million, comprising (a) fees and
expenses of our legal advisors and reporting accountants of approximately HK$25.5 million,
and (b) other fees and expenses of approximately HK$22.6 million. During the Track Record
Period, we incurred listing expenses of RMB20.6 million, of which (i) RMB0.8 million was
charged to the consolidated statements of profit or loss, and (ii) RMB19.8 million was directly
attributable to the issue of our H Shares to the public and is expected to be deducted from
equity upon the Listing. Subsequent to the Track Record Period, approximately HK$4.7 million
is expected to be charged to our consolidated statements of profit or loss, and approximately
HK$72.6 million is expected to be accounted for as a deduction from equity upon the Listing.
We do not believe any of the above fees or expenses are material or are unusually high for our
Group. The listing expenses above are the latest practicable estimate for reference only, and the
actual amount may differ from this estimate.
FINANCIAL INFORMATION
– 369 –


--- page 380 ---
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable
to the owners of our Company has been prepared in accordance with Rule 4.29 of the Listing
Rules and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial
Information for inclusion in Investment Circulars issued by the Hong Kong Institute of
Certified Public Accountants to illustrate the effect of the Global Offering on the consolidated
net tangible assets attributable to the owners of our Company as of September 30, 2025 as if
the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to the owners of our Company has been prepared for illustrative purposes only and,
because of its hypothetical nature, it may not give a true picture of the consolidated net tangible
assets of our Group as of September 30, 2025 or at any future dates following the Global
Offering.
Consolidated
net tangible
assets
attributable
to owners of our
Company as of
September 30,
2025
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted
consolidated net
tangible assets
Unaudited
pro forma adjusted consolidated
net tangible assets attributable to
owners of our Company per Share
as of September 30, 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price of
HK$31.00 per Share /H1118/H1118/H11185,693,952 1,370,826 7,064,778 13.52 15.00
Notes:
(1) The consolidated net tangible assets attributable to owners of our Company as of September 30, 2025
is arrived at after deducting other intangible asset of RMB46.3 million from the consolidated equity
attributable to owners of our Company of RMB5,740.2 million as of September 30, 2025, as shown in
Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price at the indicative Price
of HK$31.00 per Share, after deduction of the underwriting fees and other related expenses payable by
our Group (excluding the listing expense that has been charged to profit or loss during the Track Record
Period) and do 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 from Hong
Kong dollars into Renminbi at an exchange rate of HK$1.0 to RMB0.90141. No representation is made
that the Hong Kong dollar amounts have been, could have been or may be converted to Renminbi, or
vice versa, at that rate or any other rates or at all.
(3) The unaudited pro forma adjusted net tangible assets per Share is calculated based on 522,590,644
Shares in issue immediately following completion of the Global Offering without taking into account
any Shares which may be issued upon the exercise of the Over-allotment Option.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong
Kong dollars at an exchange rate of RMB0.90141 to HK$1.00.
(5) No adjustment has been made to reflect any trading result or open transaction of our Group entered
subsequent to September 30, 2025.
FINANCIAL INFORMATION
– 370 –


--- page 381 ---
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the Latest Practicable Date, there had been no material
adverse change in our business, financial condition and results of operations since September
30, 2025, which is the end date of the years reported on in the Accountants’ Report as set out
in Appendix I to this prospectus, and there is no event since September 30, 2025 which would
materially affect the information in the Accountants’ Report as set out in Appendix I to this
prospectus.
IMPACT OF COVID-19 PANDEMIC
During the Track Record Period and up to the Latest Practicable Date, the COVID-19
pandemic did not cause any disruption to our production facilities and supply chain. However,
due to the macroeconomic and general industry challenges posed by the pandemic, our revenue
from sales of smartphones decreased from 2022 to 2023. Despite this reduction, our business
operations and financial condition remained stable during the Track Record Period and were
not materially and adversely impacted by the COVID-19 pandemic.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors have confirmed that, as of the Latest Practicable Date, they were not aware
of any circumstance that would give rise to a disclosure requirement under Rules 13.13 to
13.19 of the Listing Rules.
FINANCIAL INFORMATION
– 371 –


--- page 382 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of
100 H Shares) that may be purchased for an aggregate amount of approximately US$56.5
million (or approximately HK$440.2 million, calculated based on an exchange rate of US$1.00
to HK$7.7911 ) (exclusive of brokerage fee, the SFC transaction levy, the AFRC transaction
levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Based on the maximum Offer Price of HK$31.00 per Offer Share, the total number of
Offer Shares to be subscribed by the Cornerstone Investors would be 14,200,900 Offer Shares,
representing (i) approximately 27.17% of the Offer Shares pursuant to the Global Offering and
approximately 2.72% of the total issued share capital of the Company immediately following
the completion of the Global Offering (assuming the Over-allotment Option is not exercised);
or (ii) approximately 23.63% of the Offer Shares pursuant to the Global Offering and
approximately 2.68% of the total issued share capital of the Company immediately following
completion of the Global Offering (assuming the Over-allotment Option is exercised in full).
We believe that the Cornerstone Placing signifies our Cornerstone Investors’ confidence
in our Company and its business prospect, and that the Cornerstone Placing will help to raise
the profile of our Company. We became acquainted with each of the Cornerstone Investors
during our ordinary course of operations, through our Group’s business network, or through
introduction by our Company’s business partners or the Overall Coordinators of the Global
Offering.
The Cornerstone Placing will form part of the International Offering, and the Cornerstone
Investors and their respective close associates will not subscribe for any Offer Shares under the
Global Offering (other than pursuant to the Cornerstone Investment Agreements). The Offer
Shares to be subscribed by the Cornerstone Investors will rank pari passu in all respects with
the fully paid H Shares in issue following the Global Offering of the Company and will be
counted towards the public float of our Company under Rule 8.08 (as amended and replaced
by Rule 19A.13A) of the Listing Rules. Immediately following completion of the Global
Offering, the Cornerstone Investors or their close associates will not, by virtue of their
cornerstone investments, have any Board representation in our Company; and none of the
Cornerstone Investors and their close associates will become a substantial Shareholder of our
Company. Other than a guaranteed allocation of the relevant Offer Shares at the final Offer
Price, the Cornerstone Investors do not have any preferential rights under each of their
respective Cornerstone Investment Agreements, as compared with other public Shareholders.
There are no side arrangements or agreements between our Company and the Cornerstone
CORNERSTONE INVESTORS
– 372 –


--- page 383 ---
Investors or any benefit, direct or indirect, conferred on the Cornerstone Investors by virtue of
or in relation to the Listing, other than a guaranteed allocation of the relevant Offer Shares at
the final Offer Price, following the principles as set out in Chapter 4.15 of the Guide for New
Listing Applicants.
Among the Cornerstone Investors, the shareholders of Endless Growth are an existing
minority Shareholder of our Company (holding less than 5% of our total issued Shares as of
the Latest Practicable Date) and a close associate of such Shareholder. Save as the aforesaid,
to the best knowledge of our Company, (i) each of the Cornerstone Investors is an Independent
Third Party; (ii) none of the Cornerstone Investors is accustomed to take instructions from our
Company, our Directors, chief executive of our Company, Controlling Shareholders,
substantial Shareholders or existing Shareholders or any of its subsidiaries or their respective
close associates in relation to the acquisition, disposal, voting, or other disposition of Shares
registered in its name or otherwise held by it; (iii) none of the subscription of the relevant Offer
Shares by any of the Cornerstone Investors is financed by our Company, Directors, chief
executive, Controlling Shareholders, substantial Shareholders, existing Shareholders or any of
their respective subsidiaries or their respective close associates; (iv) each Cornerstone Investor
will be utilizing its internal financial resources, financial resources of its shareholders or (in
the case of Cornerstone Investors which are funds or investment managers) the assets managed
for its investors as its source of funding for the subscription of the Offer Shares, and each
Cornerstone Investor has sufficient funds to settle its respective investment under the
Cornerstone Placing; and (v) each of the Cornerstone Investors has confirmed that all
necessary approvals have been obtained with respect to the Cornerstone Placing and that no
specific approval from any stock exchange (if relevant) is required for the relevant Cornerstone
Placing.
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed for before dealings in the Company’s H Shares commence on the Stock Exchange.
Some of the Cornerstone Investors have agreed that our Company, the Joint Sponsors and the
Overall Coordinators may in their sole discretion defer the delivery of all or part of the Offer
Shares it will subscribe to on a date later than the Listing Date. Such delayed delivery
arrangement is in place to facilitate the over-allocation in the International Offering. There will
be no delayed delivery if there is no over-allocation in the International Offering. Where
delayed delivery takes place, (i) there would be delayed delivery of Offer Shares to some of
the Cornerstone Investors based on commercial negotiations with the Cornerstone Investors,
(ii) the delayed delivery date should be no later than three business days following the last day
on which the Over-allotment Option may be exercised, (iii) no extra payment will be made to
the relevant Cornerstone Investors for the purpose of the delayed delivery arrangement, and
(iv) each of the Cornerstone Investors has agreed that it shall nevertheless pay for the relevant
Offer Shares in full before the Listing. As such, there will not be any deferred settlement in
payment by the Cornerstone Investors.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around Wednesday, January 21, 2026.
CORNERSTONE INVESTORS
– 373 –


--- page 384 ---
OUR CORNERSTONE INVESTORS
The tables below set forth details of the Cornerstone Placing, assuming the final Offer
Price being fix at the maximum Offer Price of HK$31.00 per Offer Share.
Cornerstone Investor Investment amount (1)
Number of
Offer
Shares (2)
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Approximate %
of the Offer
Shares
Approximate %
of our total
issued share
capital (3)
Approximate %
of the Offer
Shares
Approximate %
of our total
issued share
capital (3)
(US$ in
millions)
(HK$ in
millions)
Qualcomm /H1118/H1118/H1118/H1118/H1118/H1118/H11188.0 62.3 2,010,613 3.85 0.38 3.35 0.38
Jiangxi Guokong /H1118/H1118/H111815.5 120.8 3,896,700 (4) 7.46 0.75 6.48 0.73
OmniVision HK /H1118/H1118/H1118/H111810.0 77.9 2,513,200 4.81 0.48 4.18 0.47
Hong Kong Y uto /H1118/H1118/H111810.0 77.9 2,513,200 4.81 0.48 4.18 0.47
Qingdao Guanlan and
Guotai Junan
Investments (Hong
Kong) Limited (in
connection with
Guanlan OTC
Swaps) /H1118/H1118/H1118/H1118/H1118/H1118/H11188.0 62.3 2,010,613 3.85 0.38 3.35 0.38
Endless Growth /H1118/H1118/H1118/H11185.0 39.0 1,256,600 2.40 0.24 2.09 0.24
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856.5 440.2 14,200,900 27.17 2.72 23.63 2.68
Notes:
(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction
levy. Calculated based on an exchange rate of US$1.00 to HK$7.7911. The actual investment amount is
denominated in Hong Kong dollars.
(2) Rounded down to the nearest whole board lot of 100 H Shares. The exact number of H Shares to be subscribed
by the Cornerstone Investors will be subject to the exchange rate as prescribed in the relevant cornerstone
investment agreement.
(3) Assuming no other changes are made to the issued share capital of our Company between the Latest Practicable
Date and the date of exercise of Over-allotment Option.
(4) With respect to the Cornerstone Investors whose original investment amount is made in HK dollars, the
relevant USD equivalent is calculated using the exchange rate as disclosed in “Information about this
Prospectus and the Global Offering — Currency Translations” in this prospectus.
CORNERSTONE INVESTORS
– 374 –


--- page 385 ---
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
Qualcomm
Qualcomm V entures LLC (“ Qualcomm ”) is a Delaware registered limited liability
company and a wholly owned subsidiary of Qualcomm Technologies, Inc., which is ultimately
controlled by QUALCOMM Incorporated (“ QUALCOMM ”), a company listed on the
NASDAQ Stock Market under the ticker symbol QCOM. QUALCOMM innovates to deliver
intelligent computing everywhere, helping the world tackle some of its most important
challenges by delivering a broad portfolio of solutions built with leading-edge AI, high-
performance, low-power computing, and unrivaled connectivity.
QUALCOMM was a supplier and a customer of our Group during the Track Record
Period.
Jiangxi Guokong
Guokong Xinzhi Co., Limited (“ Guokong Xinzhi ”) is a limited liability company
incorporated under the laws of Hong Kong in December 2025 as an investment holding
platform. As of the Latest Practicable Date, Guokong Xinzhi was wholly owned by Nanchang
Zhirui Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(ࠢ
Υྫ)) (“ Nanchang Zhirui ”). Nanchang Zhirui was controlled by its general partner, Jiangxi
Guokong Private Equity Fund Management Co., Ltd. (ʮ̡)
(“Jiangxi Guokong ”), and has two limited partners, Jiangxi Modern Private Equity Investment
Fund (Limited Partnership) (ږ(Υྫ)) (“Modern Fund ”), and
Nanchang Merchants Industrial Investment Co., Ltd. (ʮ̡)
(“Nanchang Merchants ”), each holding 49.5% of partnership interest in Nanchang Zhirui.
The general partner of Modern Fund is Jiangxi Guokong, which is ultimately wholly
controlled by the State-owned Assets Supervision and Administration Commission of Jiangxi
Province (ึ). The largest limited partner of Modern Fund is
Jiangxi Modern Industry Guide Fund (Limited Partnership) (ږ(Υ
ྫ)), which holds 99.8% partnership interest in Modern Fund and is ultimately controlled by
State-owned Assets Supervision and Administration Commission of Jiangxi Province.
Nanchang Merchants is wholly owned by Nanchang High-tech Investment Group Co., Ltd. (ی
ப΂ʮ̡), which is in turn ultimately controlled by the Management
Committee of Nanchang High-tech Industrial Development Zone (৷อҦஔପุක೯ਜ၍
ึ).
OmniVision HK
WILL semiconductor Limited (“ OmniVision HK ”) is a limited liability company
incorporated under the laws of Hong Kong in 2008 principally engaged in the business of
semiconductor design and sales. OmniVision HK is a wholly-owned subsidiary of OmniVision
CORNERSTONE INVESTORS
– 375 –


--- page 386 ---
Integrated Circuits Group, Inc. (“ OmniVision ”), a company listed on the Shanghai Stock
Exchange (stock code: 603501) and the Stock Exchange (stock code: 0501). OmniVision is the
third largest digital image sensor providers globally, with a diversified portfolio of products
and solutions, a flexible fabless business model, and an extensive customer network and supply
chain ecosystem. It serves a wide range of high-growth verticals such as smartphone,
automobile, medical, surveillance and emerging markets such as machine vision, smart glasses
and Edge AI. OmniVision was a supplier of our Group during the Track Record Period.
Hong Kong Yuto
Hong Kong Y uto Printing Company Limited (“ Hong Kong Yuto ”) is a limited liability
company incorporated in Hong Kong in February 2002. It is a wholly-owned subsidiary of
Shenzhen Y uto Packaging Technology Co., Ltd. (“ Yuto Tech ”), a company listed on the
Shenzhen Stock Exchange (stock code: 002831) in December 2016. Y uto Tech is an
industry-leading and internationally renowned provider of high-quality packaging solutions. A
subsidiary of Y uto Tech was a supplier and a customer of our Group during the Track Record
Period.
Qingdao Guanlan and Guotai Junan Investments (Hong Kong) Limited (in connection
with Guanlan OTC Swaps)
Guotai Junan Investments (Hong Kong) Limited (“ GTJA Investment ”) and Guotai
Haitong Securities Co., Ltd. (ʮ̡)( “ GTHT Onshore Parent ”) will
enter into a series of cross border delta-one OTC swap transaction (collectively, the “ Guanlan
OTC Swaps ”) with each other and the ultimate clients, namely Guanlan Investment Flexible
Allocation No. 3 Private Equity Investment Fund (ৣໄ3ږ)
the “ Guotai Haitong Ultimate Client (Guanlan) ”) managed by Qingdao Guanlan Investment
Management Co., Ltd. (ʮ̡)( “Qingdao Guanlan ”), pursuant to which
GTJA Investment will hold the Offer Shares on a non-discretionary basis to hedge the Guanlan
OTC Swaps while the economic risks and returns of the underlying Offer Shares are passed to
the Guotai Haitong Ultimate Client (Guanlan), subject to customary fees and commissions.
The Guanlan OTC Swaps will be fully funded by the Guotai Haitong Ultimate Client
(Guanlan). During the terms of the Guanlan OTC Swaps, all economic returns of the Offer
Shares subscribed by GTJA Investment will be passed to the Guotai Haitong Ultimate Client
(Guanlan) and all economic loss shall be borne by the Guotai Haitong Ultimate Client
(Guanlan) through the Guanlan OTC Swaps. GTJA Investment will not take part in any
economic return or bear any economic loss in relation to the Offer Shares.
The Guanlan OTC Swaps are linked to the Offer Shares. The Guotai Haitong Ultimate
Client (Guanlan) may, after expiration of the lock-up period beginning from the date of the
cornerstone agreement entered into between GTJA Investment and the Company and ending on
CORNERSTONE INVESTORS
– 376 –


--- page 387 ---
the date which is six months from the Listing Date, request to early terminate the Guanlan OTC
Swaps at its own discretion, upon which GTJA Investment may dispose of the Offer Shares and
settle the Guanlan OTC Swaps in cash in accordance with the terms and conditions of the
Guanlan OTC Swaps.
Despite that GTJA Investment will hold the legal title of the Offer Shares by itself, it will
not exercise the voting rights attaching to the relevant Offer Shares during the terms of the
Guanlan OTC Swaps according to its internal policy.
GTJA Investment is a company incorporated in Hong Kong. Its principal business activity
is trading and investment. It is indirectly wholly owned by Guotai Haitong Securities Co., Ltd.,
a leading securities company in the PRC, whose shares are listed on the Shanghai Stock
Exchange (stock code: 601211) and the Stock Exchange (stock code: 2611).
To the best of GTJA Investment’s knowledge, the Guotai Haitong Ultimate Client
(Guanlan) is an Independent Third Party of GTJA Investment, GTHT Onshore Parent and the
companies which are members of the same group of GTHT Onshore Parent. The Guotai
Haitong Ultimate Client (Guanlan) is an investment fund managed by Qingdao Guanlan.
Qingdao Guanlan is a limited liability company established in the PRC, engaged in private fund
management services with a primary focus on investments in primary and secondary markets,
operating under a multi-strategy business model. Its investment portfolio includes Hesai
Technology (NASDAQ: HSAI; HKEX: 2525), CIG (SSE: 603083; HKEX: 6166), PIESA T ( ঘ
˂҃ྡdSSE: 688066) and MeigSmart (౽ঐ, SZSE: 002881). Qingdao Guanlan’s actual
controller is ZHANG Y anfeng (ᔮ), holding 97.5% interest, and is hold by another
minority shareholder as to 2.5%. Both ZHANG Y anfeng and the minority shareholder are
Independent Third Parties of GTHT Onshore Parent and its group companies. No single
ultimate beneficial owner holds 30% or more interests in the Guotai Haitong Ultimate Client
(Guanlan).
According to our PRC Legal Advisors, the aforementioned transaction structure does not
violate the PRC laws and regulations.
Endless Growth
Endless Growth NH Limited (“ Endless Growth ”) is a limited company incorporated
under the laws of the British Virgin Islands in October 2024. It is controlled and managed by
Nanhai Asset Management Company Limited, a Hong Kong-based Type 9 licensed corporation,
which is wholly owned by Mr. ZHANG Feilian. Endless Growth has another shareholder, Ms.
JIANG Xiaoyu (ڠwho is an existing minority Shareholder of our Company holding less
than 5% of our total issued Shares as of the Latest Practicable Date. Mr. ZHANG Feilian is a
close associate of Ms. JIANG Xiaoyu. Endless Growth primarily engages in equity investments
and investments in primary and secondary markets globally, with a primary focus in artificial
intelligence, high-end semiconductors, intelligent manufacturing and life sciences and
healthcare sectors.
Mr. ZHANG Feilian founded Nanhai Asset Management Company Limited in 2023. He
has long been engaged in equity and industrial investments, possesses a sound understanding
of market dynamics and extensive investment experience, and has led investments in various
companies, including LandSpace ( ᔝᇋঘ˂), Oceanpayment ( ፺ऎၣഖ), CALB ( ʕ௴อঘ,
HKEX: 3931) and Conba Pharmaceutical (Ԏ, SSE: 600572).
CORNERSTONE INVESTORS
– 377 –


--- page 388 ---
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions (as the case may be):
(i) the Underwriting Agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither of the aforesaid
Underwriting Agreements having been terminated;
(ii) the Offer Price having been agreed upon between our Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(iii) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the H Shares (including the Offer Shares
subscribed for by the Cornerstone Investors) as well as other applicable waivers and
approvals, and such approval, permission or waiver having not been revoked prior
to the commencement of dealings in the H Shares on the Stock Exchange;
(iv) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the respective Cornerstone Investment Agreements and there shall be
no orders or injunctions from a court of competent jurisdiction in effect precluding
or prohibiting consummation of such transactions; and
(v) the respective acknowledgements, representations, warranties, undertakings and
confirmations of relevant Cornerstone Investor under the respective Cornerstone
Investment Agreement are accurate and true in all material respects and not
misleading and that there is no material breach of the Cornerstone Investment
Agreement on the part of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or
indirectly, at any time during the period of six months from (and inclusive of) the Listing Date
(the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares or any interest in any
company or entity holding such Offer Shares that they have purchased pursuant to the relevant
Cornerstone Investment Agreement, save for certain limited circumstances, such as transfers to
any of its wholly-owned subsidiaries who will be bound by the same obligations of such
Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
– 378 –


--- page 389 ---
FUTURE PLANS AND PROSPECTS
See “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,520.7 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, and based on the maximum Offer Price
of HK$31.00 per Share, assuming the Over-allotment Option is not exercised.
We currently intend to apply these net proceeds for the following purposes:
 Approximately 40%, or HK$608.3 million, will be used to expand our overall
production capacity both domestically and internationally, thereby enhancing our
self-production capabilities. We have established four major manufacturing centers
in China and overseas to serve both the domestic and international markets. We will
continue to invest in our existing manufacturing centers through factory expansion,
equipment upgrades, and improvements in automation levels, in order to strengthen
our capacity to undertake and fulfill orders from global customers. We will also
evaluate opportunities in other key areas to expand our production capabilities to
improve overall production layout flexibility. In particular, we plan to expand our
overall production capacity through:
/H18537Approximately 10.3%, or HK$156.6 million, will be used for the expansion of
the manufacturing center in overseas market . We have already established a
manufacturing center in Vietnam with the foundational capabilities to serve
overseas customers. In the nine months ended September 30, 2025, the
utilization rate for production capacity designed to each product type in
Vietnam manufacturing center exceeded 80%. We will continue to increase the
production capacity of our facilities in Vietnam and enhance our capabilities of
localized manufacturing to better meet the growing demand from customers in
Europe and North America, where substantial market opportunities exist.
According to Frost & Sullivan, the smart eyewear market, one of the rapidly
growing segments of consumer electronics, is expected to surge in both Europe
and North America, driven by increasingly mature AI technology and
lightweight integrated hardware. In Europe, the shipment volume of smart
eyewear is expected to increase from 1.9 million units in 2024 to 12.3 million
units in 2029, with a CAGR of 45.3%. In North America, the shipment volume
is expected to surge from 3.8 million units in 2024 to 23.4 million units in
2029, with a CAGR of 43.8%. Leading brand owners are continuing to expand
their presence in these regions. While enhanced U.S. export restrictions and
sanctions have introduced tariff-driven cost escalation and certain challenges
to the global consumer electronics industry, products that are more cost-
competitive and better aligned with the evolving business needs of brand
FUTURE PLANS AND USE OF PROCEEDS
– 379 –


--- page 390 ---
owners are increasingly gaining market share, thereby positioning ODM
providers to secure a stable and sustained market share in North America. In
the meantime, the diversification of product styles and types driven by the
ongoing advancements in AI, along with continual hardware and software
iteration, is expected to increase demand for the ODM model and further
accelerate customer deployment enabling ODM providers to capture the
ongoing growth potential in these markets.
We expect to commence the construction of the manufacturing center in
Vietnam in phase in 2026, and complete in 2027. We do not currently designate
production capacity for smart eyewear products in the Vietnam manufacturing
center. Upon completion of the construction, we expect to increase the
production capacity of smart eyewear products by around 1.2 million units and
around 1.0 million units in 2026 and 2027, respectively, in Vietnam
manufacturing center.
Future investments will primarily be directed toward increasing the capacity of
existing production lines, improving production efficiency, and enhancing our
responsiveness to customized requirements from different customers. In
addition to our current focus, we will also evaluate opportunities to expand our
production capabilities in other key areas. This will allow us to improve the
overall flexibility and optimization of our production layout. By diversifying
and enhancing our production capabilities across different areas, we can better
adapt to changing market demands and operational requirements.
/H18537Approximately 29.7%, or HK$451.7 million, will be used for the expansion of
the manufacturing center in Chinese mainland . As of the Latest Practicable
Date, we were in the planning stage for phase II of our Nanchang
manufacturing center to further enhance our production capacity. In the nine
months ended September 30, 2025, the utilization rate for production capacity
designed to each product type in Nanchang manufacturing center exceeded
80%. For details, see “Business — Manufacturing — Manufacturing Centers.”
We plan to expand the production capacity of our facilities in Nanchang to
respond to the evolving product modalities driven by the development of AI
technologies, particularly in the area of new-generation smart devices such as
AI PCs and smart eyewear. Related investments will be primarily used to add
one and three new production lines for AI PCs in 2026 and 2027, respectively,
tailored to such cutting-edge products, upgrade supporting infrastructure, and
improve resource allocation efficiency. We expect to commence the
construction of phase II of our Nanchang manufacturing center in phase in
2026, and complete in 2027. Upon completion of the construction, we expect
to increase the production capacity of AI PCs by 1.0 million units and 2.5
million units in 2026 and 2027, respectively, in phase II of our Nanchang
manufacturing center.
FUTURE PLANS AND USE OF PROCEEDS
– 380 –


--- page 391 ---
We plan to implement a range of advanced manufacturing technologies across
our production lines. For example, we plan to further deploy and upgrade key
technologies such as (i) automated component mount, which refers collectively
to the assembly or attachment processes of a product’s own BOM-listed
components, such as touch panels, PCBs, batteries, cameras, foam pads,
conductive cloth, copper foil, labels, and similar items, across all product
categories, (ii) intelligent inspection which uses sensors, cameras, or other
methods to automatically collect relevant data about the object under
inspection, processes that data with algorithmic software, and feeds the results
back to the user, and (iii) 3D-AI technologies, which can be applied after each
step to make sure no flaw or can also be applied at the very end considering
the cost and efficiency. The integration of these cutting-edge capabilities will
enable us to further stabilize our product quality and drive greater production
efficiency.
We expect to commence the construction of the phase II of our Nanchang
manufacturing center in 2026, and complete in 2027.
 Approximately 20%, or HK$304.1 million, will be used to support our ongoing
research and development efforts, particularly to strengthen our independent R&D
and innovation capabilities in key areas. We plan to deepen our focus on
high-growth, high value-added emerging business segments, enrich and expand our
AI smart device portfolio, and explore additional application scenarios for our
products, with the goal of building a comprehensive product matrix with AI
functionalities. For example, building on our ramp-up in AI PC and smart eyewear
production, we plan to enrich our AI smart device portfolio through integration
touchpoints between our existing businesses and AI technologies, further driving the
scaling of our AI-powered hardware products, such as AI tablets and other
AI-infused product forms. We will expand applications for our products in
customer-facing scenarios — including smart mobility, smart home, smart health,
and smart life — while simultaneously deploying our AI-driven digital operation
system internally to optimize R&D project management, operational workflows, and
talent development. For details, see “Business — Our Strategies — Strengthening
R&D and Product Innovation with AI as the Core Innovation Engine” in this
prospectus.
To strengthen our R&D capabilities and achieve these goals, we will focus on
deepen the integration of AI with our products and build an AI-driven digital R&D
and operational framework. We will leverage our core expertise in wireless
communication, audio, display, and optics to systematically embed AI into the initial
product definition and design phases. Our R&D will focus on driving innovation in
the perception, interaction, and application layers of key devices such as AI PCs,
smart glasses, and tablets, with the goal of enriching our portfolio of intelligent
hardware. In addition, we will deploy internal AI-powered systems to optimize R&D
FUTURE PLANS AND USE OF PROCEEDS
– 381 –


--- page 392 ---
project management, workflows, and talent development. By applying AI to critical
stages like design simulation and testing, we aim to significantly improve efficiency
and accelerate the entire product lifecycle, from initial concept to final delivery.
 Approximately 10%, or HK$152.1 million, will be used to improve our domestic
and international marketing and customer expansion efforts. We plan to recruit more
sales and marketing personnel, including 20 and 30 sales and marketing personnel
in 2026 and 2027, respectively. We also plan to conduct market promotion activities
aimed at customer acquisition, and engage external consultants for business
development and market strategy support. Through these initiatives, we intend to
strengthen our brand presence in key markets, enhance our ability to reach and serve
potential customers across different regions, and support the long-term growth of
our customer base.
 Approximately 20%, or HK$304.1 million, will be used to support our global
strategic investments or acquisitions. Through strategic investments or acquisitions,
we aim to further strengthen our forward-looking technology deployment, expand
our ecosystem, and increase our market share. We expect to explore and evaluate
potential targets that can complement our existing business operations. For example,
we will evaluate comprehensive consumer electronics ODM companies like us, or
ODM companies with expertise in automotive electronics, or technology companies
with expertise related to consumer electronics, with a specific focus on entities
located in or serving overseas markets. We expect that these opportunities can
provide us (i) access to new technologies, such as fundamental research
technologies for the ODM sector and its upstream supply chain, covering acoustics,
optics, and similar technologies; technology tied to new product categories, such as
AI glasses, and the related innovations these categories require; as well as advanced
manufacturing technologies, including process automation and precision
manufacturing, (ii) entry into new markets, expansion of customer base or solidified
customer relationship leveraging the targets’ established network or mature
channels in new markets and their access to blue chip customers, (iii) expansion of
our production capacity by complementing our existing products’ capacity, and/or
(iv) integration of value-added capabilities. While remaining focused on our ODM
services, we may pursue strategic investments or acquisitions to strengthen supply
chain autonomy, enable closer collaboration, and ensure better synergies with our
product innovations. We believe these targets will enhance our overall
competitiveness and long-term growth potential.
According to Frost & Sullivan, the global consumer electronics ODM market
consists of over 50 providers. These companies offer a wide range of products such
as smartphones, tablets, laptops, smartwatches, and TWS earphones. While industry
leaders dominate the market, smaller enterprises often concentrate on specific
product categories. In the automotive electronics ODM sector, there are over 100
providers worldwide. These include both specialized automotive electronics
manufacturers and consumer electronics ODM providers that have diversified into
FUTURE PLANS AND USE OF PROCEEDS
– 382 –


--- page 393 ---
this field. As a result, our Directors are of the view that there is a sufficient pool of
companies in the market that meet our acquisition criteria and can serve as potential
acquisition targets. Within such pool of potential investment or acquisition
opportunities, we will primarily consider targets that possess strong complementary
technical capabilities and product portfolios aligned with our strategic objectives,
and proven, stable relationships with premium customers to enhance our market
access. Additionally, the targets’ management team must demonstrate deep
knowledge and extensive relevant experience within the ODM industry. See also
“Business — Our Strengths.” Lastly, we will prioritize targets that (i) demonstrate
a track record of continuous operations; and (ii) have achieved commercialization
and maintain recurring revenue streams, with a revenue scale typically ranging from
RMB2.0 billion to RMB5.0 billion. Targets that do not meet these financial criteria
but demonstrate strong synergies with us in terms of business, products, customers,
or technology will also be considered. As of the Latest Practicable Date, we have not
identified any specific investment or acquisition targets.
 Approximately 10%, or HK$152.1 million, will be used for working capital and
other general corporate purposes.
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will
be approximately HK$1,756.0 million, at an Offer Price of HK$31.00 per Share. In the event
that the Over-allotment Option is exercised in full, we intend to apply the additional net
proceeds to the above purposes in the proportions stated above.
To the extent that the net proceeds are not immediately applied to the above purposes and
to the extent permitted by applicable law and regulations, we will only deposit the net proceeds
into short-term interest-bearing accounts at licensed commercial banks and/or other authorized
financial institutions (as defined under the SFO or applicable laws and regulations in other
jurisdictions).
We will issue an appropriate announcement if there is any material change to the above
proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
– 383 –


--- page 394 ---
HONG KONG UNDERWRITERS
Citigroup Global Markets Asia Limited
Haitong International Securities Company Limited
Guotai Junan Securities (Hong Kong) Limited
Huatai Financial Holdings (Hong Kong) Limited
ABCI Securities Company Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
Open Securities Limited
HONG KONG UNDERWRITING ARRANGEMENTS
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially
5,226,000 Hong Kong Offer Shares (subject to adjustment) for subscription by the public in
Hong Kong at the Offer Price on and subject to the terms and conditions of this prospectus.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to
deal in, the H Shares in issue and to be issued pursuant to the Global Offering (including any
additional H Shares which may be issued pursuant to the exercise of the Over-allotment
Option) as mentioned in this prospectus and (b) certain other conditions set out in the Hong
Kong Underwriting Agreement, the Hong Kong Underwriters have severally agreed to
subscribe or procure subscriptions for their respective applicable proportions of the Hong Kong
Offer Shares now being offered but 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.
The Hong Kong Underwriting Agreement is conditional on and subject to the
International Underwriting Agreement having been signed and becoming unconditional and not
having been terminated in accordance with its terms.
UNDERWRITING
– 384 –


--- page 395 ---
Grounds for Termination
The Joint Sponsors and Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) shall be entitled by written notice to our Company to terminate the Hong
Kong Underwriting Agreement with immediate effect if prior to 8:00 a.m. on the Listing Date:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a
prospective change or any event or series of events or circumstances likely to
result in a change or a development involving a prospective change in existing
laws or regulations, or the interpretation or application thereof by any court or
any competent Authority (as defined in the Hong Kong Underwriting
Agreement) in or affecting Hong Kong, the PRC, the United States, the United
Kingdom or the European Union (or any member thereof), or other
jurisdictions relevant to our Group or the Global Offering (each a “ Relevant
Jurisdiction ” and collectively, the “ Relevant Jurisdictions ”); or
(ii) any change or development involving a prospective change, or any event or
series of events or circumstances likely to result in or representing any change
or development involving a prospective change, in any local, national, regional
or international financial, political, military, industrial, economic, fiscal, legal,
regulatory, currency, credit or market conditions, Taxation (as defined in the
Hong Kong Underwriting Agreement), equity securities or currency exchange
rate or controls or any monetary or trading settlement system, or foreign
investment regulations (including, without limitation, a devaluation of the
Hong Kong dollar, United States dollar or Renminbi against any foreign
currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to
any foreign currency or currencies) or other financial markets (including,
without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the inter-bank markets and credit
markets) in or affecting any Relevant Jurisdictions, or affecting an investment
in the Offer Shares; or
(iii) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire,
explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion,
riots, rebellion, public disorder, paralysis in government operations, acts of
war, epidemic (including Severe Acute Respiratory Syndrome (SARS),
Coronavirus Disease 2019 (COVID-19), H1N1, H5N1 and such
related/mutated forms and the outbreak, escalation, mutation or aggravation of
such diseases), pandemic, outbreak or escalation, mutation or aggravation of
UNDERWRITING
– 385 –


--- page 396 ---
diseases, accident or interruption or delay in transportation, local, national,
regional or international outbreak or escalation of hostilities (whether or not
war is or has been declared), act of God or act of terrorism (whether or not
responsibility has been claimed)) in or directly or indirectly affecting any of
the Relevant Jurisdictions; or
(iv) the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on (i) the trading in H Shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange,
the Shenzhen Stock Exchange, the New Y ork Stock Exchange, the NASDAQ
Global Market or the London Stock Exchange; or (ii) the trading in any
securities of our Company listed or quoted on a stock exchange or an
over-the-counter market; or
(v) the imposition or declaration of any general moratorium on banking activities
in or affecting any of the Hong Kong (imposed by the Financial Secretary or
the Hong Kong Monetary Authority or other competent authority), the PRC,
New Y ork (imposed at Federal or New Y ork State level or by any other
competent authority), London, the European Union (or any member thereof),
or any other Relevant Jurisdiction, or any disruption in commercial banking or
foreign exchange trading or securities settlement or clearance services,
procedures or matters in or affecting any of the Relevant Jurisdictions; or
(vi) other than with the prior written consent (which shall not be unreasonably
withheld or delayed) of the Overall Coordinators, the issue or requirement to
issue by our Company of any supplement or amendment to this prospectus or
other documents in connection with the offer and sale of the Offer Shares
pursuant to the Companies Ordinance or the Companies (Winding Up and
Miscellaneous Provisions) Ordinance or the Listing Rules or upon any
requirement or request of the Stock Exchange and/or the SFC; or
(vii) the commencement by any Authority (as defined in the Hong Kong
Underwriting Agreement) or other regulatory or political body or organization
(including, in particular, the CSRC and its local branches and representative
offices) of any public action or investigation against a Group Company (as
defined in the Hong Kong Underwriting Agreement) or a director or a senior
management member of any Group Company 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 Group Company or any of the Controlling Shareholders
(affecting business of the Group) or by or on any Relevant Jurisdiction, or the
UNDERWRITING
– 386 –


--- page 397 ---
withdrawal of trading privileges which existed on the date of the Hong Kong
Underwriting Agreement, in whatever form, directly or indirectly, by, or for,
any Relevant Jurisdiction; or
(ix) any valid demand by creditor for repayment or payment of any indebtedness of
any member of our Group or in respect of which any member of our Group is
liable prior to its stated maturity or any loss or damage sustained by that
member of our Group (howsoever caused and whether or not the subject of any
insurance or claim against any person); or
(x) any order or petition for the winding up or liquidation of any member of our
Group or any composition or arrangement made by any member of our Group
with its creditors or a scheme of arrangement entered into by any member of
our Group or any resolution for the winding-up of any member of our Group
or the appointment of a provisional liquidator, receiver or manager over all or
part of the assets or undertaking of any member of our Group or anything
analogous thereto occurring in respect of any member of our Group; or
(xi) any non-compliance of this prospectus, the CSRC Filings (as defined in the
Hong Kong Underwriting Agreement) or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of the Offer Shares or any aspect of the Global Offering with any
applicable Laws (including, without limitation, the Listing Rules, the
Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, and the CSRC Rules); or
(xii) a change or development involving a prospective change in or affecting Taxed
(as defined in the Hong Kong Underwriting Agreement) or exchange control,
currency exchange rates or foreign investment regulations (including a
material devaluation of the Hong Kong dollar or RMB against any foreign
currencies, and a change in the system under which the value of the Hong Kong
dollar is linked to that of the currency of the United States), or the
implementation of any exchange control, in any of the Relevant Jurisdictions;
or
(xiii) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened or instigated or announced against any
member of our Group or, or our Controlling Shareholder or any Director or
senior management members as named in this prospectus; or
(xiv) that the Chairman of the Board, any Director or any member of senior
management of our Company named in the prospectus seeks to retire, or is
removed from office or vacating his/her office; or
UNDERWRITING
– 387 –


--- page 398 ---
(xv) any contravention by any Group Company or any Director of the Listing Rules
or applicable Laws (as defined in the Hong Kong Underwriting Agreement); or
(xvi) an order or petition is presented for the winding-up or liquidation of any
member of the Group, or any member of the Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement or any
resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is appointed over all or part of the
assets or undertaking of any member of the Group or anything analogous
thereto occurs in respect of any member of the Group; or
(xvii) any change or prospective change, or a materialization of, any of the risks set
out in the section headed “Risk Factors” of this prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters), (1) has or will or may have a material
adverse effect, whether directly or indirectly, on the assets, liabilities, general
affairs, business, management, prospects, shareholders’ equity, profits, losses,
results of operations, position or condition, financial or otherwise, or performance
of our Company or our Group as a whole; or (2) has or will or may have a material
adverse effect on the success or marketability of the Global Offering or the level of
applications under the Hong Kong Public Offering or the level of indications of
interest under the International Offering; or (3) makes or will make or may make it
impracticable, inadvisable, inexpedient or incapable for any material part of the
Hong Kong Underwriting Agreement, the Hong Kong Public Offering or the Global
Offering to be performed or implemented as envisaged, or for the Hong Kong Public
Offering and/or the Global Offering to proceed or to market the Global Offering or
the delivery or distribution of the Offer Shares on the terms and in the manner
contemplated by the prospectus; or (4) has or will have or may have the effect of
making any material part of the Hong Kong Underwriting Agreement (including
underwriting) impracticable or incapable of performance in accordance with its
terms or preventing the processing of applications and/or payments pursuant to the
Global Offering or pursuant to the underwriting thereof; or
UNDERWRITING
– 388 –


--- page 399 ---
(b) there has come to the notice of the Joint Sponsors or the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(i) any statement contained in any of the Offering Documents, the Operative
Documents, the CSRC Filings (as defined in the Hong Kong Underwriting
Agreement), and/or any notices or announcements, advertisements,
communications or other documents issued or on behalf of our Company in
connection with the Hong Kong Public Offering (including any supplement or
amendment thereto), but excluding the information relating to the Joint
Sponsors and the Underwriters, it being understood that such information
consists of only their logos, names and addresses (the “ Global Offering
Documents ”) was, when it was issued, or has become untrue, incorrect,
inaccurate in any material respect or misleading; or that any estimate, forecast,
expression of opinion, intention or expectation contained in any such
documents, was, when it was issued, or has become unfair or misleading in any
respect or based on untrue, dishonest or unreasonable assumptions or given in
bad faith; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the prospectus, constitute a material
omission or misstatement in any Global Offering Documents; or
(iii) any breach of, or any event or circumstance rendering untrue or incomplete or
incorrect or misleading in any respect, any of the representations, warranties
and undertakings given by our Company and our Controlling Shareholders in
the Hong Kong Underwriting Agreement or the International Underwriting
Agreement, or the Cornerstone Investment Agreements; or
(iv) any event, act or omission which gives or is likely to give rise to any liability
of any of the Indemnifying Party (as defined in the Hong Kong Underwriting
Agreement) pursuant to the indemnities under the Hong Kong Underwriting
Agreement; or
(v) any material adverse change or any development involving a prospective
material adverse change in the assets, liabilities, business, general affairs,
management, prospects, shareholders’ equity, profits, losses, properties, results
of operations, position or condition, financial or otherwise, or performance of
any member of our Group; or
(vi) any material breach of any of the obligations or undertakings imposed upon our
Company or any cornerstone investor (as applicable) to the Hong Kong
Underwriting Agreement, the International Underwriting Agreement or the
Cornerstone Investment Agreements; or
UNDERWRITING
– 389 –


--- page 400 ---
(vii) there is any change or development involving a prospective change,
constituting or having a Material Adverse Effect (as defined in the Hong Kong
Underwriting Agreement); or
(viii) any Director or any member of senior management of our Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
or taking directorship of a company, or the commencement by any government,
political, regulatory body of any investigation or other action against any
Director in his or her capacity as such or an announcement by any
governmental, political regulatory body that it intends to commence any such
investigation or take any such action; or
(ix) our Company withdraws this prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to
the Global Offering) or the Global Offering; or
(x) the approval of the Listing Committee of the Stock Exchange of the listing of,
and permission to deal in, the H Shares to be issued pursuant to the Global
Offering (including pursuant to any exercise of the Over-allotment Option) is
refused or not granted, other than subject to customary conditions, on or before
the date of the Listing, or if granted, the approval is subsequently withdrawn,
cancelled, qualified (other than by customary conditions), revoked or withheld;
or
(xi) any prohibition on our Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares (including the Over-allotment Option
Shares (as defined in the Hong Kong Underwriting Agreement)) pursuant to the
terms of the Global Offering; or
(xii) any person named as expert in this prospectus (other than the Joint Sponsors)
has withdrawn or sought to withdraw its consent to being named in any of the
Offering Documents or to the issue of any of the Offering Documents (as
defined under the Hong Kong Underwriting Agreement); or
(xiii) (A) the notice of acceptance of the CSRC Filings (as defined in the Hong Kong
Underwriting Agreement) issued by the CSRC and/or the results of the CSRC
Filings published on the website of the CSRC is rejected, withdrawn, revoked
or invalidated; or (B) other than with the prior written consent (which shall not
be unreasonably withheld or delayed) of the Overall Coordinators, the issue or
requirement to issue by our Company of a supplement or amendment to the
CSRC Filings pursuant to the CSRC Rules or upon any requirement or request
of the CSRC; or (C) any non-compliance of the CSRC Filings with the CSRC
Rules (as defined in the Hong Kong Underwriting Agreement) or any other
applicable Laws; or
UNDERWRITING
– 390 –


--- page 401 ---
(xiv) (i) a material portion of the orders placed or confirmed in the bookbuilding
process, or (ii) any investment commitment made by any cornerstone investors
under the Cornerstone Investment Agreements signed with such cornerstone
investors, have been withdrawn, terminated or cancelled 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.
UNDERTAKINGS TO THE STOCK EXCHANGE PURSUANT TO THE LISTING
RULES
Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that, we will not issue any further Shares or securities convertible into equity securities
(whether or not of a class already listed) or enter into any agreement to such issue within six
months from the Listing Date (whether or not such issue of Shares or our securities will be
completed within six months from the Listing Date), except for (a) the Offer Shares to be
issued pursuant to the Global Offering and the exercise of the Over-allotment Option, or (b)
under the circumstances permitted under Rule 10.08 of the Listing Rules.
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, the Controlling Shareholders have
undertaken to each of the Stock Exchange, the Joint Sponsors and the Overall Coordinators and
to our Company that, save as disclosed in this prospectus and except pursuant to the Global
Offering or the exercise of the Over-allotment Option, they will not, and will procure that the
relevant registered holder(s) (if any) of our Shares in which they have a beneficial interest will
not without the prior written consent of the Stock Exchange or unless otherwise in compliance
with the applicable requirement of the Listing Rules:
(a) at any time in the period commencing on the date by reference to which disclosure
of their shareholdings in our Company is made in this prospectus and ending on the
date which is six months from the Listing Date, dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of any Shares in respect of which our Controlling
Shareholders are shown in this prospectus to be the beneficial owners; and
UNDERWRITING
– 391 –


--- page 402 ---
(b) at any time in the period of six months commencing from the date on which the
period referred to in the above paragraph (a) expires, dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of any Shares to such extent that, immediately following
such disposal or upon the exercise or enforcement of such options, rights, interests
or encumbrances, our Controlling Shareholders will, directly or indirectly cease to
be our Controlling Shareholders, provided that the above shall not prevent them
from using securities of our Company beneficially owned by them as security
(including a charge or a pledge) in favor of an authorized institution (as defined in
the Banking Ordinance (Chapter 155 of the laws of Hong Kong) for a bona fide
commercial loan.
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, the Controlling Shareholders
have further undertaken to the Stock Exchange and our Company respectively that within the
period commencing from the date by reference to which disclosure of their shareholdings in
our Company is made in this prospectus and ending on the date which is 12 months from the
Listing Date, they will immediately inform our Company and the Stock Exchange in writing
of:
(i) any pledge(s) or charge(s) of any Shares or securities of our Company beneficially
owned by them directly or indirectly in favor of an authorized institution (as defined
in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide
commercial loan as permitted under the Listing Rules, and the number of such
Shares or securities of our Company so pledged or charged; and
(ii) any indication(s) received by it, either verbal or written, from any pledgee or
chargee of any Shares or other securities of our Company pledged or charged that
any of such Shares or other share capital will be sold, transferred or disposed of.
We will also inform the Stock Exchange as soon as we have been informed of the above
matters (if any) by our Controlling Shareholders and disclose such matters in accordance with
the publication requirements under Rule 2.07C of the Listing Rules as soon as possible after
being so informed by our Controlling Shareholders.
UNDERTAKINGS PURSUANT TO THE HONG KONG UNDERWRITING
AGREEMENT
Undertaking by our Company
Except pursuant to the Global Offering (including pursuant to the Over-allotment Option)
and otherwise in compliance with the Listing Rules, during the period commencing on the date
of the Hong Kong Underwriting Agreement and ending on, and including, the date that is six
months after the Listing Date (the “ First Six-Month Period ”), our Company undertakes to
each of the the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint Global
Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong
UNDERWRITING
– 392 –


--- page 403 ---
Underwriters that it will not, and to procure each other member of our Group not to, 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) offer, allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract
or agree to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend,
grant or sell any option, warrant, contract or right to subscribe for or purchase, grant
or purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create an Encumbrance over, or agree to transfer or dispose
of or create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any legal or beneficial interest in the share capital or any other
securities of our Company or any interest in any of the foregoing (including, without
limitation, any securities convertible into or exchangeable or exercisable for or that
represent the right to receive, or any warrants or other rights to purchase any share
capital or other securities of our Company, as applicable), or deposit any share
capital or other securities of our Company, as applicable, with a depositary in
connection with the issue of depositary receipts; or
(b) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the H Shares or any other securities of our Company, or any interest in
any of the foregoing (including, without limitation, any securities convertible into
or exchangeable or exercisable for or that represent the right to receive, or any
warrants or other rights to purchase, any H Shares or any shares or other securities
of such other member of the Group, as applicable); or
(c) enter into any transaction with the same economic effect as any transaction specified
in (a) or (b) above; or
(d) offer to or agree to do any of the foregoing specified in paragraphs (a), (b) or (c)
above or announce any intention to do so,
in each case, whether any of the transactions is to be settled by H Shares or other securities of
our Company or any shares or other securities of such other member of the Group, as
applicable, or in cash or otherwise (whether or not the issue of such H Shares or other shares
or securities or any shares or other securities of such other member of the Group will be
completed within the First Six Month Period).
In the event that our Company is allowed to enter into any of the transactions described
in paragraphs (a), (b) or (c) above or offers to or agrees to or announces any intention to effect
any such transaction during the period of six months commencing on the date on which the
First Six Month Period expires (the “ Second Six Month Period ”), it will take all reasonable
steps to ensure that such an issue or disposal will not, and no other act of our Company will,
create a disorderly or false market for any H Shares or other securities of our Company For the
avoidance of doubt, this undertaking shall not apply to any issue of debt securities by our
Company which are not convertible into equity securities of our Company.
UNDERWRITING
– 393 –


--- page 404 ---
INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, among others, the Overall Coordinators and the
International Underwriters. Under the International Underwriting Agreement, the International
Underwriters, subject to certain conditions set out therein, will agree severally to purchase, or
procure subscribers or purchasers for, the International Offer Shares being offered pursuant to
the International Offering. Please see the paragraph headed “Structure of the Global Offering
— The International Offering” in this prospectus.
We expect to grant the Over-allotment Option to the International Underwriters,
exercisable by the Overall Coordinators (on behalf of the International Underwriters), on or
before Wednesday, February 18, 2026, being the 30th day from the last day for lodging
applications under the Hong Kong Public Offering, to require us to issue and allot, up to an
aggregate of 7,838,800 additional Shares, representing in aggregate approximately 15% of
Offer Shares initially available under the Global Offering at the Offer Price to cover
over-allocations, if any, in the International Offering. Please see the paragraph headed
“Structure of the Global Offering — Over-allotment Option” in this prospectus.
COMMISSIONS AND EXPENSES
Our Company will pay an underwriting commission of 2.2% of the aggregate Offer Price
of all the Offer Shares, including Offer Shares to be issued pursuant to the Over-allotment
Option (the “ Fixed Fees ”). Our Company may, at our sole and absolute discretion, pay an
additional incentive fee of up to 1.0% of the Offer Price in respect of all the Offer Shares
(including Offer Shares to be issued pursuant to the Over-allotment Option) (the
“Discretionary Fees ”). The ratio of Fixed Fees and Discretionary Fees payable is therefore
68.75%: 31.25% (on the basis that the Discretionary Fees will be fully paid and assuming that
the Over-allotment Option is fully exercised). For unsubscribed Hong Kong Offer Shares
reallocated to the International Offering, we will pay an underwriting commission at the rate
applicable to the International Offering and such commission will be paid to the relevant
International Underwriters and not the Hong Kong Underwriters.
The Joint Sponsors are entitled to a sponsor fee in the amount of US$1,100,000 in
aggregate. The aggregate commissions and fees, together with the listing fees, SFC transaction
levy, the Stock Exchange trading fee, AFRC transaction levy, legal and other professional fees,
printing and other expenses payable by us relating to the Global Offering are estimated to
amount to approximately RMB90.3 million (approximately HK$100.1 million) in total (based
on the Offer Price of HK$31.00 per Offer Share (being the maximum Offer Price stated in this
prospectus) and assuming the Over-allotment Option is not exercised).
UNDERWRITING
– 394 –


--- page 405 ---
HONG KONG UNDERWRITERS’ INTERESTS IN OUR COMPANY
Save as disclosed in this prospectus, save for their respective obligations under the Hong
Kong Underwriting Agreement and the International Underwriting Agreement, as of the Latest
Practicable Date, none of the Hong Kong Underwriters has any shareholding interest in any
member of our Group or any right or option (whether legally enforceable or not) to purchase
or subscribe for or to nominate persons to purchase or subscribe for securities in any member
of our Group.
Following completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement and/or the International
Underwriting Agreement.
JOINT SPONSORS’ INDEPENDENCE
Each of the Joint Sponsors satisfies the independence criteria set out in Rule 3A.07 of the
Listing Rules.
ACTIVITIES BY SYNDICATE MEMBERS
The Hong Kong Underwriters and the International Underwriters (together, the
“Syndicate Members ”) and their affiliates may each individually undertake a variety of
activities (as further described below) which do not form part of the underwriting or stabilizing
process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments 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 our
Group’s loans and other debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, including as a lender to initial purchasers
of the H Shares (which financing may be secured by the Shares) in the Global Offering,
proprietary trading in the H Shares, and entering into over the counter or listed derivative
transactions or listed or unlisted securities transactions (including issuing securities such as
UNDERWRITING
– 395 –


--- page 406 ---
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Such transactions may be carried out as bilateral agreements or trades
with selected counterparties. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares, which may have a
negative impact on the trading price of the H Shares. Activities could occur in Hong Kong and
elsewhere in the world and may result in the Syndicate Members and their affiliates holding
long and/or short positions in the H Shares, in baskets of securities or indices including the
Shares, in units of funds that may purchase the Shares, or in derivatives related to any of the
foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the relevant rules of the exchange may require the issuer of those
securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in
the security, and this will also result in hedging activity in the Shares in most cases.
All such activities may occur both during and 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 the Shares, the liquidity or trading volume
in the Shares and the volatility of the price of the Shares, and the extent to which this occurs
from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the Stabilizing Manager or any person acting for
it) must not, in connection with the distribution of the Offer Shares, effect any
transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares) whether in the open market or otherwise,
with a view to stabilizing or maintaining the market price of any of the Offer Shares
at levels other than those which might otherwise prevail in the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking, derivative and other services
to our Company and its affiliates for which such Syndicate Members or their respective
affiliates have received or will receive customary fees and commissions.
UNDERWRITING
– 396 –


--- page 407 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The listing of the H Shares on the Stock Exchange is sponsored by the
Joint Sponsors and the Global Offering is managed by the Overall Coordinators. The Joint
Sponsors have made an application on behalf of our Company to 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.
The Global Offering consists of (subject to reallocation and the Over-allotment Option):
(i) the Hong Kong Public Offering of initially 5,226,000 Offer Shares (subject to
reallocation as mentioned below) in Hong Kong as described in the paragraph
headed “The Hong Kong Public Offering” in this section; and
(ii) the International Offering of initially 47,033,100 Offer Shares (subject to
reallocation and Over-allotment Option as mentioned below) in the United States to
QIBs in reliance on Rule 144A or another available exemption from the registration
requirements of the U.S. Securities Act, and outside the United States in offshore
transactions in reliance on Regulation S.
The Offer Shares will represent approximately 10% of the total issued share capital of our
Company immediately after completion of the Global Offering without taking into account the
exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the
Offer Shares will represent approximately 11.3% of the total issued share capital immediately
after completion of the Global Offering and the exercise of the Over-allotment Option as set
out in the paragraph headed “The International Offering — Over-allotment Option” in this
section.
Investors may either:
(i) apply for the Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest, if qualified to do so, for the International Offer
Shares under the International Offering,
but may not do both.
STRUCTURE OF THE GLOBAL OFFERING
– 397 –


--- page 408 ---
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors in Hong Kong. The International Offering will
involve selective marketing of the International Offer Shares in the United States to QIBs in
reliance on Rule 144A or another available exemption from the registration requirements of the
U.S. Securities Act, as well as to institutional and professional investors and other investors
expected to have a sizable demand for the International Offer Shares in Hong Kong and other
jurisdictions outside the United States in offshore transactions in reliance on Regulation S. The
International Underwriters and the Joint Bookrunners are soliciting from prospective investors’
indications of interest in acquiring the International Offer Shares. Prospective investors will be
required to specify the number of International Offer Shares under the International Offering
they would be prepared to acquire either at different prices or at a particular price.
The number of Hong Kong Offer Shares and International Offer Shares to be offered
under the Hong Kong Public Offering and the International Offering respectively may be
subject to reallocation as described in the paragraph headed “The Hong Kong Public Offering
— Reallocation” in this section.
THE HONG KONG PUBLIC OFFERING
Number of Shares Initially Offered
Subject to reallocation as mentioned below, our Company is initially offering 5,226,000
H Shares at the Offer Price under the Hong Kong Public Offering for subscription by the public
in Hong Kong, representing approximately 10% of the 52,259,100 H Shares initially available
under the Global Offering. Subject to reallocation as mentioned below, the number of H Shares
initially offered under the Hong Kong Public Offering will represent approximately 1% of our
total issued share capital immediately after completion of the Global Offering, assuming that
the Over-allotment Option is not exercised.
In Hong Kong, individual retail investors are expected to apply for the Hong Kong Offer
Shares through the Hong Kong Public Offering and individual retail investors, including
individual investors in Hong Kong applying through banks and other institutions, seeking
International Offer Shares will not be allotted International Offer Shares in the International
Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) and the Joint
Sponsors may require any investor who has been offered H 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 and the Joint Sponsors so as to allow them
to identify the relevant applications under the Hong Kong Public Offering and to ensure that
it is excluded from any application for the International Offering.
Completion of the Hong Kong Public Offering is subject to the conditions set out in the
paragraph headed “Conditions of the Global Offering” in this section.
STRUCTURE OF THE GLOBAL OFFERING
– 398 –


--- page 409 ---
Allocation
For allocation purposes only, the 5,226,000 H Shares initially being offered for
subscription under the Hong Kong Public Offering (after taking into account any reallocation
in the number of Offer Shares allocated between the Hong Kong Public Offering and the
International Offering) will be divided equally (with any odd lots being allocated to pool A)
into two pools: Pool A and Pool B, both of which are available on an equitable basis to
successful applicants. All valid applications that have been received for the Hong Kong Offer
Shares with a total subscription amount (excluding brokerage, SFC transaction levy, the Stock
Exchange trading fee and AFRC transaction levy) of HK$5 million or below will fall into Pool
A and all valid applications that have been received for the Hong Kong Offer Shares with a
total subscription amount (excluding brokerage, SFC transaction levy, Stock Exchange trading
fee and AFRC transaction levy) of over HK$5 million and up to the total value of Pool B, will
fall into Pool B.
Applicants should be aware that applications in Pool A and Pool B are likely to receive
different allocation ratios. If the Hong Kong Offer Shares in one pool (but not both pools) are
under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to
satisfy demand in that other pool and be allocated accordingly. Applicants can only receive an
allocation of Hong Kong Offer Shares from either Pool A or Pool B but not from both pools
and only apply for Hong Kong Offer Shares in either Pool A or Pool B. When there is
over-subscription, allocation of Hong Kong Offer Shares to investors under the Hong Kong
Public Offering, both in relation to Pool A and Pool B, will be based on the level of valid
applications received under the Hong Kong Public Offering. The basis of allocation in each
pool may vary, depending on the number of Hong Kong Offer Shares validly applied for by
each applicant. The allocation of Hong Kong Offer Shares could, where appropriate, consist of
balloting, which would mean that some applicants may receive a higher allocation than others
who have applied for the same number of Hong Kong Offer Shares and those applicants who
are not successful in the ballot may not receive any Hong Kong Offer Shares.
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 and the Joint Global Coordinators. Subject to the
allocation cap described in the subsequent paragraph, the Overall Coordinators and the Joint
Global Coordinators may in their discretion reallocate Offer Shares from the International
Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong
Public Offering. In addition, if the Hong Kong Public Offering is not fully subscribed, the
Overall Coordinators and the Joint Global Coordinators will have the discretion (but shall not
be under any obligation) to reallocate to the International Offering all or any unsubscribed
Hong Kong Offer Shares in such amounts as they deem appropriate.
STRUCTURE OF THE GLOBAL OFFERING
– 399 –


--- page 410 ---
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between pool A and pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate.
In the event of reallocation of Offer Shares between the International Offering and the
Hong Kong Public Offering in the circumstances where (a) the International Offer Shares are
fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times, or (b) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times, then up to 2,612,800 Offer Shares may be reallocated from
the International Offering to the Hong Kong Public Offering, so that the total number of Offer
Shares available for subscription under the Hong Kong Public Offering will increase up to
7,838,800 Offer Shares, representing 15% of the number of Offer Shares initially available
under the Global Offering (before any exercise of the Over-allotment Option) in accordance
with Chapter 4.14 of the Guide.
In the event where the Hong Kong Offer Shares are undersubscribed: (i) if the
International Offering Shares are fully subscribed or oversubscribed, the Overall Coordinators
have the authority to reallocate all or any unsubscribed Hong Kong Offer Shares to the
International Offering, in such proportions as the Overall Coordinators deems appropriate; and
(ii) if the International Offering Shares are undersubscribed, the Global Offering will not
proceed unless the Underwriters would subscribe for or procure subscribers for their respective
applicable proportions of the Offer Shares being offered which are not taken up under the
Global Offering on the terms and conditions of this prospectus and the Underwriting
Agreements.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and the provision of Paragraph 4.2(b) of Practice Note 18
of the Listing Rules, no mandatory clawback or reallocation mechanism is required to increase
the number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering
expected to be published on Wednesday, January 21, 2026.
Where the International Offer Shares are undersubscribed, 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
being offered which are not taken up under the Global Offering on the terms and conditions of
this prospectus and the Underwriting Agreements.
STRUCTURE OF THE GLOBAL OFFERING
– 400 –


--- page 411 ---
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him or her that he or she and any
person(s) for whose benefit he or she is making the application have not applied for or taken
up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
Offer Shares under the International Offering, and such applicant’s application under the
International Offering will be rejected if the said undertaking and/or confirmation is breached
and/or untrue (as the case may be).
Multiple or suspected multiple applications and any application for more than 50% of the
5,226,000 H Shares initially comprised in the Hong Kong Public Offering (that is 2,613,000
Hong Kong Offer Shares) will be rejected.
The listing of the Offer Shares on the Stock Exchange is sponsored by the Joint Sponsors.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$31.00 per H Share in
addition to any brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC
transaction levy payable on each Offer Share. If the Offer Price, as finally determined in the
manner described in the paragraph headed “Pricing of the Global Offering” in this section, is
less than the maximum Offer Price of HK$31.00 per Offer Share, appropriate refund payments
(including the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC
transaction levy attributable to the surplus application monies) will be made to successful
applications, without interest. Further details are set out in the section headed “How to Apply
for Hong Kong Offer Shares” in this prospectus.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE INTERNATIONAL OFFERING
Number of International Offer Shares Offered
The number of International Offer Shares to be initially offered by us for subscription
under the International Offering will consist of an initial offering of 47,033,100 Offer Shares,
representing approximately 90% of the Offer Shares under the Global Offering. Subject to any
reallocation of Offer Shares between the International Offering and the Hong Kong Public
Offering, the International Offer Shares will represent approximately 9% of our total issued
share capital immediately after completion of the Global Offering, assuming that the
Over-allotment Option is not exercised.
STRUCTURE OF THE GLOBAL OFFERING
– 401 –


--- page 412 ---
Allocation
Pursuant to the International Offering, the International Underwriters will conditionally
place the International Offer Shares in the United States to QIBs in reliance on Rule 144A or
another available exemption from the registration requirements under the U.S. Securities Act,
as well as to institutional and professional investors and other investors expected to have a
sizable demand for the H Shares in Hong Kong and other jurisdictions outside the United States
in offshore transactions in reliance on Regulation S. The International Offering is subject to the
Hong Kong Public Offering being unconditional.
Allocation of the International Offer Shares pursuant to the International Offering will be
determined by the Overall Coordinators and will be based on a number of factors 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 the relevant investor is likely to buy
further, and/or hold or sell Offer Shares after the Listing. Such allocation may be made to
professional, institutional and corporate investors and is intended to result in a distribution of
our Offer Shares on a basis which would lead to the establishment of a solid shareholder base
to the benefit of our Company and our Shareholders as a whole.
The Overall Coordinators (on behalf of the Underwriters) may require any investor who
has been offered Offer Shares under the International Offering and who has made an
application under the Hong Kong Public Offering to provide sufficient information to the
Overall Coordinators so as to allow it 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 Hong Kong Public Offering.
Reallocation
The total number of International Offer Shares to be transferred pursuant to the
International Offering may change as a result of exercise of the Over-allotment Option in
whole or in part and/or reallocation of all or any unsubscribed Hong Kong Offer Shares to the
International Offering.
Over-allotment Option
In connection with the Global Offering, our Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Overall
Coordinators at their sole and absolute discretion on behalf of the International Underwriters
for up to 30 days after the last day for lodging applications under the Hong Kong Public
Offering. Pursuant to the Over-allotment Option, the Overall Coordinators will have the right
to require our Company to issue and allot, at the Offer Price, up to an aggregate of additional
7,838,800 H Shares representing in aggregate approximately 15% of the number of the Offer
Shares initially available under the Global Offering at the Offer Price to cover over-allocations
in the International Offering, if any. An announcement will be made in the event that the
Over-allotment Option is exercised.
STRUCTURE OF THE GLOBAL OFFERING
– 402 –


--- page 413 ---
If the Over-allotment Option is exercised in full, the additional International Offer Shares
to be issued pursuant thereto will represent approximately 1.48% of the issued share capital of
our Company immediately after completion of the Global Offering.
Employee Preferential Offering
Of the 47,033,100 Offer Shares initially being offered under the International Offering,
no more than 5,225,000 Offer Shares, representing approximately 11.11% of the Offer Shares
initially available for subscription under the International Offering, are available for
subscription as Employee Reserved Shares by the Eligible Employees on a preferential basis
under the Employee Preferential Offering according to Rule 10.01 of the Listing Rules.
The Eligible Employees are selected by the Company by taking into consideration, among
others, their seniority, current position as well as contribution made to the Group. Since all
Eligible Employees are PRC residents and could not directly participate in the Employee
Preferential Offering according to relevant applicable PRC laws and regulations, the Company
intends to place certain Employee Reserved Shares to Guotai Junan Investments (Hong Kong)
Limited (“ GTJA Investments ”), a connected client of Haitong International Securities
Company Limited (“ HISCL ”) and Guotai Junan Securities (Hong Kong) Limited
(“GTJAHK ”), to facilitate the Eligible Employees in participating in the economic exposure
to the Global Offering of the Company through OTC Swaps (as defined below) under the
Employee Preferential Offering.
GTJA Investments shall hold the Offer Shares for hedging purpose as the single
underlying asset of several sets of back-to-back total return swap transaction (the “ GTHT
Back to-back TRS ”) to be entered into between GTJA Investments and Guotai Haitong
Securities Co., Ltd. (the “ GTHT Onshore Parent ”) in connection with the total return swap
orders (the “ GTHT Client TRS ”) to be entered into by GTHT Onshore Parent and the relevant
ultimate clients (the “ GTHT Onshore Ultimate Client ”), respectively. Such GTHT Client
TRS is to be fully funded by the GTHT Onshore Ultimate Client, an investment trust
subscribed by the Eligible Employees as ultimate beneficiaries through the Company’s labour
union as the trustor, with Y unnan International Trust Co, Ltd. (ʮ̡)a st h e
trustee and a private fund nominated by the trustor as the investment vehicle for Back to-back
TRS. Accordingly, GTJA Investments will hold the Employee Reserved Shares on a
non-discretionary basis for and on behalf of the GTHT Onshore Ultimate Client to hedge the
GTHT Back to-back TRS while the economic risks and returns of the underlying H Shares will
be passed to such Eligible Employees ultimately, subject to customary fees and commissions
in accordance with terms of the GTHT Back to-back TRS.
Each Eligible Employee will also confirm that he/she:
(a) is and remains an employee as of the date of this prospectus;
(b) is not a core connected person of the Company;
STRUCTURE OF THE GLOBAL OFFERING
– 403 –


--- page 414 ---
(c) is not any person whose acquisition of securities will be financed directly or
indirectly by the Company or a core connected person;
(d) is not any person who is accustomed to take instructions from the Company or a core
connected person in relation to the acquisition, disposal, voting or other disposition
of securities of the Company registered in his/her name or otherwise held by
him/her;
(e) is outside the U.S. and not a U.S. person (as defined in Rule 902 of Regulation S);
and
(f) will only participate in the Global Offering through the subscription of the
Employee Reserved Shares under the Employee Preferential Offering and will not
subscribe for the Company’s H Shares in the Global Offering through any other
channels.
Any Employee Reserved Shares not subscribed for by the Eligible Employees will be available
for subscription by other investors in the International Offering after the reallocation as
described in “— The Hong Kong Public Offering” in this prospectus.
Stabilization
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the Underwriters may bid for, or purchase, the new
securities in the secondary market, during a specified period of time, to curb and, if possible,
prevent any decline in the market price of the securities below the Offer Price. In Hong Kong
and certain other jurisdictions, an activity aimed at reducing the market price is prohibited and
the price at which stabilization is effected is not permitted to exceed the Offer Price.
In connection with the Global Offering, the Stabilizing Manager, its affiliates or any
person acting for it, on behalf of the Underwriters, may, to the extent permitted by applicable
laws of Hong Kong or elsewhere, over-allocate or effect short sales or any other stabilizing
transactions with a view to stabilizing or maintaining the market price of the H Shares at a level
higher than that which might otherwise prevail in the open market for a limited period after the
last day for the lodging of applications under the Hong Kong Public Offering. Any market
purchases of H Shares will be effected in compliance with all applicable laws and regulatory
requirements. However, there is no obligation on the Stabilizing Manager or any person acting
for it to conduct any such stabilizing activity, which if commenced, will be done at the absolute
discretion of the Stabilizing Manager and may be discontinued at any time. Any such
stabilizing activity is required to be brought to an end within 30 days of the last day for the
lodging of applications under the Hong Kong Public Offering. The number of H Shares that
may be over-allocated will not exceed the number of H Shares that may be issued and/or sold
under the Over-allotment Option, namely 7,838,800 H Shares, which is approximately 15% of
the Offer Shares initially available under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 404 –


--- page 415 ---
Stabilizing action will be entered into in accordance with the laws, rules and regulations
in place in Hong Kong on stabilization and stabilization action permitted in Hong Kong
pursuant to the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of
Hong Kong) under SFO includes: (i) over-allocation for the purpose of preventing or
minimizing any reduction in the market price of the H Shares; (ii) selling or agreeing to sell
the H Shares so as to establish a short position in them for the purpose of preventing or
minimizing any reduction in the market price of the H Shares; (iii) purchasing or subscribing
for, or agreeing to purchase or subscribe for, the H Shares pursuant to the Over-allotment
Option in order to close out any position established under (i) or (ii) above; (iv) purchasing,
or agreeing to purchase, any of the H Shares for the sole purpose of preventing or minimizing
any reduction in the market price of the H Shares; (v) selling or agreeing to sell any H Shares
in order to liquidate any position held as a result of those purchases; and (vi) offering or
attempting to do anything described in (ii), (iii), (iv) or (v).
Specifically, prospective applicants for and investors in the Offer Shares should note that:
 the Stabilizing Manager, or any person acting for it, may, in connection with the
stabilizing action, maintain a long position in the H Shares;
 there is no certainty regarding the extent to which and the time period for which the
Stabilizing Manager, or any person acting for it, will maintain such a position;
 liquidation of any such long position by the Stabilizing Manager may have an
adverse impact on the market price of the H Shares;
 no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilizing period which will begin on the Listing Date following announcement
of the Offer Price, and is expected to expire on the 30th day after the last date for
lodging applications under the Hong Kong Public Offering. After this date, when no
further stabilizing action may be taken, demand for the H Shares, and therefore the
price of the H Shares, could fall;
 the price of the H Shares cannot be assured to stay at or above the Offer Price either
during or after the stabilizing period by the taking of any stabilizing action; and
 stabilizing bids may be made or transactions effected in the course of the stabilizing
action at any price at or below the Offer Price, which means that stabilizing bids
may be made or transactions effected at a price below the price paid by applicants
for, or investors in, the H Shares.
Our Company will procure that a public announcement in compliance with the Securities
and Futures (Price Stabilizing) Rules will be made within seven days of the expiration of the
stabilizing period.
STRUCTURE OF THE GLOBAL OFFERING
– 405 –


--- page 416 ---
Over-Allocation
Following any over-allocation of Shares in connection with the Global Offering, the
Stabilizing Manager or any person acting for it may cover such over-allocations by exercising
the Over-allotment Option in full or in part, making purchases in the secondary market at prices
that do not exceed the Offer Price or by any combination of these means.
PRICING OF THE GLOBAL OFFERING
The Offer Price is expected to be fixed by agreement between the Overall Coordinators
(for themselves and on behalf of the Underwriters) and our Company on the Price
Determination Date, when market demand for the Offer Shares will be determined. The Price
Determination Date is expected to be on or before Tuesday, January 20, 2026 and in no event
later than 12:00 noon on Tuesday, January 20, 2026.
We will determine the Offer Price by reference to, among other factors, the closing prices of the
A Shares on the Shanghai Stock Exchange on the last trading day on or before the Price Determination
Date (which is accessible to the Shareholders and potential investors at https://www.sse.com.cn/
assortment/stock/list/info/company/index.shtml?COMPANY_CODE=603341), and the Offer
Price will not be more than HK$31.00. The historical prices of our A Shares and trading volume on
Shanghai Stock Exchange are set out below.
Period High Low ADTV (1)
(RMB) (RMB) (A shares)
Y ear ended December 31, 2024 (2) /H1118/H1118/H1118/H1118/H111856.45 33.85 6,581,004
Y ear ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H111854.58 34.46 6,955,933
Y ear of 2026 (up to the Latest
Practicable Date) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846.49 46.49 16,443,960
Note:
(1) Average daily trading volume (“ADTV”) represents daily average number of our A Shares traded over
the relevant period rounded to the nearest share.
(2) Calculated since the Company’s listing on the Shanghai Stock Exchange on March 1, 2024.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$31.00 for each Hong Kong
Offer Share together with brokerage of 1%, a Stock Exchange trading fee of 0.00565%, a SFC
transaction levy of 0.0027% and an AFRC transaction levy of 0.00015%.
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of H Shares under the
STRUCTURE OF THE GLOBAL OFFERING
– 406 –


--- page 417 ---
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.
If, based on the level of interest expressed by prospective institutional, professional and
other investors during the book-building process, the Overall Coordinators (for themselves and
on behalf of the Underwriters) and the Joint Sponsors consider it appropriate, with our consent
the number of Offer Shares being offered under the Global Offering and/or the maximum Offer
Price stated in this prospectus may be reduced at any time on or prior to the morning of the
last day for lodging applications under the Hong Kong Public Offering. In such a case, we will,
as soon as practicable following the decision to make such reduction, and in any event not later
than the morning of Monday, January 19, 2026, being the last day for lodging applications
under the Hong Kong Public Offering, cause to be published on the Stock Exchange’s website
at www.hkexnews.hk , and on our Company’s website at www.longcheer.com notice of such
reduction in the number of Offer Shares being offered under the Global Offering and/or the
maximum Offer Price. Such notice will also include confirmation or revision, as appropriate,
of the working capital statement and the offering statistics as currently set out in this
prospectus and any other financial information which may change as a result of such reduction.
Upon issue of such notice, the number of Offer Shares in the Global Offering and/or the revised
maximum Offer Price will be final and conclusive and the Offer Price, if agreed upon between
the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company,
will be fixed within such revised maximum Offer Price.
As soon as practicable after such reduction of the number of Offer Shares and/or the
indicative maximum Offer Price, we will also issue a supplemental or new prospectus updating
investors of the reduction in the number of Offer Shares and/or the maximum Offer Price, and
giving investors at least three business days to consider the new information. The supplemental
or new prospectus shall include at least the following: (a) maximum Offer Price and market
capitalization; (b) listing timetable and underwriting obligations; (c) price/earnings multiple (if
applicable), unaudited pro forma and adjusted net tangible assets; and (d) use of proceeds and
working capital adequacy confirmation based on revised estimated proceeds. The Global
Offering must first be canceled and subsequently relaunched on FINI pursuant to the
supplemental prospectus.
In the absence of any such notice and supplemental prospectus so published, the number
of Offer Shares will not be reduced and/or the Offer Price, if agreed upon between our
Company and the Overall Coordinators (for themselves and on behalf of the Underwriters),
will under no circumstances be set above the maximum Offer Price as stated in this prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
being offered under the Global Offering and/or the maximum Offer Price may not be made
until the day which is the last day for lodging applications under the Hong Kong Public
Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 407 –


--- page 418 ---
The Hong Kong Offer Shares and the International Offer Shares may, in certain
circumstances, be reallocated as between the Hong Kong Public Offering and International
Offering at the discretion of the Overall Coordinators and the Joint Sponsors.
The final Offer Price, the level of applications in the Hong Kong Public Offering, the
level of indications of interest in the International Offering, the basis of allocations of the Hong
Kong Offer Shares and the results of applications in the Hong Kong Public Offering are
expected to be announced on Wednesday, January 21, 2026 through a variety of channels
described in the paragraph headed “How to Apply for Hong Kong Offer Shares — B.
Publication of Results” in this prospectus.
UNDERWRITING ARRANGEMENTS
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement, subject to agreement on the Offer
Price between the Overall Coordinators (for themselves and on behalf of the Underwriters) and
us on the Price Determination Date.
We expect that our Company will, on or about Tuesday, January 20, 2026, enter into the
International Underwriting Agreement relating to the International Offering. Underwriting
arrangements, the Hong Kong Underwriting Agreement and the International Underwriting
Agreement are summarized in the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for the Offer Shares will be conditional on, inter alia :
 the Stock Exchange granting approval for the listing of, and permission to deal in,
the Shares in issue and to be issued pursuant to the Global Offering (including
pursuant to the exercise of the Over-allotment Option) as mentioned in this
prospectus on the Main Board of the Stock Exchange and such listing and
permission not subsequently having been revoked prior to the commencement of
dealings in the Shares on the Stock Exchange;
 the Offer Price having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company;
 the execution and delivery of the International Underwriting Agreement on or
around the Price Determination Date;
 our Company having submitted to HKSCC all requisite documents to enable the
Offer Shares to be admitted to trade on the Stock Exchange; and
STRUCTURE OF THE GLOBAL OFFERING
– 408 –


--- page 419 ---
 the obligations of the Underwriters under the respective Underwriting Agreements
becoming and remaining unconditional (unless and to the extent such conditions are
validly waived on or before such dates and times) and not having been terminated
in accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times) and in any event not later than the date which is 30 days after the date of this
prospectus.
If for any reason, the Offer Price is not agreed by 12:00 noon on Tuesday, January 20,
2026 between us and the Overall Coordinators (for themselves and on behalf of the
Underwriters), the Global Offering will not proceed and will lapse.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. We will
cause a notice of the lapse of the Hong Kong Public Offering to be published by us on the
websites of our Company at www.longcheer.com , and the Stock Exchange at
www.hkexnews.hk , respectively on the next day following such lapse. In such event, all
application monies will be returned, without interest, on the terms set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this prospectus. In the meantime, the
application monies will be held in separate bank account(s) with our Company’s receiving
banker(s) or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155
of the Laws of Hong Kong) (as amended).
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, amongst other things, the other becoming unconditional and not
having been terminated in accordance with its terms.
Share certificates for the Offer Shares are expected to be issued on Wednesday, January
21, 2026 but will only become valid evidence of title at 8:00 a.m. on the date of commencement
of the dealings in our H Shares, which is expected to be on Thursday, January 22, 2026,
provided that (i) the Global Offering has become unconditional in all respects at or before that
time and (ii) neither of the Underwriting Agreements has been terminated in accordance with
its terms. Investors who trade H Shares prior to the receipt of Share certificates or prior to the
Share certificates bearing valid evidence of title do so entirely at their own risk.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Thursday, January 22, 2026, it is expected that dealings in the H Shares
on the Stock Exchange will commence on Thursday, January 22, 2026. The H Shares will be
traded in board lots of 100 each and the stock code will be 9611.
STRUCTURE OF THE GLOBAL OFFERING
– 409 –


--- page 420 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARE
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering and below are the procedures for application. We will not provide any printed
copies of this prospectus for use by the public.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”
section, and our website at www.longcheer.com .
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 are outside the United States; and
 have a Hong Kong address ( for the White Form eIPO service only ).
Unless permitted by the Listing Rules and the Guide for New Listing Applicants issued
by the Stock Exchange, or any relevant waivers that have been granted by the Stock Exchange,
you cannot apply for any Hong Kong Offer Shares if you or the person(s) for whose benefit
you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or any of his/her close associates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 410 –


--- page 421 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Wednesday,
January 14, 2026 and end at 12:00 noon on Monday, January 19, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.eipo.com.hk Applicant who would
like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Wednesday, January
14, 2026 to 11:30
a.m. on Monday,
January 19, 2026.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Monday, January
19, 2026.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Applicant who would
not like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in the
name of HKSCC
Nominees, deposited
directly into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest
time for giving such
instructions, as this
may vary by broker
or custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 1–


--- page 422 ---
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different application reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO service provider to apply on the terms and conditions in this prospectus,
as supplemented and amended by the terms and conditions of the White Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 412 –


--- page 423 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual or Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing
country or jurisdiction
 Identity document type, with
order of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your identity
document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong address. Y ou are also required to declare that the
identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
Hong Kong Offer Shares. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
Such is subject to change, if the Company’s Articles of Association and applicable company law
prescribe for a lower cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 413 –


--- page 424 ---
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 100 Offer Shares
Permitted number of
Hong Kong Offer
Shares for application
and amount payable on
application/successful
allotment
: Hong Kong Offer Shares are available for application
in specified board lot sizes only. Please refer to the
amount payable associated with each specified board
lot size in the table below.
The maximum Offer Price is HK$31.00 per Offer
Share.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require you to
pre-fund your application in such amount as
determined by the broker or custodian, based on the
applicable laws and regulations in Hong Kong. Y ou
are responsible for complying with any such pre-
funding requirement imposed by your broker or
custodian with respect to the Hong Kong Offer Shares
you applied for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 414 –


--- page 425 ---
By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through
the HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of
the final Offer Price, brokerage, SFC transaction levy,
the Stock Exchange trading fee and the AFRC
transaction levy by debiting the relevant nominee bank
account at the Designated Bank for your broker or
custodian .
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you have
selected. Y ou must pay the respective amount payable
on application in full upon application for Hong Kong
Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 3,131.26 2,000 62,625.26 30,000 939,379.06 400,000 12,525,054.00
200 6,262.53 3,000 93,937.90 40,000 1,252,505.40 500,000 15,656,317.50
300 9,393.79 4,000 125,250.55 50,000 1,565,631.76 600,000 18,787,581.00
400 12,525.05 5,000 156,563.18 60,000 1,878,758.10 700,000 21,918,844.50
500 15,656.32 6,000 187,875.81 70,000 2,191,884.46 800,000 25,050,108.00
600 18,787.58 7,000 219,188.45 80,000 2,505,010.80 900,000 28,181,371.50
700 21,918.85 8,000 250,501.08 90,000 2,818,137.16 1,000,000 31,312,635.00
800 25,050.11 9,000 281,813.71 100,000 3,131,263.50 1,500,000 46,968,952.50
900 28,181.37 10,000 313,126.36 200,000 6,262,527.00 2,000,000 62,625,270.00
1,000 31,312.64 20,000 626,252.70 300,000 9,393,790.50 2,613,000
(1) 81,819,915.25
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and
Accounting and Financial Reporting Council (“ AFRC ”) transaction levy. If your application is successful,
brokerage will be paid to the Exchange Participants (as defined in the Listing Rules) and the SFC transaction
levy, the Stock Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange (in the case
of the SFC transaction levy and in the case of the AFRC transaction levy, collected by the Stock Exchange on
behalf of the SFC and the AFRC respectively).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 415 –


--- page 426 ---
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Application for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply further
for any Offer Shares in the Global Offering.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 416 –


--- page 427 ---
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Company, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, the Capital Market Intermediaries, any of their or the Company’s
respective directors, officers, employees, partners, agents, advisors and any other
parties involved in the Global Offering (the “ Relevant Persons ”), the H Share
Registrar and HKSCC will not be liable for any information and representations not
in this prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes and 4. Transfer of personal data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “—
C. Circumstances In Which Y ou Will Not Be Allocated Hong Kong Offer Shares” in
this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 417 –


--- page 428 ---
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the White Form eIPO Service Provider or by any one as your agent or by any other
person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC or to the
White Form eIPO Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 418 –


--- page 429 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
The full list of (i) wholly or partially
successful applicants using the
White Form eIPO service and
HKSCC EIPO channel, and (ii) the
number of Hong Kong Offer Shares
conditionally allotted to them, among
other things, will be displayed on the
“Allotment Results” page of the
White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
24 hours, from 11:00
p.m. on Wednesday,
January 21, 2026 to
12:00 midnight on
Tuesday, January 27,
2026 (Hong Kong
time)
Date/Time /H1118/H1118/H1118The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.longcheer.com which will
provide links to the above mentioned
websites of the H Share Registrar.
No later than 11:00 p.m.
on Wednesday, January
21, 2026 (Hong Kong
time)
Telephone /H1118/H1118/H1118+852 2862 8555 — the allocation results
telephone enquiry line provided by the
H Share Registrar.
between 9:00 a.m. and
6:00 p.m., on Thursday,
January 22, 2026,
Friday, January 23,
2026, Monday, January
26, 2026 and Tuesday,
January 27, 2026 on a
Business Day (Hong
Kong time)
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 419 –


--- page 430 ---
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Tuesday, January 20, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Tuesday, January 20, 2026 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the International Offering, the level of applications in the Hong Kong Public
Offering and the basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s
website at www.hkexnews.hk and our website at www.longcheer.com by no later than 11:00
p.m. on Wednesday, January 21, 2026 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 420 –


--- page 431 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 421 –


--- page 432 ---
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on Thursday,
January 22, 2026 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in the section headed “Underwriting” has
not been exercised. Investors who trade H Shares prior to the receipt of H Share certificates
or the H Share certificates becoming valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 422 –


--- page 433 ---
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 1
For physical share
certificates of
1,000,000 or more
Hong Kong Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
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,
Wanchai, Hong Kong.
Time: from 9:00 a.m. to 1:00
p.m. on Thursday, January
22, 2026 (Hong Kong time).
If you are an individual, you
must not authorise any other
person to collect for you. If
you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
Both individuals and
authorised representatives
must produce, at the time of
collection, evidence of
identity acceptable to the
H Share Registrar.
Note: If you do not collect
your H Share certificate(s)
personally within the time
above, it/they will be sent to
the address specified in your
application instructions by
ordinary post at your own
risk.
H Share certificate(s) will
be issued in the name of
HKSCC Nominees,
deposited into CCASS
and credited to your
designated HKSCC
Participant’s stock
account
No action by you is
required
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 423 –


--- page 434 ---
White Form eIPO service HKSCC EIPO channel
For physical share
certificates of less
than 1,000,000
Offer Shares
issued under your
own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our H Share certificate(s)
will be sent to the address
specified in your application
instructions by ordinary post
on Wednesday, January 21,
2026 at your own risk.
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Thursday, January 22, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118H Share Registrar Y our broker or custodian
Application monies
paid through
single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
White form e-Refund payment
instructions to your
designated bank account.
Y our broker or custodian
will arrange refund to
your designated bank
account subject to the
arrangement between you
and it
Application monies
paid through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk.
1. Except in the event of any Severe Weather Signals (defined below) in force in Hong Kong in the
morning on the Wednesday, January 21, 2026 rendering it impossible for the relevant Share certificates
to be despatched to HKSCC in a timely manner, the Company shall 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. Y ou may see “— E. Severe Weather Arrangements”
in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 424 –


--- page 435 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Monday, January 19, 2026 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 Monday, January 19,
2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next Business Day which does not have Severe Weather Signals in force at any time
between 9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.longcheer.com of the revised timetable.
If a Severe Weather Signal is hoisted on Wednesday, January 21, 2026, the H Share
Registrar will make appropriate arrangements for the delivery of the H Share certificates to the
CCASS Depository’s service counter so that they would be available for trading on Thursday,
January 22, 2026.
If a Severe Weather Signal is hoisted on Wednesday, January 21, 2026, the despatch of
physical H Share certificates of less than 1,000,000 Offer Shares issued under your own name
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 Wednesday, January 21, 2026 or on Thursday,
January 22, 2026).
If a Severe Weather Signal is hoisted on Thursday, January 22, 2026, physical H Share
certificates of 1,000,000 Offer Shares or more issued under your own name are available for
collection in person at the H Share Registrar’s office after the Severe Weather Signal is lowered
or cancelled (e.g. in the afternoon of Thursday, January 22, 2026 or on Friday, January 23,
2026).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 425 –


--- page 436 ---
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 426 –


--- page 437 ---
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 H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the Shares and/or regulators and/or any other purposes to which
applicants and holders of the Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 427 –


--- page 438 ---
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial 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, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the
H Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the 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 and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate Information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 428 –


--- page 439 ---
The following is the text of a report on Shanghai Longcheer Technology Co., Ltd.,
prepared for the purpose of incorporation in this prospectus received from the independent
reporting accountants of the Company, Ernst & Young, Certified Public Accountants, Hong
Kong.
Ernst & Young
27/F , One T aikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ה
༸  ໮
ᅽ
5FM ཥ༑

'BY ෂॆ

FZDPN
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHANGHAI LONGCHEER TECHNOLOGY CO., LTD., CITIGROUP
GLOBAL MARKETS ASIA LIMITED, HAITONG INTERNATIONAL CAPITAL
LIMITED AND GUOTAI JUNAN CAPITAL LIMITED
Introduction
We report on the historical financial information of Shanghai Longcheer Technology Co.,
Ltd. (the “Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-108,
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 nine months ended 30 September
2025 (the “Relevant Periods”), and the consolidated statements of financial position of the
Group and the statements of financial position of the Company as at 31 December 2022, 2023
and 2024 and 30 September 2025 and material accounting policy information and other
explanatory information (together, the “Historical Financial Information”). The Historical
Financial Information set out on pages I-4 to I-108 forms an integral part of this report, which
has been prepared for inclusion in the prospectus of the Company dated 14 January 2026 (the
“Prospectus”) in connection with the initial listing of the shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are 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 of the Historical Financial
Information that is free from material misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 440 ---
Information in Investment Circulars as 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, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in note 2.1 to the Historical Financial Information, in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the Company
as at 31 December 2022, 2023 and 2024 and 30 September 2025 and of the financial
performance and cash flows of the Group for each of the Relevant Periods in accordance with
the basis of preparation set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative 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 nine months ended 30
September 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 accordance with the basis of preparation set out in note
2.1 to the Historical Financial Information. Our responsibility is to express a conclusion on the
Interim Comparative Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the Entity as issued by the
HKICPA. A review consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing and consequently does not enable us to obtain assurance that we would become
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 441 ---
aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion. Based on our review, nothing has come to our attention that causes
us to believe that the Interim Comparative Financial Information, for the purposes of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on the Stock
Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Relevant Periods.
Ernst & Y oung
Certified Public Accountants
Hong Kong
14 January 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 442 ---
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 & Y oung in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 443 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 29,343,152 27,185,064 46,382,472 34,920,860 31,331,603
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,978,031) (24,594,908) (43,676,093) (32,887,922) (28,725,221)
Cost of sales of goods
and services /H1118/H1118/H1118/H1118/H1118/H1118(26,874,340) (24,527,999) (43,605,123) (32,820,573) (28,659,491)
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H11186 (103,691) (66,909) (70,970) (67,349) (65,730)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,365,121 2,590,156 2,706,379 2,032,938 2,606,382
Other income and gains /H11185 251,084 309,652 578,647 441,375 536,020
Sales and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,880) (79,922) (89,840) (58,865) (69,151)
Administrative expenses /H1118 (392,774) (437,328) (506,081) (361,794) (506,135)
Research and
development expenses /H1118 (1,507,834) (1,687,762) (2,080,172) (1,472,924) (1,951,106)
Reversal of impairment
losses/(impairment
losses) on financial
assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,700 (842) (1,343) 125 (560)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,739) (46,132) (56,103) (84,489) (29,154)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (37,948) (39,896) (67,525) (56,280) (43,022)
Share of profits of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 23,588 43,154 30,042 15,976 6,614
PROFIT BEFORE TAX /H1118/H11186 588,318 651,080 514,004 456,062 549,888
Income tax expense /H1118/H1118/H1118/H111810 (26,805) (48,369) (20,654) (30,634) (35,404)
PROFIT FOR THE
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118561,513 602,711 493,350 425,428 514,484
Attributable to:
Owners of the parent /H1118/H1118 561,301 605,316 501,132 430,855 507,275
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212 (2,605) (7,782) (5,427) 7,209
561,513 602,711 493,350 425,428 514,484
EARNINGS PER SHARE
A TTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE
PARENT
Basic and diluted (RMB) /H111812 1.39 1.49 1.10 0.95 1.10
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 444 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
PROFIT FOR THE
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,513 602,711 493,350 425,428 514,484
OTHER COMPREHENSIVE
INCOME
Other comprehensive
income/(loss) that may be
reclassified to profit or loss
in subsequent periods:
Share of other comprehensive
income/(loss) of associates /H1118/H11181,234 (8,842) (7,721) (4,612) 7,100
Cash flow hedges:
Effective portion of changes in
fair value of hedging
instruments arising during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,008) (20,112) (3,790) 21,816 684
Exchange differences:
Exchange differences on
translation of foreign
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,579 13,278 9,037 (8,624) (22,355)
Net other comprehensive
income/(loss) that may be
reclassified to profit or loss
in subsequent periods /H1118/H1118/H1118/H1118/H1118/H111855,805 (15,676) (2,474) 8,580 (14,571)
OTHER COMPREHENSIVE
INCOME/(LOSS) FOR THE
YEAR/PERIOD, NET OF
TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,805 (15,676) (2,474) 8,580 (14,571)
TOTAL COMPREHENSIVE
INCOME FOR THE
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118617,318 587,035 490,876 434,008 499,913
Attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118617,106 589,640 498,658 439,435 492,643
Non-controlling interests /H1118/H1118/H1118/H1118212 (2,605) (7,782) (5,427) 7,270
617,318 587,035 490,876 434,008 499,913
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 445 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H111813 1,598,284 2,039,957 2,405,797 2,819,540
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 2,600 2,463 2,326 2,222
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 588,610 668,419 655,273 659,939
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 26,860 24,372 32,999 46,251
Investments in associates /H1118/H1118/H1118/H1118/H1118/H111817 591,151 621,541 629,787 597,832
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 164,190 145,109 187,893 221,704
Investments measured at fair
value through profit or loss /H1118/H1118/H111823 269,228 318,526 242,652 348,091
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 5,639 32,732 28,148 41,444
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11183,246,562 3,853,119 4,184,875 4,737,023
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 1,144,444 1,714,801 1,881,625 2,235,000
Trade and bills receivables /H1118/H1118/H1118/H1118/H111821 5,538,222 9,008,400 11,732,512 11,215,498
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 137,969 160,354 341,181 604,961
Investments measured at fair
value through profit or loss /H1118/H1118/H111823 – – 1,384,902 1,168,726
Derivative financial instruments /H111828 – – 726 –
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 1,184,320 692,020 1,222,947 446,532
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – 3,298 41,442 2,013
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – 93,876 46,719
Cash and cash equivalents /H1118/H1118/H1118/H1118/H111824 3,278,958 4,406,907 5,461,528 6,850,371
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,283,913 15,985,780 22,160,739 22,569,820
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111825 9,585,085 13,653,990 17,310,801 16,680,460
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 108,647 24,101 9,445 91,514
Other payables and accruals /H1118/H1118/H1118/H111826 420,837 440,433 461,536 688,742
Derivative financial instruments /H111828 3,008 23,120 27,636 47,132
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 428,787 752,815 1,806,660 3,034,508
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 53,921 60,728 75,716 68,407
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,110 35,272 32,656 36,776
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,632,395 14,990,459 19,724,450 20,647,539
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118651,518 995,321 2,436,289 1,922,281
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118/H11183,898,080 4,848,440 6,621,164 6,659,304
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 446 ---
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT
LIABILITIES
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 557,217 712,430 694,717 604,357
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 97,813 182,570 168,998 169,906
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 22,159 207 14 –
Other payables and accruals /H1118/H1118/H1118/H111826 – – 1,125 –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 64,807 127,836 163,180 145,211
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118741,996 1,023,043 1,028,034 919,474
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156,084 3,825,397 5,593,130 5,739,830
EQUITY
Equity attributable to owners of
the parent
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 405,097 405,097 465,097 469,382
Treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 – – – (265,717)
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 2,750,987 3,420,161 5,135,676 5,536,538
3,156,084 3,825,258 5,600,773 5,740,203
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118– 139 (7,643) (373)
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156,084 3,825,397 5,593,130 5,739,830
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 447 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2022
Attributable to owners of the parent
Share
capital
Capital
and other
reserve*
Share-
based
payment
reserves*
Cash flow
hedge
reserve*
Exchange
fluctuation
reserve*
Statutory
reserves*
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 RMB’000
(Note 31) (Note 33) (Note 33)
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,373,002 66,425 – (15,659) 70,664 1,044,167 2,943,696 3,000 2,946,696
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 561,301 561,301 212 561,513
Other comprehensive income for the year:
Share of other comprehensive income of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,23 4––––– 1,234 – 1,234
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (3,008) – – – (3,008) – (3,008)
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 57,579 – – 57,579 – 57,579
Total comprehensive income for the year /H1118/H1118 – 1,234 – (3,008) 57,579 – 561,301 617,106 212 617,318
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 58,23 9–––– 58,239 – 58,239
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 35,825 (35,825) – – –
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (455,053) (455,053) – (455,053)
Share of capital reserves of associates /H1118/H1118/H1118/H1118– (7,634) ––––– (7,634) – (7,634)
Acquisition of non-controlling interests /H1118/H1118/H1118– (270) ––––– (270) (3,212) (3,482)
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,366,332 124,664 (3,008) 41,920 106,489 1,114,590 3,156,084 – 3,156,084
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 448 ---
Y ear ended 31 December 2023
Attributable to owners of the parent
Share
capital
Capital
and other
reserve*
Share-
based
payment
reserves*
Cash flow
hedge
reserve*
Exchange
fluctuation
reserve*
Statutory
reserves*
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 RMB’000
(Note 31) (Note 33) (Note 33)
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,366,332 124,664 (3,008) 41,920 106,489 1,114,590 3,156,084 – 3,156,084
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 605,316 605,316 (2,605) 602,711
Other comprehensive loss for the year:
Share of other comprehensive loss of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (8,842) ––––– (8,842) – (8,842)
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (20,112) – – – (20,112) – (20,112)
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 13,278 – – 13,278 – 13,278
Total comprehensive income for the year /H1118/H1118 – (8,842) – (20,112) 13,278 – 605,316 589,640 (2,605) 587,035
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 69,62 9–––– 69,629 – 69,629
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 29,273 (29,273) – – –
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––––– 2,744 2,744
Share of capital reserves of associates /H1118/H1118/H1118/H1118– 9,90 5––––– 9,905 – 9,905
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,367,395 194,293 (23,120) 55,198 135,762 1,690,633 3,825,258 139 3,825,397
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 449 ---
Y ear ended 31 December 2024
Attributable to owners of the parent
Share
capital
Capital
and other
reserve*
Share-
based
payment
reserves*
Cash flow
hedge
reserve*
Exchange
fluctuation
reserve*
Statutory
reserves*
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 RMB’000
(Note 31) (Note 33) (Note 33)
As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,367,395 194,293 (23,120) 55,198 135,762 1,690,633 3,825,258 139 3,825,397
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 501,132 501,132 (7,782) 493,350
Other comprehensive loss for the year:
Share of other comprehensive loss of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (7,721) ––––– (7,721) – (7,721)
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (3,790) – – – (3,790) – (3,790)
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 9,037 – – 9,037 – 9,037
Total comprehensive income for the year /H1118/H1118 – (7,721) – (3,790) 9,037 – 501,132 498,658 (7,782) 490,876
Issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,000 1,500,000 ––––– 1,560,000 – 1,560,000
Share issue expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (119,321) ––––– ( 1 19,321) – (119,321)
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 71,63 4–––– 71,634 – 71,634
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 14,995 (14,995) – – –
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (232,548) (232,548) – (232,548)
Share of capital reserves of associates /H1118/H1118/H1118/H1118– (2,908) ––––– (2,908) – (2,908)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,097 2,737,445 265,927 (26,910) 64,235 150,757 1,944,222 5,600,773 (7,643) 5,593,130
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 450 ---
Nine months ended 30 September 2024
Attributable to owners of the parent
Share
capital
Capital
and other
reserve
Share-
based
payment
reserves
Cash flow
hedge
reserve
Exchange
fluctuation
reserve
Statutory
reserves
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 RMB’000
(Note 31) (Note 33) (Note 33)
As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 1,367,395 194,293 (23,120) 55,198 135,762 1,690,633 3,825,258 139 3,825,397
Profit for the period
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– 430,855 430,855 (5,427) 425,428
Other comprehensive income for the
period:
Share of other comprehensive loss of
associates (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,612) – – – – – (4,612) – (4,612)
Cash flow hedges (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 21,816 – – – 21,816 – 21,816
Exchange differences on translation of
foreign operations (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118–––– (8,624) – – (8,624) – (8,624)
Total comprehensive income for the
period (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,612) – 21,816 (8,624) – 430,855 439,435 (5,427) 434,008
Issue of shares (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,000 1,500,000 – – – – – 1,560,000 – 1,560,000
Share issue expenses (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118– (119,321) – – – – – (119,321) – (119,321)
Share-based payments (unaudited) /H1118/H1118/H1118/H1118/H1118– – 56,294 – – – – 56,294 – 56,294
Dividends declared (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– (232,548) (232,548) – (232,548)
Share of capital reserves of associates
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2 5–– ––– 2 5 – 2 5
As at 30 September 2024 (unaudited) /H1118/H1118465,097 2,743,487 250,587 (1,304) 46,574 135,762 1,888,940 5,529,143 (5,288) 5,523,855
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 451 ---
Nine months ended 30 September 2025
Attributable to owners of the parent
Share
capital
Treasury
shares
Capital
and other
reserve*
Share-
based
payment
reserves*
Cash flow
hedge
reserve*
Exchange
fluctuation
reserve*
Statutory
reserves*
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 RMB’000 RMB’000
(Note 31) (Note 33) (Note 33) (Note 33)
As at 1 January 2025 /H1118/H1118/H1118465,097 – 2,737,445 265,927 (26,910) 64,235 150,757 1,944,222 5,600,773 (7,643) 5,593,130
Profit for the period /H1118/H1118/H1118/H1118/H1118–––– ––– 507,275 507,275 7,209 514,484
Other comprehensive loss
for the period:
Share of other
comprehensive income
of associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,100 – –––– 7,100 – 7,100
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118–––– 6 8 4––– 6 8 4– 6 8 4
Exchange differences on
translation of foreign
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – (22,416) – – (22,416) 61 (22,355)
Total comprehensive
income for the period /H1118/H1118 – – 7,100 – 684 (22,416) – 507,275 492,643 7,270 499,913
Issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,285 – 78,587 – –––– 82,872 – 82,872
Shares repurchased under a
share award scheme /H1118/H1118/H1118– (299,820) (49) – –––– (299,869) – (299,869)
Shares repurchase
obligation recognised /H1118/H1118/H1118– (216,548) – – –––– (216,548) – (216,548)
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 452 ---
Attributable to owners of the parent
Share
capital
Treasury
shares
Capital
and other
reserve*
Share-
based
payment
reserves*
Cash flow
hedge
reserve*
Exchange
fluctuation
reserve*
Statutory
reserves*
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 RMB’000 RMB’000
(Note 31) (Note 33) (Note 33) (Note 33)
Issue of shares granted
under a share award
scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 250,651 (116,975) – –––– 133,676 – 133,676
Share-based payments /H1118/H1118/H1118/H1118– – 2,309 88,593 –––– 90,902 – 90,902
Dividends declared /H1118/H1118/H1118/H1118/H1118–––– ––– (228,798) (228,798) – (228,798)
Share of capital reserves of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 84,552 – –––– 84,552 – 84,552
As at 30 September 2025 /H1118 469,382 (265,717) 2,792,969 354,520 (26,226) 41,819 150,757 2,222,699 5,740,203 (373) 5,739,830
* These reserve accounts represent the total consolidated reserves of RMB2,750,987,000, RMB3,420,161,000, RMB5,135,676,000 and RMB5,536,538,0 00 in the consolidated
statements of financial position as at 31 December 2022, 2023 and 2024 and 30 September 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 453 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118588,318 651,080 514,004 456,062 549,888
Adjustments for:
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,948 39,896 67,525 56,280 50,822
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (102,502) (139,912) (160,361) (105,311) (96,866)
(Reversal of impairment
losses)/impairment losses on
financial assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,700) 842 1,343 (125) 560
Impairment of prepayments /H1118/H1118/H1118/H1118/H11186 – – 39,111 – –
Impairment of inventories /H1118/H1118/H1118/H1118/H1118/H11186, 20 103,691 66,909 70,970 67,349 65,730
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186, 13 236,512 270,909 338,922 256,571 294,863
Amortisation of other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186, 16 23,641 24,463 22,787 17,160 16,709
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186, 15 61,107 74,116 84,567 68,860 70,699
Depreciation of investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186, 14 137 137 137 103 104
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 58,239 69,629 71,634 56,294 88,593
Loss on disposal of items of
property, plant and equipment,
and other intangible assets /H1118/H1118/H1118/H11186 12,797 12,398 2,531 2,455 8,797
Loss/(gain) on lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118231 (3,682) 3,760 248 (41)
Fair value changes in investments
measured at fair value through
profit or loss, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 37,666 (30,687) (517) 10,871 (95,204)
Share of profits of associates /H1118/H1118/H1118/H111817 (23,588) (43,154) (30,042) (15,976) (6,614)
Gain on disposal of investments
measured at fair value through
profit or loss, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (7,675) – (6,630) (13,047) (5,116)
Loss/(gain) on settlement of
derivative financial instruments /H11186 5,626 20,095 (4,531) (270) (20,951)
Foreign exchange differences, net /H1118 (988) 7,356 10,671 82,835 18,586
1,028,460 1,020,395 1,025,881 940,359 940,559
Decrease/(increase) in inventories /H1118 586,162 (637,267) (237,793) (1,116,514) (419,105)
Decrease/(increase) in trade and
bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,205,868 (3,473,915) (2,764,391) (3,029,719) 424,401
Decrease/(increase) in
prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,123 19,826 (189,820) (29,976) (242,204)
(Decrease)/increase in trade and
bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(331,832) 4,020,757 3,627,928 4,260,431 (706,116)
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 454 ---
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
(Decrease)/increase in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(236,861) (38,004) 20,228 (45,038) 8,536
(Decrease)/increase in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,617) (84,546) (14,656) (3,521) 82,069
(Decrease)/increase in deferred
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,151) 63,029 35,344 25,326 (17,969)
(Increase)/decrease in restricted
cash and pledged deposits /H1118/H1118/H1118/H1118(907,740) 489,002 (569,071) (130,437) 815,844
Cash generated from operations /H1118/H11181,427,412 1,379,277 933,650 870,911 886,015
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,502 139,912 160,361 105,311 96,866
Taxes paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,925) (52,961) (67,518) (56,635) (67,120)
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,470,989 1,466,228 1,026,493 919,587 915,761
CASH FLOWS FROM
INVESTING ACTIVITIES
Proceeds from disposal of
investments measured at fair
value through profit or loss /H1118/H1118/H11185,769,434 – 8,078,407 6,201,421 18,728,408
Settlement of derivative financial
instruments, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (20,095) 11,643 124 42,107
Disposal of an associate /H1118/H1118/H1118/H1118/H1118/H1118/H11189,589 – – – –
Dividends received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,727 25,060 35,412 29,796 143,507
Purchases of items of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(659,183) (646,891) (675,975) (481,318) (641,360)
Additions to other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,968) (32,365) (31,450) (21,976) (25,840)
Proceeds from disposal of items
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,921 1,584 3,145 219 2,614
Purchases of investments
measured at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,018,954) (25,000) (9,394,900) (7,130,764) (18,544,716)
Investment in an associate /H1118/H1118/H1118/H1118/H1118(13,651) – – – –
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118– (767) – – (35,775)
Increase in other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220 525 875 495 850
Decrease/(increase) in non-
pledged time deposits with
original maturity of three
months or more when acquired /H1118 382,000 – (93,876) (25,142) 47,157
Increase in prepayments, other
receivables and other assets /H1118/H1118/H1118 – – – – (6,820)
Additions to leasehold land /H1118/H1118/H1118/H1118/H111815(a) (414,513) (118) – – –
Net cash flows from/(used in)
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,064,622 (698,067) (2,066,719) (1,427,145) (289,868)
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 455 ---
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
FINANCING ACTIVITIES
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,847) (38,505) (50,427) (47,959) (49,269)
Discount interest on bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,554) (3,128) (13,619) (7,316) (4,840)
Proceeds from issue of shares /H1118/H1118/H1118 – – 1,482,000 1,482,000 82,872
Share issue expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,755) (3,716) (33,473) (32,461) (18,910)
New bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,536,543 2,168,253 3,890,482 3,366,159 4,568,212
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118(1,529,202) (1,690,403) (2,853,064) (2,852,226) (3,331,618)
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815(b) (56,850) (65,357) (83,833) (60,658) (69,920)
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(455,053) – (232,548) (232,548) (228,798)
Withdrawal of pledged deposits /H1118 1,651 – – – –
Acquisition of non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,482) – – – –
Repurchase of shares held for
a share award scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (299,869)
Proceeds from shares granted
under a share award scheme /H1118/H1118/H1118 – – – – 133,676
Net cash flows (used in)/from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(547,549) 367,144 2,105,518 1,614,991 781,536
NET INCREASE IN CASH
AND CASH EQUIV ALENTS /H1118 1,988,062 1,135,305 1,065,292 1,107,433 1,407,429
Cash and cash equivalents at
beginning of year/period /H1118/H1118/H1118/H1118/H11181,289,908 3,278,958 4,406,907 4,406,907 5,461,528
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118988 (7,356) (10,671) (82,835) (18,586)
CASH AND CASH
EQUIV ALENTS A T END OF
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,278,958 4,406,907 5,461,528 5,431,505 6,850,371
ANAL YSIS OF BALANCES OF
CASH AND CASH
EQUIV ALENTS
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H11184,463,278 5,102,225 6,819,793 6,282,402 7,345,635
Less: Non-pledged time deposits
with original maturity
more than three months /H1118 – – 93,876 25,142 46,719
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 41,442 1,172 2,013
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,320 692,020 1,222,947 824,583 446,532
Cash and cash equivalents as
stated in the statement of cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,278,958 4,406,907 5,461,528 5,431,505 6,850,371
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 456 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H111813 76,154 72,509 81,458 102,656
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 8,960 3,369 10,682 12,370
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H111816 15,955 15,803 15,906 19,628
Investments in subsidiaries /H1118/H1118/H1118/H111818 856,008 856,008 1,386,008 1,401,534
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 63,739 57,348 83,469 103,191
Investments measured at fair
value through profit or loss /H111823 63,429 121,739 53,992 179,987
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 2,169 6,586 9,497 13,765
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H11181,086,414 1,133,362 1,641,012 1,833,131
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,551 2,368 3,565 3,961
Trade and bills receivables /H1118/H1118/H1118/H111821 517,477 440,157 1,171,241 1,348,056
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 1,428,997 1,436,094 1,877,855 2,039,353
Investments measured at fair
value through profit or loss /H111823 – – 554,298 395,973
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – 726 –
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 558,428 55,352 98,524 50,000
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 ––3 3
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – 25,423 13,670
Cash and cash equivalents /H1118/H1118/H1118/H111824 1,117,225 1,449,794 1,359,001 1,860,484
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,625,678 3,383,765 5,090,636 5,711,500
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H111825 1,665,898 474,210 1,593,533 1,018,944
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 20,379 – – 1,578
Other payables and accruals /H1118/H1118/H111826 716,376 1,376,992 1,142,805 2,629,111
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – 1,793 – 1,316
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 10,509 150,104 42,835 254,423
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 5,609 3,409 6,731 7,342
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11182,418,771 2,006,508 2,785,904 3,912,714
NET CURRENT ASSETS /H1118/H1118/H1118/H11181,206,907 1,377,257 2,304,732 1,798,786
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118 2,293,321 2,510,619 3,945,744 3,631,917
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 457 ---
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT
LIABILITIES
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 135,573 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 3,358 – 3,939 5,157
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111819 3,085 – – –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 3,351 2,104 1,051 824
Total non-current liabilities /H1118/H1118/H1118145,367 2,104 4,990 5,981
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,147,954 2,508,515 3,940,754 3,625,936
EQUITY
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 405,097 405,097 465,097 469,382
Treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 – – – (265,717)
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 1,742,857 2,103,418 3,475,657 3,422,271
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,147,954 2,508,515 3,940,754 3,625,936
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 458 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
The Company was established in the People’s Republic of China (the “PRC”) as a wholly foreign owned
enterprise on 27 October 2004. The Company’s ordinary shares were listed on the Shanghai Stock Exchange on 1
March 2024. The registered office of the Company is located at Building 1, No. 401 Caobao Road, Xuhui District,
Shanghai, the PRC.
During the Relevant Periods, the Company and its subsidiaries (collectively, the “Group”) are engaging in the
manufacture and sale of smartphones, tablets, artificial intelligence and internet of things (“AIoT”) products and
other electronic equipment and the provision of research and development (“R&D”) and technical services.
As at the end of the Relevant Periods, the Company had direct and indirect interests in its subsidiaries, all of
which are private limited liability companies, the particulars of the subsidiaries are set out below:
Name Notes
Place and date of
incorporation/
registration and
operations
Nominal value of
issued ordinary
share capital/
registered capital
Percentage of
equity attributable
to the Company
Principal activitiesDirect Indirect
(’000) % %
Shanghai Haocheng Information
Technology Co., Ltd.
ʮ̡ /H1118/H1118
(1) PRC/Chinese
mainland/
13 October 2009
RMB18,000 100.00 – Technical research and
development, and design
Miaobo Software Co., Ltd.
ʮ̡ /H1118/H1118
(2) PRC/Chinese
mainland/
16 January 2014
RMB10,000 100.00 – Software technology
research and
development, design, and
software sales
Guolong Information
Technology (Shanghai)
Co., Ltd.
Ҧஔ(ɪऎ)ʮ̡ /H1118
(2) PRC/Chinese
mainland/
13 December
2004
RMB120,000 100.00 – Technical research and
development, design, and
sales of products to
overseas customers
Shanghai Huanmi Technology
Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118
(1), (3) PRC/Chinese
mainland/
21 October 2016
RMB18,200 – 100.00 Research, design and sale of
optical products
Huizhou Longcheer Automotive
Electronics Co., Ltd.
ʮ̡ /H1118/H1118
(4) PRC/Chinese
mainland/
30 January 2019
RMB50,000 – 100.00 Sales of products to
domestic customers
Longcheer Electronics
(Huizhou) Co., Ltd.
Ꮂ࿩ཥɿ(౉ψ)ʮ̡ /H1118/H1118/H1118
(4) PRC/Chinese
mainland/
26 November
2009
RMB600,000 100.00 – Manufacture of mobile
phones and tablet
computers and the
procurement of raw
materials
Shanghai Longcheer Information
Co., Ltd.
ʮ̡ /H1118/H1118
(1) PRC/Chinese
mainland/
5 July 2017
RMB10,000 100.00 – Investment holding
Nanchang Longcheer
Information Technology Co.,
Ltd.
ʮ̡ /H1118/H1118
(5) PRC/Chinese
mainland/17 July
2017
RMB1,800,000 – 100.00 Manufacturing business of
mobile phones, tablet
computers and AIoT
products, and the
procurement of raw
materials
Nanchang Longcheer Smart
Technology Co., Ltd.
ʮ̡ /H1118/H1118
(5) PRC/Chinese
mainland/27 July
2022
RMB20,000 – 100.00 Technical research and
development, and design
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 459 ---
Name Notes
Place and date of
incorporation/
registration and
operations
Nominal value of
issued ordinary
share capital/
registered capital
Percentage of
equity attributable
to the Company
Principal activitiesDirect Indirect
(’000) % %
Longcheer Telecommunication
(H.K.) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6) Hong Kong/
21 April 2004
Hong Kong
Dollar
(“HKD”) 10
100.00 – Procurement and sales of
raw materials overseas
Longcheer Technology (U.S.)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(12) The United States/
22 February
2016
United States
Dollar
(“USD”) 400
– 100.00 Business expansion and
sales in the U.S.
Longcheer Mobile (India)
Private Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118
(7) India/5 July 2017 Indian Rupee
(“INR”) 100
– 100.00 Sales of products to
overseas
Longcheer Telecommunication
Company Limited /H1118/H1118/H1118/H1118/H1118/H1118
(8) Malaysia/9 March
2018
USD0.001 – 100.00 Sales of products to
overseas
Longcheer Korea Technology
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(12) Republic of Korea/
21 November
2019
Korean Won
(“KRW”)
100,000
– 100.00 Business expansion and
sales of products in
Korea
Nanchang Sinolong Co., Ltd.
ʮ̡ /H1118/H1118
(5) PRC/Chinese
mainland/
30 March 2020
RMB50,000 – 100.00 Sales of products to
domestic customers
Shanghai Longcheer Smart
Technology Co., Ltd.
ʮ̡ /H1118/H1118
(2) PRC/Chinese
mainland/
19 October 2021
RMB600,000 100.00 – Technical research and
development, design, and
sales of products to
domestic customers
Shanghai Longcheer Industrial
Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118
(1) PRC/Chinese
mainland/
22 October 2021
RMB18,000 100.00 – Investment holding
Sinolong Technology (H.K)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(9) Hong Kong/
3 November
2021
HKD0.001 – 100.00 Investment holding
Longcheer Meiko Electronics
Vietnam Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
(10) Vietnam/20 May
2020
Vietnamese Dong
(“VND”)
115,825,000
– 80.00 Assembly, processing,
manufacture, export, and
wholesale of electronic
components
Longcheer Intelligence
Pte. Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(11) Singapore/26 June
2023
USD2,200 – 100.00 Investment holding
Longcheer Japan Co., Ltd. /H1118/H1118/H1118(12) Japan/7 December
2023
Japanese Y en
(“JPY”) 75,000
– 100.00 Business expansion and
sales of products in
Japan
Hefei Longcheer Smart
Technology Co., Ltd.
ʮ̡ /H1118/H1118
(1) PRC/Chinese
mainland/
22 November
2021
RMB10,000 100.00 – R&D, design, and sales of
products to domestic
customers
Huizhou Longhe Technology
Co., Ltd.
ʮ̡ /H1118/H1118/H1118
(13) PRC/Chinese
mainland/
3 December
2009
RMB46,000 – 100.00 Property development
The English names of all group companies registered in the PRC, Republic of Korea and Japan represent the
best efforts made by the management of the Company to translate the names of these companies as they do not have
official English names.
Notes:
(1) The statutory financial statements of these entities for the years ended 31 December 2022 and 2023 prepared
in accordance with generally accepted accounting principles in the Chinese mainland were audited by Shanghai
Oukemeng Certified Public Accountants Co., Ltd. (ʮ̡), a certified public
accounting firm registered in the PRC and the statutory financial statements of these entities for the year ended
31 December 2024 prepared in accordance with generally accepted accounting principles in the Chinese
mainland were audited by RSM (ה(౷ஷΥྫ)), a certified public accounting firm
registered in the PRC.
(2) The statutory financial statements of these entities for the years ended 31 December 2022, 2023 and 2024
prepared in accordance with generally accepted accounting principles in the Chinese mainland were audited
by RSM (ה(౷ஷΥྫ)), a certified public accounting firm registered in the PRC.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 460 ---
(3) The Group held an 87.91% equity interest in Shanghai Huanmi Technology Co., Ltd. upon the registration of
this entity. On 31 August 2022, the Group acquired all non-controlling interests in Shanghai Huanmi
Technology Co., Ltd.
(4) The statutory financial statements of these entities for the years ended 31 December 2022, 2023 and 2024
prepared in accordance with generally accepted accounting principles in the Chinese mainland were audited
by Huizhou Shangpin Xinyuan Certified Public Accountants (ה(౷ஷΥྫ)), a
certified public accounting firm registered in the PRC.
(5) The statutory financial statements of these entities for the years ended 31 December 2022, 2023 and 2024
prepared in accordance with generally accepted accounting principles in the Chinese mainland were audited
by Nanchang Huaxi Certified Public Accountants (ה(౷ஷΥྫ)), a certified public
accounting firm registered in the PRC.
(6) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024
prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of
Certified Public Accountants have been audited by Flexkin & Co. CPA Limited (ʮ̡),
a certified public accounting firm registered in Hong Kong.
(7) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024,
prepared in accordance with AS Accounting Standards prescribed under section 133 of the Act read with the
Companies (Accounting Standards) Rules, 2006, as amended, (“AS”) and other accounting principles generally
accepted in India, were audited by Niti nKG& Company, Niti nKG& Company, and Juno Consultants Pvt
Ltd, respectively, both of which are certified public accounting firms registered in India.
(8) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024
prepared in accordance with Malaysian Financial Reporting Standards, IFRS Accounting Standards and the
requirements of the Labuan Companies Act, 1990 in Malaysia have been audited by KCSM, a certified public
accounting firm registered in Malaysia.
(9) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024,
prepared in accordance with the Small and Medium-sized Entity Financial Reporting Standard (“SME-FRS”)
issued by the HKICPA, were audited by Flexkin Corporate Services Limited, Flexkin Corporate Services
Limited, and Flexkin & Co CPA Limited, respectively, both of which are certified public accounting firms
registered in Hong Kong.
(10) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024,
prepared in accordance with Vietnamese Enterprise Accounting Regime and the Vietnamese Accounting
System and Standards, were audited by KPMG Vietnam Limited, FINDIRECT Auditing and V aluation
Company Limited, and International Audit and Evaluation Co., LTD, respectively, both of which are certified
public accounting firms registered in Vietnam.
(11) This company was incorporated on 26 June 2023. The statutory financial statements of this company for the
year ended 31 December 2024 prepared in accordance with the provisions of the Companies Act 1967 (the Act)
and Financial Reporting Standards in Singapore (“FRSs”) were audited by ERI PENGSHENG PAC, a certified
public accounting firm registered in Singapore.
(12) No audited financial statements have been prepared for these entities since their dates of incorporation as these
entities were not subject to any statutory audit requirements under the relevant rules and regulations in their
jurisdictions of incorporation.
(13) This subsidiary was acquired by the Group in May 2025. The statutory financial statements for the year ended
31 December 2024 prepared in accordance with generally accepted accounting principles in the Chinese
mainland were audited by Huizhou Shangpin Xinyuan Certified Public Accountants (ࢪࠇ
ה(౷ஷΥྫ)), a certified public accounting firm registered in the PRC. No audited financial statements
have been prepared for the years ended 31 December 2022 and 2023 as it was not subject to any statutory audit
requirements under the relevant rules and regulations in its jurisdictions of incorporation.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 461 ---
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards, which
comprise all standards and interpretations approved by the International Accounting Standards Board (the “IASB”).
All IFRS Accounting Standards effective for the accounting period commencing from 1 January 2025, together with
the relevant transitional provisions, have been early adopted by the Group in the preparation of the Historical
Financial Information throughout the Relevant Periods.
The Historical Financial Information has been prepared under the historical cost convention except for
investments measured at fair value through profit or loss, derivative financial instruments which have been measured
at fair value.
Basis of consolidation
The Historical Financial Information includes the financial statements of the Group for the Relevant Periods.
A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control
is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the
current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the Company has
less than a majority of the voting or similar rights of 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.
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, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control described above. A change in the ownership interest of a
subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
any non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment
retained and any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised
in other comprehensive income is reclassified to profit or 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 462 ---
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 the Historical Financial Information. The Group intends to apply these new and amended
IFRS Accounting Standards, if applicable, when they become effective.
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial Statements
2
IFRS 19 and its amendments /H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118Amendments to the Classification and Measurement of
Financial Instruments 1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10 and IAS 28 /H1118/H1118Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture 3
Annual Improvements to IFRS
Accounting Standards — V olume 11 /H1118
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 1
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation Currency 2
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
IFRS 18 replaces IAS 1 Presentation of Financial Statements . While a number of sections have been brought
forward from IAS 1 with limited changes, IFRS 18 introduces new requirements for presentation within the statement
of profit or loss, including specified totals and subtotals. Entities are required to classify all income and expenses
within the statement of profit or loss into one of the five categories: operating, investing, financing, income taxes and
discontinued operations and to present two new defined subtotals. It also requires disclosures about management-
defined performance measures in a single note and introduces enhanced requirements on the grouping (aggregation
and disaggregation) and the location of information in both the primary financial statements and the notes. Some
requirements previously included in IAS 1 are moved to IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors , which is renamed as IAS 8 Basis of Preparation of Financial Statements. As a consequence of the
issuance of IFRS 18, limited, but widely applicable, amendments are made to IAS 7 Statement of Cash Flows, IAS
33 Earnings per Share and IAS 34 Interim Financial Reporting. In addition, there are minor consequential
amendments to other IFRS Accounting Standards. IFRS 18 and the consequential amendments to other IFRS
Accounting Standards are effective for annual periods beginning on or after 1 January 2027 with earlier application
permitted. Retrospective application is required. The application of IFRS 18 is not expected to have material impact
on the financial position of the Group but is expected to affect the presentation of the statements of profit or loss and
disclosures.
The Group has already commenced an assessment of the impact of these new and revised IFRS, which are
relevant to the Group’s operations. According to the preliminary assessment made by the directors, no significant
impact on the financial performance and financial position of the Group is expected when new and amended IFRS
Accounting Standards become effective.
2.3 MATERIAL ACCOUNTING POLICIES
Investments in associates
An associate is an entity in which the Group 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. The Group’s share
of the post-acquisition results and other comprehensive income of associates is included in the consolidated statement
of profit or loss and consolidated other comprehensive income, respectively. In addition, when there has been a
change recognised directly in the equity 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 resulting 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
acquisition of associates is included as part of the Group’s investments in associates.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 463 ---
If an investment in an associate becomes an investment in joint ventures 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 Group measures and recognises any retained investment at
its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the
fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred is
measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred
by the Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued
by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to
measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s
identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition-
related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets includes
an input and a substantive process that together significantly contribute to the ability to create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts of the
acquiree.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition
date. Contingent consideration classified as an asset or liability is measured at fair value with changes in fair value
recognised in profit or loss. Contingent consideration that is classified as equity is not remeasured and subsequent
settlement is accounted for within equity.
Fair value measurement
The Group measures its structured deposits, wealth management products, derivative financial instruments and
equity investments at fair value at the end of each reporting period. Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal market for the asset or liability, or in the absence of a principal market,
in the most advantageous market for the asset or liability. The principal or the most advantageous market must be
accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its 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 financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 464 ---
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an non-financial asset is
required (other than inventories, deferred tax assets and non-current assets), 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 smallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. An
impairment loss is charged to 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.
An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there
has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher
than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment
loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss
in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 465 ---
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated
depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase
price and any directly attributable costs of bringing the asset to its working condition and location for its intended
use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs
and maintenance, is normally charged to 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 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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189% to 30%
Office equipment and electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 18% to 30%
V ehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818% to 30%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shorter of the remaining lease terms and estimated
useful lives
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 including any significant part initially recognised is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
or retirement recognised in the statement of 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 appropriate category of property, plant and equipment when completed and ready for use.
Investment properties
Investment properties are interests in land and buildings (including the leasehold property held as a
right-of-use asset which would otherwise meet the definition of an investment property) held to earn rental income
and/or for capital appreciation, rather than for use in the production or supply of goods or services or for
administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost,
including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less any
impairment loss and are depreciated on the straight-line basis over their estimated useful lives.
Any gains or losses on the retirement or disposal of an investment property are recognised in the statement of
profit or loss in the year of the retirement or disposal.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 466 ---
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is the fair value at the date of acquisition. The useful lives of intangible assets
are assessed to be finite. Intangible assets with finite lives are subsequently amortised over the useful economic life
and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least
at each financial year end.
Software
Purchased software is stated at cost less any impairment losses and is amortised on the straight-line basis over
its estimated useful life of 2 to 5 years.
Research and development expenses
All research and development expenses are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its
intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the project and the ability to measure reliably the expenditure during the
development. Product development expenditure which does not meet these criteria is expensed when incurred.
Development costs are stated at cost less any impairment losses and are amortised using the straight-line basis
over the commercial lives of the underlying products, commencing from the date when the products are put into
commercial production.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease terms and the estimated useful lives of the assets as follows:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 10 years
Plant and machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 10 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 10 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 467 ---
(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 termination of a lease, if the lease term
reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on
an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification,
a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a
change in an index or rate) or a change in assessment of an option to purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (that is those leases that have a lease term of 12 months or less from the commencement date and do not
contain a purchase option). It also applies the recognition exemption for leases of low-value assets to leases of office
equipment 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.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each
of its leases as an operating lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of
an asset are classified as operating leases. When a contract contains lease and non-lease components, the Group
allocates the consideration in the contract to each component on a relative stand-alone selling price basis. Rental
income is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of
profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental
income. Contingent rents are recognised as revenue in the period in which they are earned.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost and fair value
through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient of not
adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair
value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are
measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue
recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other
comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”)
on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured
at fair value through profit or loss, irrespective of the business model.
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 468 ---
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. Financial assets classified and measured at amortised cost are held
within a business model with the objective to hold financial assets in order to collect contractual cash flows, while
financial assets classified and measured at fair value through other comprehensive income are held within a business
model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not
held within the aforementioned business models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established by
regulation or convention in the marketplace are recognised on the trade date, that is, the date that the Group commits
to purchase or sell the asset.
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 statement of profit or loss when the asset is
derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and equity investments which the Group had not irrevocably
elected to classify at fair value through other comprehensive income. Dividends on the equity investments are also
recognised as other income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from
the host and accounted for as a separate derivative if the economic characteristics and risks are not closely related
to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment occurs
if there is a change in the terms of the contract that significantly modifies the cash flows.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for
separately.
The financial asset host together with the embedded derivative is required to be classified in its entirety as a
financial asset at fair value through profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 469 ---
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When
it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement.
In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information.The Group considers that there has
been a significant increase in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due. 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 contractual amounts in full before taking into account
any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified
approach as detailed below.
Stage 1 — Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 — Financial instruments for which credit risk has increased significantly since initial recognition
but that are not credit-impaired financial assets and for which the loss allowance is measured
at an amount equal to lifetime ECLs
Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal
to lifetime ECLs
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 470 ---
Simplified approach
For trade and bills receivables that do not contain a significant financing component or when the Group applies
the practical expedient of not adjusting the effect of a significant financing component, the Group applies the
simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit
risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. 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 initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and bills payables, financial liabilities included in other payables
and accruals, derivative financial instruments and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and bills payables, financial liabilities included in other payables and accruals
and interest-bearing bank borrowings are subsequently measured at amortised cost, using the effective interest rate
method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses
are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective
interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance
costs in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or
expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are 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 statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 471 ---
Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as forward currency contracts, to hedge its foreign
currency risk. Such derivative financial instruments are initially 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
when the fair value is positive and as liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging the exposure to
variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability
or a highly probable forecast transaction, or a foreign currency risk in an unrecognised firm commitment.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship
to which the Group wishes to apply hedge accounting, the risk management objective and its strategy for undertaking
the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk
being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness
requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A
hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
 There is “an economic relationship” between the hedged item and the hedging instrument.
 The effect of credit risk does not “dominate the value changes” that result from that economic
relationship.
 The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the Group actually hedges and the quantity of the hedging instrument that the Group actually
uses to hedge that quantity of hedged item.
Hedges which meet all the qualifying criteria for hedge accounting are accounted for as follows:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised directly in other
comprehensive income in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the
statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on
the hedging instrument and the cumulative change in fair value of the hedged item.
The amounts accumulated in other comprehensive income are accounted for, depending on the nature of the
underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial
item, the amount accumulated in equity is removed from the separate component of equity and included in the initial
cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not
be recognised in other comprehensive income for the period. This also applies where the hedged forecast transaction
of a non-financial asset or non-financial liability subsequently becomes a firm commitment to which fair value hedge
accounting is applied.
For any other cash flow hedges, the amount accumulated in other comprehensive income is reclassified to the
statement of profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash
flows affect the statement of profit or loss.
If cash flow hedge accounting is discontinued, the amount that has been accumulated in other comprehensive
income must remain in accumulated other comprehensive income if the hedged future cash flows are still expected
to occur. Otherwise, the amount will be immediately reclassified to the statement of profit or loss as a reclassification
adjustment. After the discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated other
comprehensive income is accounted for depending on the nature of the underlying transaction as described above.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 472 ---
Treasury shares
Own equity instruments which are reacquired and held by the Company or the Group (treasury shares) are
recognised directly in equity at cost. No gain or loss is recognised in the statement of profit or loss on the purchase,
sale, issue or cancellation of the Group’s own equity instruments.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an
appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs
to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-
term highly liquid deposits with a maturity of generally within three months that are readily convertible into known
amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of meeting short-term
cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand
and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form
an integral part of the Group’s cash management.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss
is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the
Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries and associates,
when the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carryforward of unused tax credits and
unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences; and
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 473 ---
 in respect of deductible temporary differences associated with investments in subsidiaries, associates
and deferred tax assets are only recognised to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right
to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period 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 statement of profit or loss over the expected useful life of the relevant asset by equal annual instalments or
deducted from the carrying amount of the asset and released to the statement of profit or loss by way of a reduced
depreciation charge.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred to the
customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those
goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to
which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable
consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue
reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the
variable consideration is subsequently resolved.
(a) Sale of smartphones, tablets, AIoT products and other electronic equipment
The Group sells smartphones, tablets, AIoT products and other electronic equipment to customers. Revenue
from the sale of products is recognised at the point in time when control of the products is transferred to the customer,
generally when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the
customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location,
the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the
products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective
evidence that all criteria for acceptance have been satisfied.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 474 ---
The Group sells products to a customer who is also the supplier of key materials used in the manufacturing
of products. The Group obtains the control of the materials purchased from the customer and provides significant
services to integrate materials with other goods and services into a portfolio of outputs. The Group considered itself
as a principal in the arrangement and accordingly recognises revenue on a gross basis.
(b) Provision of R&D and technical services
The Group recognises revenue from the R&D and technical services at a point in time when the relevant
services are rendered and acknowledged for receipt by the customers.
(c) Contract manufacturing services
The Group provides processing services and charges processing fees exclusively. Revenue is recognised at a
point in time when the finished products meet the delivery criteria and are transferred to customers.
Revenue from other sources
Rental income is recognised on a time proportion basis over the lease terms. V ariable lease payments that do
not depend on an index or a rate are recognised as income in the accounting period in which they are incurred.
Other income
Interest income is recognised on an accrual basis using the effective interest 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.
Dividend income
Dividend income is recognised when the shareholders’ right to receive payment has been established, it is
probable that the economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from
a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue
when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
Share-based payments
Several employee incentive schemes are operated for the purpose of providing incentives and rewards to
eligible participants who contribute to the success of the Group’s operations. 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 is
measured by reference to the fair value at the date at which they are granted. The fair value is determined by an
external valuer based on a recent transaction price, further details of which are given in note 32 to the Historical
Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents
the movement in the cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance 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 reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 475 ---
For awards that do not ultimately vest because non-market performance and/or service conditions have not
been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are
treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any
modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee
as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award is recognised immediately.
Other employee benefits
Pension schemes
The employees of the Company and the Group’s subsidiaries which operate in the Chinese mainland are
required to participate in a central pension schemes operated by the local municipal government. These subsidiaries
are required to contribute a certain percentage of their payroll costs to the central pension scheme. The contributions
are charged to the statement of profit or loss as they become payable in accordance with the rules of the central
pension scheme.
Housing fund and other social insurances
The Group has participated in defined social security contribution schemes for its employees pursuant to the
relevant laws and regulations of the PRC. These include housing fund, basic medical insurance, unemployment
insurance, injury insurance and maternity insurance. The Group makes monthly contributions to the housing fund and
other social insurances. The contributions are charged to profit or loss on an accrual basis. The Group’s liability in
respect of these funds is limited to the contributions payable in each reporting period.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e.,
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially
ready for their intended use or sale. All other borrowing costs are expensed in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders in a general meeting.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency.
Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective
functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period.
Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss
on change in fair value of 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).
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 476 ---
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of
initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability
arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines
the transaction date for each payment or receipt of the advance consideration.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures. Uncertainty about these assumptions and estimates could result in outcomes that could require a material
adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in the
financial statements:
Principal versus agent considerations
The Group sells products to a customer who is also the supplier of key materials used in the manufacturing
of products. The Group needs to determine whether it is a principal or an agent in these transactions by evaluating
the nature of its promise to the customer. The Group is a principal and therefore records revenue on a gross basis if
it controls promised goods before transferring the goods to the customer. Otherwise, the Group is an agent and
records as revenue the net amount that it retains for its agency services if its role is to arrange to provide the goods.
To assess whether the Group controls the goods before they are transferred to the customer, the Group has considered
various factors, including but not limited to whether the Group (i) is the principal in the arrangement, (ii) has general
inventory risk, (iii) has latitude in establishing the selling price and (iv) has significant involvement in the
determination of product and service specifications.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will
be available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits,
together with future tax planning strategies.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.
Share-based payments
The Group operates employee incentive schemes for the purpose of providing incentives to the Company’s
directors and the Group’s employees. The grant date fair value of the shares of the employee incentive schemes was
determined based on investors’ recent capital injection price. Further details are contained in note 32 to the Historical
Financial Information.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on
days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product
type, customer type and rating).
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 477 ---
The provision matrix is initially based on the Group’s historical observed default rates. The Group will
calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if
forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can
lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At each
reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are
analysed.
The assessment of the correlation among historical observed default rates, forecast economic conditions and
ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic
conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be
representative of a customer’s actual default in the future.
Impairment of inventories
The Group periodically assesses the net realisable value of its inventories and provides for inventory
impairment based on the difference between the cost of the inventory and the net realisable value. When estimating
the net realisable value of inventories, management considers the purpose for which the inventories are held, as well
as future use or sales as the basis for estimation. Where the expectation is different from the original estimate, such
difference will impact on the carrying value of the inventories and write-down of inventories in the period in which
such estimates have been changed.
Fair value measurement for unlisted investments
The Group made unlisted investments in a wide variety of companies and those investments are accounted for
as financial assets at fair value through profit or loss. The fair values of those investments are determined using
valuation techniques and the Group exercises judgement to select a variety of methods and makes assumptions that
are mainly based on market conditions existing at the end of each reporting date. Further details are included in note
41. Should any of the estimates and assumptions change, it may lead to a material change in the respective fair values
of these financial assets.
4. OPERATING SEGMENT INFORMATION
The Group is principally engaged in the manufacture and sale of smartphones, tablets, AIoT products and other
electronic equipment and the provision of R&D and technical services. Information reported to the Group’s chief
operating decision maker, for the purpose of resource allocation and performance assessment, focuses on the
operating results of the Group as a whole as the Group’s resources are integrated and no discrete operating segment
financial information is available. Accordingly, no operating segment information is presented.
Geographical information
(a) Revenue from external customers
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H111822,279,637 23,392,783 31,406,597 23,041,794 19,065,646
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,063,515 3,792,281 14,975,875 11,879,066 12,265,957
Total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 27,185,064 46,382,472 34,920,860 31,331,603
The revenue information above is based on the locations of the customers.
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 478 ---
(b) Non-current assets
Information about the Group’s non-current assets excluding deferred tax assets and financial instruments is
presented based on the geographical locations of the assets.
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,212,436 2,583,074 2,905,348 2,895,330
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118600,708 806,410 848,982 1,261,881
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,813,144 3,389,484 3,754,330 4,157,211
Information about major customers
External customers that contributed over 10% of total revenue of the Group during each of the Relevant
Periods and the nine months ended 30 September 2024 were as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,357,127 11,519,947 17,261,692 12,764,718 8,953,639
Customer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,387,885 * 6,903,382 5,301,053 4,035,523
Customer F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 2,989,087 * * *
Customer D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 2,832,977 * * *
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * 8,012,394 6,398,595 7,236,973
* Less than 10% of the Group’s revenue
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts
with customers /H1118/H1118/H1118/H1118/H1118/H111829,343,152 27,185,064 46,382,472 34,920,860 31,331,603
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 479 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Types of goods or
services
Smartphones /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,265,640 21,821,620 36,132,747 27,885,130 21,704,132
Tablets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,798,156 2,509,102 3,696,313 2,542,749 2,990,404
AIoT and other products /H1118/H11181,887,127 2,510,561 5,573,138 3,837,130 5,603,482
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,229 343,781 980,274 655,851 1,033,585
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 27,185,064 46,382,472 34,920,860 31,331,603
Geographical markets
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H111822,279,637 23,392,783 31,406,597 23,041,794 19,065,646
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,063,515 3,792,281 14,975,875 11,879,066 12,265,957
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 27,185,064 46,382,472 34,920,860 31,331,603
Timing of revenue
recognition
Transferred at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,343,152 27,185,064 46,382,472 34,920,860 31,331,603
The following table shows the amounts of revenue recognised in the Relevant Periods and the nine months
ended 30 September 2024 that were included in the contract liabilities at the beginning of each of the Relevant
Periods:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue recognised that
was included in contract
liabilities at the
beginning of the
reporting period /H1118/H1118/H1118/H1118/H1118/H1118147,264 108,647 24,101 5,686 3,723
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 480 ---
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of products
The performance obligation is satisfied upon acceptance and payment generally varies between 30 days
and 60 days.
Provision of services
The performance obligation is satisfied at the point in time once the services are completed and accepted
by customers based on the milestones achieved. Contract price is usually paid by customers within 30 to 60
days.
All amounts of transaction prices allocated to the performance obligations of the sale of products and
provision of services are expected to be recognised as revenue within one year. The Group has no significant
unsatisfied performance obligations arising from revenue contracts that have an original expected duration of
more than one year, thus management applied the practical expedient under IFRS 15 and has not disclosed the
aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or
partially satisfied at the end of each reporting period.
An analysis of other income and gains is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other income
Government grants /H1118/H1118/H1118/H1118/H1118138,715 135,415 179,320 146,433 216,035
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118102,502 139,912 160,361 105,311 96,866
V alue-added tax
additional deduction /H1118/H1118 – 639 214,154 168,804 96,294
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,192 2,999 12,973 7,504 5,554
Total other income /H1118/H1118/H1118/H1118/H1118243,409 278,965 566,808 428,052 414,749
Gains
Fair value changes of
investments measured
at fair value through
profit or loss, net /H1118/H1118/H1118/H1118– 30,687 517 – 95,204
Gain on disposal of
investments measured
at fair value through
profit or loss, net /H1118/H1118/H1118/H11187,675 – 6,630 13,047 5,116
Gain on settlement of
derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,531 270 20,951
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 1 6 16–
Total gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,675 30,687 11,839 13,323 121,271
Total other income and
gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118251,084 309,652 578,647 441,375 536,020
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 481 ---
6. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Nine months ended 30
September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of inventories and
services* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,743,870 23,414,089 42,152,365 31,829,950 27,285,808
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 236,512 270,909 338,922 256,571 294,863
Amortisation of other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 23,641 24,463 22,787 17,160 16,709
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 61,107 74,116 84,567 68,860 70,699
Depreciation of investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 137 137 137 103 104
Research and development
expenses* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118459,448 562,641 762,721 505,615 761,177
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 7 7 9
Lease payments not included in
the measurement of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 44,797 56,504 81,636 55,374 54,599
Employee benefit expense
(including directors’, chief
executive’s and supervisors’
remuneration (note 8)):
Wages and salaries /H1118/H1118/H1118/H1118/H1118/H1118/H11181,783,633 1,813,186 2,242,498 1,519,062 2,099,334
Share-based payments /H1118/H1118/H1118/H1118/H111858,239 69,629 71,634 56,294 88,593
Pension scheme contributions
and social welfare /H1118/H1118/H1118/H1118/H1118/H1118345,497 360,652 424,673 334,907 426,125
Impairment of prepayments /H1118/H1118/H1118 –– 3 9 , 1 1 1––
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 103,691 66,909 70,970 67,349 65,730
Loss on disposal of items of
property, plant and
equipment, and other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,797 12,398 2,531 2,455 8,797
Fair value changes in
investments measured at fair
value through profit or loss,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,666 (30,687) (517) 10,871 (95,204)
Gain on disposal of
investments measured at fair
value through profit or loss,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,675) – (6,630) (13,047) (5,116)
Loss/(gain) on settlement of
derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,626 20,095 (4,531) (270) (20,951)
* The depreciation of property, plant and equipment, the depreciation of right-of-use assets and the
amortisation of other intangible assets related to manufacturing and research and development for the
Relevant Periods and the nine months ended 30 September 2024 are included in “Depreciation of
property, plant and equipment”, “Depreciation of right-of-use assets” and “Amortisation of other
intangible assets”, respectively. The employees costs related to manufacturing and research and
development for the Relevant Periods and the nine months ended 30 September 2024 are included in
“Employee benefit expense”. Share-based payments related to manufacturing and research and
development for the Relevant Periods and the nine months ended 30 September 2024 are included in
“Share-based payments”.
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 482 ---
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on interest-bearing
bank borrowings /H1118/H1118/H1118/H1118/H111832,583 38,521 63,972 54,033 41,469
Interest on lease liabilities /H1118 5,365 6,683 9,824 7,269 7,313
Less: Interest capitalised /H1118/H1118 – (5,308) (6,271) (5,022) (5,760)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,948 39,896 67,525 56,280 43,022
8. DIRECTORS’, CHIEF EXECUTIVE’S AND SUPERVISORS’ REMUNERATION
The remuneration paid or payable to directors and supervisors of the Company during the Relevant Periods and
the nine months ended 30 September 2024 is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 360 270 290
Other emoluments:
Salaries, allowances
and bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H11187,404 7,484 7,102 5,362 6,188
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 21 2 9 1 7 3
Pension scheme
contributions and
social welfare /H1118/H1118/H1118/H1118/H1118/H1118717 783 826 618 670
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,128 8,279 7,940 5,989 7,031
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,488 8,639 8,300 6,259 7,321
* Certain executive directors of the Company are entitled to bonus payments which are determined by key
performance indicators.
During the Relevant Periods and the nine months ended 30 September 2024, certain directors and supervisors
were granted restricted shares, in respect of their services to the Group, under the employee incentive scheme of the
Company, further details of which are set out in note 32 to the Historical Financial Information. The difference
between the fair value of the shares granted and the subscription price was recorded in the share-based payment
reserve within equity with the corresponding “share-based payment expenses” recognised in profit or loss over the
vesting period. The amounts of the share-based payment expenses during the Relevant Periods and the nine months
ended 30 September 2024 are included in the above directors’, chief executive’s and supervisors’ remuneration
disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 483 ---
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods and the nine months ended
30 September 2024 were as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Mr. Shen Jianxin (i) /H1118/H1118/H1118/H1118/H1118120 120 120 90 90
Mr. Kang Zhijun (i) /H1118/H1118/H1118/H1118120 120 120 90 60
Mr. Y ang Chuan (i) /H1118/H1118/H1118/H1118/H1118120 120 120 90 90
Ms. Niu Shuangxia (ii) /H1118/H1118/H1118 –––– 5 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 360 270 290
(i) Mr. Shen Jianxin, Mr. Kang Zhijun and Mr. Y ang Chuan were appointed as independent non-executive
directors in January 2022. Mr. Kang Zhijun resigned in June 2025.
(ii) Ms. Niu Shuangxia was appointed as an independent non-executive director in June 2025.
There were no other emoluments payable to the independent non-executive directors during the Relevant
Periods and the nine months ended 30 September 2024.
(b) Chief executive, directors and supervisors
Salaries,
allowances and
bonuses
Share-based
payment expenses
Pension scheme
contributions and
social welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2022
Directors:
Mr. Du Junhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118705 – 107 812
Mr. Ge Zhengang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,384 – 134 2,518
Mr. Guan Y adong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,618 5 134 1,757
Mr. Wang Boliang (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,205 – 134 1,339
Mr. Liu De /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Mr. Wang Cunfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
5,912 5 509 6,426
Supervisors:
Ms. Qin Y anling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,183 2 134 1,319
Mr. Xu Wei (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Ms. Tai Lili (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309 – 74 383
1,492 2 208 1,702
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,404 7 717 8,128
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 484 ---
Salaries,
allowances and
bonuses
Share-based
payment expenses
Pension scheme
contributions and
social welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2023
Directors:
Mr. Du Junhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015 – 118 1,133
Mr. Ge Zhengang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,433 – 148 2,581
Mr. Guan Y adong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,460 8 144 1,612
Mr. Wang Boliang (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,182 – 144 1,326
Mr. Liu De /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Mr. Wang Cunfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
6,090 8 554 6,652
Supervisors:
Ms. Qin Y anling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,061 4 144 1,209
Mr. Xu Wei (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Ms. Tai Lili (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333 – 85 418
1,394 4 229 1,627
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,484 12 783 8,279
Salaries,
allowances and
bonuses
Share-based
payment expenses
Pension scheme
contributions and
social welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2024
Directors:
Mr. Du Junhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,451 – 131 1,582
Mr. Ge Zhengang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,400 – 162 2,562
Mr. Guan Y adong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,372 8 145 1,525
Mr. Wang Boliang (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118522 – 145 667
Mr. Liu De /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Mr. Wang Cunfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
5,745 8 583 6,336
Supervisors:
Ms. Qin Y anling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,049 4 145 1,198
Mr. Xu Wei (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Ms. Tai Lili (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308 – 98 406
1,357 4 243 1,604
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,102 12 826 7,940
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 485 ---
Salaries,
allowances and
bonuses
Share-based
payment expenses
Pension scheme
contributions and
social welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Nine months ended 30 September
2024
Directors:
Mr. Du Junhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,082 – 98 1,180
Mr. Ge Zhengang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,794 – 121 1,915
Mr. Guan Y adong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,029 6 109 1,144
Mr. Wang Boliang (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442 – 109 551
Mr. Liu De /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Mr. Wang Cunfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
4,347 6 437 4,790
Supervisors:
Ms. Qin Y anling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118788 3 109 900
Mr. Xu Wei (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Ms. Tai Lili (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227 – 72 299
1,015 3 181 1,199
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,362 9 618 5,989
Salaries,
allowances and
bonuses
Share-based
payment expenses
Pension scheme
contributions and
social welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000
Nine months ended 30 September
2025
Directors:
Mr. Du Junhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,719 – 137 1,856
Mr. Ge Zhengang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,892 – 122 2,014
Mr. Guan Y adong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,029 6 114 1,149
Mr. Wang Boliang (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433 – 73 506
Ms. Qin Y anling (iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348 85 49 482
Mr. Liu De (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Mr. Wang Cunfu (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
5,421 91 495 6,007
Supervisors:
Ms. Qin Y anling (iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441 2 61 504
Mr. Zhang Lugang (vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118172 80 61 313
Mr. Xu Wei (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Ms. Tai Lili (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154 – 53 207
767 82 175 1,024
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,188 173 670 7,031
(i) In November 2022, Mr. Wang Boliang was appointed as a director of the Company. Mr. Wang Boliang
resigned in June 2025.
(ii) In January 2022, Mr. Xu Wei was appointed as a supervisor of the Company. Mr. Xu Wei resigned in
February 2025.
(iii) In January 2022, Ms. Tai Lili was appointed as a supervisor of the Company.
(iv) In June 2025, Ms. Qin Y anling was appointed as a director of the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 486 ---
(v) Mr. Liu De and Mr. Wang Cunfu resigned in February 2025.
(vi) In February 2025, Mr. Zhang Lugang was appointed as a supervisor of the Company.
(vii) Mr. Ge Zhengang was the chief executive of the Company during the Relevant Periods and the nine
months ended 30 September 2024.
Pursuant to a resolution of the shareholders’ meeting in June 2025, the Company resolved to dissolve the board
of supervisors.
There was no arrangement under which a director, the chief executive or a supervisor waived or agreed to
waive any remuneration during the Relevant Periods and the nine months ended 30 September 2024.
9. FIVE HIGHEST PAID EMPLOYEES
None of the five individuals with the highest emoluments in the Group during the Relevant Periods and the
nine months ended 30 September 2024 were directors or supervisors. Details of the remuneration for the Relevant
Periods and the nine months ended 30 September 2024 of the highest paid employees who are neither a director nor
supervisor of the Company are as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,459 8,661 7,844 4,623 4,722
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,798 24,188 24,607 19,526 26,446
Pension scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118671 719 733 521 566
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,928 33,568 33,184 24,670 31,734
The numbers of non-director, non-chief executive and non-supervisor highest paid employees whose
remuneration fell within the following bands are as follows:
Number of employees
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(Unaudited)
HKDnil to HKD3,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811–2–
HKD3,500,001 to HKD4,000,000 /H1118/H1118/H1118/H1118/H1118/H11182–11–
HKD4,000,001 to HKD4,500,000 /H1118/H1118/H1118/H1118/H1118/H1118–111–
HKD4,500,001 to HKD5,000,000 /H1118/H1118/H1118/H1118/H1118/H11181–––1
HKD5,000,001 to HKD5,500,000 /H1118/H1118/H1118/H1118/H1118/H1118–22–2
HKD5,500,001 to HKD6,000,000 /H1118/H1118/H1118/H1118/H1118/H1118––––1
HKD12,000,001 to HKD12,500,000 /H1118/H1118/H1118/H1118–––1–
HKD14,000,001 to HKD14,500,000 /H1118/H1118/H1118/H1118––––1
HKD14,500,001 to HKD15,000,000 /H1118/H1118/H1118/H11181–1––
HKD15,000,001 to HKD15,500,000 /H1118/H1118/H1118/H1118–1–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855555
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 487 ---
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions
in which members of the Group are domiciled and/or operate.
Chinese mainland
Pursuant to the income tax rules and regulations of the PRC, the provision for PRC income tax for the group
entities is calculated based on the statutory tax rate of 25% during the Relevant Periods and the nine months ended
30 September 2024, except for the Company and certain subsidiaries of the Group in the Chinese mainland which
are registered as High and New Technology Enterprises (“HNTEs”) pursuant to the PRC tax regulations and are
entitled to a preferential tax rate of 15% for the years ended 31 December, 2022, 2023 and 2024 and the nine months
ended 30 September 2025.
Certain subsidiaries of the Group have applied the Small-Scaled Minimal Profit Corporate Income Tax
Preferential Policy, and pursuant to which 25% of these subsidiaries’ annual taxable income amount not exceeding
RMB3,000,000 was applied to compute the actual taxable income payable and be levied at a reduced tax rate of 20%.
The Company and Shanghai Miaobo Software Technology Co., Ltd. were accredited as HNTEs in the previous
year and reapplied for the certificate in 2023. The certification was valid for three years, therefore, for each of the
Relevant Periods and the nine months ended 30 September 2024, the Company and Shanghai Miaobo Software
Technology Co., Ltd. were entitled to a preferential PRC corporate income tax rate of 15%. Shanghai Longcheer
Intelligent Technology Co., Ltd. was accredited as an HNTE on 12 December 2023 and entitled to a preferential PRC
corporate income tax rate of 15% for the years ended 31 December 2023 and 2024 and the nine months ended 30
September 2024 and 2025. Longcheer Electronics (Huizhou) Co., Ltd. was accredited as an HNTE on 12 December
2023 and entitled to a preferential PRC corporate income tax rate of 15% for the year ended 31 December 2024 and
the nine months ended 30 September 2025.
Hong Kong
The subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax at the rate of 16.5% on
the estimated taxable income arising in Hong Kong during the Relevant Periods and the nine months ended 30
September 2024.
The United States
Pursuant to the relevant tax laws, the subsidiary incorporated in the United States was subject to federal
corporation income tax at the rate of 21% on its federal taxable income as well as California state corporate income
tax at the rate of 8.84% (minimum tax of USD800) on its California taxable income during the Relevant Periods and
the nine months ended 30 September 2024.
India
Pursuant to the relevant tax laws, the subsidiary incorporated in India was subject to corporate income tax at
a rate of 22% during the Relevant Periods and the nine months ended 30 September 2024.
Malaysia
Pursuant to the relevant tax laws, the subsidiaries incorporated in Malaysia were subject to corporate income
tax at a rate of 24% during the Relevant Periods and the nine months ended 30 September 2024. The subsidiaries
incorporated in Malaysia were registered in Labuan and according to local policies, offshore income is exempt from
corporate income tax.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 488 ---
Republic of Korea
Pursuant to the relevant tax laws, the subsidiary incorporated in the Republic of Korea was subject to corporate
income tax at a progressive tax rate of 10% to 25% according to the annual pre-tax profit in 2022 and at a progressive
tax rate of 9% to 24% according to the annual pre-tax profit for the year ended 31 December 2023 and 2024, the nine
months ended 30 September 2024 and 2025.
Vietnam
Pursuant to the relevant tax laws, the subsidiary located in Vietnam was subject to corporate income tax at a
rate of 20% during the Relevant Periods and the nine months ended 30 September 2024. No profit tax has been
provided for the subsidiary incorporated in Vietnam as no assessable profits were generated in Vietnam during the
Relevant Periods and the nine months ended 30 September 2024.
Japan
The subsidiary incorporated in Japan was subject to corporate tax at the rate of 15% for ordinary corporation
with capital of less than 100 million yen and taxable income not exceeding 8 million yen during the Relevant Periods
and the nine months ended 30 September 2024.
Singapore
Pursuant to the relevant tax laws, the subsidiary located in Singapore was subject to corporate income tax at
a rate of 17% during the Relevant Periods and the nine months ended 30 September 2024.
The income tax expense of the Group for the Relevant Periods and the nine months ended 30 September 2024
is analysed as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current — Chinese
mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,635 47,538 52,800 28,755 52,610
Current — Elsewhere /H1118/H1118/H1118/H11185,612 3,702 10,831 5,083 14,310
Deferred tax expense
(note 19) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,442) (2,871) (42,977) (3,204) (31,516)
Total tax expense for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,805 48,369 20,654 30,634 35,404
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 489 ---
A reconciliation of the tax expense applicable to profit before tax at the preferential tax rate for the jurisdiction
in which the Company and the majority of its subsidiaries are domiciled and/or operate to the tax expense at the
effective tax rates, are as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118588,318 651,080 514,004 456,062 549,888
Tax at the preferential tax
rate of 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,248 97,662 77,101 68,409 82,483
Impact of different tax
rates on subsidiaries /H1118/H1118/H111823,259 10,258 12,805 19,752 10,295
Effect on opening deferred
tax of decrease in rates /H1118 – – 6,768 – –
Adjustments in respect of
current income tax
of previous periods /H1118/H1118/H1118/H1118(711) – 1,050 1,973 (1,913)
Expenses not deductible
for tax (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,265 14,504 14,488 14,417 15,121
Income not subject to tax /H1118 (10,666) (7,639) (10,746) (2,514) (19,172)
Utilisation of tax losses
not recognised from
previous periods /H1118/H1118/H1118/H1118/H1118(4,747) – (11,845) (21,348) (240)
Tax losses and deductible
temporary differences
not recognised /H1118/H1118/H1118/H1118/H1118/H111838,100 22,390 10,988 19,434 28,440
Additional deduction on
research and
development expenses
(b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(121,427) (87,308) (78,933) (68,958) (79,042)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(516) (1,498) (1,022) (531) (568)
Tax expense at the Group’s
effective tax rate /H1118/H1118/H1118/H1118/H111826,805 48,369 20,654 30,634 35,404
(a) Expenses not deductible for tax mainly include the tax effect of share-based payments and
non-deductible business entertainment expenses.
(b) The additional deduction allowance was for qualified research and development expenses. According to
the relevant laws and regulations promulgated by the State Taxation Administration of the Chinese
mainland, certain enterprise engaging in research and development activities is entitled to claim 175%
of their research and development expenses incurred as tax deductible expenses when determining their
assessable profits for the nine months ended 30 September 2022 and other enterprises are entitled to
claim 200%. According to the relevant laws and regulations, starting from 1 October 2022, the
aforementioned deduction rate increased to 200% for all enterprises.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 490 ---
11. DIVIDENDS
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Dividends for ordinary
shareholders of
the Company recognised
as distribution
during the year/period:
Interim dividend (note i) /H1118/H1118293,01 4––––
Final dividend (note ii,
note iii, note iv) /H1118/H1118/H1118/H1118/H1118/H1118162,039 – 232,548 232,548 228,798
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118455,053 – 232,548 232,548 228,798
Notes:
(i) On 1 November 2022, the Company declared a cash dividend distribution for the first half of 2022,
amounting to RMB7.23 (inclusive of related tax) for every 10 ordinary shares to the shareholders based
on the total number of shares of 405,096,544 as at 30 June 2022.
(ii) On 20 April 2022, the Company declared a cash dividend distribution for 2021, amounting to RMB4.00
(inclusive of related tax) for every 10 ordinary shares to the shareholders based on the total number of
shares of 405,096,544 as at 31 December 2021.
(iii) On 20 May 2024, the final dividend of RMB5.00 (inclusive of related tax) for every 10 ordinary shares
to the shareholders based on the total number of shares of 465,096,544 was approved by the annual
general meeting of the Company.
(iv) On 15 May 2025, a resolution to declare cash dividends was passed by the shareholders in the annual
general meeting for year ended 31 December 2024 with the amount of RMB5 per 10 ordinary shares
(inclusive of related tax).
(v) No dividend was declared by the Company during the year ended 31 December 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 491 ---
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic earnings per share amounts is based on the profit for the Relevant Periods and the
nine months ended 30 September 2024 attributable to ordinary equity holders of the parent, and the weighted average
number of ordinary shares outstanding during the Relevant Periods and the nine months ended 30 September 2024.
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Earnings
Profit attributable to ordinary
equity holders of the parent,
used in the basic earnings per
share calculation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,301 605,316 501,132 430,855 507,275
Shares
Weighted average number (’000)
of ordinary shares outstanding
during the year/period /H1118/H1118/H1118/H1118/H1118405,097 405,097 455,097 451,764 461,140
Earnings per share
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H11181.39 1.49 1.10 0.95 1.10
* The weighted average number of shares was after taking into account the effect of treasury shares held.
The Group had no potentially dilutive ordinary shares in issue for the year ended 31 December 2022, 2023 and
2024 and the nine months ended 30 September 2024.
Potential dilutive ordinary shares issued for the nine months ended 30 September 2025 had no dilutive effect.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 492 ---
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
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
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118362,559 1,080,877 199,556 4,741 8,505 – 1,656,238
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(56,667) (311,619) (114,645) (4,543) – – (487,474)
Net carrying amount /H1118/H1118305,892 769,258 84,911 198 8,505 – 1,168,764
At 1 January 2022,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118305,892 769,258 84,911 198 8,505 – 1,168,764
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,931 547,453 42,543 1,015 25,082 70,927 688,951
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,510 – – – (3,510) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (17,554) (5,332) (33) – – (22,919)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(17,082) (173,354) (34,829) (563) (10,684) – (236,512)
At 31 December 2022,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118290,741 1,129,313 87,293 617 22,903 67,417 1,598,284
At 31 December 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118364,490 1,593,814 230,439 4,977 33,587 67,417 2,294,724
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(73,749) (464,501) (143,146) (4,360) (10,684) – (696,440)
Net carrying amount /H1118/H1118290,741 1,129,313 87,293 617 22,903 67,417 1,598,284
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 493 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
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
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118364,490 1,593,814 230,439 4,977 33,587 67,417 2,294,724
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(73,749) (464,501) (143,146) (4,360) (10,684) – (696,440)
Net carrying amount /H1118/H1118290,741 1,129,313 87,293 617 22,903 67,417 1,598,284
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118290,741 1,129,313 87,293 617 22,903 67,417 1,598,284
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118551 303,200 37,496 3,558 12,959 371,998 729,762
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,838 5,223 – – – (9,061) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (13,341) (3,485) (354) – – (17,180)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(17,155) (208,936) (32,447) (782) (11,589) – (270,909)
At 31 December 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118277,975 1,215,459 88,857 3,039 24,273 430,354 2,039,957
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,879 1,870,406 258,596 8,162 35,862 430,354 2,972,259
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(90,904) (654,947) (169,739) (5,123) (11,589) – (932,302)
Net carrying amount /H1118/H1118277,975 1,215,459 88,857 3,039 24,273 430,354 2,039,957
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
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
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,879 1,870,406 258,596 8,162 35,862 430,354 2,972,259
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(90,904) (654,947) (169,739) (5,123) (11,589) – (932,302)
Net carrying amount /H1118/H1118277,975 1,215,459 88,857 3,039 24,273 430,354 2,039,957
At 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118277,975 1,215,459 88,857 3,039 24,273 430,354 2,039,957
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 367,944 37,363 5,148 32,988 266,995 710,438
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,927 15,697 – – 12,388 (397,012) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,095) (1,581) – – – (5,676)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(25,225) (261,217) (31,617) (1,140) (19,723) – (338,922)
At 31 December 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118621,677 1,333,788 93,022 7,047 49,926 300,337 2,405,797
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118737,806 2,240,051 290,327 13,159 69,649 300,337 3,651,329
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(116,129) (906,263) (197,305) (6,112) (19,723) – (1,245,532)
Net carrying amount /H1118/H1118621,677 1,333,788 93,022 7,047 49,926 300,337 2,405,797
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 494 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118737,806 2,240,051 290,327 13,159 69,649 300,337 3,651,329
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(116,129) (906,263) (197,305) (6,112) (19,723) – (1,245,532)
Net carrying amount /H1118/H1118621,677 1,333,788 93,022 7,047 49,926 300,337 2,405,797
At 1 January 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118621,677 1,333,788 93,022 7,047 49,926 300,337 2,405,797
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,311 310,807 46,547 1,333 16,545 319,487 708,030
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,255 – – – (17,255) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (13,805) (1,406) (308) – – (15,519)
Acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H111816,09 32–– –– 16,095
Depreciation provided
during the period /H1118/H1118/H1118(25,765) (225,733) (22,872) (1,024) (19,469) – (294,863)
At 30 September 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118625,316 1,422,314 115,291 7,048 47,002 602,569 2,819,540
At 30 September 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,210 2,527,049 329,965 13,478 86,194 602,569 4,326,465
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(141,894) (1,104,735) (214,674) (6,430) (39,192) – (1,506,925)
Net carrying amount /H1118/H1118625,316 1,422,314 115,291 7,048 47,002 602,569 2,819,540
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 495 ---
The Company
Machinery
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,787 61,002 2,250 5,211 139,250
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(50,742) (40,679) (1,963) – (93,384)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,045 20,323 287 5,211 45,866
At 1 January 2022, net of
accumulated depreciation /H1118/H1118/H1118/H111820,045 20,323 287 5,211 45,866
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,787 10,231 265 2,077 54,360
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(691) (1,498) (83) – (2,272)
Depreciation provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,108) (8,005) (62) (6,625) (21,800)
At 31 December 2022, net of
accumulated depreciation /H1118/H1118/H1118/H111854,033 21,051 407 663 76,154
At 31 December 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,820 68,250 1,697 7,288 189,055
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(57,787) (47,199) (1,290) (6,625) (112,901)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,033 21,051 407 663 76,154
Machinery
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,820 68,250 1,697 7,288 189,055
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(57,787) (47,199) (1,290) (6,625) (112,901)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,033 21,051 407 663 76,154
At 1 January 2023, net of
accumulated depreciation /H1118/H1118/H1118/H111854,033 21,051 407 663 76,154
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,891 4,831 360 251 14,333
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(349) (307) – – (656)
Depreciation provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,507) (7,251) (80) (484) (17,322)
At 31 December 2023, net of
accumulated depreciation /H1118/H1118/H1118/H111853,068 18,324 687 430 72,509
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,585 70,627 2,057 914 193,183
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(66,517) (52,303) (1,370) (484) (120,674)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,068 18,324 687 430 72,509
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 496 ---
Machinery
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,585 70,627 2,057 914 193,183
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(66,517) (52,303) (1,370) (484) (120,674)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,068 18,324 687 430 72,509
At 1 January 2024, net of
accumulated depreciation /H1118/H1118/H1118/H111853,068 18,324 687 430 72,509
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,159 7,662 987 508 28,316
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (864) – – (864)
Depreciation provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,672) (6,146) (276) (409) (18,503)
At 31 December 2024, net of
accumulated depreciation /H1118/H1118/H1118/H111860,555 18,976 1,398 529 81,458
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,505 75,779 3,045 938 216,267
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(75,950) (56,803) (1,647) (409) (134,809)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,555 18,976 1,398 529 81,458
Machinery
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,505 75,779 3,045 938 216,267
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(75,950) (56,803) (1,647) (409) (134,809)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,555 18,976 1,398 529 81,458
At 1 January 2025, net of
accumulated depreciation /H1118/H1118/H1118/H111860,555 18,976 1,398 529 81,458
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,907 12,890 60 6,168 37,025
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44) (272) – – (316)
Depreciation provided during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,031) (4,833) (218) (429) (15,511)
At 30 September 2025, net of
accumulated depreciation /H1118/H1118/H1118/H111868,387 26,761 1,240 6,268 102,656
At 30 September 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118153,777 87,331 3,105 7,106 251,319
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118(85,390) (60,570) (1,865) (838) (148,663)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,387 26,761 1,240 6,268 102,656
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 497 ---
14. INVESTMENT PROPERTIES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,737 2,600 2,463 2,326
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(137) (137) (137) (104)
Carrying amount at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,600 2,463 2,326 2,222
The Group’s investment properties consist of several buildings, parking lots and retail stores leased to third
parties under operating leases in Huizhou. The directors of the Company have determined the buildings to be
investment properties based on the nature, characteristics and risks of each property.
15. LEASES
The Group as a lessee
The Group has lease contracts for various items of leasehold land, buildings, machinery and motor vehicles
used in its operations. Leases of lump sum payments were made upfront to acquire the leasehold land from the owners
with lease periods of 50 years, and no ongoing payments will be made under the terms of these land leases. Leases
of buildings, machinery and motor vehicles generally have lease terms between 1 and 10 years. Other equipment
generally has lease terms of 12 months or less or is individually of low value. Generally, the Group is restricted from
assigning and subleasing the leased assets outside the Group.
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 498 ---
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements during the Relevant Periods
are as follows:
The Group
Leasehold land Buildings Machinery Motor vehicles Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H111831,330 99,524 128 58 131,040
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118414,513 120,261 – – 534,774
Decrease arising from
lease term termination /H1118 – (16,097) – – (16,097)
Depreciation charge /H1118/H1118/H1118/H1118(1,929) (58,992) (128) (58) (61,107)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118443,914 144,696 – – 588,610
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118 189,824 – – 189,942
Decrease arising from
lease term termination /H1118 – (35,904) – – (35,904)
Depreciation charge /H1118/H1118/H1118/H1118(8,987) (65,129) – – (74,116)
Exchange realignment /H1118/H1118/H1118– (113) – – (113)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118435,045 233,374 – – 668,419
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 78,777 – – 78,777
Decrease arising from
lease term termination /H1118 – (7,112) – – (7,112)
Depreciation charge /H1118/H1118/H1118/H1118(8,988) (75,579) – – (84,567)
Exchange realignment /H1118/H1118/H1118– (244) – – (244)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118426,057 229,216 – – 655,273
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 58,215 – – 58,215
Acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,13 4––– 20,134
Decrease arising from
lease term termination /H1118 – (1,968) – – (1,968)
Depreciation charge /H1118/H1118/H1118/H1118(7,276) (63,423) – – (70,699)
Exchange realignment /H1118/H1118/H1118– (1,016) – – (1,016)
At 30 September 2025 /H1118/H1118438,915 221,024 – – 659,939
As at 31 December 2022, 2023 and 2024 and 30 September 2025, certain of the Group’s leasehold land
with aggregate carrying amounts of approximately nil, RMB405,105,000, RMB362,555,000 and
RMB356,881,000, respectively, were pledged to secure interest-bearing bank borrowings granted to the Group
(note 29).
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 499 ---
The Company
Buildings
RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,111
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,294
Decrease arising from lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,751)
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,694)
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,960
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,692)
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,369
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,500
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,187)
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,682
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,177
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,489)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,370
(b) Lease liabilities
The carrying amount of lease liabilities and the movements during the Relevant Periods are as follows:
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111898,824 151,734 243,298 244,714
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,261 189,824 78,777 58,215
Accretion of interest
recognised during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,365 6,683 9,824 7,313
Decrease arising from lease
term termination /H1118/H1118/H1118/H1118/H1118/H1118(15,866) (39,586) (3,352) (2,009)
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,850) (65,357) (83,833) (69,920)
Carrying amount at the end
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118151,734 243,298 244,714 238,313
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H111853,921 60,728 75,716 68,407
Non-current portion /H1118/H1118/H1118/H111897,813 182,570 168,998 169,906
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 500 ---
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the
beginning of the year/period /H1118/H111821,914 8,967 3,409 10,670
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,294 101 13,500 7,177
Accretion of interest recognised
during the year/period /H1118/H1118/H1118/H1118/H1118/H1118646 215 190 241
Decrease arising from lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,751) – (55) –
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,136) (5,874) (6,374) (5,589)
Carrying amount at the end
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,967 3,409 10,670 12,499
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,609 3,409 6,731 7,342
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H11183,358 – 3,939 5,157
The maturity analysis of lease liabilities is disclosed in note 42 to the Historical Financial Information.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,365 6,683 9,824 7,269 7,313
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H111861,107 74,116 84,567 68,860 70,699
Expenses relating to
short-term leases and
leases of low-value
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,797 56,504 81,636 55,374 54,599
Total amount recognised
in profit or loss /H1118/H1118/H1118/H1118/H1118111,269 137,303 176,027 131,503 132,611
The Company
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118646 215 190 93 241
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H11189,694 5,692 6,187 4,377 5,489
Expenses relating to
short-term leases and
leases of low-value
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,947 2,379 1,377 1,238 223
Total amount recognised
in profit or loss /H1118/H1118/H1118/H1118/H111815,287 8,286 7,754 5,708 5,953
(d) The total cash outflows for leases are disclosed in note 35 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 501 ---
16. OTHER INTANGIBLE ASSETS
The Group
Software
RMB’000
At 31 December 2022
At 1 January 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129,247
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(105,096)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,151
Cost at 1 January 2022, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,151
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,741
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,641)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,391)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,860
At 31 December 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,988
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(134,128)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,860
At 31 December 2023
At 1 January 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,988
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(134,128)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,860
Cost at 1 January 2023, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,860
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,625
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,976)
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,463)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,674)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,372
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,148
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(83,776)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,372
At 31 December 2024
At 1 January 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,148
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(83,776)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,372
Cost at 1 January 2024, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,372
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,576
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,787)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(162)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,999
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
133,619
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100,620)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,999
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 502 ---
Development costs Software Total
RMB’000 RMB’000 RMB’000
At 30 September 2025
At 1 January 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 133,619 133,619
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (100,620) (100,620)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 32,999 32,999
Cost at 1 January 2025, net of accumulated
amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 32,999 32,999
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,463 16,916 29,379
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (12) (12)
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118/H1118– (16,709) (16,709)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 594 594
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,463 33,788 46,251
At 30 September 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,463 138,540 151,003
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (104,752) (104,752)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,463 33,788 46,251
The Company
Software
RMB’000
At 31 December 2022
At 1 January 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,878
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,963)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,915
Cost at 1 January 2022, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,915
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,755
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,715)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,955
At 31 December 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,633
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,678)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,955
At 31 December 2023
At 1 January 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,633
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,678)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,955
Cost at 1 January 2023, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,955
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,600
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26)
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,726)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,803
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,903
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(67,100)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,803
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 503 ---
Software
RMB’000
At 31 December 2024
At 1 January 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,903
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(67,100)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,803
Cost at 1 January 2024, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,803
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,628
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,525)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,906
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,732
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(75,826)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,906
At 30 September 2025
At 1 January 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,732
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(75,826)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,906
Cost at 1 January 2025, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,906
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,874
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10)
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,142)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,628
At 30 September 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,865
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(73,237)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,628
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 504 ---
17. INVESTMENTS IN ASSOCIATES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118591,151 621,541 629,787 597,832
The associates of the Group are considered not individually material for the Relevant Periods and the following
table illustrates the aggregate financial information of the Group’s associates:
The Group
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Share of the associates’
profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,588 43,154 30,042 15,976 6,614
Share of the associates’
other comprehensive
income/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,234 (8,842) (7,721) (4,612) 7,100
Share of the associates’
total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,822 34,312 22,321 11,364 13,714
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Aggregate carrying amount of the
Group’s investments in the
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118591,151 621,541 629,787 597,832
18. INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments, at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118856,008 856,008 1,386,008 1,401,534
Impairment losses on investments
in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118856,008 856,008 1,386,008 1,401,534
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 505 ---
19. DEFERRED TAX
The Group
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax assets
Tax losses
Impairment
provision
Fair value
adjustments
Deferred
income
Lease
liabilities
Difference
between
accounting
depreciation
and related
tax
depreciation
Unrealised
profit on
intra-group
transactions
Share-
based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Gross deferred tax assets at
1 January 2022 /H1118/H1118/H1118/H1118/H111870,229 21,015 19,160 16,582 22,118 6,830 2,514 – 158,448
Deferred tax (charged)/
credited to profit or loss
during the year /H1118/H1118/H1118/H1118/H1118(7,998) 7,208 7,635 (2,355) (980) 8 2,224 – 5,742
Gross deferred tax assets at
31 December 2022 /H1118/H1118/H111862,231 28,223 26,795 14,227 21,138 6,838 4,738 – 164,190
Deferred tax credited/
(charged) to profit or
loss during the year /H1118/H1118/H11184,475 (7,442) (1,424) 16,493 (9,269) (2,137) (1,984) – (1,288)
Gross deferred tax assets at
31 December 2023 /H1118/H1118/H111866,706 20,781 25,371 30,720 11,869 4,701 2,754 – 162,902
Deferred tax credited/
(charged) to profit or
loss during the year /H1118/H1118/H111820,982 8,001 2,882 7,918 7,294 (2,621) (619) – 43,837
Gross deferred tax assets at
31 December 2024 /H1118/H1118/H111887,688 28,782 28,253 38,638 19,163 2,080 2,135 – 206,739
Deferred tax credited/
(charged) to profit or
loss during the period /H1118/H111847,361 (1,436) (10,104) (3,955) (2,306) (640) 2,082 4,919 35,921
Deferred tax credited to
reserve during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– – – 2,309 2,309
Gross deferred tax assets at
30 September 2025 /H1118/H1118/H1118135,049 27,346 18,149 34,683 16,857 1,440 4,217 7,228 244,969
Deferred tax liabilities
Fair value
adjustments
Difference
between
accounting
depreciation
and related
tax depreciation
Right-of-use
assets Total
RMB’000 RMB’000 RMB’000 RMB’000
Gross deferred tax liabilities at
1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,659 – 22,200 25,859
Deferred tax (credited)/charged to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,520) 1,602 (1,782) (3,700)
Gross deferred tax liabilities at
31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139 1,602 20,418 22,159
Deferred tax charged/(credited) to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,033 (296) (8,896) (4,159)
Gross deferred tax liabilities at
31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,172 1,306 11,522 18,000
Deferred tax (credited)/charged to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,169) (317) 6,346 860
Gross deferred tax liabilities at
31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 989 17,868 18,860
Deferred tax charged/(credited) to profit or
loss during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,637 (222) (2,010) 4,405
Gross deferred tax liabilities at
30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,640 767 15,858 23,265
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 506 ---
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of
financial position. The following is an analysis of the deferred tax balances of the Group for financial reporting
purposes:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised
in the consolidated statement of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118164,190 145,109 187,893 221,704
Net deferred tax liabilities
recognised in the consolidated
statement of financial position /H1118/H1118 22,159 207 14 –
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,683 332,179 192,865 309,663
Deductible temporary differences /H1118 148,198 207,578 149,137 150,625
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,881 539,757 342,002 460,288
The Group has tax losses arising in the Chinese mainland of RMB243,683,000, RMB332,179,000,
RMB192,865,000 and RMB309,663,000 as at 31 December 2022, 31 December 2023, 31 December 2024 and 30
September 2025, respectively, that will expire in one to ten years for offsetting against future taxable profits. Deferred
tax assets have not been recognised in respect of these losses as it is not considered probable that taxable profits will
be available against which the tax losses can be utilised.
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118954 811 954 954
2026 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,775 3,496 3,496 3,496
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118152,405 152,405 25,102 25,102
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 85,831 80,336 80,336
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 49,881 49,512
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 118,767
2031 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,549 86,828 30,288 27,149
2032 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –
2033 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,808 2,808 4,347
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,683 332,179 192,865 309,663
The Group has tax losses arising in Hong Kong, the United States and Singapore of RMB135,222,000,
RMB69,987,000, RMB105,962,000 and RMB78,106,000 as at 31 December 2022, 31 December 2023, 31 December
2024 and 30 September 2025, respectively, that are available indefinitely for offsetting against future taxable profits
of the companies in which the losses arose.
The Group also has tax losses arising in Republic of Korea of RMB131,000 as at 31 December 2022 that will
expire in fifteen years for offsetting against future taxable profits, tax losses arising in Vietnam of RMB2,492,000,
RMB13,259,000, RMB42,902,000 and RMB2,570,000 as at 31 December 2022, 31 December 2023, 31 December
2024 and 30 September 2025, respectively, that will expire in one to five years for offsetting against future taxable
profits, and tax losses arising in Japan of RMB1,642,000 and RMB1,591,000 as at 31 December 2024 and
30 September 2025, respectively, that will expire in nine to ten years for offsetting against future taxable profits.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 507 ---
The Company
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax assets
Tax losses
Impairment
provision
Fair value
adjustments
Deferred
income
Lease
liabilities
Share-based
Payment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Gross deferred tax assets at
1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,229 356 – 612 – – 71,197
Deferred tax (charged)/
credited to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118(8,691) (3) – (109) 1,345 – (7,458)
Gross deferred tax assets at
31 December 2022 /H1118/H1118/H1118/H1118/H111861,538 353 – 503 1,345 – 63,739
Deferred tax credited/
(charged) to profit or
loss during the year /H1118/H1118/H1118/H1118/H11181,861 (246) – (187) (835) – 593
Gross deferred tax assets at
31 December 2023 /H1118/H1118/H1118/H1118/H111863,399 107 – 316 510 – 64,332
Deferred tax credited/
(charged) to profit or
loss during the year /H1118/H1118/H1118/H1118/H111819,676 (22) 1,143 (158) 1,089 – 21,728
Gross deferred tax assets at
31 December 2024 /H1118/H1118/H1118/H1118/H111883,075 85 1,143 158 1,599 – 86,060
Deferred tax credited/
(charged) to profit or loss
during the period /H1118/H1118/H1118/H1118/H1118/H111818,484 (38) (1,143) (34) 276 4,919 22,464
Deferred tax credited to
reserve during the period /H1118/H1118 ––––– 2,309 2,309
Gross deferred tax assets at
30 September 2025 /H1118/H1118/H1118/H1118/H1118101,559 47 – 124 1,875 7,228 110,833
Deferred tax liabilities
Fair value
adjustments
Difference
between
accounting
depreciation
and related
tax depreciation
Right-of-use
assets Total
RMB’000 RMB’000 RMB’000 RMB’000
Gross deferred tax liabilities at
1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,659 – – 3,659
Deferred tax (credited)/charged to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,519) 1,602 1,343 (574)
Gross deferred tax liabilities at
31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118140 1,602 1,343 3,085
Deferred tax charged/(credited) to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,033 (296) (838) 3,899
Gross deferred tax liabilities at
31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,173 1,306 505 6,984
Deferred tax (credited)/charged to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,173) (317) 1,097 (4,393)
Gross deferred tax liabilities at
31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 989 1,602 2,591
Deferred tax charged/(credited) to profit or
loss during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,019 (222) 254 5,051
Gross deferred tax liabilities at
30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,019 767 1,856 7,642
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 508 ---
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of
financial position. The following is an analysis of the deferred tax balances of the Company for financial reporting
purposes:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised
in the consolidated statement of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,739 57,348 83,469 103,191
Net deferred tax liabilities
recognised in the consolidated
statement of financial position /H1118/H1118 3,085 – – –
20. INVENTORIES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118886,391 1,381,678 1,579,402 1,862,005
Consigned processing materials /H1118/H1118/H1118229,155 159,249 126,017 119,471
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,409 29,689 11,093 58,904
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,988 221,676 248,700 280,884
1,255,943 1,792,292 1,965,212 2,321,264
Less: provision for impairment
losses on inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(111,499) (77,491) (83,587) (86,264)
1,144,444 1,714,801 1,881,625 2,235,000
The movements in provision
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,344 111,499 77,491 83,587
Impairment losses recognised
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,691 66,909 70,970 65,730
Amounts written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,536) (100,917) (64,874) (63,053)
Carrying amount at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,499 77,491 83,587 86,264
21. TRADE AND BILLS RECEIV ABLES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,524,264 9,021,218 11,643,657 11,023,477
Bank acceptance notes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,570 638 96,928 199,821
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,612) (13,456) (8,073) (7,800)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,222 9,008,400 11,732,512 11,215,498
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 509 ---
The Group’s trading terms with its customers are mainly on credit.
The Group seeks to maintain strict control over its outstanding receivables and has a credit control department
to minimise credit risk.
The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade
receivables are interest free.
An ageing analysis of the Group’s trade receivables and bank acceptance notes as at the end of each of the
Relevant Periods, based on invoice date information and net of loss allowance, is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,215 9,003,935 11,732,510 11,215,403
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 4,465 2 95
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538,222 9,008,400 11,732,512 11,215,498
The movements in the impairment losses on trade receivables are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H11189,812 9,612 13,456 8,073
Impairment losses (reversed)/
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(477) 3,737 1,410 (221)
Amount written off as
uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (6,942) –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118277 107 149 (52)
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,612 13,456 8,073 7,800
The bank acceptance notes were issued by reputable banks and with short-term maturity. Accordingly, the
identified impairment loss was not significant as at the end of each of the Relevant Periods.
The Group applies the simplified approach in calculating expected credit losses for trade receivables. Trade
receivables relating to customers not sharing similar credit risk with others are assessed individually for impairment
allowance. Trade receivables are grouped and collectively assessed for impairment allowance. Under the collective
approach, an impairment analysis is performed at the end of each of the relevant periods using a provision matrix
to measure expected credit losses. The provision rates are based on past due information for groupings of customers
that have similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money
and reasonable and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions. Generally, trade receivables are written off if past due for
more than five years and are not subject to enforcement activity.
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 510 ---
The Group
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a
provision matrix:
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118 0.05% 22.22% – 100.00% 0.06%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,517,405 9 – 350 5,517,764
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,760 2 – 350 3,112
On an individual basis:
Expected credit loss rate /H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 6,500
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 6,500
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2023
On a collective basis:
Expected credit loss rate /H1118/H1118 0.05% 33.61% 44.44% 100.00% 0.08%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,007,558 6,718 9 350 9,014,635
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,261 2,258 4 350 6,873
On an individual basis:
Expected credit loss rate /H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 6,583
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 6,583
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2024
On a collective basis:
Expected credit loss rate /H1118/H1118 0.05% – 75.00% – 0.05%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,641,401 – 8 – 11,641,409
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,81 9–6– 5,825
On an individual basis:
Expected credit loss rate /H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,248
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,248
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 30 September 2025
On a collective basis:
Expected credit loss rate /H1118/H1118 0.05% 30.15% – – 0.05%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,021,093 136 – – 11,021,229
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,511 41 – – 5,552
On an individual basis:
Expected credit loss rate /H1118/H1118 100%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,248
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,248
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 511 ---
The net carrying amounts of due from related parties included in the above are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Xiaomi Corporation and its
subsidiaries (“Xiaomi Group”) /H1118/H11182,688,961 5,285,643 5,179,332 3,795,346
DBG Technology (India) Private
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,284 67,568 66,368 49,550
Shanghai Moban Intelligent
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118475 35 22 –
Zhenshi Information Technology
(Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 1 58 37 0 4 6
DBG Technology Co., Ltd. /H1118/H1118/H1118/H1118/H111820 351 834 459
Shanghai Imilab Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 – 15 –
70mai Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841– 1
Shenzhen WangXin Precision
Industrial Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,066 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,745,874 5,358,747 5,246,641 3,845,402
The balances are unsecured, interest free and on credit terms similar to those offered to the major customers
of the Group.
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118517,905 440,579 1,128,815 1,315,117
Bank acceptance notes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 42,835 33,000
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(428) (422) (409) (61)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118517,477 440,157 1,171,241 1,348,056
An ageing analysis of the Company’s trade receivables and bank acceptance notes as at the end of each of the
Relevant Periods, based on the ageing analysis and net of loss allowance, is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118517,477 440,157 1,171,241 1,348,056
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118426 428 422 409
Impairment losses recognised/
(reversed) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 (6) 337 (348)
Amount written off as
uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (350) –
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428 422 409 61
The bank acceptance notes were issued by reputable banks and with short-term maturity. Accordingly, the
identified impairment loss was immaterial as at the end of each of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 512 ---
Set out below is the information about the credit risk exposure on the Company’s trade receivables using a
provision matrix:
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118 0.02% – – 100.00% 0.08%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118517,555 – – 350 517,905
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 – – 350 428
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2023
On a collective basis:
Expected credit loss rate /H1118/H1118 0.02% – – 100.00% 0.10%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,229 – – 350 440,579
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872 – – 350 422
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2024
On a collective basis:
Expected credit loss rate /H1118/H1118 0.04% – – – 0.04%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,128,815 – – – 1,128,815
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 0 9––– 4 0 9
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 30 September 2025
On a collective basis:
Expected credit loss rate /H1118/H1118 0.00% – – – 0.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,315,117 – – – 1,315,117
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 1––– 6 1
The net carrying amounts of due from related parties included in the above are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Longcheer Telecommunication
(H.K.) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118232,685 98,350 107,899 141,782
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,697 137,946 62,912 34,037
Nanchang Longcheer Information
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111881,355 47,975 144,655 282,198
Nanchang Sinolong Co., Ltd. /H1118/H1118/H1118/H111825,655 8,800 50,808 50,980
Guolong Information Technology
(Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,068 – – –
Sinolong Technology (H.K.)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,299 – – –
Longcheer Electronics (Huizhou)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,917 116,424 – –
Longcheer Mobile (India) Private
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 24,847 7,759 –
Shanghai Longcheer Smart
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 694,524
Longcheer Intelligence Pte. Ltd. /H1118/H1118 – – – 23,781
Huizhou Longcheer Automotive
Electronics Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 7 2 5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118477,676 434,342 374,033 1,228,027
The balances are unsecured, interest-free and on credit terms similar to those offered to the major customers
of the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 513 ---
22. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,386 33,351 22,722 22,536
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H111835,325 91,119 79,243 95,087
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,649 24,413 257,317 471,705
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,755 7,849 – 19,803
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,383 5,290 22,587 36,768
142,498 162,022 381,869 645,899
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,529) (1,668) (40,688) (40,938)
137,969 160,354 341,181 604,961
Non-current portion:
Prepayments for items of property,
plant and equipment and other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,639 32,732 28,148 31,426
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,545
5,639 32,732 28,148 41,971
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (527)
5,639 32,732 28,148 41,444
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143,608 193,086 369,329 646,405
These balances were interest-free, unsecured and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 514 ---
An impairment analysis was performed at the end of each of the Relevant Periods. Impairment allowance for
prepayments, other receivables and other assets was mainly due to the uncollectibility of these receivables as at
31 December 2022, 31 December 2023, 31 December 2024 and 30 September 2025.
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,385,188 1,416,150 1,851,500 1,972,800
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,442 5,774 3,098 3,074
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H11181,028 3,296 4,662 9,668
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,447 359 14,915 28,924
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,755 7,849 – 19,803
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062 2,955 3,836 5,313
1,430,922 1,436,383 1,878,011 2,039,582
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,925) (289) (156) (229)
1,428,997 1,436,094 1,877,855 2,039,353
Non-current portion:
Prepayments for items of property,
plant and equipment and other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,169 6,586 9,497 13,339
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 4 4 8
2,169 6,586 9,497 13,787
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (22)
2,169 6,586 9,497 13,765
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,431,166 1,442,680 1,887,352 2,053,118
These balances were interest-free, unsecured and repayable on demand (note 38).
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 515 ---
23. INVESTMENTS MEASURED AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Listed equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 13,871 5,942
Structured deposits and wealth
management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,371,031 1,162,784
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,384,902 1,168,726
Non-current portion:
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118269,228 318,526 242,652 348,091
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Listed equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 9,012 –
Structured deposits and wealth
management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 545,286 395,973
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 554,298 395,973
Non-current portion:
Unlisted equity investments /H1118/H1118/H1118/H1118/H111863,429 121,739 53,992 179,987
As at 30 September 2025, the structured deposits and wealth management products were issued by banks
and securities companies. The listed equity investments were issued by listed companies and are publicly
trading on the stock exchange.
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 516 ---
24. CASH AND CASH EQUIV ALENTS, TIME DEPOSITS, RESTRICTED CASH AND PLEDGED
DEPOSITS
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H11183,278,958 4,406,907 5,461,528 6,850,371
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 93,876 46,719
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 41,442 2,013
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,320 692,020 1,222,947 446,532
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,463,278 5,102,225 6,819,793 7,345,635
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,752,181 4,090,862 3,972,575 4,806,164
Denominated in USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,292,010 224,345 1,394,114 1,879,074
Denominated in KRW /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 747 1,264 1,449
Denominated in HKD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,237 547 4,358 22,241
Denominated in INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,530 89,404 83,308 136,007
Denominated in VND /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,002 3,128 1,703
Denominated in Euro (“EUR”) /H1118/H1118/H1118 – – 724 862
Denominated in JPY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,914 1,887
Denominated in Singapore dollar
(“SGD”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 143 984
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,278,958 4,406,907 5,461,528 6,850,371
Time deposits denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 93,876 46,719
Restricted cash denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 41,442 2,013
Pledged deposits denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,320 692,020 1,222,947 446,532
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H11181,117,225 1,449,794 1,359,001 1,860,484
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 25,423 13,670
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––3 3
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118558,428 55,352 98,524 50,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,675,653 1,505,146 1,482,951 1,924,157
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 517 ---
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,111,738 1,447,630 1,357,949 1,860,451
Denominated in USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,487 2,164 1,052 33
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,117,225 1,449,794 1,359,001 1,860,484
Time deposits denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 25,423 13,670
Restricted cash denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––3 3
Pledged deposits denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118558,428 55,352 98,524 50,000
The RMB is not freely convertible into other currencies, however, under the Chinese mainland’s Foreign
Exchange Control Regulations and Administration of Settlement, and Sale and Payment of Foreign Exchange
Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to
conduct foreign exchange business. Short term time deposits are made depending on the immediate cash
requirements of the Group and earn interest at the respective short term time deposit rates. Cash at banks earns
interest at floating rates based on daily bank deposit rates.
As at 31 December 2022, 2023 and 2024 and 30 September 2025, restricted cash represented bank
deposits amounting to nil, RMB3,298,000, RMB41,442,000 and RMB2,013,000, respectively, which consisted
of funds frozen by court order pursuant to civil rulings and frozen funds in loan supervision accounts.
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group and the Company assessed
the credit risk of cash and cash equivalents, time deposits and restricted cash to be minimal as they were placed
in reputable financial institutions.
Pledged deposits of RMB1,184,320,000, RMB692,020,000, RMB1,222,947,000 and RMB446,532,000
at 31 December 2022, 2023 and 2024 and 30 September 2025, respectively, were pledged for the issuance of
bank acceptance notes and bank guarantee.
25. TRADE AND BILLS PAYABLES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,087,971 9,630,348 9,285,569 8,679,913
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,497,114 4,023,642 8,025,232 8,000,547
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
An ageing analysis of the trade and bills payables as at the end of each of Relevant Periods, based on invoice
date, is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,560,166 13,631,722 17,281,571 16,660,206
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,984 13,720 17,595 8,089
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,483 5,460 6,256 6,097
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,452 3,088 5,379 6,068
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 518 ---
The trade payables are interest-free and are normally settled within 30 to 90 days upon receipt of the invoice.
The net carrying amounts of due to related parties included in the above are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
DBG Technology Co., Ltd. /H1118/H1118/H1118/H1118/H111839,201 141,335 116,199 33,114
Shenzhen WangXin Precision
Industrial Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,232 22,897 – –
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,792 3,082 33,357 150,218
Dongguan Liesheng Electronic
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852 1,621 – –
Shanghai Donghe Jiugu Happy
Farm Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896– –
DBG Technology (India) Private
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 39,747
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,286 168,941 149,556 223,079
The balances are unsecured, interest-free and on credit terms similar to those offered to the major customers
of the Group.
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118339,901 224,210 874,338 668,125
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,325,997 250,000 719,195 350,819
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,665,898 474,210 1,593,533 1,018,944
An ageing analysis of the trade and bills payables as at the end of each of Relevant Periods, based on invoice
date, is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,660,465 473,785 1,593,384 969,327
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,433 391 38 49,617
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–3 47 7 –
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 4 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,665,898 474,210 1,593,533 1,018,944
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 519 ---
The net carrying amounts of due to related parties included in the above are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Nanchang Longcheer Information
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118163,891 71,114 620,789 566,681
Longcheer Electronics (Huizhou)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,089 358 6,002 448
Guolong Information Technology
(Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 8 3–– –
Miaobo Software Co., Ltd. /H1118/H1118/H1118/H1118/H11183 0 3–– –
Longcheer Telecommunication
(H.K.) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 45,899 45,369
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168,966 71,472 672,690 612,498
The balances are unsecured, interest free and on credit terms similar to those offered to the major customers
of the Group.
The Group entered into supplier finance arrangement with Xiaomi Group, China Construction Bank
(“Construction Bank”), China Merchants Bank (“Merchants Bank”), China CITIC Bank (“CITIC”), Shanghai Pudong
Development Bank (“SPDB”) and Bank of Shanghai (“BOS”), collectively as the “factoring companies”. Pursuant
to the arrangement, Xiaomi Group, Construction Bank, Merchants Bank, CITIC, SPDB and BOS provided factoring
on the trade receivables of the Group’s suppliers with a total credit limit up to RMB3 billion, RMB350 million,
RMB1.2 billion, RMB1.3 billion, RMB600 million and RMB350 million, respectively, as at 30 September 2025.
Under these supplier finance arrangements, the Group’s suppliers are eligible to have their undue accounts
receivables from the Group factored by the factoring companies. Upon the Group’s approval, the suppliers enter into
accounts receivables transfer agreements with the factoring companies, whereby their corresponding accounts
receivables transferred from the Group to the factoring companies. The factoring companies settled with the suppliers
directly for the factored receivables. The Group subsequently made payments to the factoring companies to settle the
factored accounts receivables. The credit periods of the above supplier finance arrangements are usually not more
than 12 months.
All financial liabilities that are part of the supplier finance arrangements are included in trade and bills
payables.
As at 31 December As at 30 September
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:
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H11182,713,962 2,761,286 3,670,648 3,610,046
Of which suppliers have
received payments /H1118/H1118/H1118/H1118/H1118/H1118672,019 923,587 686,837 696,902
For financial liabilities that are part of the supplier finance arrangements included in trade and bills payables,
there were no significant non-cash changes in the carrying amounts of these financial liabilities.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 520 ---
26. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118357,804 363,726 377,267 364,658
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,538 57,582 54,318 76,640
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,080 18,124 24,644 24,515
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,008
Shares repurchase obligation
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 216,548
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118415 1,001 5,307 5,373
420,837 440,433 461,536 688,742
Non-current portion:
Long-term payables for equipment /H1118 – – 1,125 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118420,837 440,433 462,661 688,742
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118602,713 1,270,745 1,017,606 2,310,930
Payroll and welfare payable /H1118/H1118/H1118/H1118/H111885,076 88,875 95,120 75,366
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,431 17,197 29,188 24,500
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156 175 891 250
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,008
Shares repurchase obligation
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 216,548
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 5 0 9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118716,376 1,376,992 1,142,805 2,629,111
Other payables in current portion were interest-free, unsecured and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 521 ---
27. CONTRACT LIABILITIES
The Group
As at 31 December
As at
30 September
2021 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118147,264 108,647 24,101 9,445 91,514
The Company
As at 31 December
As at
30 September
2021 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118182,846 20,379 – – 1,578
28. DERIV ATIVE FINANCIAL INSTRUMENTS
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Foreign currency
forward
contracts /H1118/H1118/H1118/H1118/H1118– 3,008 – 23,120 726 27,636 – 47,132
The Company
As at 31 December As at 30 September
2022 2023 2024 2025
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Foreign currency
forward
contracts /H1118/H1118/H1118/H1118/H1118– – – 1,793 726 – – 1,316
Cash flow hedge — Foreign currency risk
Foreign currency forward contracts are measured as hedging instruments in cash flow hedges of forecast sales
and purchases in foreign currencies. The foreign exchange forward contract balances vary with the level of expected
foreign currency sales and purchases and changes in foreign exchange forward rates.
To measure the hedge effectiveness, the Group uses the hypothetical derivative method and compares the
changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable
to the hedged risks.
The source of ineffectiveness is primarily the timing difference between the hedged transaction and the
maturity of the hedging instrument.
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 522 ---
29. INTEREST-BEARING BANK BORROWINGS
The Group
As at 31 December 2022
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.00%-2.50% 2023 371,428
Current portion of long term bank borrowings —
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.35%-3.80% 2023 57,359
Total — current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,787
Non-current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.35%-3.80% 2024-2027 557,217
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118986,004
As at 31 December 2023
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.00%-5.60% 2024 692,695
Current portion of long term bank borrowings —
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00%-3.80% 2024 60,120
Total — current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118752,815
Non-current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00%-3.80% 2025-2028 712,430
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,465,245
As at 31 December 2024
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.78%-6.30% 2025 1,801,656
Current portion of long term bank borrowings —
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.40%-3.00% 2025 5,004
Total — current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,806,660
Non-current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.40%-3.00% 2026-2030 694,717
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,501,377
As at 30 September 2025
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.70%-3.60% 2025-2026 2,503,430
Current portion of long term bank borrowings —
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.30%-2.40% 2026 298,655
Bank borrowings — unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.95%-2.08% 2026 232,423
Total — current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,034,508
Non-current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.30%-2.40% 2027-2032 604,357
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,638,865
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 523 ---
The Company
As at 31 December 2022
Effective interest
rate (%) Maturity RMB’000
Current
Current portion of long term bank borrowings —
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.35%-3.80% 2023 10,509
Total — current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,509
Non-current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.35%-3.80% 2024-2025 135,573
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,082
As at 31 December 2023
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50% 2024 150,104
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,104
As at 31 December 2024
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.10%-1.30% 2025 42,835
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,835
As at 30 September 2025
Effective interest
rate (%) Maturity RMB’000
Current
Bank borrowings — secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.95%-1.35% 2025-2026 22,000
Bank borrowings — unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.95%-2.08% 2026 232,423
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,423
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,787 752,815 1,806,660 3,034,508
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,617 74,237 296,480 221,017
In the third to fifth years, inclusive /H1118 469,600 512,190 385,000 267,500
Beyond five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 126,003 13,237 115,840
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118986,004 1,465,245 2,501,377 3,638,865
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 524 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,509 150,104 42,835 254,423
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,37 3–––
In the third to fifth years, inclusive /H1118 95,20 0–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,082 150,104 42,835 254,423
As at 31 December 2022, 31 December 2023, 31 December 2024 and 30 September 2025, the Group’s
leasehold land with aggregate carrying amounts of approximately nil, RMB405,105,000, RMB362,555,000 and
RMB356,881,000, respectively, were pledged to secure interest-bearing bank borrowings granted to the Group.
As at 31 December 2022, 31 December 2023,31 December 2024 and 30 September 2025, the Group’s
and the Company’s interest-bearing bank borrowings of RMB614,576,000, RMB1,065,243,000,
RMB712,609,000 and RMB1,335,943,000, respectively, were guaranteed by Shanghai Longcheer Technology
Co., Ltd., Longcheer Electronics (Huizhou) Co., Ltd., Guolong Information Technology (Shanghai) Co., Ltd.
of which are subsidiaries of the Company.
As at 31 December 2023, the entire equity interest of Nanchang Longcheer Intelligent Technology Co.,
Ltd., a subsidiary of the Company, was pledged to secure interest-bearing bank borrowings granted to Shanghai
Longcheer Information Technology Co., Ltd. This pledge has been released subsequently.
30. DEFERRED INCOME
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government grants
(a) Asset-related grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,807 127,836 163,180 145,211
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government grants
(a) Asset-related grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,351 2,104 1,051 824
(a) Asset-related grants
The asset-related grants were the subsidies received from the government in relation to the Group’s property,
plant and equipment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 525 ---
31. SHARE CAPITAL
The Group and the Company
Shares
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Issued and fully paid:
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 405,097 465,097 469,382
A summary of movements in the Company’s share capital is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,097 405,097 405,097 465,097
Issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 60,000 4,285
At the end of the year/period /H1118/H1118/H1118/H1118/H1118405,097 405,097 465,097 469,382
On 21 February 2024, the Company issued 60,000,000 new shares with a nominal value of RMB1.00
each in the public offering at an issue price of RMB26.00 per share for total proceeds of RMB1,560,000,000
before issuance expenses of RMB119,321,000.
On 15 July 2025, the Company issued 4,285,000 shares with a nominal value of RMB1.00 each for
RMB19.34 per share for a total consideration of RMB82,872,000 and an amount of RMB78,587,000,
representing the consideration received over the par value, was credited to capital reserve.
32. SHARE-BASED PAYMENTS
The Group adopted a share award scheme (the “ Share Award Scheme ”) for certain employees of the Group
(“Share Incentive Participants ”) in order to recognise the contributions of the Share Incentive Participants to the
growth and development of the Group and incentivise them to further promote the development of the Group.
In order to implement the Share Award Scheme, Kunshan Longcheer Investment Management Center (Limited
Partnership), Shanghai Qili ( ࿩Ꮈ) Enterprise Management Partnership (Limited Partnership), Shanghai Qizhuang
Enterprise Management Partnership (Limited Partnership), Shanghai Qili ( ࿩ᘥ) Enterprise Management Partnership
(Limited Partnership), Kunshan Qiyun Investment Management Center (Limited Partnership), Shanghai Qijing
Enterprise Management Partnership (Limited Partnership), Ningbo Meishan Bonded Port Area Qizhong Enterprise
Management Partnership Enterprise (Limited Partnership), Shanghai Qixue Enterprise Management Partnership
(Limited Partnership), Ningbo Meishan Bonded Port Area Qifei Enterprise Management Partnership Enterprise
(Limited Partnership) and Ningbo Meishan Bonded Port Area Qiyuan Enterprise Management Partnership Enterprise
(Limited Partnership) were established and designated as share incentive platforms to hold the shares specially
awarded to the eligible participants.
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 526 ---
During the Relevant Periods, the shares granted to employees under the share award scheme are set out below.
The difference between the fair value of the shares granted and the subscription price was recognised in the
share-based payment reserve within equity with the corresponding “share-based payment expenses” in profit or loss.
Date granted
Number
of shares
granted
Subscription
price
Fair values
on the grant
date
The basis for determining the fair
value as of the grant date
RMB
per share
RMB
per share
15 December 2020 /H1118/H1118/H1118/H1118/H11184,000,000 2.78 19.06 Recent transaction price with
investors
31 March 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H11189,786,197 1.00-2.78 18.78 Recent transaction price with
investors
1 June 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,237,964 3.00-4.80 24.69 Discounted cash flow
1 April 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118191,855 4.80-5.20 24.69 Discounted cash flow
12 December 2023 /H1118/H1118/H1118/H1118/H1118513,497 3.00-3.25 24.69 Discounted cash flow
28 February 2024 /H1118/H1118/H1118/H1118/H1118/H1118782,896 5.20 26.00 The issuing price for listing of the
Company’s shares on the
Shanghai Stock Exchange “SSE”
Main Board
15 December 2024 /H1118/H1118/H1118/H1118/H1118384,616 5.20 48.63 The closing price of the
Company’s shares on the last
trading day before the equity
award date
26 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,285,000 19.34 39.30 The closing price of the
Company’s shares on the last
trading day before the shares
granting date
4 July 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,270,000 21.32 39.03 The closing price of the
Company’s shares on the last
trading day before the shares
granting date
Each grant of shares granted before 2025 shall vest on the later of: (i) five years from the grant date, or (ii)
three years after the Company’s successful listing on the Shanghai Stock Exchange. After taking into consideration
the best estimation of timeline for the Company’s successful listing, the management determined the vesting period
of the relevant shares based on the above service requirements. As such, the share-based payment expenses are
amortized during the vesting period.
In May 2025, the Company’s board of directors approved the restricted shares incentive plan (the “RSs”). The
participants were entitled to receive newly issued ordinary shares of the Company. The RSs granted would vest at
a rate of 30%,30%,40% upon the first, second and third anniversaries of the vesting commencement date respectively,
on condition that employees remain in service and certain non-market performance criteria is met. The performance
goals are determined by the Company’s board of directors. Evaluations are made as of each reporting period to assess
the likelihood of performance criteria being met. Share award expenses are then adjusted to reflect the revision of
original estimates.
In July 2025, the Company’s directors approved an employee shares ownership plan (the “ESOP”). Under this
ESOP , the Company repurchased its shares and granted to those eligible grantees which are being held on custody
by the Company. The repurchased shares granted under the ESOP would be vested at rate of 30%, 30%, 40% upon
the first, second and third anniversaries of the vesting commencement date, respectively, on condition that employees
remain in service and certain non-market performance criteria are met. The performance goals are determined by the
Company’s director. Evaluations are made as of each reporting period to assess the likelihood of performance criteria
being met. Share award expenses are then adjusted to reflect the revision of original estimates.
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 527 ---
The directors have used the discounted cash flow method to determine the underlying equity fair value of the
Company for grants of shares granted at 1 June 2022, 1 April 2023 and 12 December 2023. Key assumptions, such
as discount rate and projections of future performance, are required to be determined by the directors with best
estimate. The discount rate was estimated based on the Weighted Average Cost of Capital (“W ACC”). The following
table lists the input to the model used:
Discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.40%
Movements in the number of shares granted under the above share base payments arrangements were as
follows:
Number of shares
As at 31 December
As at
30 September
2022 2023 2024 2025
At the beginning of the year/period /H1118 13,306,197 21,355,184 20,875,536 21,205,048
Granted during the year/period /H1118/H1118/H1118/H11189,237,964 705,352 1,167,512 10,555,000
Forfeited during the year/period /H1118/H1118/H1118(1,188,977) (1,185,000) (838,000) (392,221)
At the end of the year/period /H1118/H1118/H1118/H1118/H111821,355,184 20,875,536 21,205,048 31,367,827
33. RESERVES AND TREASURY SHARES
The Group
The amounts of the Group’s reserves and the movements therein for the Relevant Periods are presented in the
consolidated statements of changes in equity of the Historical Financial Information.
(i) Capital and other reserve
Capital and other reserve of the Group mainly represents the difference between the consideration received for
the capital paid up and the par value of the ordinary share, the share of capital reserves of associates, and the
difference between the Group’s consideration paid and the share of net asset attributable to the non-controlling
interests then being acquired.
(ii) Statutory surplus reserve
In accordance with the Company Law of the Chinese mainland, companies which are domestic enterprises are
required 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 reserve
may be converted to capital, provided that the remaining balance after the capitalisation is not less than 25% of the
registered capital.
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 528 ---
(iii) Treasury shares
Number of shares Treasury shares
RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
Repurchase of shares (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,499,937 299,820
Shares granted under a share award scheme (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,270,000) (250,651)
Shares repurchase obligation (ii) (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,555,000 216,548
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,784,937 265,717
(i) The Company purchased 7,499,937 of its shares from open market at a total consideration of
RMB299,869,000.
(ii) In May 2025, the Company granted 4,285,000 shares to certain employees at the grant price of
RMB19.34 per share under the RSs for an aggregate consideration of RMB82,872,000 which was
received in July 2025. A corresponding shares repurchase obligation liability was recognized.
(iii) In August 2025, the Company granted 6,270,000 shares, which were repurchased by the Company from
the open market for RMB250,651,000 to certain employees under the ESOP for RMB21.32 per shares
with an aggregate consideration of RMB133,676,000 and a corresponding shares repurchase obligation
liability was recognised.
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 529 ---
The Company
Capital
and other
reserve
Share-
based
payment
reserve
Cash flow
hedge
reserve
Statutory
reserves
Retained
profits
Total
reserve
Treasury
shares Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2021 and
1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,055,598 66,425 – 75,307 584,088 1,781,418 – 1,781,418
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 358,253 358,253 – 358,253
Total comprehensive income for
the years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 358,253 358,253 – 358,253
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 58,239 – – – 58,239 – 58,239
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118– – – 35,825 (35,825) – – –
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (455,053) (455,053) – (455,053)
As at 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,055,598 124,664 – 111,132 451,463 1,742,857 – 1,742,857
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 292,725 292,725 – 292,725
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,793) – – (1,793) – (1,793)
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,793) – 292,725 290,932 – 290,932
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 69,629 – – – 69,629 – 69,629
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118– – – 29,273 (29,273) – – –
As at 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,055,598 194,293 (1,793) 140,405 714,915 2,103,418 – 2,103,418
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 149,955 149,955 – 149,955
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,519 – – 2,519 – 2,519
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,519 – 149,955 152,474 – 152,474
Issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,380,679 – – – – 1,380,679 – 1,380,679
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 71,634 – – – 71,634 – 71,634
Transfer from retained profits /H1118/H1118/H1118/H1118/H1118– – – 14,995 (14,995) – – –
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (232,548) (232,548) – (232,548)
As at 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,436,277 265,927 726 155,400 617,327 3,475,657 – 3,475,657
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 124,989 124,989 – 124,989
Cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (2,042) – – (2,042) – (2,042)
Total comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (2,042) – 124,989 122,947 – 122,947
Issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,587 – – – – 78,587 – 78,587
Share repurchased under a share
award scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) – – – – (49) (299,820) (299,869)
Shares repurchase obligation
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –––– (216,548) (216,548)
Issue of shares under a share award
scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(116,975) – – – – (116,975) 250,651 133,676
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,309 88,593 – – – 90,902 – 90,902
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (228,798) (228,798) – (228,798)
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,400,149 354,520 (1,316) 155,400 513,518 3,422,271 (265,717) 3,156,554
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 530 ---
34. ACQUISITION OF A SUBSIDIARY THAT IS NOT A BUSINESS
In May 2025, the Group acquired the entire equity interest of Huizhou Longhe Technology Co., Ltd. from
Shanghai Lilong Investment Management Co., Ltd. (ʮ̡), a company of which Mr. Du
Junhong is an equity holder, for a total cash consideration of RMB57,765,000. Huizhou Longhe Technology Co., Ltd.
is engaging in property development business.
Details of assets purchased are included in note 13 and note 15(a) to the Historical Financial Information.
An analysis of the cash flows in respect of the acquisition of a subsidiary is as follows:
RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(57,765)
Cash and bank balances acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,990
Net outflow of cash and cash equivalents included in cash flows from investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,775)
35. 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 nine months ended 30 September 2025, the
Group had non-cash additions to right-of-use assets and lease liabilities of RMB120,261,000, RMB189,824,000,
RMB78,777,000 and RMB58,215,000, respectively, in respect of lease arrangements for buildings.
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118979,197 98,824 1,078,021
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,506) (56,850) (85,356)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120,261 120,261
Lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (15,866) (15,866)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,583 5,365 37,948
Foreign exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,730 – 2,730
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118986,004 151,734 1,137,738
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118439,345 (65,357) 373,988
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 189,824 189,824
Lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (39,586) (39,586)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,521 6,683 45,204
Foreign exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,375 – 1,375
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H11181,465,245 243,298 1,708,543
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118986,991 (83,833) 903,158
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 78,777 78,777
Lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,352) (3,352)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,972 9,824 73,796
Foreign exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,831) – (14,831)
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H11182,501,377 244,714 2,746,091
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,187,325 (69,920) 1,117,405
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 58,215 58,215
Lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,009) (2,009)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,469 7,313 48,782
Changes from operating cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,800 – 7,800
Derecognition for bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(92,834) – (92,834)
Foreign exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,272) – (6,272)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,638,865 238,313 3,877,178
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 531 ---
(c) Total cash outflow for leases
The total cash outflow for leases included in the statements of cash flows is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Within operating activities /H1118/H1118/H111845,557 42,672 78,339 61,865 46,637
Within financing activities /H1118/H1118/H111856,850 65,357 83,833 60,658 69,920
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,407 108,029 162,172 122,523 116,557
36. CONTINGENT LIABILITIES
As of the end of each of the Relevant Periods, we did not have any material contingent liabilities, guarantees
or any litigations or claims of material importance, pending or threatened against any member of the Group.
37. COMMITMENTS
The Group had the following capital commitments at the end of each of the relevant periods:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Properties, plant and equipment /H1118/H1118215,332 313,131 318,270 233,204
38. RELATED PARTY TRANSACTIONS
The related companies with which the Group had transactions were as follows:
Name of related parties Relationship with the Group
DBG Technology (India) Private Limited /H1118/H1118/H1118/H1118/H1118/H1118The Group holds 11.07% equity interest
DBG Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Group indirectly holds 10.63% of effective equity
interest
Shenzhen WangXin Precision Industrial Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Group indirectly holds 2.16% of effective equity
interest
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Companies of which Mr. Lei Jun (a shareholder of the
Company) is a shareholder
Dongguan Liesheng Electronic Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Liu De (a director of the
Company) is a director
Shanghai Donghe Jiugu Happy Farm Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Du Junqi (a close family
member of Mr. Du Junhong) has equity interest
Shanghai Donghe V egetable and Fruit Planting
Professional Cooperative
ٟH1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Du Junqi (a close family
member of Mr. Du Junhong) has equity interest
Zhenshi Information Technology (Shanghai)
Co., Ltd.
Ҧ(ɪऎ)ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Fan Haitao (a shareholder of
the Company) is a shareholder
70mai Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Tang Xiaoxun (a
shareholder of the Company) is a shareholder
Shanghai Imilab Technology Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118
A company of which Mr. Deng Hua (a shareholder of
the Company) is a shareholder
Shanghai Moban Intelligent Technology Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanghai Lingxun Enterprise Management Center
(Limited Partnership) (Mr. Du Junhong is a
managing partner) holds 21.18% equity interest
Dongguan WangXin Precision Industrial Co., Ltd.
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A subsidiary of Shenzhen WangXin Precision
Industrial Co., Ltd.
Huizhou Longhe Technology Co., Ltd.*
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Du Junhong is a equity
holder
Shanghai Lilong Investment Management
Co., Ltd.ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A company of which Mr. Du Junhong is a equity
holder
* Huizhou Longhe Technology Co., Ltd. has become a subsidiary of the Group since May 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 532 ---
(a) Transactions with related parties:
The Group had the following transactions with related parties during the Relevant Periods and the nine months
ended 30 September 2024:
Transactions with related parties Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Purchase of products and
service
DBG Technology (India)
Private Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,722 678,742 554,875 225,472
DBG Technology Co., Ltd. /H1118/H1118/H1118170,884 349,119 508,572 375,516 152,797
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,884 353,841 1,187,314 930,391 378,269
Purchases of products
Shenzhen WangXin Precision
Industrial Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118489,872 381,176 428,755 412,282 –
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,976 3,868 244,399 139,020 443,148
Dongguan Liesheng Electronic
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846 10,476 3,100 3,100 –
Shanghai Donghe Jiugu Happy
Farm Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285 382 273 147 34
Shanghai Donghe V egetable
and Fruit Planting
Professional Cooperative /H1118/H1118/H1118431 571 46 46 816
Dongguan WangXin Precision
Industrial Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H11182 2 2––––
Shanghai Moban Intelligent
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H11181 8––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118496,850 396,473 676,573 554,595 443,998
Provision of services or sales
of products
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,357,127 11,519,947 17,261,692 12,764,718 8,953,639
Zhenshi Information
Technology (Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481 520 594 477 248
70mai Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2 65222
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,358,034 11,520,472 17,262,288 12,765,197 8,953,889
Sales of products
DBG Technology (India)
Private Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,857 225,887 195,197 167,667 56,693
DBG Technology Co., Ltd. /H1118/H1118/H1118539 365 9,721 8,004 4,324
Shenzhen WangXin Precision
Industrial Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118– 4,997 9,552 7,745 –
Shanghai Imilab Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857 57 57 42 –
Shanghai Moban Intelligent
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118567 88 30 30 1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,020 231,394 214,557 183,488 61,018
Lease expenses
Huizhou Longhe Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,095 3,095 3,095 2,321 1,356
In May 2025, the Group acquired Huizhou Longhe Technology Co. Ltd. which became a subsidiary of the
Group. Further details of the transaction are included in note 34 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 533 ---
The transactions with related parties were made according to the published prices and conditions negotiated
between the parties.
(b) Outstanding balances with related parties:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due from related parties
Trade-related
Xiaomi Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118617 617 389 380
Lease liabilities
Trade-related
Huizhou Longhe Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,044 – –
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due from subsidiaries
Non-trade related
Shanghai Longcheer Information
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,255,811 1,328,150 1,748,500 1,730,100
Shanghai Longcheer Smart
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118128,000 – – –
Longcheer Electronics (Huizhou)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,37 7–––
Hefei Longcheer Smart Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 88,000 53,000 146,000
Nanchang Longcheer Smart
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 50,000 96,700
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,385,188 1,416,150 1,851,500 1,972,800
Due to subsidiaries
Non-trade related
Guolong Information Technology
(Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,713 213,970 68,807 80,403
Longcheer Electronics (Huizhou)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,000 608,773 394,845 235,739
Miaobo Software Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118135,000 148,000 223,000 213,000
Nanchang Longcheer Information
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 300,000 – 700,358
Shanghai Longcheer Smart
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2 300,154 1,045,261
Shanghai Huanmi Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 27,000 27,000
Shanghai Haocheng Information
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,800 3,000
Longcheer Telecommunication
(H.K.) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,168
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118602,713 1,270,745 1,017,606 2,310,929
These balances were interest-free, unsecured and repayable on demand.
Further details of trade related outstanding balances with related parties are included in note 21 and note 25.
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 534 ---
(c) Compensation of key management personnel of the Group:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 360 270 290
Other emoluments:
Salaries, allowances and
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,671 12,612 11,891 8,955 10,630
Share-based payment expenses /H1118 16,986 17,836 21,732 13,739 20,838
Pension scheme contributions /H1118 1,121 1,213 1,263 945 1,155
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,138 32,021 35,246 23,909 32,913
Further details of directors’, the chief executive’s and supervisors’ emoluments are included in note 8 to the
Historical Financial Information.
39. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant
Periods are as follows:
As at 31 December 2022
Financial assets
Financial assets at
fair value through
profit or loss
Financial assets at
amortised cost Total
RMB’000 RMB’000 RMB’000
Investments measured at fair value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,228 – 269,228
Trade and bills receivables (note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,538,222 5,538,222
Financial assets included in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 89,995 89,995
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,184,320 1,184,320
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,278,958 3,278,958
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,228 10,091,495 10,360,723
Financial liabilities
Hedging
instruments
designated in
cash flow hedges
Financial liabilities
at amortised cost Total
RMB’000 RMB’000 RMB’000
Derivative financial instruments designated as
hedging instruments in cash flow hedges /H1118/H1118/H1118/H11183,008 – 3,008
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 151,734 151,734
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,585,085 9,585,085
Financial liabilities included in other payables
and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,495 10,495
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 986,004 986,004
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,008 10,733,318 10,736,326
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 535 ---
As at 31 December 2023
Financial assets
Financial assets at
fair value through
profit or loss
Financial assets at
amortised cost Total
RMB’000 RMB’000 RMB’000
Investments measured at fair value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,526 – 318,526
Trade and bills receivables (note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,008,400 9,008,400
Financial assets included in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 44,822 44,822
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 692,020 692,020
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,298 3,298
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,406,907 4,406,907
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,526 14,155,447 14,473,973
Financial liabilities
Hedging
instruments
designated in
cash flow hedges
Financial liabilities
at amortised cost Total
RMB’000 RMB’000 RMB’000
Derivative financial instruments designated as
hedging instruments in cash flow hedges /H1118/H1118/H1118/H111823,120 – 23,120
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 243,298 243,298
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,653,990 13,653,990
Financial liabilities included in other payables
and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 19,125 19,125
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,465,245 1,465,245
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,120 15,381,658 15,404,778
As at 31 December 2024
Financial assets
Financial assets
at fair value
through profit or
loss
Hedging
instruments
designated in
cash flow hedges
Financial assets
at amortised cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instruments
designated as hedging instruments
in cash flow hedges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 726 – 726
Investments measured at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,627,554 – – 1,627,554
Trade and bills receivables
(note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 11,732,512 11,732,512
Financial assets included in
prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 43,732 43,732
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,222,947 1,222,947
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 41,442 41,442
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 93,876 93,876
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,461,528 5,461,528
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,627,554 726 18,596,037 20,224,317
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 536 ---
Financial liabilities
Hedging
instruments
designated in
cash flow hedges
Financial liabilities
at amortised cost Total
RMB’000 RMB’000 RMB’000
Derivative financial instruments designated as
hedging instruments in cash flow hedges /H1118/H1118/H1118/H111827,636 – 27,636
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 244,714 244,714
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,310,801 17,310,801
Financial liabilities included in other payables
and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 29,951 29,951
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,501,377 2,501,377
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,636 20,086,843 20,114,479
As at 30 September 2025
Financial assets
Financial assets
at fair value
through other
comprehensive
income
Financial assets
at fair value
through profit or
loss
Financial assets
at amortised cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Investments measured at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,516,817 – 1,516,817
Trade and bills receivables
(note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,821 – 11,198,677 11,215,498
Financial assets included in
prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 67,495 67,495
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 446,532 446,532
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,013 2,013
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 46,719 46,719
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,850,371 6,850,371
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,821 1,516,817 18,611,807 20,145,445
Financial liabilities
Hedging
instruments
designated in cash
flow hedges
Financial liabilities
at amortised cost Total
RMB’000 RMB’000 RMB’000
Derivative financial instruments designated as
hedging instruments in cash flow hedges /H1118/H1118/H1118/H111847,132 – 47,132
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 238,313 238,313
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 16,680,460 16,680,460
Financial liabilities included in other payables
and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 247,444 247,444
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,638,865 3,638,865
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,132 20,805,082 20,852,214
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 537 ---
40. TRANSFERS OF FINANCIAL ASSETS
Transferred financial assets that were derecognized in their entirety
During the Relevant Periods, the Group endorsed certain bank acceptance notes to certain suppliers in order
to settle the trade payables such suppliers and discounted certain bank acceptance bills with commercial banks
(collectively, the “Derecognised Bills”) with carrying amounts in aggregate of RMB13,180,000, RMB1,587,000,
RMB239,483,000 and RMB233,384,000 as at 31 December 2022, 2023 and 2024 and 30 September 2025,
respectively. The Derecognised Bills had a maturity ranging from 1 to 12 months at the end of each Relevant Periods.
In accordance with the Law of Negotiable Instruments of the Chinese mainland, the holders of the Derecognised Bills
may exercise the right of recourse against any, several or all of the persons/entities who are liable for the
Derecognised Bills, including the Group, regardless of the order of precedence (the “Continuing Involvement”). In
the opinion of the Company’s directors, the Group has transferred substantially all the risks and rewards relating to
the Derecognised Bills. Accordingly, the Group 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 undiscounted cash flows to repurchase these Derecognised Bills is their carrying amounts.
In the opinion of the Company’s directors, the fair values of the Group’s Continuing Involvement in the Derecognised
Bills are not significant.
Transferred financial assets that were not derecognised in their entirety
During the Relevant Periods, the Group endorsed certain bills receivable accepted by banks in the Chinese
mainland (the “Endorsed Bills”). In the opinion of the Company’s directors, the Group has retained substantially the
risks and rewards, which include the default risks relating to those Endorsed Bills, and accordingly, the Group
continued to recognise the full carrying amounts of the Endorsed Bills and the associated trade payables settled.
Subsequent to the Endorsement, the Group has not retained 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 trade
payables settled by the Endorsed Bills during the year to which the suppliers have recourse were RMB392,232,000,
RMB1,160,803,000, RMB1,033,299,000 and RMB409,946,000 as at 31 December 2022, 2023 and 2024 and 30
September 2025, respectively.
41. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, restricted cash, time deposits,
pledged deposits, trade and bills receivables, financial assets included in prepayments, other receivables and other
assets, trade and bills payables, derivative financial instruments, investments measured at fair value through profit
or loss, financial liabilities included in other payables and accruals, lease liabilities and short-term 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. The finance manager reports directly to the chief
financial officer. At each reporting date, 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 valuation process and results are discussed with the audit committee twice a year for
interim and annual financial reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values:
The Group invests in financial assets at fair value through profit or loss, which represent listed equity
investments in the secondary market, structured deposits and wealth management product issued by banks. The Group
has estimated the fair value of equity investments in the secondary market based on the closing price in publicly
traded markets on the balance sheet date. For structured deposits and wealth management products, since the
historical actual returns are consistent with expected returns, the Group measures the fair value of bank wealth
management products classified as trading financial assets using the expected rate of return and the investment
period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 538 ---
The Group enters into derivative financial instruments with banks. Derivative financial instruments are mainly
about forward currency contracts. The fair values of derivative financial instruments are measured based on the
valuation report obtained.
The fair values of the interest-bearing bank borrowings have been assessed to be approximate to their carrying
amounts as at 31 December 2022, 2023 and 2024, respectively. As at 30 September 2025, the fair value and the
carrying amount of the interest-bearing bank borrowings were RMB3,602,653,000 and RMB3,638,865,000. The fair
values of the interest-bearing bank borrowings have been calculated by discounting the expected future cash flows
using significant observable inputs within Level 2.
The fair values of unlisted equity investments measured at fair value through profit or loss have been estimated
using a market-based valuation technique based on assumptions that are not supported by observable market prices
or rates. The valuation requires the directors to determine comparable public companies (peers) based on industry,
size, leverage and strategy, and to calculate an appropriate price multiple, such as price to book (“P/B”) multiple,
price to earnings (“P/E”) multiple and price to sales (“P/S”) multiple for each comparable company identified. The
multiple is calculated by dividing the enterprise value of the comparable company by an earnings measure. The
trading multiple is then discounted for considerations such as illiquidity and size differences between the comparable
companies based on company-specific facts and circumstances. The discounted multiple is applied to the
corresponding earnings measure of the unlisted equity investments to measure the fair value. The directors believe
that the estimated fair values resulting from the valuation technique, which are recorded in the consolidated statement
of financial position, and the related changes in fair values, which are recorded in profit or loss, are reasonable, and
that they were the most appropriate values at the end of the reporting period.
Below is a summary of significant unobservable inputs to the valuation of financial instruments together with
a quantitative sensitivity analysis as at 31 December 2022, 2023 and 2024 and 30 September 2025:
Valuation technique
Significant
unobservable input Range
Sensitivity of fair value to
the input
Financial assets
Investments measured
at fair value through
profit or loss
Unlisted equity
investments /H1118/H1118/H1118/H1118/H1118/H1118
Market approach Discounts for lack
of marketability
(“DLOM”)
31 December
2022: 12% to
18%
1% increase or
decrease in multiple
would result in
decrease or increase
in fair value by
RMB1,213,000.
31 December
2023: 4% to
18%
1% increase or
decrease in multiple
would result in
decrease or increase
in fair value by
RMB2,118,000.
31 December
2024: 4% to
18%
1% increase or
decrease in multiple
would result in
decrease or increase
in fair value by
RMB1,474,000.
30 September
2025: 12% to
18%
1% increase or
decrease in multiple
would result in
decrease or increase
in fair value by
RMB1,682,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 539 ---
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
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 269,228 269,228
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
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 318,526 318,526
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 instruments /H1118/H1118/H1118 – 726 – 726
Listed equity investments /H1118/H1118/H1118/H1118/H1118/H1118/H111813,871 – – 13,871
Structured deposits and wealth
management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,371,031 – 1,371,031
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 242,652 242,652
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,871 1,371,757 242,652 1,628,280
As at 30 September 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
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118– 16,821 – 16,821
Listed equity investments /H1118/H1118/H1118/H1118/H1118/H1118/H11185,942 – – 5,942
Structured deposits and wealth
management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,162,784 – 1,162,784
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H1118– – 348,091 348,091
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,942 1,179,605 348,091 1,533,638
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 540 ---
Liabilities 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
Derivative financial instruments /H1118/H1118/H1118 – 3,008 – 3,008
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
Derivative financial instruments /H1118/H1118/H1118 – 23,120 – 23,120
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 instruments /H1118/H1118/H1118 – 27,636 – 27,636
As at 30 September 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 instruments /H1118/H1118/H1118 – 47,132 – 47,132
The movements in fair value measurements within Level 3 during the year/period are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted equity investments
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118246,137 269,228 318,526 242,652
Total (losses)/gains recognised in
the statements of profit or loss /H1118/H1118 (45,028) 24,298 (18,685) 33,173
Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,119 25,000 10,000 86,000
Transfer into level 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (67,189) (979)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (12,755)
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,228 318,526 242,652 348,091
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 541 ---
42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments, other than a derivative, comprise bank loans, other interest-
bearing borrowings, and cash and pledged deposits. The main purpose of these financial instruments is to raise
finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade and bills
receivables and trade and bills payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. The board of directors reviews and agrees policies for managing each of these risks and
they are summarised below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long term
debt obligations with a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed
and variable rate debts.
If the interest rate of bank borrowings had increased/decreased by 50 basis points and all other variables were
held constant, the profit before tax of the Group, through the impact on floating rate borrowings, would have
increased/decreased by approximately RMB1,317,000, RMB3,963,000, RMB4,393,000 and RMB1,539,000 for the
years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, respectively.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by operating
units in currencies other than the units’ functional currencies.
The following table demonstrates the sensitivity at the end of each of the Relevant Periods to a reasonably
possible change in foreign currency exchange rates, with all other variables held constant, of the Group’s profit before
tax (due to changes in the fair value of monetary assets and liabilities) and the Group’s equity.
Increase/(decrease) in
rate of foreign
exchange
Increase/(decrease) in
profit before tax
% RMB’000
Y ear ended 31 December 2022
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 39,277
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (39,277)
If the RMB weakens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 6,472
If the RMB strengthens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (6,472)
Y ear ended 31 December 2023
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (23,443)
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 23,443
If the RMB weakens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 3,279
If the RMB strengthens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (3,279)
Y ear ended 31 December 2024
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 38,037
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (38,037)
If the RMB weakens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 8,313
If the RMB strengthens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (8,313)
Nine months ended 30 September 2025
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 86,363
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (86,363)
If the RMB weakens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 44,931
If the RMB strengthens against the INR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (44,931)
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 542 ---
Credit risk
The Group trades only with recognised and creditworthy third parties. 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. For transactions that are not denominated in the functional currency of
the relevant operating unit, the Group does not offer credit terms without specific verification procedures.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit
policy, which is mainly based on past due information unless other information is available without undue cost or
effort, and year-end staging classification. The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2022
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,547,834 5,547,834
Financial assets included
in prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,52 4––– 94,524
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11181,184,320 – – – 1,184,320
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11183,278,958 – – – 3,278,958
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,557,802 – – 5,547,834 10,105,636
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 9,021,856 9,021,856
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,49 0––– 46,490
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118692,02 0––– 692,020
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11183,29 8––– 3,298
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11184,406,907 – – – 4,406,907
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,148,715 – – 9,021,856 14,170,571
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 543 ---
As at 31 December 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,740,585 11,740,585
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,30 9––– 45,309
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11181,222,947 – – – 1,222,947
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H111841,44 2––– 41,442
Time deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H111893,87 6––– 93,876
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11185,461,528 – – – 5,461,528
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,865,102 – – 11,740,585 18,605,687
As at 30 September 2025
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,223,298 11,223,298
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,84 9––– 69,849
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118446,53 2––– 446,532
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11182,01 3––– 2,013
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H111846,71 9––– 46,719
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11186,850,371 – – – 6,850,371
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,415,484 – – 11,223,298 18,638,782
* For trade and bills receivables to which the Group applies the simplified approach for impairment,
information based on the provision matrix is disclosed in note 21.
** The credit quality of the financial assets included in prepayments, other receivables 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 increase in credit risk since initial recognition. Otherwise, the credit
quality of the financial assets is considered to be “doubtful”.
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 544 ---
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management
of the Group to finance the operations and mitigate the effects of fluctuations of cash flows.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of interest-bearing bank borrowings and lease liabilities.
The maturity profile of the Group’s financial liabilities as at the end of the each of the Relevant period, based
on the contractual undiscounted payments, is as follows:
Less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,022 106,643 156,921 346,846 – 1,062,432
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,069 55,189 40,672 5,691 – 162,621
Trade and bills payables /H1118/H1118/H1118/H11189,585,085 –––– 9,585,085
Financial liabilities included
in other payables /H1118/H1118/H1118/H1118/H1118/H1118/H111810,49 5–––– 10,495
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,00 8–––– 3,008
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,111,679 161,832 197,593 352,537 – 10,823,641
Less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777,970 96,067 100,590 453,970 127,340 1,555,937
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,411 57,068 27,531 43,519 82,713 280,242
Trade and bills payables /H1118/H1118/H1118/H111813,653,990 –––– 13,653,990
Financial liabilities included
in other payables /H1118/H1118/H1118/H1118/H1118/H1118/H111819,12 5–––– 19,125
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,12 0–––– 23,120
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,543,616 153,135 128,121 497,489 210,053 15,532,414
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 545 ---
Less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,824,037 312,430 222,648 168,212 13,413 2,540,740
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,171 51,436 34,742 43,799 62,048 276,196
Trade and bills payables /H1118/H1118/H1118/H111817,310,801 –––– 17,310,801
Financial liabilities included
in other payables /H1118/H1118/H1118/H1118/H1118/H1118/H111829,95 1–––– 29,951
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,63 6–––– 27,636
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,276,596 363,866 257,390 212,011 75,461 20,185,324
Less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 September 2025
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,068,026 234,284 71,308 216,439 117,585 3,707,642
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,466 44,846 35,306 53,571 41,260 248,449
Trade and bills payables /H1118/H1118/H1118/H111816,680,460 –––– 16,680,460
Financial liabilities included
in other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118247,44 4–––– 247,444
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,13 2–––– 47,132
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,116,528 279,130 106,614 270,010 158,845 20,931,127
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as
a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders or issue new
shares.
APPENDIX I ACCOUNTANTS’ REPORT
– I-107 –


--- page 546 ---
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net
debt includes, interest-bearing bank borrowings, trade and bills payables, derivative financial instrument, other
payables and accruals and lease liabilities, less cash and cash equivalents. Capital includes equity attributable to the
owners of the parent. The gearing ratios as at the end of each of the Relevant Periods were as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,585,085 13,653,990 17,310,801 16,680,460
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118420,837 440,433 462,661 688,742
Derivative financial instruments /H1118/H1118/H11183,008 23,120 27,636 47,132
Interest-bearing bank borrowings /H1118/H1118/H1118986,004 1,465,245 2,501,377 3,638,865
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,734 243,298 244,714 238,313
Less: Cash and cash equivalents /H1118/H1118/H1118(3,278,958) (4,406,907) (5,461,528) (6,850,371)
Net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,867,710 11,419,179 15,085,661 14,443,141
Equity attributable to owners of
the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156,084 3,825,258 5,600,773 5,740,203
Capital and net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,023,794 15,244,437 20,686,434 20,183,344
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871% 75% 73% 72%
43. EVENTS AFTER THE RELEV ANT PERIODS
On 20 November 2025, the Company granted a total of 950,000 shares to certain employees under the RSs at
a grant price of RMB19.34 per share.
44. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any subsidiaries of the
Group in respect of any period subsequent to 30 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-108 –


--- page 547 ---
The estimated consolidated profit attributable to owners of our Company for the year
ended December 31, 2025 is set out in “Financial Information — Profit estimate for the year
ended December 31, 2025” in this prospectus.
A. BASES
Our Directors have prepared the estimate of the consolidated profit attributable to owners
of our Company for the year ended December 31, 2025 (the “Profit Estimate”) on the basis of
(i) the audited consolidated results of our Group for the nine months ended September 30,
2025; and (ii) the unaudited consolidated results of our Group for the three months ended
December 31, 2025 based on the management accounts of our Group.
The Profit Estimate has been prepared on the basis of the accounting policies consistent
in all material respects with those currently adopted by our Group as summarised in the
Accountants’ Report as set out in Appendix I to this prospectus.
B. PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
On the basis set out in Appendix IA to this prospectus, and in the absence of unforeseen
circumstances, we estimate that our unaudited consolidated profit attributable to owners of our
Company for the year ended December 31, 2025 is as follows:
Estimated consolidated profit attributable
to owners of our Company .................... .Not less than RMB570 million
APPENDIX IA PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IA-1 –


--- page 548 ---
C. LETTER FROM THE REPORTING ACCOUNTANTS
The following is the text of a letter , prepared for the inclusion in this prospectus, received
from our Company’ s reporting accountants, Ernst & Young, Certified Public Accountants,
Hong Kong, in connection with the estimate of the consolidated profit attributable to owners
of our Company for the year ended 31 December 2025.
Ernst & Young
27/F , One T aikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ה
༸  ໮
ᅽ
5FM ཥ༑

'BY ෂॆ

FZDPN
14 January 2026
The Board of Directors
Shanghai Longcheer Technology Co., Ltd.
Citigroup Global Markets Asia Limited
Haitong International Capital Limited
Guotai Junan Capital Ltd.
Dear Sirs,
SHANGHAI LONGCHEER TECHNOLOGY CO., LTD. (“THE COMPANY”)
Profit estimate for year ended 31 December 2025
We refer to the estimate of the consolidated profit attributable to equity holders of the
Company for the year ended 31 December 2025 (“the Profit Estimate”) set forth in the section
headed “Summary” in the prospectus of the Company dated 14 January 2026 (“the
Prospectus”).
Directors’ responsibilities
The Profit Estimate has been prepared by the directors of the Company based on the
audited consolidated results of the Company and its subsidiaries (collectively referred to as
“the Group”) for the nine months ended 30 September 2025 and the unaudited consolidated
results based on the management accounts of the Group for the three months ended 31
December 2025.
The Company’s directors are solely responsible for the Profit Estimate.
APPENDIX IA PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IA-2 –


--- page 549 ---
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 Hong Kong Institute of Certified Public
Accountants (“HKICPA”), which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior.
Our firm applies Hong Kong Standard on Quality Management 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 control including policies 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 on the accounting policies and calculations of
the Profit Estimate based on our procedures.
We conducted our engagement in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 500 Reporting on Profit Forecasts, Statements of Sufficiency
of Working Capital and Statements of Indebtedness and with reference to Hong Kong Standard
on Assurance Engagements 3000 (Revised) Assurance Engagements Other Than Audits or
Reviews of Historical Financial Information issued by the HKICPA. Those standards require
that we plan and perform our work to obtain reasonable assurance as to whether, so far as the
accounting policies and calculations are concerned, the Company’s directors have properly
compiled the Profit Estimate in accordance with the bases adopted by the directors and as to
whether the Profit Estimate is presented on a basis consistent in all material respects with the
accounting policies normally adopted by the Group. Our work is substantially less in scope
than an audit conducted in accordance with Hong Kong Standards on Auditing issued by the
HKICPA. Accordingly, we do not express an audit opinion.
Opinion
In our opinion, so far as the accounting policies and calculations are concerned, the Profit
Estimate has been properly compiled in accordance with the bases adopted by the directors as
set out in Appendix IA of the Prospectus and is presented on a basis consistent in all material
respects with the accounting policies normally adopted by the Group as set out in our
accountants’ report dated 14 January 2026, the text of which is set out in Appendix I of the
Prospectus.
Y ours faithfully,
Ernst & Y oung
Certified Public Accountants
Hong Kong
APPENDIX IA PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IA-3 –


--- page 550 ---
(D) LETTER FROM THE JOINT SPONSORS
The following is the text of a letter , prepared for inclusion in this prospectus by the Joint
Sponsors in connection with the profit estimate for the year ended December 31, 2025.
January 14, 2026
The Board of Directors
Shanghai Longcheer Technology Co., Ltd.
Dear Sirs,
We refer to the estimate of the consolidated profit attributable to the equity holders of
Shanghai Longcheer Technology Co., Ltd. (the “ Company ”) and its subsidiaries (together the
“Group ”) for the year ended December 31, 2025 (the “ Profit Estimate ”) as set out in the
section headed “Summary” in the prospectus of the Company dated January 14, 2026 (the
“Prospectus ”).
The Profit Estimate, for which you as the directors of the Company (the “ Directors ”) are
solely responsible, has been prepared by the Directors based on the audited consolidated results
of the Group for the nine months ended September 30, 2025 and unaudited consolidated results
of the Group based on the management accounts for the three months ended December 31,
2025.
We have discussed with you the bases and assumptions, as set forth in Appendix IA to the
Prospectus, upon which the Profit Estimate has been made. We have also considered and relied
upon the letter dated January 14, 2026 addressed to you and us from Ernst & Y oung regarding
the accounting policies and calculations upon which the Profit Estimate has been made.
On the basis of the information comprising the Profit Estimate and on the basis of the
accounting policies and calculations adopted by you and reviewed by Ernst & Y oung, we are
of the opinion that the Profit Estimate, for which you as the Directors of the Company are
solely responsible, has been made after due and careful enquiry.
For and on behalf of
Citigroup Global
Markets Asia Limited
Haitong International
Capital Limited
Guotai Junan Capital
Limited
50/F, Champion Tower
Three Garden Road Central
Hong Kong
Suites 3001-3006 and 3015-3016
One International Finance Centre
No. 1 Harbour View Street
Central
Hong Kong
27/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
APPENDIX IA PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IA-4 –


--- page 551 ---
The following information does not form part of the Accountants’ Report from Ernst &
Young, Certified Public Accountants, Hong Kong, the Company’ s reporting accountants, as set
out in Appendix I to this prospectus, and is included herein for illustrative purpose only. The
unaudited pro forma financial information should be read in conjunction with the section
headed “Financial Information” in this prospectus and the Accountants’ Report set out in
Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable
to the owners of the Company has been prepared in accordance with Rule 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 Information for
inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants to illustrate the effect of the Global Offering on the consolidated net tangible
assets attributable to owners of the Company as at 30 September 2025 as if the Global Offering
had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to owners of the Company has been prepared for illustrative purposes only and
because of its hypothetical nature, it may not give a true picture of the consolidated net tangible
assets of the Group as at 30 September 2025 or any future dates following the Global Offering.
Consolidated net
tangible assets
attributable to
owners of the
Company as at
30 September
2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated
net tangible
assets as at
30 September
2025
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of the
Company per Share
as at 30 September
2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price of
HK$31.00 per Share /H1118/H1118/H11185,693,952 1,370,826 7,064,778 13.52 15.00
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as at 30 September 2025 is arrived
at after deducting other intangible asset of RMB46.3 million from the consolidated equity attributable to
owners of the Company of RMB5,740.2 million as at 30 September 2025, as shown in Appendix I to this
prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 552 ---
(2) The estimated net proceeds from the Global Offering are based on the Offer Price at the indicative Price of
HK$31.00 per Share, after deduction of the underwriting fees and other related expenses payable by the Group
(excluding the listing expense that has been charged to profit or loss during the Track Record Period) and do
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 from Hong Kong dollars into Renminbi at an
exchange rate of HK$1.0 to RMB0.90141. No representation is made that the Hong Kong dollar amounts have
been, could have been or may be converted to Renminbi, or vice versa, at that rate or any other rates or at all.
(3) The unaudited pro forma adjusted net tangible assets per Share is calculated based on 522,590,644 Shares in
issue immediately following completion of the Global Offering without taking into account any Shares which
may be issued upon the exercise of the Over-allotment Option.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong Kong
dollars at an exchange rate of RMB0.90141 to HK$1.00.
(5) No adjustment has been made to reflect any trading result or open transaction of the Group entered subsequent
to 30 September 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 553 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
The following is the text of a report, prepared for inclusion in this document, received
from the independent reporting accountants of the Company, Ernst & Young, Certified Public
Accountants, Hong Kong, for the purpose of incorporation in this prospectus.
Ernst & Young
27/F , One T aikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ה
༸  ໮
ᅽ
5FM ཥ༑

'BY ෂॆ

FZDPN
To the Directors of Shanghai Longcheer Technology Co., Ltd.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Shanghai Longcheer Technology Co., Ltd. (the “Company”) and its
subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The pro forma financial information
consists of the pro forma consolidated net tangible assets as at 30 December 2025 and related
notes as set out on pages II-1 and II-2 of the prospectus dated 14 January 2026 issued by the
Company (the “Pro Forma Financial Information”). The applicable criteria on the basis of
which the Directors have compiled the Pro Forma Financial Information are described in Part
A of Appendix II to the Prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the
impact of the global offering of shares of the Company on the Group’s financial position as at
30 September 2025 as if the transaction had taken place at 30 September 2025. As part of this
process, information about the Group’s financial position has been extracted by the Directors
from the Group’s financial statements for the period ended 30 September 2025, on which an
accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline (“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the
“HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 554 ---
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 555 ---
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the Pro Forma Financial Information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the Directors have compiled the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely
to illustrate the impact of the global offering of shares of the Company on unadjusted financial
information of the Group as if the transaction had been undertaken at an earlier date selected
for purposes of the illustration. Accordingly, we do not provide any assurance that the actual
outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the Pro Forma Financial Information provide a reasonable basis for presenting
the significant effects directly attributable to the transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, the transaction in respect
of which the Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 556 ---
The engagement also involves evaluating the overall presentation of the 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 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 Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
14 January 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-6 –


--- page 557 ---
PRC TAXATION
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 resident or otherwise
subject to tax. The following summary of certain relevant taxation provisions is based on
current laws and practices in effect, and constitutes no predictions of changes or adjustments
to relevant laws or policies or any advice or suggestions thereunder. The discussion does not
deal with all possible tax consequences relating to an investment in the H Shares or take into
account the specific circumstances of any particular investor, some of which may be subject to
special rules. Accordingly, investors should consult their own tax adviser regarding the
taxation of an investment in the H Shares. The discussion is based upon current laws and
relevant interpretations in effect as at the execution date of this document, all of which are
subject to change or adjustment and may differ from our past practices.
The discussion below does not involve any issue concerning the PRC or Hong Kong
taxation other than income tax, capital gains tax, stamp duty and estate duty. Prospective
investors are urged to consult their financial advisers regarding the PRC, Hong Kong and other
tax consequences of owning and disposing of H Shares.
Taxation on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC (੻೼
) (the “IIT Law”) last amended on 31 August 2018 and implemented on 1 January 2019
as well as the Regulations for the Implementation of the Individual Income Tax Law of the PRC
(ૢԷ) last amended on 18 December 2018 and
implemented on 1 January 2019, dividends distributed by PRC enterprises are subject to an
individual income tax levied at a flat rate of 20%.
For a foreign individual who is not a resident of the PRC, the receipt of dividends from
an enterprise in the PRC is normally subject to an individual income tax of 20% unless
specifically exempted by the tax authority of the State Council or reduced by an applicable tax
treaty. In accordance with the Circular on Certain Issues Concerning the Policies of Individual
Income Tax (Cai Shui Zi [1994] No. 020) ((ৌ೼ο
[1994]020 ໮)) promulgated by the Ministry of Finance (“MOF”) and the State Administration
of Taxation (the “SA T”) on 13 May 1994 and effective from the same day, overseas individuals
are, as an interim measure, exempted from the individual income tax for dividends or bonuses
received from foreign-invested enterprises. According to the Notice of the State Council on
Approving and Relaying the Several Opinions of the National Development and Reform
Commission and Other Departments on Deepening Reform of the Income Distribution System
(Guo Fa [2013] No. 6) (ʍจԈ
(਷೯[2013]6 ໮)) issued by the State Council on 5 February 2013, overseas
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 558 ---
individuals are no longer exempted from the individual income tax for dividends or bonuses
received from foreign-invested enterprises, which is, however, not specified in the subsequent
IIT Law and relevant tax regulations.
On 28 June 2011, the SA T issued the Notice on Matters Concerning the Levy and
Administration of Individual Income Tax After the Repeal of Document Guo Shui Fa [1993]
No. 045 (Guo Shui Han [2011] No. 348) (਷೼೯[1993]045੻
(਷೼Ռ[2011]348 ໮)), pursuant to which, dividends received by overseas
resident individual shareholders from domestic non-foreign invested enterprises which have
issued shares in Hong Kong are subject to individual income tax, which shall be withheld and
paid by a withholding agent according to the items of interest, dividend and bonus income.
Overseas resident individual shareholders of domestic non-foreign invested enterprises which
have issued shares in Hong Kong are entitled to relevant preferential tax treatment pursuant to
the provisions in the tax treaties between the countries in which they are residents and China,
and the tax arrangements between Chinese Mainland and Hong Kong (Macau). Individual
shareholders are generally subject to a withholding tax rate of 10% without any application
when domestic non-foreign invested enterprises which have issued shares in Hong Kong
distribute dividends. Where the tax rates on dividends are not 10%, the following requirements
shall apply: (i) for individuals receiving dividends who are citizens from countries that have
entered into tax treaties with China with tax rates lower than 10%, they may, according to the
Notice of SA T on Issuing the Administrative Measures on Preferential Treatment Entitled by
Non-residents under Tax Treaties (Guo Shui Fa [2009] No. 124) (೯̺<ڢ
ج>ʮѓ(਷೼೯[2009]124 ໮)), apply for refund; (ii) for
individuals receiving dividends who are citizens from countries that have entered into tax
treaties with China with tax rates higher than 10% but lower than 20%, the withholding agent
will, upon distribution of dividends, withhold and pay the individual income tax at the agreed
effective tax rates under the treaties, without seeking such approval; (iii) for individuals
receiving dividends who are citizens from countries without tax treaties with China or under
other circumstances, the withholding agent will, upon distribution of dividends, withhold and
pay the individual income tax at the rate of 20%.
In accordance with the Arrangement between the Mainland of China and the Hong Kong
Special Administrative Region for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income (੻ᒒеᕐ
τર) promulgated on 21 August 2006 and implemented on 8
December 2006, the PRC Government may levy taxes on the dividends paid by a PRC company
to Hong Kong residents (including natural persons and legal entities) in an amount not
exceeding 10% of total dividends payable by the PRC company. If a Hong Kong resident
directly holds 25% or more of the equity interest in a PRC company, then such tax shall not
exceed 5% of the dividends payable by the PRC company.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 559 ---
Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the PRC (੻೼
) (the “EIT Law”), which was last amended and became effective on 29 December 2018,
and the Regulations for the Implementation of the Enterprise Income Tax Law of the PRC
(ૢԷ), which was last amended on 6 December 2024
and became effective on 20 January 2025, a non-resident enterprise is generally subject to a
10% enterprise income tax on PRC-sourced income (including dividends from PRC resident
enterprises with shares issued in Hong Kong), if such non-resident enterprise does not have an
establishment or place in the PRC or has an establishment or place in the PRC but the
PRC-sourced income is not connected with such establishment or place. The above income tax
may be reduced or exempted to avoid double taxation in accordance with the applicable
treaties.
The withholding tax payable for non-resident enterprises is deducted at source, where the
payer of the income is required to withhold the income tax from the amount to be paid to the
non-resident enterprise when such amount is payable or due.
The SA T Circular on Issues Relating to the Withholding of Enterprise Income Tax by PRC
Resident Enterprises on Dividends Paid to Overseas Non-PRC Resident Enterprise
Shareholders of H Shares (Guo Shui Han [2008] No. 897) (͏Άุ
Σྤ̮H(਷೼Ռ[2008]897
໮)) issued by the SA T on 6 November 2008, which became effective on the same day, further
clarified that a PRC-resident enterprise must withhold corporate income tax at a flat rate of
10% on dividends paid to non-PRC resident enterprise shareholders of H Shares with respect
to the dividends of 2008 and onwards. In addition, the SA T Response to Questions on Levying
Enterprise Income Tax on Dividends Derived by Non-resident Enterprises from Holding Stocks
such as B Shares (Guo Shui Han [2009] No. 394) (͏Άุ՟੻Bഃ
ҭᔧ(਷೼Ռ[2009]394 ໮)) issued by the SA T on 24 July
2009, which became effective on the same day, further provides that PRC-resident enterprises
listed on Chinese and overseas stock exchanges by issuing stocks (A shares, B shares and
overseas shares) must withhold enterprise income tax at a flat rate of 10% on dividends of 2008
and onwards that it distributes to non-resident enterprise shareholders. Such tax rates may be
further modified pursuant to the tax treaties or agreements that China has concluded with a
relevant jurisdiction, where applicable.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income (ᅄ೼
τર) promulgated on 21 August 2006 and implemented on 8 December
2006, the PRC Government may levy taxes on the dividends paid by a PRC company to Hong
Kong residents (including natural persons and legal entities) in an amount not exceeding 10%
of total dividends payable by the PRC company. If a Hong Kong resident directly holds 25%
or more of the equity interest in a PRC company, then such tax shall not exceed 5% of the
dividends payable by the PRC company.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 560 ---
Tax Treaties
Investors who are not PRC residents and reside in jurisdictions which have entered into
avoidance of double taxation treaties or arrangements with the PRC are entitled to a reduction
of the PRC enterprise income taxes imposed on the dividends received from PRC companies.
At present, the PRC has entered into agreements/arrangements for the avoidance of double
taxation with a number of countries or regions including HKSAR, Macau S.A.R, Australia,
Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United Kingdom
and the United States. Non-PRC resident enterprises entitled to preferential tax rates in
accordance with the relevant income tax treaties or arrangements may apply to the PRC tax
authorities for a refund of enterprise income tax in excess of the agreed tax rate, and the refund
application is subject to approval by the PRC tax authorities.
Taxation on Share Transfer
Income Tax
Individual investors
According to the IIT Law, gains realised from the transfer of personal assets are subject
to income tax at a rate of 20%. According to the Circular on Declaring that Individual Income
Tax Continues to be Exempted over Income of Individuals from Transfer of Shares (Cai Shui
Zi [1998] No. 61) ((ৌ೼ο[1998]61
໮)) jointly issued by the MOF and STA on 30 March 1998 and implemented from the same
date, since 1 January 1997, gains of individuals from the transfer of shares of listed companies
continue to be temporarily exempted from individual income tax. Pursuant to the IIT Law and
its implementation regulations, the STA has not expressly stipulated whether gains from the
transfer of shares of listed companies will continue to be exempted from individual income tax.
However, on 31 December 2009, the MOF, the SA T and the CSRC jointly issued the
Circular on Relevant Issues Concerning the Collection of Individual Income Tax over the
Income Received by Individuals from Transfer of Listed Shares Subject to Sales Limitation
(Cai Shui [2009] No. 167) (ٙ
(ৌ೼[2009]167 ໮)), which became effective on 1 January 2010 and provides that
individuals’ income from transferring listed shares publicly issued and transferred on the
Shanghai Stock Exchange and the Shenzhen Stock Exchange shall continue to be exempted
from individual income tax, except for shares subject to sales limitations as defined in the
Supplementary Circular on Relevant Issues Concerning the Collection of Individual Income
Tax over the Income Received by Individuals from Transfer of Listed Shares Subject to Sales
Limitation (Cai Shui [2010] No. 70) (੻೼Ϟ
(ৌ೼[2010]70 ໮)) jointly issued by such departments on 10 November
2010 and coming into effect on the same day.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 561 ---
As of the execution date of this document, no provision has expressly provided that
individual income tax shall be collected from non-PRC resident individual shareholders on
their gains from the transfer of shares of PRC resident enterprises listed on overseas stock
exchanges (such as the Hong Kong Stock Exchange).
Enterprise Investors
According to the Enterprise Income Tax Law of the PRC (੻೼
) (the “EIT Law”) and the Implementation Regulation of the EIT Law of the PRC last
amended on 6 December 2024 and implemented on 20 January 2025, a non-resident enterprise
is generally subject to enterprise income tax at the uniform rate of a 10% on PRC-sourced
income if it does not have an establishment or premise in the PRC or has an establishment or
premise in the PRC but its PRC-sourced income has no real connection with such establishment
or premise. The aforesaid income tax payable for non-resident enterprises is deducted at
source, where the payer of the income is required to withhold the income tax from the amount
to be paid to the non-resident enterprise when such amount is payable or due. The tax may be
deducted in accordance with special arrangements or agreements entered into between the PRC
and the jurisdiction in which the non-resident enterprise operate.
V alue-Added Tax and Local Additional Tax
Pursuant to the Notice of Taxation on Implementing the Pilot Program of Replacing
Business Tax with V alue-Added Tax in an All-round Manner (Cai Shui [2016] No. 36) ( ᗫ
(ৌ೼[2016]36 ໮)) (the “Notice 36”) promulgated
by the MOF and the SA T on 23 March 2016, implemented on 1 May 2016, and amended on
11 July 2017 and 20 March 2019, respectively, entities and individuals engaging in the sale of
services within the PRC are subject to the V A T. Sales services include the provision of financial
services, and “engaging in the sale of services within the PRC” refers to the situation where
the seller or purchaser of taxable services (other than leasing of real estate) is located in the
PRC.
In addition, Notice 36 also stipulates that for general or overseas value-added tax
taxpayers, the transfer of financial products (including the transfer of the ownership of
securities) is subject to a value-added tax of 6% on taxable income. According to the Notice
on Several Tax Exemption Policies for Business Tax on Sale and Purchase of Financial
Commodities by Individuals ()
promulgated by the MOF and the SA T of Taxation on 27 September 2009 and implemented on
1 January 2009, income obtained by individuals from the transfer of financial products such as
securities is temporarily exempted from business tax.
Stamp Duty
According to the Stamp Duty Law of the PRC () issued by
the SCNPC on 10 June 2021 and implemented on 1 July 2022, the PRC stamp duty applies to
entities and individuals that conclude taxable vouchers and conduct securities transactions
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 562 ---
within the PRC and the entities and individuals that conclude taxable vouchers outside the PRC
which are used within the PRC. Therefore, the PRC stamp duty imposed on the transfer of
shares by PRC listed companies does not apply to the acquisition and disposal of H shares
outside the PRC by non-PRC investors.
Estate Duty
As of the execution date of this document, no estate duty has been levied in China under
the PRC laws.
Taxation Policies of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock
Connect
On 31 October 2014 and 5 November 2016, the MOF, the SA T and the CSRC jointly
issued the Notice on Taxation Policies Concerning the Pilot Program of an Interconnection
Mechanism for Transactions in the Shanghai and Hong Kong Stock Markets (Cai Shui [2014]
No. 81) ( (ৌ೼[2014]81
໮)) and the Notice on Tax Policies Concerning the Pilot Program of an Interconnection
Mechanism for Transactions in the Shenzhen and Hong Kong Stock Markets (Cai Shui [2016]
No. 127) ((ৌ೼[2016]127
໮)), pursuant to which, the income from transfer differences and dividend and bonus income
derived by PRC enterprise investors from investing in stocks listed on the Hong Kong Stock
Exchange through Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock
Connect shall be included in their total income and subject to enterprise income tax in
accordance with the law. In particular, the dividend and bonus income derived by PRC resident
enterprises which hold H shares for at least 12 consecutive months shall be exempted from
enterprise income tax according to law. H-share companies do not withhold tax on dividends
and bonus income of PRC enterprise investors, and the tax payable shall be declared and paid
by enterprises.
For dividends and bonuses received by PRC individual investors investing in H shares
listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect, H-share companies shall submit an application to China
Securities Depository and Clearing Corporation Limited, which shall provide H-share
companies with a register of PRC individual investors. H-share companies shall withhold
individual income tax at a rate of 20%. Individual investors who have paid withholding tax
outside the PRC may apply for tax credits at the competent tax authorities of the CSDC with
valid tax deduction certificates. Individual income tax is levied on dividend and bonus income
derived by PRC security investment funds from investing in stocks listed on the Hong Kong
Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock
Connect in accordance with the above provisions.
On 4 December 2019, the MOF, the SA T and the CSRC jointly issued the Announcement
on the Continued Implementation of the Individual Income Tax Policies on the Interconnection
Mechanisms for Transactions in Shanghai and Hong Kong Stock Markets and for Transactions
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 563 ---
in Shenzhen and Hong Kong Stock Markets (MOF Announcement 2019 No. 93) (ᘱᚃ
ʮ
ѓ(௅ʮѓ2019 ϋୋ93໮)). It stipulates that for PRC individual investors, the transfer
difference income derived from investing in stocks listed on the Hong Kong Stock Exchange
through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect and the
trading of Hong Kong fund units through mutual recognition of funds will continue to be
exempt from individual income tax on a temporary basis from 5 December 2019 to 31
December 2022.
In addition, pursuant to the Announcement on Continuing the Implementation of the
Individual Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect and the Mutual Recognition of Funds between Chinese
Mainland and Hong Kong (ʝᑌʝஷዚՓձʫήၾ
ʮѓ(௅ʮѓ2023 ϋୋ23໮)) (Announcement of
the MOF No. 23 of 2023) jointly issued by the MOF, the SA T and the CSRC on 21 August
2023, the period for the implementation of the individual income tax exemption policy has
been further extended to 31 December 2027.
Principal Taxation of Our Company in the PRC
Enterprise Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC (the “EIT Law”) promulgated by
the National People’s Congress on 16 March 2007, last amended on 29 December 2018 and
effective from the same date, and the Regulations for the Implementation of the Enterprise
Income Tax Law of the PRC promulgated by the State Council on 6 December 2007, last
amended on 6 December 2024 and effective from 20 January 2025, enterprises are classified
into resident enterprises and non-resident enterprises. A resident enterprise refers to an
enterprise that is established inside China, or which is established under the law of a foreign
country (region) but whose actual office of management is inside China. A non-resident
enterprise refers to an enterprise established under the law of a foreign country (region), whose
actual institution of management is not inside China but which has offices or establishments
inside China; or which does not have any offices or establishments inside China but has
incomes sourced in China. According to the EIT Law and related implementation regulations,
the uniform tax rate for enterprise income tax is 25%.
Small meagre-profit enterprises that meet the prescribed conditions shall pay enterprise
income tax at a rate of 20%. Important high- and new-tech enterprises that are supported by
the state can enjoy a preferential enterprise income tax rate of 15%.
According to the Detailed Rules for the Implementation of the Law of the PRC on the
Administration of Tax Collection ()
promulgated by the State Council on 6 February 2016 and coming into effect on the same day,
taxpayers eligible for tax reduction or exemption shall resume tax payment from the date
following the expiry date of the tax reduction or exemption. If there is a change in the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-7 –


--- page 564 ---
requirements for tax reduction or exemption, taxpayers shall report to tax authorities when
filing tax returns. Taxpayers shall fulfill tax payment liabilities according to law when they no
longer meet the requirements for tax reduction or exemption; if they fail to pay the tax
according to law, tax authorities shall pursue tax payment.
V alue-added Tax
According to the Interim Regulations on V alue-Added Tax of the PRC (the “V A T
Regulations”) (೼ᅲБૢԷ(೼ૢԷ)), which was
promulgated by the State Council on 13 December 1993 and last amended on 19 November
2017, and the Implementation Rules for the Interim Regulations on V alue-Added Tax of the
PRC (), which was promulgated by the MOF
with effect from 25 December 1993 and latest amended on 28 October 2011, all taxpayers that
engage in the sale of goods, the provision of processing, repair and replacement services or the
importation of goods in the PRC shall pay value-added tax. Except as otherwise provided in
the V A T Regulations, general taxpayers are subject to a V A T rate of 17% on the sale or
importation of goods; taxpayers are subject to a V A T rate of 17% on the provision of
processing, repair and replacement services; and taxpayers are subject to a V A T rate of 0% on
the exportation of goods, unless otherwise provided.
Pursuant to the Notice on Implementing the Pilot Program of Replacing Business Tax
with V alue-Added Tax in an All-round Manner (Cai Shui [2016] No. 36) (પකᐄ
(ৌ೼[2016]36 ໮)) issued by the MOF and the SA T on 23 March
2016, the pilot program of replacing business tax with value-added tax (V A T) shall be
implemented across the country, the financial industry shall be included in the scope of the
pilot program, and the payment of business tax shall be replaced by the payment of V A T, unless
otherwise provided in the Implementation Measures for Replacing Business Tax with V alue
Added Tax () in accordance with the Implementation
Measures.
According to the Notice of the Ministry of Finance and the State Administration of
Taxation on the Adjustment to V A T Rates (Cai Shui [2018] No. 32) (೼ਕᐼ҅
(ৌ೼[2018]32 ໮)), which was promulgated on 4 April 2018 and
became effective on 1 May 2018, the tax rates of 17% and 11% originally applicable to the
taxpayers who have V A T taxable sales activities or imported goods are adjusted to 16% and
10%, respectively. According to the Announcement of the Ministry of Finance, the State
Taxation Administration and the General Administration of Customs on Relevant Policies for
Deepening the V alue-Added Tax Reform (Announcement No. 39 of 2019) (௅e೼ਕᐼ
ʮѓ(2019 ϋୋ39໮ʮѓ)), which was
promulgated on 20 March 2019 and became effective on 1 April 2019, the value-added tax rates
were reduced to 13% and 9% respectively.
According to the Notice of the Ministry of Finance and the State Administration of
Taxation on V alue-added Tax Policies for Software Products (Cai Shui [2011] No. 100) ( ৌ
(ৌ೼[2011]100 ໮)), which was
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-8 –


--- page 565 ---
promulgated by the MOF and the SA T on 13 October 2011 and came into effect on 1 January
2011, if general V A T taxpayers sell self-developed and produced software products, after V A T
has been collected at a tax rate of 17%, the refund-upon-collection policy shall be applied to
the part of actual V A T burden in excess of 3%.
On 25 December 2024, the SCNPC promulgated the V alue-added Tax Law of the PRC
(), which will come into effect on 1 January 2026 and replace the
Provisional Regulations of the PRC on V alue-added Tax (೼ᅲБૢ
Է). The new law reiterates the provisions of the Provisional Regulations of the PRC on
V alue-added Tax (೼ᅲБૢԷ) and makes modifications in terms of
taxable activities, tax jurisdiction, deemed sales, non-taxable items, simplified taxation,
withholding agents, input tax, non-deductible input tax, mixed sales, and input tax carry-
forward and refund.
Foreign Exchange Policy of China
RMB is the legal currency of the PRC and is currently subject to foreign exchange
controls and cannot be freely inverted into foreign currency. The State Administration of
Foreign Exchange (“SAFE”) under the People’s Bank of China is responsible for all matters
relating to foreign exchange, including the enforcement of exchange control regulations.
Under the Regulations of the PRC on Foreign Exchange Administration ( ʕശɛ͏΍ձ
਷̮ි၍ଣૢԷ) issued by the State Council on 29 January 1996 and effective from 1 April
1996, all international payments and transfers are classified into current items and capital
items. Approval by the foreign exchange authorities is not required for most current items, but
required for capital items. According to the Regulations of the PRC on Foreign Exchange
Administration ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) amended on 14 January 1997 and 5
August 2008, the state does not impose restrictions on current international payments and
transfers.
Under the Administrative Regulations for Foreign Exchange Settlement, Sale and
Payment (Yin Fa [1996] No. 210) ((ვ೯[1996]210 ໮)) issued
by the People’s Bank of China on 20 June 1996 and implemented from 1 July 1996, the existing
restrictions on foreign exchange transactions under capital items are retained, while the
remaining restrictions on foreign exchange conversion for current items are abolished.
According to the Announcement on Reforming the RMB Exchange Rate Regime (׵
ʮѓ(ʕ਷ɛ͏ვБʮѓ[2005] ୋ16໮)) (People’s Bank of
China Announcement [2005] No. 16) issued by the People’s Bank of China on 21 July 2005 and
effective from the same date, from 21 July 2005 onwards, China has implemented a floating
exchange rate system with management and regulation based on market supply and demand and
with reference to a basket of currencies. As a result, RMB exchange rates are no longer pegged
to USD. The People’s Bank of China publishes the closing prices of the exchange rates of RMB
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-9 –


--- page 566 ---
against USD and other currencies in the interbank foreign exchange market after the market
closes on each working day, which serves as the mid-price for the currency’s transactions
against RMB on the following working day.
On 5 August 2008, the State Council promulgated the amended Regulations of the PRC
on Foreign Exchange Administration ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ), with significant
changes to China’s foreign exchange regulatory system. Firstly, balanced treatment has been
adopted for foreign exchange inflows and outflows. Foreign exchange earnings from overseas
may be transferred back to the PRC or deposited abroad, and foreign exchange and settlement
funds under capital items may only be used for the purposes approved by competent authorities
and foreign exchange control authorities. Secondly, it has improved the RMB exchange rate
formation mechanism based on market supply and demand. Thirdly, when there is or appears
to be a serious imbalance in international balance of payments or when there is or appears to
be a serious crisis in the national economy, the state can take necessary safeguard and control
measures on international balance of payments. Fourthly, it has strengthened the supervision
and management of foreign exchange transactions and granted extensive powers to the SAFE
to enhance its supervision and management capabilities.
According to relevant PRC laws and regulations, Chinese enterprises (including
foreign-invested enterprises) requiring foreign exchange for current account transactions may,
without the approval of foreign exchange authorities, make payments through foreign exchange
accounts opened at designated foreign exchange banks, provided that valid receipts or vouchers
for the transactions are produced. Foreign-invested enterprises that need to distribute profits in
foreign currency to their shareholders and Chinese enterprises that need to pay dividends in
foreign currency to their shareholders may make payments from foreign exchange accounts at
designated foreign exchange banks or exchange and pay at such banks in accordance with the
decision of the board of directors or the shareholders’ general meeting on the distribution of
profits.
Pursuant to the Decision of the State Council on Cancelling and Adjusting a Range of
Administrative Approval Items and Other Matters (Guo Fa [2014] No. 50) (՟ऊ
(਷೯[2014]50 ໮)) issued by the State Council on 23
October 2014 and effective from the same date, the requirement has been cancelled for the
SAFE and its branches to approve the repatriation and settlement of foreign exchange proceeds
raised by overseas listed foreign shares.
According to the Notice of the State Administration of Foreign Exchange on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (Hui Fa [2014] No. 54)
((ි೯[2014]54 ໮)) issued by the
SAFE on 26 December 2014 and effective from the same date, a domestic company shall
register its overseas listing with the local branch of the State Administration of Foreign
Exchange within 15 working days from the date of completion of overseas listing. Funds raised
by a domestic company from overseas listing may be transferred back or deposited overseas,
and the use of the funds shall be consistent with those set out in the document and other
disclosure documents.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-10 –


--- page 567 ---
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 (Hui Fa [2015] No. 13) (ટҳ༟̮ි၍
(ි೯[2015]13 ໮)) issued by the SAFE on 13 February 2015, implemented
from 1 June 2015 and amended on 30 December 2019, two administrative approvals have been
cancelled, namely foreign exchange registration under domestic direct investment and that
under overseas direct investment, which will be directly reviewed and approved by banks. The
SAFE and its branches exercise indirect supervision over the foreign exchange registration of
direct investment through banks.
Pursuant to the Notice of the State Administration of Foreign Exchange on Reforming and
Regulating the Policies for the Administration of Foreign Exchange Settlement under Capital
Items (Hui Fa [2016] No. 16) (ஷ
(ි೯[2016]16 ໮)) issued by the SAFE on 9 June 2016 and implemented from the same
date, the relevant policies have explicitly stated that the foreign exchange income from capital
items (including foreign exchange capital funds, foreign debt funds, funds transferred back
from overseas listings, etc.) which are subject to voluntary settlement can be settled at banks
according to the particular needs of domestic institutions. The ratio of voluntary settlement of
foreign exchange earnings from capital items of domestic institutions is temporarily set at
100%, which is subject to adjustment by the SAFE according to international balance of
payments.
According to 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 (Hui Fa [2017] No. 3) (ආɓӉપආ̮ි
(ි೯[2017]3 ໮)) issued by the SAFE on 26 January
2017 and implemented from the same date, the scope of domestic foreign exchange loan
settlement is further expanded to allow domestic foreign exchange loans with the background
of commodity trade and exports to be settled, allow funds under domestic guarantee and
foreign loans to be transferred back, allow foreign exchange settlement via the foreign
exchange accounts of foreign institutions in pilot free trade zones, and implement full-coverage
overseas lending management in both RMB and foreign currencies; where a domestic
institution engages in overseas lending, the combined balance of foreign exchange lending in
RMB and foreign currencies shall not exceed a maximum of 30% of the owner’s equity in the
audited financial statements of the preceding year.
According to the Notice on Further Facilitating Cross-border Trade and Investment (Hui
Fa [2019] No.28) ((ි೯[2019]28 ໮)) issued
by the SAFE on 23 October 2019 and implemented from the same date, restrictions have been
removed on the use of capital funds by non-investment foreign-invested enterprises for
domestic equity investment. In addition, restrictions have also been removed on the use of
funds in domestic asset realization accounts for foreign exchange settlement and the use of
security deposits for foreign exchange settlement by foreign investors. Eligible enterprises in
pilot areas are allowed to use capital funds, foreign debt, overseas listings and other income
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-11 –


--- page 568 ---
under capital items for domestic payments without providing the banks with proofs of
authenticity in advance, and their use of funds should be genuine and compliant with the
current regulations governing the use of income from capital items.
TAXATION IN HONG KONG
Tax on Dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is
payable in Hong Kong in respect of dividends paid by us.
Capital Gains and Profit Tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of the H Shares by persons carrying on a trade, profession
or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such
trade, profession or business will be subject to Hong Kong profits tax, which is currently
imposed at the maximum rate of 16.5% on corporations and at the maximum rate of 15% on
unincorporated businesses. Certain categories of taxpayers (for example, financial institutions,
insurance companies and securities dealers) are likely to be regarded as deriving trading gains
rather than capital gains unless these taxpayers can prove that the investment securities are held
for long-term investment purposes. Trading gains from sales of H Shares effected on the Stock
Exchange will be considered to be derived from or arise in Hong Kong. Liability for Hong
Kong profits tax would thus arise in respect of trading gains from sales of H Shares effected
on the Stock Exchange realized by persons carrying on a business of trading or dealing in
securities in Hong Kong.
Stamp Duty
Hong Kong stamp duty, currently levied at an ad valorem rate of 0.13% based on the
higher of the consideration or the market value of the H Shares, will be payable by the
purchaser on every purchase and by the seller on every sale of Hong Kong securities, including
H Shares (in other words, a total of 0.26% is currently payable on a typical sale and purchase
transaction involving H Shares). In addition, a fixed duty of HK$5.00 is currently payable on
any instrument of transfer of H Shares. Where one of the parties is a resident outside Hong
Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the
instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid
on or before the due date, a penalty of up to ten times the duty payable may be imposed.
Estate Duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on 11 February
2006 in Hong Kong, pursuant to which no Hong Kong estate duty is payable, and no estate duty
clearance papers are needed for an application of a grant of representation in respect of holders
of H Shares whose deaths occur on or after 11 February 2006.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-12 –


--- page 569 ---
This Appendix summarizes certain aspects of PRC laws and regulations which are
relevant to our Company’s operations and business. Laws and regulations relating to taxation
in the PRC are discussed separately in “Appendix III — Taxation and Foreign Exchange” to
this document. This Appendix also contains a summary of laws and regulatory provisions of the
PRC Company Law. The principal objective of this summary is to provide potential investors
with an overview of the principal laws and regulatory provisions applicable to our Company.
This summary is not intended to include all the information which is important to the potential
investors. For a discussion of laws and regulations which are relevant to our Company’s
business, see “Regulatory Overview”, in this document.
THE PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the People’s Republic of China
(), or the Constitution, and is made up of written laws, administrative
regulations, local regulations, separate regulations, rules and regulations of departments of the
State Council, rules and regulations of local governments, autonomous regulations, separate
regulations of autonomous regions, special administrative region law and international treaties
and other regulatory documents signed by the PRC government. Court decisions do not
constitute binding precedents, although they are used for the purposes of judicial reference and
guidance.
According to the Constitution and the Legislation Law of the People’s Republic of China
(), or the Legislation Law, which was amended latest by the
National People’s Congress (“NPC”) on 13 March 2023 and became effective on 15 March
2023, the NPC and the Standing Committee of the National People’s Congress (“SCNPC”) are
empowered to exercise the legislative power of the State. The NPC has the power to formulate
and amend basic laws governing criminal and civil matters, state organs and other matters. The
SCNPC is empowered to formulate and amend laws other than those required to be enacted by
the NPC and to supplement and amend any parts of laws enacted by the NPC during the
adjournment of the NPC, provided such supplements and amendments are not in conflict with
the basic principles of such laws.
The State Council is the highest organ of state administration in our country and has the
power to formulate administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may formulate local regulations based on the specific
circumstances and actual needs of their respective administrative areas, provided that such
local regulations do not contravene any provision of the Constitution, laws or administrative
regulations. The people’s congresses of cities divided into districts and their standing
committees may formulate local regulations on matters such as urban and rural construction
and management, environmental conservation and historical and cultural protection 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
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 1–


--- page 570 ---
regulations of such provinces or autonomous regions. Where laws have other stipulations on
matters of local regulations formulated by cities divided into districts, such stipulations shall
prevail. The local regulations of cities divided into autonomous regions shall be submitted for
approval before implementation.
The standing committees of the people’s congresses of provinces or autonomous regions
shall examine the legality of local regulations submitted for approval, and such approval
should be granted within four months if they are not in conflict with the Constitution, laws,
administrative regulations and local regulations of their respective provinces or autonomous
regions. People’s congresses of national autonomous areas have the power to enact autonomous
regulations and separate regulations in the light of the political, economic and cultural
characteristics of the nationality (nationalities) in the areas concerned. The ministries and the
commissions of the State Council, People’s Bank of China, National Audit Office and public
institutions with administrative functions directly under the State Council may formulate rules
and regulations within the jurisdiction of their respective departments based on the laws and
the administrative regulations, decisions and rulings of the State Council.
The Constitution has supreme legal authority and no laws, administrative regulations,
local regulations, autonomous regulations or separate regulations or rules may contravene the
Constitution. The authority of laws is greater than that of administrative regulations, local
regulations and rules. The authority of administrative regulations is greater than that of local
regulations and rules. The authority of the rules enacted by the people’s governments of the
provinces and autonomous regions is greater than that of the rules enacted by the people’s
governments of the cities divided into districts within their respective administrative regions.
The NPC has the power to alter or repeal inappropriate laws enacted by the SCNPC, and
to repeal any autonomous regulations and separate regulations which have been approved by
the SCNPC but which contravene the Constitution and the Legislation Law. The SCNPC has
the power to repeal administrative regulations that contravene the Constitution and laws, to
repeal local regulations that contravene the Constitution, laws and administrative regulations,
and to repeal autonomous regulations and separate regulations which have been approved by
the SCNPC of the relevant provinces, autonomous regions or municipalities directly under the
Central Government, but which contravene the Constitution and the Legislation Law; the State
Council has the power to alter or repeal any inappropriate ministerial rules and local rules. The
people’s congresses of provinces, autonomous regions and municipalities directly under the
Central Government have the power to alter or repeal any inappropriate local regulations
enacted or approved by their respective standing committees. The standing committees of the
local people’s congresses have the power to repeal inappropriate rules enacted by the people’s
governments at the corresponding level. The people’s governments of provinces and
autonomous regions have the power to alter or repeal any inappropriate rules enacted by the
people’s governments at a lower level.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 2–


--- page 571 ---
According to the Constitution and the Legislation Law, the power to interpret laws is
vested in the SCNPC. According to the Decision of the SCNPC Regarding the Strengthening
of Interpretation of Laws (Ӕᙄ)
passed by the SCNPC and effective on 10 June 1981, the Supreme People’s Court is vested
with the power to give interpretation on questions involving the specific application of laws
and decrees in court trials. The Supreme People’s Procuratorate shall interpret all issues
involving the specific application of laws and decrees in the procuratorial work. Interpretation
of questions involving the specific application of laws and decrees in areas unrelated to trail
and procuratorial work shall be provided by the State Council and competent authorities.
Where the scope of local regulations needs to be further defined or additional stipulations
need to be made, the SCNPC of provinces, autonomous regions and municipalities directly
under the Central Government which have enacted these regulations shall provide the
interpretations or make the stipulations. Interpretation of questions involving the specific
application of local regulations shall be provided by the competent departments of the people’s
governments of provinces, autonomous regions and municipalities directly under the Central
Government.
PRC JUDICIAL SYSTEM
According to the Constitution and the Law of the PRC of Organization of the People’s
Courts () amended latest by the SCNPC on 26 October
2018 and becoming effective from 1 January 2019, the PRC People’s Court is made up of the
Supreme People’s Court, the local people’s courts at all levels, and other special people’s
courts. The local people’s courts are divided into three levels, namely the basic people’s courts,
the intermediate people’s courts and the higher people’s courts. The basic people’s courts may
set up certain people’s tribunals based on the status of the region, population and cases. The
Supreme People’s Court shall be the highest judicial organ of the state. The Supreme People’s
Court shall supervise the exercise of judicial power by the local people’s courts at all levels and
by the special people’s courts. The people’s courts at a higher level shall supervise the judicial
work of the people’s courts at lower levels.
According to the Constitution and the Law of Organization of the People’s Procuratorate
of the PRC () amended latest by the SCNPC on 26
October 2018 and becoming effective from 1 January 2019, the People’s Procuratorate is the
law supervision organ of the state. The Supreme People’s Procuratorate shall be the highest
procuratorial organ. The Supreme People’s Procuratorate shall direct the work of the local
people’s procuratorates at all levels and of the special people’s procuratorates. The people’s
procuratorates at higher levels shall direct the work of those at lower levels.
The people’s courts implement a two-tier appellate system, and judgments or rulings of
the second instance at the people’s courts are final judgments or rulings. A party may appeal
against the judgment or ruling of the first instance of a local people’s court. The people’s
procuratorate may present a protest to the people’s courts at the next higher level in accordance
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 3–


--- page 572 ---
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. 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 judgments or rulings.
However, if the Supreme People’s Court or the people’s courts at the next higher level finds
any definite errors in a legally effective final judgment or ruling of the people’s court at a lower
level, or if the chief judge of a people’s court at any level finds any definite errors in a legally
effective final judgment or ruling of such court, the case can be retried according to judicial
supervision procedures.
The Civil Procedure Law of the People’s Republic of China (revised 2023) ( ʕശɛ͏
ج2023͍)), (the “PRC Civil Procedure Law”), adopted by the SCNPC on
1 September 2023 and effective on 1 January 2024 sets forth the requirements for instituting
a civil action, the jurisdiction of the people’s courts, the procedures to be followed for
conducting a civil action and the procedures for enforcement of a civil judgment or order. All
parties to a civil action conducted within the PRC must comply with the PRC Civil Procedure
Law. Civil cases are generally heard by the courts where the defendants are located. The court
of jurisdiction in a civil action may be chosen by express agreement between the parties,
provided that the court is located at a place that has direct connection with the dispute, such
as the plaintiff’s or the defendant’s place of domicile, the place where the contract is performed
or signed, or the object of the action is located. However, the choice of the court cannot be in
conflict with the regulations of different jurisdictions and exclusive jurisdictions in any case.
A foreign individual, a person without nationality, a foreign-invested enterprise or a
foreign organization must have the same litigation rights and obligations as a PRC citizen,
legal person or other organizations when initiating or defending any proceedings at a people’s
court. If a foreign court limits the litigation rights of PRC citizens and enterprises, the PRC
court may apply the same limitations to the citizens and enterprises of such foreign country.
A foreign individual, a person without nationality, a foreign-invested enterprise or a foreign
organization must engage a PRC lawyer if such person needs to engage a lawyer in initiating
or defending any proceedings at a people’s court. Under an international treaty or the principle
of reciprocity signed or acceded to by the PRC, the people’s court and foreign courts may
require each other to act on their behalf to serve documents, conduct investigations, collect
evidence and take other actions on behalf of each other. If the request by a foreign court would
result in the violation of the PRC’s sovereignty, security or public interest, the people’s court
shall decline the request.
All parties must comply with legally effective civil judgments and rulings. If any party
to a civil action refuses to comply with a judgment or ruling made by a people’s court or an
award made by an arbitration tribunal in the PRC, the other party may apply to the people’s
court for enforcement within two years. Suspension or disruption of the time limit for applying
for such enforcement shall comply with the provisions of the applicable law concerning the
suspension or disruption of the time-barring of actions.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 4–


--- page 573 ---
When a party applies to a people’s court for enforcing an effective judgment and ruling
by a people’s court against a party who is not located within the territory of the PRC or whose
property is not within the PRC, the party may apply to a foreign court with proper jurisdiction
for recognition and enforcement of the judgment and ruling. A foreign judgment and ruling
may also be recognized and enforced by the people’s court according to the PRC enforcement
procedures if the PRC has entered into, or acceded to, an international treaty with the foreign
country, which provides for such recognition and enforcement, or if the judgment and ruling
satisfies the court’s examination according to the principle of reciprocity, unless among other
exceptions, the people’s court finds that the recognition or enforcement of such judgment and
ruling will result in a violation of the basic legal principles of the PRC, its sovereignty or
security, or for reasons of social and public interests.
THE PRC COMPANY LA W, INTERIM MEASURES FOR THE ADMINISTRATION,
AND GUIDELINES FOR ARTICLES OF ASSOCIATION
A joint stock limited company incorporated in the PRC seeking a listing on The Stock
Exchange of Hong Kong Limited is mainly subject to the following laws and regulations of the
PRC:
 The Company Law of the People’s Republic of China ()
(the “PRC Company Law”), was adopted by the Fifth Standing Committee Meeting
of the Eighth NPC on 29 December 1993 and came into effect on 1 July 1994, and
was amended latest on 29 December 2023 and came into effect on 1 July 2024.
 The Interim Measures for the Administration of Overseas Securities Offering and
Listing by Domestic Enterprises (the “Interim Measures for the Administration”)
and the filing rules promulgated by the CSRC on 17 February 2023 and came into
effect on 31 March 2023, were applicable to the direct and indirect overseas share
subscription and listing of domestic companies.
 According to the Interim Measures for the Administration and its interpretative
guidelines, where a domestic company directly offering and listing overseas, it shall
formulate its articles of association in line with the Guidelines for Articles of
Association of Listed Companies (ˏ) (the “Guidelines for
Articles of Association”), in place of the Mandatory Provisions for Articles of
Association of Companies to be Listed Overseas ( Ցྤ̮ɪ̹ʮ̡௝೻̀௪ૢ
ಛ). The Guidelines for Articles of Association were promulgated by the CSRC on
16 December 1997 and last amended on 28 March 2025.
Set out below is a summary of the major provisions of the PRC Company Law, the Interim
Measures for the Administration and the Guidelines for Articles of Association which are
applicable to our Company.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 5–


--- page 574 ---
General Provisions
“A joint stock limited company” means a corporate legal person incorporated under the
PRC Company Law, whose registered capital is divided into shares of equal par value. The
liability of its shareholders is limited to the extent of the shares held by them and the liability
of a company is limited to the full value of all the property owned by it.
A company must conduct its business in accordance with laws as well as public and
commercial ethics. A company may invest in other limited liability companies. The liabilities
of the company to such invested companies are limited to the amount invested. Unless
otherwise provided by laws, a company cannot be the capital contributor who has the joint
liabilities associated with the debts of the invested enterprises.
Incorporation
A joint stock limited company may be incorporated by promotion or subscription. A joint
stock limited company may be incorporated by a minimum of one but not more than 200
promoters, and at least half of the promoters must have residence within the PRC.
The promoters shall convene a general meeting within 30 days from the date when the
share capital for the issued shares is paid up. The promoters shall notify each of the subscribers
of the meeting date or make an announcement 15 days before the general meeting. The general
meeting may be held only if the promoters and subscribers holding more than half of the voting
rights are present. At the general meeting, matters including the approval of the Company’s
articles of association and the election of directors and supervisors will be reviewed. Any
resolution made by the general meeting shall be passed by more than half of the voting rights
held by the subscribers attending the meeting. Within 30 days after the conclusion of the
general meeting of the Company, the board of directors shall apply to the registration authority
for registration of the incorporation of the joint stock limited company. A company is formally
established and has the status of a legal person after the business license has been issued by
the relevant registration authority.
Registered Shares
Under the PRC Company Law, shareholders may make capital contributions in cash, or
with non-monetary property that may be valued in money and legally transferred, such as
contribution in kind or with intellectual property rights, land use rights, shareholding or
creditor’s rights.
The Interim Measures for the Administration provides that domestic enterprises that are
listed overseas may raise funds and distribute dividends in foreign currencies or Renminbi.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 6–


--- page 575 ---
Under the PRC Company Law, a joint stock limited company is required to maintain a
register of shareholders, detailing the following information: (i) the name and domicile of each
shareholder; (ii) the class and number of shares subscribed for by each shareholder; (iii) the
serial number of shares if issued in paper form; and (iv) the date on which each shareholder
acquired the shares.
Allotment and Issue of Shares
Issue of shares of a joint stock limited company shall be based on the principles of
fairness and equality, and shall rank pari passu in all respects with the shares of the same class.
Shares of the same class issued at the same time shall be issued on the same conditions and at
the same price. The joint stock limited company may issue shares at par value or at a premium,
but not below the par value.
Domestic enterprises issued and listed overseas shall file with the CSRC in accordance
with Interim Measures for the Administration, submit filing reports, legal opinions and other
relevant materials, and truthfully, accurately and completely explain shareholder information
and other information. Where a domestic enterprise directly issues and is listed overseas, the
issuer shall file with the CSRC.
Increase in Share Capital
Under the PRC Company Law, a joint stock limited company issuing new shares shall be
resolved at the general meeting in respect of the class and number of new shares, the issue price
of the new shares, the commencement and end dates for the issuance of new shares and the
class and number of the new shares proposed to be issued to existing shareholders, if any.
Additionally, if a company intends to make public offering of shares, it is required to complete
the registration with the securities regulatory authority of the State Council and announce this
document.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the PRC Company Law:
(i) to prepare a balance sheet and a property list;
(ii) to make a resolution of reducing registered capital by the company at the general
meeting;
(iii) to inform creditors within 10 days and publish an announcement in newspapers or
the National Enterprise Credit Information Publicity System within 30 days after the
approval of resolution of reducing registered capital;
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 7–


--- page 576 ---
(iv) the creditors shall have the right to require the company to repay its debts or provide
corresponding guarantees within 30 days after receiving the notice or within 45 days
after the announcement if the creditors have not received the notice;
(v) when a company reduces its registered capital, it shall register the change with a
company registration authority in accordance with the law.
When a company reduces its registered capital, it must reduce the amount of capital
contribution or shares in proportion to the capital contribution or shares held by the
shareholders, unless otherwise prescribed by any law, or agreed upon by all the shareholders
of a limited liability company, or as specified in the articles of association of a joint stock
limited company.
Repurchase of Shares
Under the PRC Company Law, a company shall not purchase its own shares. Except for
any following circumstances:
(i) reducing the registered capital;
(ii) merging with other company that holds the shares of the company;
(iii) using the shares for employee stock ownership plan or equity incentives;
(iv) the right of the shareholders voting against any resolution adopted at the general
meeting on the merger or division of the company to demand the company to acquire
the shares they hold;
(v) using the shares for the conversion of convertible corporate bonds issued by the
Company;
(vi) as required for maintenance of the corporate value and shareholders’ rights and
interests of a listed company.
The purchase of shares of a company for reasons specified in the case of (i) to (ii) above
shall be subject to the resolution of the general meeting. The purchase of shares of a company
for reasons specified in the case of (iii), (v) and (vi) above shall be subject to the resolution
of the Board meeting attended by more than two-thirds of the directors in accordance with the
provisions of the articles of association or the authorization from the general meeting.
Following the purchase of a company’s shares by a company in accordance with the above
provisions, such shares shall be canceled within 10 days from the date of buy-back in the case
of item (i) above; such shares shall be transferred or canceled within six months in the case of
items (ii) and (iv) above; the total accumulated number of shares held by a company shall not
exceed 10% of the total issued shares of a company, and shall be transferred or canceled within
three years in the case of items (iii), (v) and (vi) above.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 8–


--- page 577 ---
Transfer of Shares
Shares held by a shareholder may be transferred according to the law. Under the PRC
Company Law, the transfer of shares by shareholders shall be carried out on a securities
exchange established by law or in other ways as prescribed by the State Council. Shares may
be transferred by endorsement of shareholders or by other means stipulated by laws or
administrative regulations. After the transfer, a company shall record the name and address of
the transferee in the register of shareholders. No changes of registration in the share register
provided in the foregoing requirement shall be affected during a period of 20 days prior to the
convening of shareholder’s meeting or 5 days prior to the record date for a company’s
distribution of dividends. If any law, administrative regulation, or any provision by the
securities regulatory authority of the State Council specifies otherwise for the modification of
the register of shareholders of a listed company, such provisions should prevail.
Under the PRC Company Law, shares issued by a company prior to the public offering
of shares shall not be transferred within one year from the date on which the shares of a
company are listed and traded on a securities exchange. The directors, supervisors and senior
management of the company should declare to the company the shares they hold and the
changes thereof. During the term of office as determined when they assume the posts, the
shares transferred each year should not exceed 25% of the total shares they hold of the
company. Shares of a company held by its directors, supervisors and senior management shall
not be transferred within one year from the date of a company’s listing on a securities
exchange, nor within six months after their resignation from their positions with a company.
If the shares are pledged within the time limit for restricted transfer as provided for by
laws and administrative regulations, the pledgee cannot exercise the pledge right within such
period.
General Meeting
Under the PRC Company Law, the general meeting of a joint stock limited company is
made up of all shareholders. The general meeting is the organ of authority of a company, which
exercises the following functions and powers:
(i) to elect and replace directors and supervisors and to decide on matters relating to the
remuneration of directors and supervisors;
(ii) to consider and approve reports of the board of directors;
(iii) to consider and approve reports of the board of supervisors;
(iv) to consider and approve profit distribution plans and loss recovery plans;
(v) to resolve on the increase or reduction of registered capital;
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 9–


--- page 578 ---
(vi) to resolve on the issuance of corporate bonds;
(vii) to resolve on the merger, division, dissolution, liquidation or change of corporate
form of a company;
(viii) to amend a company’s articles of association; and
(ix) other functions and powers specified in the articles of association.
Under the PRC Company Law, the annual general meeting shall be held once a year. The
company shall convene an extraordinary general meeting within two months from the date of
occurrence of any of the following circumstances:
(i) the number of directors is less than the number stipulated in the PRC Company Law
or less than two-thirds of the number specified in the articles of association;
(ii) when the unrecovered losses of a company amount to one-third of the total paid-up
share capital;
(iii) shareholders individually or jointly holding 10% or more of the company’s shares
request;
(iv) when deemed necessary by the board of directors;
(v) the board of supervisors proposes to convene the meeting;
(vi) other circumstances as stipulated in the articles of association.
The 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 not performing his duties, the meeting shall be presided over by the vice chairman. In the
event that the vice chairman is incapable of performing or not performing his duties, a director
nominated by more than half of directors shall preside over the meeting.
If the board of directors is incapable of performing or is not performing its duties to
convene the general meeting, the board of supervisors should convene and preside over general
meeting in a timely manner; if the board of supervisors fails to convene and preside over
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
general meeting.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-10 –


--- page 579 ---
If the shareholders who separately or aggregately hold more than 10% of the shares of the
company request to convene an extraordinary general meeting, the board of directors and the
board of supervisors should, within 10 days after the receipt of such request, decide whether
to hold an extraordinary general meeting and reply to the shareholders in writing.
Notice of a general meeting shall state the time and venue of and matters to be considered
at the meeting and shall be given to all shareholders 20 days before the meeting. Notice of a
extraordinary general meeting shall be given to all shareholders 15 days prior to the meeting.
Shareholders who individually or jointly hold more than 1% of the company’s shares may
put forward interim proposals and submit them to the convener in writing 10 days before the
general meeting. The convener shall issue a supplementary notice of the general meeting within
two days after receiving the proposal and announce the contents of the interim proposal.
Under the PRC Company Law, a shareholder may entrust a proxy to attend the general
meeting, and it should clarify the matters, power and time limit of the proxy. The proxy shall
present a written power of attorney issued by the shareholder to a company and shall exercise
his voting rights within the scope of authorization. There is no specific provision in the PRC
Company Law regarding the number of shareholders constituting a quorum in the general
meeting.
Under the PRC Company Law, shareholders present at the general meeting have one vote
for each share they hold, except the shareholders of classified shares. However, shares held by
the company itself are not entitled to any voting rights.
The cumulative voting system may be adopted for the election of directors and
supervisors at the general meeting in accordance with the provisions of the articles of
association or the resolutions of the general meeting. Under the accumulative voting system,
each share shall have the same number of voting rights as the number of directors or
supervisors to be elected at the general meeting, and shareholders may consolidate their voting
rights when casting a vote.
Under the PRC Company Law and the Guidelines for Articles of Association, a resolution
made by the general meeting shall be passed by more than half of the voting rights held by the
shareholders present at the meeting. Matters relating to merger, division or dissolution of a
company, increase or reduction of registered capital, change of corporate form or amendments
to the articles of association must be approved by more than two-thirds of the voting rights held
by the shareholders present at the meeting.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
–I V - 1 1–


--- page 580 ---
Board of Directors
Under the PRC Company Law, a joint stock limited company should have a board of
directors. However, companies with a small scale or a limited number of shareholders may opt
not to establish a board of directors. The board of directors shall consist of no fewer than three
members. The term of office of a director shall be stipulated in the articles of association, but
each term of office shall not exceed three years. Directors may serve consecutive terms if
re-elected.
For a joint stock limited company, meetings of the board of directors shall be convened
at least twice a year. Notice of meeting shall be given to all directors and supervisors at least
ten days before the meeting. The board of directors shall exercise the following functions and
powers:
(i) to convene the general meeting and report to the general meeting;
(ii) to implement the resolution of the general meeting;
(iii) to decide on the company’s operational plans and investment programs;
(iv) to formulate the company’s profit distribution plan and loss recovery plan;
(v) to formulate proposals for the increase or reduction of a company’s registered
capital and the issuance of bonds;
(vi) to formulate plans for merger, division, dissolution or change of the form of a
company;
(vii) to decide on the internal management structure of a company;
(viii) to decide on the appointment or removal of the company’s general manager and his
remuneration, and to decide on the appointment or dismissal of the deputy general
manager and financial officer and their remuneration based on the nomination of the
general manager;
(ix) to formulate the company’s basic management systems;
(x) other functions and powers specified in the articles of association or granted by the
general meeting.
The board of directors shall be held only if more than half of the directors are present.
Where a director is unable to attend, he or she may authorize, in writing, another director to
attend the meeting of the board of directors on his or her behalf. The instrument of proxy shall
specify the scope of authorization. If a resolution of the board of directors violates the laws,
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-12 –


--- page 581 ---
administrative regulations or the articles of association, resulting in serious losses to the
company, the directors participating in the resolution shall be 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 was recorded in the minutes of the
meeting, such director may be exempt from such liability.
Under the PRC Company Law, a person may not serve as a director of a company if he/she
is:
(i) a person without capacity or with restricted capacity;
(ii) a person who has been sentenced to any criminal penalty due to an offence of
corruption, bribery, encroachment of property, misappropriation of property, or
disrupting the order of the socialist market economy, or has been deprived of
political rights due to a crime, where a five-year period has not elapsed since the
date of completion of the sentence; if he/she is pronounced for suspension of
sentence, a two-year period has not elapsed since the expiration of the suspension
period;
(iii) a person who was a director, factory manager or manager of a company or enterprise
which 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 completion of the insolvency and liquidation of such company or
enterprise;
(iv) persons who were legal representatives of a company or enterprise which had its
business license revoked due to violation of the law and had been closed down by
order, and who were personally liable, where less than three years have elapsed
since the date of the revocation of the business license of the company or enterprise
or the order for closure;
(v) being listed as the “dishonest person subject to enforcement” by the people’s court
due to his/her failure to pay off a relatively large amount of due debts.
The board of directors shall have one chairman, who shall be elected by more than half
of all the directors. The chairman shall exercise the following functions and powers (including
but not limited to):
(i) to preside over the general meetings and convene and preside over the board of
directors;
(ii) to examine the implementation of resolutions of the board of directors;
(iii) to exercise other powers conferred by the board of directors.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-13 –


--- page 582 ---
Managers and Senior Management
Under the PRC Company Law, a company should have a general manager who is
appointed or removed by the board of directors. The general manager is responsible to the
board of directors and exercises his/her functions and powers according to the articles of
association or the authorization of the board of directors. The manager attends the meetings of
the board of directors as a non-voting member.
According to the PRC Company Law, senior management shall refer to the general
manager, deputy general manager(s), chief financial officer, secretary of the board of directors
and other personnel as stipulated in the articles of association of the listed company.
Duties of Directors, Supervisors and Senior Management
Directors, supervisors and senior management of the company are required under the PRC
Company Law to comply with the relevant laws, regulations and the articles of association, and
have fiduciary and diligent duties to the company. Directors, supervisors and senior
management are prohibited from abusing their powers to accept bribes or other unlawful
income and from misappropriating the company’s properties.
Directors, supervisors and senior management are prohibited from:
(i) embezzling the company’s property or misappropriating of the company’s capital;
(ii) depositing the company’s capital into accounts under his own name or the name of
other individuals;
(iii) giving bribes or accepting other illegal proceeds by taking advantage of their power;
(iv) accept and possess commissions paid by other parties for transactions conducted
with the company;
(v) unauthorized divulgence of confidential business information of the company; or
(vi) other acts in violation of their fiduciary duty to the company.
If any director, supervisor or senior management directly or indirectly concludes a
contract or conducts a transaction with the company, he/she should report the matters relating
to the conclusion of the contract or transaction to the board of directors or the general meeting,
subject to the approval of the board of directors or shareholders according to the articles of
association.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-14 –


--- page 583 ---
The provisions of the preceding paragraph shall apply if any near relatives of the
directors, supervisors or senior management, or any of the enterprises directly or indirectly
controlled by the directors, supervisors or senior management or any of their near relatives, or
any related parties with any other related-party relationship with the directors, supervisors or
senior management, concludes a contract or conducts a transaction with the company.
No director, supervisor or senior management may take advantage of his/her position to
seek any business opportunity that belongs to the company for himself/herself or any other
person except under any of the following circumstances:
(i) where he/she has reported to the board of directors or the general meeting and has
been approved by a resolution of the board of directors or the general meeting
according to the articles of association; or
(ii) where the company cannot make use of the business opportunity as stipulated by
laws, administrative regulations or the articles of association.
Where any director, supervisor or senior management fails to report to the board of
directors or the general meeting and obtain an approval by resolution of the board of directors
or the general meeting according to the articles of association, he/she may not engage in any
business that is similar to that of the company where he/she holds office for himself/herself or
for any other person.
A director, supervisor or senior management who contravenes any laws, administrative
regulations or the articles of association in the performance of his duties resulting in any loss
to the company shall be personally liable for the damages to the company.
Finance and Accounting
Under the PRC Company Law, a company shall establish its financial and accounting
systems according to laws, administrative regulations and the regulations of the financial
department of the State Council. At the end of each fiscal year, the company shall prepare
financial and accounting reports which shall be audited by an 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 financial department of the State
Council.
A joint stock limited company shall make its financial and accounting reports available
at the company for inspection by the shareholders 20 days before the convening of an annual
general meeting. A joint stock limited company issuing its shares in public must announce its
financial and accounting reports.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-15 –


--- page 584 ---
When distributing the after-tax profits of the current year, the company shall allocate 10%
of the profits into the statutory surplus reserve. When the cumulated amount of the statutory
surplus reserve of the company has reached 50% or more of its registered capital, no further
allocation is required.
If the statutory surplus reserve of the company is insufficient to make up for the losses
of the previous years, the current year profits shall be used to make up for the losses before
making allocations to the statutory surplus reserve in accordance with the preceding paragraph.
After the company has made an allocation to the statutory surplus reserve from its after-tax
profit, it may also make an allocation to the arbitrary surplus reserve from its after-tax profit
by the general meeting or its resolution.
A joint stock limited company may distribute profits in proportion to the number of shares
held by its shareholders, except for distributions that are not in proportion to the number of
shares held in accordance with the provisions of the articles of association.
The premium over the nominal value of the shares of a joint stock limited company from
the issue of shares, the amount of share proceeds from the issuance of no-par shares that have
not been credited to the registered capital and other incomes required by the financial
department of the State Council to be treated as the capital reserve fund shall be accounted for
as the capital reserve fund of the company.
The surplus reserves of the company shall be used to cover losses of the company, expand
the production and operation of the company or increase the capital of the company. To make
up for the Company’s losses, the Company shall first use the arbitrary surplus reserve and
statutory surplus reserve. If they are insufficient, the capital reserve can be used in accordance
with the regulations. When the statutory surplus reserve is converted to increase registered
capital, the remaining statutory surplus reserve shall be no less than 25% of the registered
capital of the company before such conversion.
The company shall not keep accounting books other than those provided by law.
Appointment and Dismissal of Accounting Firms
Pursuant to the PRC Company Law, the appointment or removal of an accounting firm
responsible for the company’s auditing shall be determined by the general meeting, the board
of directors or the board of supervisors in accordance with the articles of association. The
accounting firm should be allowed to make representations when the general meeting, the
board of directors or the board of supervisors conduct a vote on the removal of the accounting
firm.
The company should provide true and complete accounting vouchers, accounting books,
financial and accounting reports and other accounting information to the engaged accounting
firm without any refusal or withholding or falsification of information.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-16 –


--- page 585 ---
The Guidelines for Articles of Association provides that the company guarantees to
provide true and complete accounting vouchers, accounting books, financial and accounting
reports and other accounting information to the engaged accounting firm without any refusal
or withholding or falsification of information. And the audit fee of the accounting firm shall
be decided by the general meeting.
Profit Distribution
Pursuant to the PRC Company Law, a company shall not distribute profits before making
up for losses and allocation to the surplus reserves. Where a company distributes profits to
shareholders in violation of the provisions of the PRC Company Law, the shareholders shall
refund the profits distributed to the company, and the shareholders, directors, supervisors, and
senior management who are responsible for causing losses to the company shall bear
compensation liability.
Dissolution and Liquidation
According to the PRC Company Law, a company shall be dissolved for the following
reasons:
(i) the term of business stipulated in the articles of association has expired or other events
of dissolution specified in the articles of association have occurred; (ii) the general meeting
resolves to dissolve the company; (iii) dissolution is necessary due to a merger or division of
the company; (iv) the business license is revoked, or the business license is ordered to be
closed or revoked in accordance with laws; or (v) where the company encounters serious
difficulties in its operation and management and its continuance shall cause a significant loss
in the interest of shareholders, and where this cannot be resolved through other means,
shareholders who hold more than 10% of the total shareholders’ voting rights of the company
may present a petition to a people’s court for the dissolution of the company with the support
of the judgment.
If any event of dissolution as mentioned in the preceding paragraph arises, a company
shall publicize the event of dissolution through the National Enterprise Credit Information
Publicity System within ten days.
Where the company is dissolved in accordance with sub-paragraph (i) or (ii) above but
has not yet distributed its assets to the shareholders, it may carry on its existence by amending
its articles of association or upon a resolution of the general meeting, which must be approved
by more than two-thirds of the voting rights held by the shareholders present at the general
meeting. Where the company is dissolved pursuant to sub-paragraphs (i), (ii), (iv) or (v) above,
it shall be liquidated. The directors, who are the liquidation obligors of the company, shall form
a liquidation group to carry out liquidation within 15 days from the date of occurrence of the
event of dissolution.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-17 –


--- page 586 ---
The liquidation group shall be composed of the directors, unless it is otherwise provided
for in the company’s articles of association or it is otherwise elected by the general meeting.
The liquidation obligors shall be liable for compensation if they fail to fulfill their obligations
of liquidation in a timely manner, and thus any loss is caused to the company or the creditors.
The liquidation group fails to be formed within the time limit or fails to carry out the
liquidation after its formation, any interested party may request the people’s court to designate
relevant persons to form a liquidation group. The people’s court shall accept such request and
organize a liquidation group to carry out the liquidation in a timely manner.
The liquidation committee shall exercise the following functions and powers during the
liquidation period:
(i) to liquidate the company’s property and respectively prepare a balance sheet and list
of property;
(ii) to notify creditors by notice or public announcement;
(iii) to deal with the outstanding business of the company involved in the liquidation;
(iv) to pay all outstanding taxes and taxes arising in the course of liquidation;
(v) to liquidate claims and debts;
(vi) distributing the remaining property of the company after paying off debts;
(vii) to participate in civil litigations on behalf of the company.
The liquidation group shall notify the company’s creditors within ten days as of its
formation and shall make a public announcement in the newspaper or on the National
Enterprise Credit Information Publicity System within 60 days. The creditors shall file their
proofs of claim with the liquidation group within 30 days as of the receipt of the notice or
within 45 days as of the issuance of the public announcement in the case of failing to receive
such notice.
The remaining property of the company after the payment of liquidation expenses,
employees’ wages, social insurance expenses and statutory compensation, outstanding taxes
and the company’s debts, shall be distributed to shareholders in proportion to their
shareholdings.
During the liquidation period, the company shall continue to exist but shall not carry out
any business activities unrelated to the liquidation. The company’s property shall not be
distributed to the shareholders before the liquidation in accordance with the preceding
paragraph.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-18 –


--- page 587 ---
If the liquidation group, having examined the company’s assets and having prepared a
balance sheet and an inventory of assets, discovers that the company’s property are insufficient
to pay its debts in full, it shall file an application to a people’s court for bankruptcy liquidation.
After the people’s court accepts the application for bankruptcy, the liquidation group shall hand
over the liquidation matters to the bankruptcy administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation group shall prepare a liquidation
report to be submitted to the general meeting or the people’s court for confirmation, and submit
to the company registration authority to apply for cancellation of the company’s registration.
The members of the liquidation group performing their duties of liquidation are obliged
to loyalty and diligence. Any member of the liquidation group who neglects to fulfill his/her
liquidation duties, thus causing any loss to the company shall be liable for compensation, and
any member of the liquidation group who causes any loss to any creditor due to his/her
intentional or gross negligence shall be liable for compensation.
Where, after three years since the business license of a company is revoked, or the
company is ordered to close down or is revoked, the company fails to apply for its
deregistration with the company registration authority, the said authority may announce the
company’s deregistration through the National Enterprise Credit Information Publicity System
for a period of no less than 60 days. If there is no objection after the announcement period
expires, the company registration authority may deregister the company.
Overseas Listing
According to the Interim Measures for the Administration, where an issuer makes an
overseas initial public offering or listing, it shall file with the CSRC within 3 working days
after submitting the application documents for overseas issuance and listing. If an issuer issues
securities in the same overseas market after overseas issuance and listing, it shall file with the
CSRC within 3 working days after completion of the issuance. If an issuer issues and lists in
other overseas markets after overseas issuance and listing, it shall file with the CSRC within
3 working days after submitting the application documents for overseas issuance and listing.
Moreover, if the filing materials are complete and meet the requirements, the CSRC shall
complete the filing within 20 working days from the date of receiving the filing materials, and
publicize the filing information through the website. If the filing materials are incomplete or
do not meet the requirements, the CSRC shall inform the issuer of the materials to be
supplemented within 5 working days after receiving the filing materials. The issuer shall
supplement the materials within 30 working days.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-19 –


--- page 588 ---
Loss of Share Certificates
A shareholder may, in accordance with the public notice procedures set out in the Civil
Procedure Law of the People’s Republic of China, apply to a people’s court if his share
certificate(s) in registered form is either stolen, lost or destroyed, for a declaration that such
certificate(s) will no longer be valid. After the people’s court declared that such certificate(s)
will no longer be valid, the shareholder may apply to the company for the issue of a
replacement certificate(s).
Suspension and Termination of Listing
The PRC Company Law has deleted provisions governing suspension and termination of
listing. The Securities Law () has also deleted provisions regarding suspension of
listing. Where listed securities fall under the delisting circumstances stipulated by the stock
exchange, the stock exchange shall terminate its listing and trading in accordance with the
business rules.
According to the Interim Measures for the Administration, in case of active or compulsory
termination of listing, the issuer shall report the specific situation to the CSRC within 3
working days from the date of occurrence and announcement of the relevant matters.
SECURITIES LA W AND REGULATIONS
In October 1992, the State Council established the Securities Committee and the CSRC.
The Securities Committee is responsible for coordinating the drafting of securities regulations,
formulating securities-related policies, planning the development of securities markets,
directing, coordinating and supervising all securities-related institutions in the PRC and
administering the CSRC. The CSRC is the regulatory arm of the Securities Committee and is
responsible for the drafting of regulatory provisions of securities markets, supervising
securities companies, regulating public offers of securities by Chinese companies in the
Chinese mainland or overseas, regulating the trading of securities, compiling securities-related
statistics and undertaking research and analysis. In April 1998, the State Council consolidated
the above two departments and reformed the CSRC.
The Provisional Regulations Concerning the Issue and Trading of Shares (ୃ೯Бၾ
၍ଣᅲБૢԷ) promulgated by the State Council and effective on 22 April 1993 provide
the application and approval procedures for public offerings of shares, trading in shares, the
acquisition of listed companies, the deposit, settlement and transfer of listed shares, the
disclosure of information with respect to a listed company, investigation and penalties and
dispute arbitration.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-20 –


--- page 589 ---
The Regulations of the State Council Concerning the Domestic Listed Foreign Shares of
Joint Stock Limited Companies (), which
were promulgated by the State Council and came into effect on 25 December 1995, mainly
provide for the issue, subscription, trading and payment of dividends of domestic listed foreign
shares and disclosure of information of joint stock limited companies with domestic listed
foreign shares.
The Securities Law provides a series of provisions regulating, among other things, the
issue and trading of securities, takeovers by listed companies, securities exchanges, securities
companies and the duties and responsibilities of the State Council’s securities regulatory
authorities in the PRC, and comprehensively regulates activities in the PRC securities market.
The Securities Law provides that a domestic enterprise must comply with the relevant
provisions of the State Council in issuing securities directly or indirectly outside the PRC or
listing and trading its securities outside the PRC. Currently, the issue and trading of foreign
issued shares are mainly governed by the rules and regulations promulgated by the State
Council and the CSRC.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
Under the Arbitration Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷΀൒
) (the “Arbitration Law”), amended by the Standing Committee of the NPC on 1
September 2017 and effective on 1 January 2018, the Arbitration Law is applicable to economic
disputes involving foreign parties, and all parties have entered into a written agreement to refer
the matter to an arbitration committee constituted in accordance with the Arbitration Law. An
arbitration committee may, before the promulgation by the PRC Arbitration Association of
arbitration regulations, formulate interim arbitration rules in accordance with relevant
regulations under the Arbitration Law and the Civil Procedure Law of the People’s Republic
of China. Where both parties have agreed to settle disputes by means of arbitration, the
people’s court will refuse to take legal action brought by a party in the people’s court.
Under the Arbitration Law, an arbitral award is final and binding on the parties. If a party
fails to comply with an award, the other party to the award may apply to the people’s court for
enforcement according to the Civil Procedure Law of the People’s Republic of China. A
people’s court may refuse to enforce an arbitral award made by an arbitration commission if
there is any procedural irregularity (including irregularity in the composition of the arbitration
committee or the making of an award on matters beyond the scope of the arbitration agreement
or the jurisdiction of the arbitration commission). A party seeking to enforce an arbitral award
of foreign arbitration commission against a party who or whose property is not within the PRC
shall apply to a foreign court with jurisdiction over the case for recognition and enforcement.
Similarly, an arbitral award made by a foreign arbitration body may be recognized and enforced
by the people’s court in accordance with the principles of reciprocity or any international treaty
concluded or acceded to by the PRC.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-21 –


--- page 590 ---
An arrangement was reached between Hong Kong and the Supreme People’s Court of
China allowing for mutual recognition and enforcement of arbitral awards. On 18 June 1999,
the Supreme People’s Court adopted the “Arrangement Concerning Mutual Enforcement of
Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region”,
which came into effect on 1 February 2000. Pursuant to this arrangement, arbitral awards
rendered by arbitral authorities in the Chinese Mainland in accordance with the Arbitration
Law may be enforced in Hong Kong, and Hong Kong arbitral awards may also be enforced in
the Chinese Mainland.
On 26 November 2020, the Supreme People’s Court promulgated the “Supplemental
Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and
the Hong Kong Special Administrative Region”, which clarifies the procedure for
“recognition,” which expands the scope of mutual recognition and enforcement of arbitral
awards, and removes restrictions on arbitral authorities. The supplemental arrangement also
provides that an applicant may apply for enforcement of an arbitral award to both Mainland and
Hong Kong courts, and includes provisions regarding interim measures.
APPENDIX IV SUMMARY OF PRINCIPAL LA WS AND
REGULATORY PROVISIONS
– IV-22 –


--- page 591 ---
This Appendix contains a summary of the principal provisions of the (Draft) Articles of
Association of the Company adopted on June 9, 2025, which will become effective on the date
of issuance and listing of the H Shares on the Hong Kong Stock Exchange. This Appendix is
mainly designed to provide investors with an overview of the Articles of Association of the
Company. As this is a summary, it may not contain all the information that may be important
to you.
ISSUANCE OF SHARES
The shares of the Company shall be issued based on the principle of fairness and
impartiality, and shall rank pari passu in all respects with the shares of the same class. Shares
of the same class issued at the same time shall be issued under the same conditions and at the
same price. The same price shall be paid for each of the shares subscribed for by all
subscribers.
INCREASE, REDUCTION AND REPURCHASE OF SHARES
Based on the needs of operation and development, the Company may increase capital by
the following means in accordance with the provisions of the laws and regulations upon
resolution of the general meeting:
(I) issuing shares to non-specific investors;
(II) offering of shares to specific investors;
(III) allotting bonus shares to existing shareholders;
(IV) conversion of capital reserve into share capital;
(V) other methods prescribed by laws, administrative regulations, the CSRC and other
securities regulatory rules of the place where the Company’s shares are listed.
The Company may reduce its registered capital. The Company shall reduce its registered
capital in accordance with the Company Law of the People’s Republic of China and other
relevant provisions and the procedures stipulated in the Articles of Association.
REPURCHASE OF SHARES
The Company shall not purchase its own shares, except in any of the following
circumstances:
(I) to reduce the registered capital of the Company;
(II) to merge with another company which holds the shares of the Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 1–


--- page 592 ---
(III) to use the shares for Employee Stock Ownership Plan or as equity incentive;
(IV) the shareholders disagreeing with the merger or division resolution made by the
general meeting ask the Company to acquire their shares;
(V) to use the shares in the conversion of the convertible corporate bonds issued by the
Company;
(VI) necessary for the Company to protect its value and its shareholders’ equity.
Where the Company intends to repurchase its own shares in the situations prescribed in
Items (III), (V) and (VI) above, the repurchase shall be conducted through public and
centralized trading.
Where the Company repurchases its shares under the circumstances set out in preceding
item (I) or (II), it shall be resolved at the general meeting. Where the Company repurchases its
shares under the circumstances set out in preceding item (III), (V) or (VI), it shall be resolved
at a board meeting attended by more than two-thirds of the directors in accordance with the
provisions of the Articles of Association or upon authorization by the general meeting, subject
to the securities regulatory rules of the place where the Company’s shares are listed.
In terms of A shares, the shares repurchased by the Company shall be processed in the
following ways: for the circumstance in item (I), such shares shall be canceled in 10 days after
the date of repurchase; for the circumstance in item (II) or (IV), such shares shall be transferred
or canceled in 6 months; for the circumstance in item (III), (V) or (VI), the total number of
shares held by the Company shall not exceed 10% of the total issued shares of the Company,
and such shares shall be transferred or canceled in 3 years. In terms of H shares, if it is
otherwise specified in provisions of the laws, regulations and relevant rules of the securities
regulatory authorities where the Company’s shares are listed on the handling of the matters
involved in the aforementioned share repurchase, such provisions shall prevail.
TRANSFER OF SHARES
The shares of the Company shall be legally transferable.
Directors, and senior management of the Company shall declare to the Company the
number of shares held by them in the Company and changes therein, and shall not transfer more
than 25% of the total number of the Company’s shares held by them in each year of their term
of office as determined at the time of their assumption of office; the shares of the Company
held by them shall not be transferred within 1 year as of the listing date of the shares of the
Company; and the above-mentioned persons are not allowed to transfer their shares in the
Company within six months after their departure. Where laws, administrative regulations, the
CSRC or the securities regulatory rules of the place where the Company’s shares are listed
provide otherwise for the transfer of the Company’s shares held by a shareholder, such
provisions shall apply accordingly.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 2–


--- page 593 ---
If a director, senior management, or shareholder holding more than 5% of the Company’s
shares sells the Company’s shares or other securities of an equity nature held by the director,
senior management, or shareholder holding more than 5% of the Company’s shares within six
months of the date of purchase, or buys again within six months of the date of sale, and the
proceeds therefrom shall belong to the Company, the Board of Directors of the Company shall
reclaim the proceeds therefrom. However, securities companies holding more than 5% of the
shares due to the purchase of the remaining shares after underwriting, and other circumstances
stipulated by the CSRC or the securities regulatory rules of the place where the Company’s
shares are listed are excluded.
The shares or other securities with an equity nature held by directors, senior management
and natural person shareholders as mentioned in the above paragraph shall include the shares
or other securities with an equity nature held by their spouses, parents, children, and those held
in the accounts of others.
In the event that the Board fails to comply with the above provisions, the Shareholders
shall have the right to request the Board to do so within 30 days. If the Board fails to follow
the above-mentioned deadline, shareholders shall have the right to file a lawsuit directly to the
people’s court in their own name in the interest of the Company. If the Board fails to comply
with the above provisions, the responsible directors shall be jointly and severally liable in
accordance with the law.
SHAREHOLDERS AND GENERAL MEETING
Shareholders
The Company shall make a register of Shareholders based on the vouchers provided by
the securities registration and settlement institution. The register of shareholders shall be the
sufficient evidence proving the shareholders’ holding of the Company’s shares. The original
register of H-shareholders shall be kept in Hong Kong for inspection by shareholders, but the
Company may suspend the registration of shareholders in accordance with applicable laws and
regulations and the rules of the securities regulatory authorities in the place where the
Company’s shares are listed. The shareholders shall enjoy the rights and assume the obligations
according to the class of the shares they hold. The shareholders holding the same class of
shares shall enjoy the same rights and assume the same obligations.
If any individual who has his/her name registered or requests to have his/her name
registered on the register of shareholders loses his/her share certificate(s), he/she may apply to
the Company for issuing a replacement share certificate(s) representing the same shares. In the
event that a shareholder of A shares loses its share certificate(s) and applies for issuing
replacement share certificate(s), it shall follow the procedures as stipulated in the Company
Law. In the event that a shareholder of H shares loses his/her share certificate(s) and applies
for issuing replacement share certificate(s), he/she shall follow the procedures as required by
the laws, rules of the stock exchange or any other related provision in the place where the
original register of shareholders for such H shares is kept.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 3–


--- page 594 ---
The shareholders of the Company shall be entitled to the following rights:
(I) to receive dividends and other forms of distribution of interests in proportion to their
respective shareholdings;
(II) to request to convene, hold, preside over, attend in person or appoint a proxy to
attend the general meeting according to law, and exercise their voting rights
correspondingly (unless individual shareholders shall waive their voting rights in
respect of certain matters in accordance with applicable laws and regulations, and
securities regulatory rules in the place where the shares of the Company are listed);
(III) to supervise, and make recommendations or inquiries on the operation of the
Company;
(IV) to transfer, bestow or pledge the shares they hold according to the laws,
administrative laws and regulations, securities regulatory rules in the place where
the shares of the Company are listed and the Articles of Association;
(V) to inspect and copy the Articles of Association, register of shareholders, minutes of
general meetings, resolutions of meetings of the board of directors, financial and
accounting reports, and eligible shareholders may inspect the Company’s accounting
books and accounting documents;
(VI) to participate in the distribution of the Company’s remaining assets in proportion to
their shareholdings upon termination or liquidation of the Company;
(VII) The shareholders disagreeing with the merger or separation resolution made by the
general meeting are entitled to ask the Company to acquire their Shares;
(VIII) other rights conferred by the laws, administrative regulations, departmental rules,
security regulatory rules of the place where the Company’s shares are listed and the
Articles of Association.
Shareholders requesting access to or copying of relevant materials of the Company shall
comply with the provisions of the Company Law, the Securities Law and other laws and
administrative regulations, and shall provide the Company with written documents proving the
class and number of shares held by them. The relevant materials shall be provided by the
Company upon verification of the identity of the shareholders and in accordance with the
request of the shareholders. If a shareholder who individually or collectively holds more than
3% of the Company’s shares for more than 180 consecutive days requests to inspect the
Company’s accounting books and documents, he/she shall submit a written request to the
Company, stating the purpose. Where the Company reasonably believes that shareholders have
unjust purposes in accessing the accounting books and reports, which may harm the legal rights
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 4–


--- page 595 ---
and interests of the Company, the Company may refuse such request and shall, within 15 days
of such request, reply in written form and state the reasons. The provisions of this Article shall
apply to shareholders requesting to inspect or copy materials related to the Company’s
wholly-owned subsidiaries.
If the content of any resolution of the general meeting or the board of directors violates
laws or administrative regulations, the shareholders shall have the right to request the people’s
court to recognize it as invalid.
The shareholders are entitled to request the people’s court to cancel the relevant
resolution within 60 days after the resolution is adopted if the convening procedure and voting
method of the general meeting or Board meeting violate the laws, administrative regulations
or the Articles of Association, or the resolution content breaches the Articles of Association,
unless there are only minor defects in the convening procedure or voting method of the general
meeting or Board meeting, which do not materially affect the resolution.
Where the Board of Directors, shareholders and other relevant parties dispute the validity
of a resolution of a general meeting, they shall promptly file a lawsuit with the people’s court.
The relevant parties shall implement the resolution of the general meeting before the people’s
court makes a judgment or ruling, such as revoking the resolution. The Company, its directors
and senior management should effectively fulfill their duties to ensure the normal operation of
the Company.
If the people’s court makes a judgment or ruling on the relevant matters, the Company
shall fulfill its information disclosure obligations in accordance with the laws, administrative
regulations, and rules of the CSRC and the stock exchanges, fully explain the impact, and
actively cooperate with the implementation of the judgment or ruling after it has come into
effect. Corrections of prior matters will be handled in a timely manner and the corresponding
information disclosure obligations will be fulfilled.
In the event of a violation of laws, administrative regulations or the provisions under the
Articles of Association by a director or senior management other than the member of the Audit
Committee in performing his duties, resulting in loss suffered by the Company, the
shareholders that solely or collectively hold 1% or more shares of the Company for a
continuous period of 180 days have the right to make a written request to the Audit Committee
to file a litigation with a people’s court. In the event of a violation of laws, administrative
regulations or the provisions under the Articles of Association by a member of the Audit
Committee in performing his duties, which has led to loss and damage suffered by the
Company, the aforesaid shareholders have the right to make a written request to the Board to
file a litigation with a people’s court.
Where the Audit Committee or the Board of Directors refuses to file a lawsuit after
receiving shareholders’ written request as prescribed in the preceding paragraph, or fails to file
a lawsuit within 30 days as of the date of receiving the request, or the situation is so urgent
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 5–


--- page 596 ---
that failure in filing immediate lawsuit will result in irreparable losses to the Company,
shareholders as prescribed in the previous paragraph shall have the right to, in their names,
directly file a lawsuit to a people’s court for the interests of the Company.
In the event of violation of laws, administrative regulations, securities regulatory rules of
the place where the Company’s shares are listed or provisions under the Articles of Association
by Directors or senior management in performing their duties, resulting damage to the
Shareholders’ interest, the shareholders may file a litigation with a people’s court.
Shareholders of the Company shall assume the following obligations:
(I) to comply with the laws, administrative regulations and Articles of Association;
(II) to pay capital contributions in accordance with the shares subscribed and the capital
participation method;
(III) not to withdraw from the Company its capital contribution except for the
circumstances set out in relevant laws and regulations;
(IV) not to abuse Shareholder’s rights to damage the interests of the Company or other
shareholders; not to abuse the independent legal person status of the Company and
the limited liability of shareholders to damage the interests of the creditors of the
Company;
(V) to assume other obligations required by the laws, administrative regulations,
regulation rules of the place where the Company’s shares are listed and the Articles
of Association.
A shareholder of the Company who abuses the rights of shareholders to cause losses to
the Company or other shareholders shall be liable for compensation in accordance with the law.
Where any shareholder of the Company abuses the independent legal person status of the
Company and the limited liability of shareholders to evade debts and severely damages the
interests of the creditors of the Company, such shareholder shall bear joint liability for the
debts of the Company.
Controlling shareholders and actual controller
The controlling shareholders and actual controller of the Company shall comply with the
following provisions:
(I) To exercise shareholders’ rights in accordance with the law, and not to abuse the
right of control or take advantage of the relationship to harm the legitimate rights
and interests of the Company or other shareholders;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 6–


--- page 597 ---
(II) To strictly fulfill the public statements and commitments made, without
unauthorized changes or exemptions;
(III) To fulfill the information disclosure obligations in strict accordance with the
relevant regulations, to proactively cooperate with the Company in making
information disclosure, and to inform the Company in a timely manner of significant
events that have occurred or are proposed to occur;
(IV) Not to take up the Company’s funds in any way;
(V) Not to force, instruct or require the Company and related persons to provide
guarantees in violation of the law;
(VI) Not to make use of the Company’s undisclosed material information to seek
benefits, not to disclose in any way undisclosed material information relating to the
Company, and not to engage in insider trading, short-term trading, market
manipulation and other illegal and illicit behaviors;
(VII) Not to harm the legitimate rights and interests of the Company and other
shareholders through any means such as unfair connected transactions, profit
distribution, asset restructuring, or external investment.
(VIII) To ensure the integrity of the Company’s assets, personnel independence, financial
independence, institutional independence and business independence, and not to
affect the independence of the Company in any way;
(IX) Other provisions of laws, administrative regulations, regulations of the CSRC,
business rules of stock exchanges, securities regulatory rules of places where the
Company’s shares are listed and the Articles of Association.
If the controlling shareholders or actual controller does not serve as directors of the
Company but actually executes the affairs of the Company, the provisions of the Articles of
Association on the duties of loyalty and diligence of directors shall apply.
Where a controlling shareholder or actual controller of the Company instructs a director
or senior management to engage in acts that are detrimental to the interests of the Company or
shareholders, he/she shall be jointly and severally liable with the director or senior
management.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 7–


--- page 598 ---
General provisions on general meeting
The general meeting shall be the organ of authority of the Company and shall exercise the
following functions and powers according to law:
(I) to elect and replace Directors who are not employee representatives, and to decide
on matters relating to the remuneration of Directors;
(II) to consider and approve reports of the Board;
(III) to examine and approve the profit distribution plans and loss recovery plans of the
Company;
(IV) to make resolutions concerning the increase or reduction of the Company’s
registered capital;
(V) to make resolutions on the issuance of corporate bonds;
(VI) to pass resolutions on matters such as the merger, division, dissolution, liquidation
or change in the organizational form of the Company;
(VII) to revise the Articles of Association;
(VIII) to make resolutions on the appointment or removal of accounting firm that
undertakes the audit service of the Company;
(IX) to review and approve the guarantees set out in Article 47 of the Articles of
Association;
(X) to examine the Company’s purchase or disposal of major assets within one year of
an aggregate value exceeding 30% of the latest audited total assets of the Company;
(XI) to examine and approve changes in the use of proceeds;
(XII) to examine the equity incentive scheme and Employee Stock Ownership Plan;
(XIII) the general meeting can authorize the board of directors to make resolutions on the
issuance of corporate bonds;
(XIV) to consider other matters that should be decided by the general meeting as stipulated
by laws, administrative regulations, departmental rules, rules of securities regulation
of the place where the Company’s shares are listed or the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 8–


--- page 599 ---
Unless otherwise provided by laws, administrative regulations, the regulations of the
CSRC or the securities regulatory rules of the place where the Company’s shares are listed, the
aforesaid powers and functions of the general meeting shall not be exercised by the Board of
Directors or any other body or individual by way of authorization.
The following external guarantees of the Company shall be considered and approved by
the general meeting:
(I) any guarantee provided after the total amount of the external guarantees provided by
the Company and its controlled subsidiaries exceeds 50% of the audited net assets
for the latest period;
(II) any guarantee provided after the total amount of the external guarantees provided by
the Company exceeds 30% of the Company’s audited total assets for the latest
period;
(III) the guarantee whose amount exceeds 30% of the Company’s total audited assets in
the latest period according to the principle of cumulative calculation of guarantee
amount for 12 consecutive months;
(IV) the guarantee provided to the guaranteed party with a debt-to-asset ratio of more
than 70%;
(V) any single guarantee with its amount exceeding 10% of the audited net assets for the
latest period;
(VI) any guarantee provided to shareholders, the actual controllers and their related
parties;
(VII) other transactions that shall be decided by the general meeting in accordance with
relevant laws and regulations or the securities regulatory rules of the place where the
Company’s shares are listed.
General meetings are categorized into annual general meetings and extraordinary general
meetings. The annual general meeting shall be held once a year and shall be held within six
months after the end of the preceding fiscal year.
In the event of any of the following circumstances, the Company shall convene an
extraordinary general meeting within two months from the date of occurrence:
(I) When the number of directors is less than that specified in the Company Law or
two-thirds of the number required by the Articles of Association;
(II) When the Company’s losses which are not covered amount to one-third of the total
share capital;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 9–


--- page 600 ---
(III) Upon written request(s) by shareholders individually or collectively holding more
than 10% of the Company’s shares;
(IV) When the Board of Directors considers it necessary;
(V) When the Audit Committee proposes to hold such a meeting;
(VI) Other circumstances required by the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
The number of shares in Item (III) above shall be calculated in accordance with the shares
held on the day on which the written request is made by the shareholders.
If the extraordinary general meeting is convened in response to the provisions of the
securities regulatory rules of the place where the Company’s shares are listed, the actual date
of the extraordinary general meeting may be adjusted in accordance with the provisions of the
securities regulatory rules of the place where the Company’s shares are listed.
Convening of a general meeting
The Board shall duly convene the general meeting within the time limit specified.
The Independent Directors are authorized to propose to the Board of Directors to convene
an extraordinary general meeting with the approval of a majority of all Independent Directors.
In response to a proposal from an independent director requesting the convening of an
extraordinary general meeting, the Board of Directors shall, in accordance with the provisions
of laws, administrative regulations, the rules of securities regulation of the place where the
Company’s shares are listed and the Articles of Association, provide written feedback on
whether it agrees or disagrees with the convening of the extraordinary general meeting within
10 days of receipt of the proposal. Where the Board agrees to convene the extraordinary
general meeting, it shall serve a notice of such meeting within five days after the resolution is
made by the Board. Where the Board does not agree to convene the extraordinary general
meeting, it shall give the reasons and make an announcement in respect thereof.
The Audit Committee shall have the right to propose to the Board to convene an
extraordinary general meeting, and shall make such proposal in writing. The Board of Directors
shall, in accordance with the provisions of laws, administrative regulations, rules of securities
regulation of the place where the Company’s shares are listed and the Articles of Association,
provide written feedback on whether it agrees or disagrees with the convening of an
extraordinary general meeting within 10 days of receipt of the proposal.
Where the Board agrees to convene the extraordinary general meeting, it shall issue a
notice of general meeting within 5 days after the decision is made. Any changes made to the
original proposal in the notice shall be agreed by the Audit Committee.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-10 –


--- page 601 ---
If the Board of Directors does not agree to convene an extraordinary general meeting or
fails to provide feedback within 10 days after receiving the proposal, it is deemed that the
Board of Directors is unable to fulfill or does not fulfill its duty to convene the general
meeting, and the Audit Committee may convene and preside over the meeting on its own.
The shareholders who individually or jointly hold more than 10% of the shares of the
Company shall have the right to request the Board to convene an extraordinary general
meeting, and shall make such request to the Board in writing. The Board of Directors shall, in
accordance with the provisions of laws, administrative regulations, rules of securities
regulation of the place where the Company’s shares are listed and the Articles of Association,
provide written feedback on whether it agrees or disagrees with the convening of an
extraordinary general meeting within 10 days of receipt of the proposal.
Where the Board agrees to convene the extraordinary general meeting, it shall issue a
notice of general meeting within 5 days after the decision is made. Any changes made to the
original request in the notice shall be agreed by the relevant shareholders.
If the Board of Directors does not agree to convene an extraordinary general meeting or
fails to provide feedback within 10 days after receiving the request, shareholders who
individually or collectively hold more than 10% of the Company’s shares and propose to the
Audit Committee to convene an extraordinary general meeting shall submit their request in
writing to the Audit Committee.
Where the Audit Committee agrees to convene the extraordinary general meeting, it shall
issue a notice of general meeting within 5 days after the decision is made. Any changes made
to the original request in the notice shall be agreed by the relevant shareholders.
If the Audit Committee fails to give notice of a general meeting within the prescribed
period, it shall be deemed that the Audit Committee does not convene and preside over the
general meeting, and the shareholders who have individually or collectively held more than
10% of the Company’s shares for more than 90 consecutive days may convene and preside over
the meeting on their own.
If the Audit Committee or the shareholders decide to convene a general meeting on their
own, they must notify the Board of Directors in writing and file a report with the stock
exchange or make an announcement.
The Audit Committee or the convening shareholders shall, at the time of issuing the notice
of the general meeting and the announcement of the resolution of the general meeting, submit
the relevant supporting materials to the stock exchange in accordance with the rules of the
securities regulation of the place where the Company’s shares are listed. Before the
announcement of the resolution of the general meeting, the shareholding ratio of convening
shareholders shall be not less than 10%.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 1 1–


--- page 602 ---
In the case of a general meeting convened by the Audit Committee or by the shareholders
themselves, the expenses necessary for the meeting shall be borne by the Company.
Proposals and Notices of General Meetings
When the Company holds a general meeting, the Board of Directors, the Audit
Committee, and shareholders who individually or collectively hold more than 1% of the
Company’s shares have the right to submit proposals to the Company.
Shareholders who individually or collectively hold more than 1% of the Company’s
shares may propose a provisional proposal and submit it in writing to the convenor 10 days
prior to the general meeting. The convenor shall issue a supplementary notice of the general
meeting within 2 days after the receipt of the proposal, announcing the contents of the
provisional proposal and submitting the provisional proposal to the general meeting for
deliberation, except that the provisional proposal is in violation of the provisions of the laws,
administrative regulations or the Articles of Association of the Company or does not fall within
the terms of reference of the general meeting. If the general meeting shall be postponed for the
publication of the supplementary notice of the general meeting in accordance with the
provisions in the securities regulatory rules of the place where the Company’s shares are listed,
the convening of the general meeting shall be postponed in accordance with the relevant
provisions.
Save as specified above, the convenor shall neither revise the proposals set out in the
notice of general meetings nor add new proposals after issuing the notice of general meeting.
The general meeting shall not vote or pass resolutions on proposals not listed in the notice
of the general meeting or resolutions not in conformity with the Articles of Association.
The convenor shall notify shareholders in writing (including announcements) 21 days
prior to the Annual General Meeting and 15 days prior to the Extraordinary General Meeting.
Where laws, regulations and the securities regulatory rules of the stock exchange where the
Company’s shares are listed have other provisions, such provisions shall prevail. The Company
shall not include the date of the meeting when calculating the starting time.
The notice of the general meeting shall include the following particulars:
(I) the time, venue and duration of the meeting;
(II) the matters and proposals to be reviewed at the meeting;
(III) explicit textual explanation: all shareholders shall be entitled to attend the general
meeting and they may appoint a proxy in writing to attend and vote at such meeting
on their behalf and that such proxy needs not be a shareholder of the Company;
(IV) the record date for shareholders who are entitled to attend the general meeting;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-12 –


--- page 603 ---
(V) the name and telephone number of the regular contact person for the meeting.
(VI) the voting time and voting procedures of the meeting for the online voting or other
means of voting.
Holding of General Meeting
All shareholders registered on the record date or their proxies shall have the right to
attend the general meeting and exercise their shareholders’ rights, including the right to speak,
in accordance with the relevant provisions of the laws and administrative regulations, the rules
of the securities regulatory authorities of the place where the Company’s shares are listed, and
the Articles of Association. The Company and the convenor shall not deny their rights to do
so for any reason whatsoever. A shareholder attending a general meeting shall have one vote
for each share held (unless such shareholder is required to waive his/her voting rights in respect
of individual matters by virtue of the provisions of laws, administrative regulations, or the
rules of the securities regulatory authorities of the place where the Company’s shares are
listed).
Shareholders may attend the general meeting in person or appoint a proxy to attend, speak
and vote on their behalf.
An individual shareholder who attends the meeting in person shall produce his own ID
card or other valid documents or proof evidencing his/her identity. If a proxy is appointed to
attend the meeting on his/her behalf, such proxy shall produce his/her own valid proof of
identity and the power of attorney from the shareholder.
If the legal representative/managing partner of the partnership (or his/her delegate) of a
corporate shareholder attends the meeting in person, he/she shall present his own valid ID,
certificate of legal representative/managing partner (or his/her delegate), and a copy of its
business license with the official seal stamped on it for registration; If the legal
representative/managing partner of the partnership of a legal person shareholder or his/her
delegate appoints a proxy to attend the meeting, the proxy shall present his own valid ID, a
copy of the business license with the official seal stamped on it, a document certifying that
he/she is the legal representative/managing partner (or his/her delegate), and a power of
attorney to complete the registration formalities; except where the shareholder is a recognized
clearing house and its nominee.
If the shareholder is a recognized clearing house (or its nominee), the shareholder may
authorize one or more individuals deemed appropriate by it to act as its representative at any
general meeting and creditors’ meeting. However, if more than one person is granted
authorization, the power of attorney should specify the number and type of shares for which
each of these individuals is authorized. The power of attorney shall be signed by an authorized
officer of the recognized clearing house. A person so authorized may attend the meeting on
behalf of the recognized clearing house (or its nominee) to exercise rights (without having to
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-13 –


--- page 604 ---
produce proof of shareholding, a notarized authorization and/or further evidence of formal
authorization) and shall have the same statutory rights as other shareholders, including the
right to speak and to vote, as if it were an individual shareholder of the Company.
Voting and Resolutions of General Meetings
The resolutions of general meeting are classified into ordinary ones and special ones.
Ordinary resolutions at a general meeting shall be passed by a majority of the votes held
by the shareholders present at the general meeting. A special resolution at a general meeting
shall be passed by more than two-thirds of the votes held by the shareholders present at the
general meeting.
The following matters shall be resolved by way of ordinary resolution of the general
meeting:
(I) work reports of the Board of Directors;
(II) profit distribution proposals and loss recovery proposals formulated by the Board of
Directors;
(III) appointment and removal of directors, and determination of the remuneration and
method of payment of the directors;
(IV) other matters other than those required to be approved by special resolutions under
the laws, administrative regulations, Listing Rules, regulatory rules of the place
where the Company’s shares are listed or the Articles of Association.
The following matters shall be resolved by way of special resolution of the general
meeting:
(I) increase or decrease of the Company’s registered capital;
(II) separation, division, merger, dissolution and liquidation of the Company;
(III) amendment to the Articles of Association;
(IV) purchase and disposal of major assets by the Company within one year, or a
guarantee amount exceeding 30% of the Company’s audited total assets for the latest
period;
(V) equity incentive plan;
(VI) adjustment or change of cash dividend policy;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-14 –


--- page 605 ---
(VII) matters required to be approved by special resolutions under the laws, administrative
regulations, regulatory rules of the place where the Company’s shares are listed or
the Articles of Association, and matters which, according to an ordinary resolution
of the general meeting, may have a significant impact on the Company and shall be
adopted by way of a special resolution.
Shareholders shall exercise their voting rights by the number of shares with voting rights
they represent, and each share shall have one vote. On a voting by ballot at a meeting, a
shareholder (including his/her proxies) entitled to two or more votes does not need to cast all
his votes for, against, or abstain. Where the securities regulatory rules of the stock exchange
where the Company’s shares are listed have other provisions, such provisions shall prevail.
When material issues affecting the interests of minority shareholders are considered at the
general meeting, the votes of minority shareholders shall be counted separately, and the results
of the separate count shall be publicly disclosed in a timely manner.
Shares of the Company held by the Company do not have voting rights, and such shares
are not counted in the total number of shares entitled to vote at the general meeting. Where the
securities regulatory rules of the place where the Company’s shares are listed have special
provisions, the relevant provisions shall prevail.
Where a shareholder’s purchase of the Company’s voting shares violates the provisions
of paragraphs 1 and 2 of Article 63 of the Securities Law, the voting rights of the shares
exceeding the prescribed proportion shall not be exercised within 36 months after the purchase,
and such shares shall not be included in the total number of voting shares of the shareholders
attending the general meeting.
If the relevant laws and regulations and the securities regulatory rules of the place where
the Company’s shares are listed require any shareholders to abstain from voting on the relevant
proposal, or restrict any shareholders to vote only in favor of or against the designated
proposal, any votes cast by or on behalf of such shareholders in contravention of the aforesaid
provisions or restrictions shall not be counted as part of the voting result.
The board of directors of the Company, independent Directors, shareholders holding more
than 1% of the voting shares or investor protection institutions established in accordance with
laws, administrative regulations or the provisions of the CSRC, may publicly solicit voting
rights from shareholders. When soliciting voting rights from shareholders, the specific voting
intention and other information shall be fully disclosed to the solicitation targets. Solicitation
of shareholders’ voting rights in a paid or disguised paid way shall be prohibited. Except for
statutory conditions, the Company shall not impose restrictions on the minimum shareholding
proportion against the solicitation of shareholders’ voting rights.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-15 –


--- page 606 ---
DIRECTORS AND BOARD OF DIRECTORS
General provisions on directors
Directors shall be natural persons, and none of the following persons may serve as a
director of the Company:
(I) persons without capacity or with limited capacity for civil acts;
(II) persons who were sentenced for crimes of corruption, bribery, encroachment or
embezzlement of property or disruption of the social and economic order, where five
years have not lapsed following the serving of the sentence, or persons who were
deprived of their political rights for committing a crime, where five years have not
lapsed following the serving of the sentence, or in case of a suspended sentence, not
more than two years have elapsed since the date of expiration of the probationary
period;
(III) persons who acted as directors, or factory managers or managers of bankrupt or
liquidated companies or enterprises who bear personal liability for the bankruptcy
or liquidation of such companies or enterprises, where three years have not lapsed
following the date of completion of such bankruptcy or liquidation;
(IV) persons who were legal representatives of a company or enterprise, which had its
business license revoked due to a violation of the law and were ordered to close
down, and who were personally liable for the revocation of business license of such
company or enterprise, where less than three years have elapsed since the date of the
revocation of business license of such company or enterprise;
(V) persons who have been listed by the people’s court as defaulter because they have
incurred debts of a large amount that have not been settled by the due date;
(VI) persons who are imposed by the CSRC a ban from entering into the securities market
for a period which has not yet expired;
(VII) persons publicly declared by the stock exchange as unsuitable for serving as a
director, or senior management member of a company for a period which has not yet
expired;
(VIII) other requirements stipulated in the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-16 –


--- page 607 ---
Directors shall comply with the provisions of laws, administrative regulations, the rules
of securities regulation of the place where the Company’s shares are listed and the Articles of
Association, and have a duty of loyalty to the Company; they shall take measures to avoid
conflicts between their own interests and the interests of the Company, and they shall not make
use of their powers to gain undue benefits. The directors shall bear the following obligations
of loyalty to the Company:
(I) Not to encroach upon the Company’s property or misappropriate the Company’s
funds;
(II) Not to deposit the Company’s assets into an account in his/her own name or any
other individual’s name;
(III) Not to take advantage of his/her functions and powers to accept bribes or obtain
other illegal income;
(IV) Not to enter into contracts or transactions directly or indirectly with the Company
without reporting to the Board or the general meeting and obtaining the approval of
the Board or the general meeting through resolution in accordance with the
provisions of the Articles of Association;
(V) Not to take advantage of his/her position to obtain business opportunities that should
belong to the Company for himself/herself or others, except in any of the following
circumstances: It has been reported to the Board of the general meeting and
approved by a resolution of the general meeting; According to laws, administrative
regulations, securities regulatory rules of the place where the Company’s shares are
listed or the Articles of Association, the Company cannot take advantage of the
business opportunity;
(VI) Not to carry on business of the same kind as that of the Company, either on his/her
own account or on behalf of others without reporting to the Board or the general
meeting and obtaining the approval of the general meeting through resolution;
(VII) Not to accept and keep privately commissions on transactions between others and
the Company;
(VIII) Not to disclose the secrets of the Company without authorization;
(IX) Not to damage the interests of the Company by taking advantage of his/her
relationship; and
(X) Other obligations of loyalty stipulated by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-17 –


--- page 608 ---
The income derived by the directors in violation of above provisions shall be returned to
the Company. If losses are caused to the Company, they shall be liable for compensation.
The provisions of Item (IV), paragraph 2 of Article 102 of the Articles of Association
shall apply to the conclusion of contracts or transactions with the Company by close relatives
of directors, and senior management, enterprises directly or indirectly controlled by directors,
and senior management or their close relatives, as well as connected persons with whom
directors, and senior management have other relationship.
Directors shall comply with the provisions of laws, administrative regulations, rules of
securities regulation of the place where the Company’s shares are listed and the Articles of
Association, and shall have a duty of diligence to the Company, and shall perform their duties
with the reasonable care normally expected of a manager in the best interests of the Company.
The directors shall bear the following obligations of diligence to the Company:
(I) to exercise the rights conferred by the Company with due discretion, care and
diligence to ensure the business operations of the Company comply with the
requirements of PRC laws, administrative regulations, securities regulatory rules of
the place where the Company’s shares are listed, and relevant PRC economic
policies, and business activities are not beyond the business scope specified in the
business license of the Company;
(II) to treat all shareholders equally;
(III) to timely understand the business operations and management of the Company;
(IV) to sign a written confirmation on the Company’s periodic reports to ensure that the
information disclosed by the Company is true, accurate and complete;
(V) to provide the status reports and information to the Audit Committee honestly, and
not to hinder the Audit Committee from exercising their functions and powers;
(VI) other obligations of diligence stipulated by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed and the Articles of Association.
The Company has established a system for managing the departure of directors, and
specified safeguards to ensure accountability and compensation in respect of any unfulfilled
public commitments and other outstanding matters. When a director’s resignation takes effect
or his/her term of office expires, the director shall complete all handover procedures with the
Board, and his/her fiduciary duties to the Company and shareholders shall not be discharged
upon the termination of office, but shall remain valid within a reasonable period specified in
the Articles of Association. A director’s liability arising from the performance of his/her duties
during his/her tenure shall not be waived or terminated by his/her departure from office.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-18 –


--- page 609 ---
Board of Directors
The Board of Directors of the Company consists of seven directors, including three
independent directors and one employee representative director. The Board shall exercise the
following functions and powers:
(I) to convene general meetings and report to the general meeting on the work of the
Board;
(II) to implement resolutions adopted by the general meeting;
(III) to determine the Company’s operational plans and investment programs;
(IV) to formulate the profit distribution plan and loss recovery plan of the Company;
(V) to formulate plans of the Company regarding increase or reduction of the registered
capital, issuance of bonds or other securities and listing;
(VI) to formulate plans for substantial acquisition, shares repurchase, or merger, division,
dissolution and change of corporate form of the Company;
(VII) to determine the outbound investment, acquisition and disposal of assets, asset
mortgage, external guarantee, entrusted wealth management, connected
transactions, external donations etc. of the Company within the authority granted by
the general meeting;
(VIII) to determine the structure of the Company’s internal management bodies;
(IX) to appoint or dismiss the general manager, Secretary to the Board and other senior
management of the Company, and decide on matters of their remuneration, rewards
and punishments; to appoint or dismiss senior management such as deputy manager
and CFO according to the nomination of the general manager, and decide on matters
of their remuneration, rewards and punishments;
(X) to formulate the basic management scheme of the Company;
(XI) to formulate the proposals for any amendment to the Articles of Association;
(XII) to manage the information disclosure of the Company;
(XIII) to request the general meeting to appoint or remove the accounting firm that
undertakes the audit service of the Company;
(XIV) to debrief the work report of the general manager of the Company and check the
works of the general manager;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-19 –


--- page 610 ---
(XV) any other functions and powers granted by the laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed, Articles of Association or the general meeting.
Matters beyond the scope of authorization from the general meeting shall be submitted to
the general meeting for consideration.
If a director has a relationship with an enterprise or individual involved in a matter
resolved at a meeting of the Board of Directors, such director shall promptly report in writing
to the Board of Directors. Directors who are related shall not exercise their voting rights on the
resolution, nor shall they exercise their voting rights on behalf of other directors. The meeting
of the Board of Directors may be held once more than half of the unrelated directors will be
present. The resolution made by the meeting of the Board shall be adopted by more than half
of all such directors. If the number of unrelated directors present at the Board meeting is less
than 3, the matter shall be submitted to the general meeting for consideration. If laws and
regulations and the securities regulatory rules of the place where the Company’s shares are
listed impose additional restrictions on the participation of directors in the meetings of the
Board of Directors and on voting, the relevant provisions shall apply accordingly.
Independent Directors
The Company has established a mechanism for special meetings attended by all
independent directors. Matters deliberated by Board of Directors, such as connected
transactions, shall be endorsed in advance by a special meeting of independent directors.
The Company holds special meetings of independent directors on a regular or irregular
basis. Matters listed in Item (I) to (III), paragraph 1 of Article 137 and Article 138 of the
Articles of Association shall be considered at a special meeting of independent directors.
The special meeting of independent Directors may study and discuss other matters of the
Company as needed.
Special meeting of independent Directors shall be convened and presided over by an
independent Director jointly elected by a majority of the independent directors; in the event
that the convenor fails to or is unable to perform his/her duties, two or more independent
directors may convene and elect a representative to preside over the meeting on their own.
Minutes of special meetings of independent directors shall be prepared in accordance with
applicable regulations, and the opinions of independent directors shall be set out in the
minutes. The independent directors shall sign and confirm the minutes of the meeting.
The Company shall facilitate and support the convening of special meeting of
independent directors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-20 –


--- page 611 ---
Special Board Committees
The Board of Directors of the Company has set up an Audit Committee to exercise the
powers and functions of the Supervisory Committee as stipulated in the Company Law.
The Audit Committee shall consist of no less than three members, all of whom must be
non-executive directors, of whom a majority shall be independent directors, with a convenor
(the chairman of the Audit Committee) being one of the independent directors who is a
professional with expertise in accounting or financial management, as stipulated in the
securities regulatory rules of the place where the Company’s shares are listed.
The Audit Committee shall be responsible for reviewing the Company’s financial
information and its disclosure, supervising and evaluating internal and external audit work and
internal control. The following matters shall be submitted to the Board of Directors for
consideration upon the consent of more than half of all members of the Audit Committee:
(I) disclosure of financial information in the financial accounting report and periodic
reports, and the internal control evaluation report;
(II) appointment or removal of the accounting firm that undertakes audit service of the
Company;
(III) appointment or removal of the chief financial officer;
(IV) making changes in accounting policies and estimates or correcting significant
accounting errors for reasons other than changes in accounting standards;
(V) other matters provided for by laws, administrative regulations, regulations of the
CSRC, securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
The Board of Directors of the Company has set up the Strategy and ESG Committee, the
Nomination Committee and the Remuneration and Appraisal Committee, which shall perform
their duties in accordance with the Articles of Association and the authorization of the Board
of Directors. Proposals from special committees shall be submitted to the Board of Directors
for consideration and decision, and the Board of Directors shall be responsible for formulating
the rules of work of the special committees.
A majority of independent directors shall be included in the Nomination Committee and
the Remuneration and Appraisal Committee, and an independent director shall serve as the
convenor (committee chairperson).
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-21 –


--- page 612 ---
The Strategy and ESG Committee is mainly responsible for conducting research and
making recommendations on the Company’s long-term development strategy, major investment
decisions and ESG. It mainly performs the following responsibilities and powers:
(I) To study and make recommendations on the long-term development strategy and
plan of the Company;
(II) To study and make recommendations on the Company’s major investment and
financing plans that should be approved by the Board as required by the Articles of
Association;
(III) To study and make recommendations on major capital operation and asset
management projects that are required to be approved by the Board of Directors as
stipulated in the Articles of Association;
(IV) To study the Company’s sustainable development and ESG strategies, objectives and
significant matters, review and make recommendations on the Company’s ESG-
related reports;
(V) To identify ESG risks and opportunities relevant to the Company, assess the impact
of the risks and opportunities on the Company, and make recommendations to
address the risks and opportunities;
(VI) To study and make recommendations on other important matters that may affect the
development of the Company;
(VII) To inspect the implementation of the above matters;
(VIII) To perform other duties as authorized by the Board.
The Nomination Committee is responsible for formulating criteria and procedures for the
selection of directors and senior management, selecting and reviewing candidates for directors
and senior management and their qualifications, and making recommendations to the Board of
Directors on the following matters:
(I) Nomination or appointment and removal of directors;
(II) Appointment or removal of senior management;
(III) Other matters provided for by laws, administrative regulations, regulations of the
CSRC, securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 613 ---
The Remuneration and Appraisal Committee is responsible for formulating appraisal
standards for directors and senior management and conducting appraisals, formulating and
reviewing remuneration policies and programs such as the mechanism for determining the
remuneration of directors and senior management, the decision-making process, and the
arrangements for payment and stoppage of recourse, as well as making recommendations to the
Board of Directors in respect of the following matters:
(I) Remunerations of directors and senior management;
(II) Formulation or change of the equity incentive plans and employee stock ownership
plans, and determination as to the entitlement of grantees to the relevant rights and
the fulfillment of the conditions for their exercise;
(III) Arrangement of shareholding plans of directors and senior management in
subsidiaries to be split;
(IV) Other matters provided for by laws, administrative regulations, regulations of the
CSRC, securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
Senior Management
The Company shall have one general manager who shall be appointed or removed by the
Board. The Company shall have several deputy general managers, who shall be appointed or
removed by the Board. The general manager, deputy general managers, the secretary to the
Board, and chief financial officer are senior management of the Company.
The general manager shall be responsible to the Board and exercise the following powers
and functions:
(I) to be in charge of the production, operation and management of the Company, to
organize and implement the Board of Directors resolutions, and to report on his/her
work to the Board of Directors;
(II) to arrange for the implementation of the Company’s annual business plans and
investment plans;
(III) to prepare the plan for the structure of the Company’s internal management;
(IV) to prepare the basic management scheme of the Company;
(V) to formulate detailed rules of the Company;
(VI) to request the Board to appoint or remove the deputy general manager and chief
financial officer;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-23 –


--- page 614 ---
(VII) to decide to appoint or remove the management personnel other than those to be
appointed and removed by the Board of Directors;
(VIII) any other functions and powers granted by the securities regulatory rules of the
place where the Company’s shares are listed, the Articles of Association or the
Board of Directors.
The general manager may attend the Board meetings as a non-voting delegate, and the
general manager who is not a director shall have no right to vote at the Board meetings.
The Company shall have one Secretary to the Board to take charge of the preparation for
general meetings and Board meetings, the safekeeping of documents, the management of the
information of shareholders, the handling of information disclosure, etc. The Board Secretary
shall comply with the relevant provisions of the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed and the
Articles of Association.
FINANCIAL AND ACCOUNTING SYSTEMS, AND DISTRIBUTION OF PROFITS AND
AUDIT
Financial Accounting System
The Company shall submit and disclose its Annual Report to the local offices of the CSRC
and the stock exchange within four months as of the end of each fiscal year, and its Interim
Report to the local offices of the CSRC and the stock exchange within two months as of the
end of the first half of each fiscal year.
The above-mentioned annual report and interim report shall be prepared in accordance
with relevant laws, administrative regulations, requirements of the CSRC and securities
regulatory rules of the place where the Company’s shares are listed.
The Company shall not set up any other accounting books except for the legal accounting
books. The funds of the Company shall not be deposited into an account established in the
name of any individual.
When the Company distributes the after-tax profits of the current year, it shall allocate
10% of the profits into the statutory surplus reserve. When the cumulated amount of the
statutory surplus reserve of the Company has reached 50% or more of its registered capital, no
further allocation is required.
Where the statutory surplus reserve of the Company is not sufficient to recover its losses
in the previous years, the profits of the current year shall be used to cover the losses before the
withdrawing of the statutory surplus reserve in accordance with the above provisions.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-24 –


--- page 615 ---
After the Company has withdrawn the statutory surplus reserve from the after-tax profit,
it can also withdraw the arbitrary surplus reserve from the after-tax profit by a resolution of
the general meeting.
The remaining after-tax profits of the Company after making up the losses and
withdrawing the surplus reserve may be distributed according to the proportion of shares held
by the shareholders, except that it is specified in the Articles of Association that the distribution
is not made based on the shareholding proportions.
If the general meeting distributes profits to shareholders in violation of the provisions of
the Company Law or the Articles of Association, the shareholders shall return the profits
distributed in violation of the provisions to the Company. If any loss is caused to the Company,
the shareholders and the responsible directors and senior management shall be liable for
compensation.
The Company’s shares held by the Company shall not be subject to profit distribution.
The Company shall appoint one or more collection agents for holders of H shares in Hong
Kong. The collection agent shall receive on behalf of the H shareholders concerned the
dividends and other payables by the Company in respect of the H shares and shall hold such
amounts on behalf of the H shareholders for subsequent payment to such H shareholders. The
collection agent appointed by the Company shall comply with the requirements of laws and
regulations and the securities regulatory rules of the place where the Company’s shares are
listed.
The surplus reserve of the Company shall be used to cover the Company’s losses, expand
its production and operation or to increase its registered capital.
To make up for the Company’s losses, the Company shall first use the arbitrary surplus
reserve and statutory surplus reserve; If they are insufficient, the capital reserve can be used
in accordance with the regulations.
When the statutory surplus reserve is converted into registered capital, the remaining
statutory surplus reserve shall be no less than 25% of the registered capital of the Company
before the capital increase.
When a resolution is made by general meeting on the profit distribution plan, or the Board
of Directors has formulated a specific plan based on the conditions and upper limit of the next
year’s interim dividend approved at the annual general meeting, the Board shall complete the
dividend (or share) distribution in 2 months after the general meeting. If it is not possible to
implement the specific plan within two months due to the provisions of laws and regulations
and the securities regulatory rules of the place where the Company’s shares are listed, the date
of implementation of the specific plan may be adjusted accordingly in accordance with such
provisions and the actual situation.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-25 –


--- page 616 ---
Internal audit
The Company has implemented an internal audit system, which specifies the leadership
system, responsibility and authority, staffing, financial security, use of audit results and
accountability for internal audit work.
The Company’s internal audit organization supervises and inspects the Company’s
business activities, risk management, internal control, financial information and other matters.
Employment of Accounting Firms
The Company shall appoint an accounting firm that complies with the provisions of the
Securities Law and the securities regulatory rules of the place where the Company’s shares are
listed to audit financial reports, verify the net assets, and offer other relevant consulting
services. The term of service of an accounting firm engaged by the Company shall be one year,
which is renewable.
The appointment or removal of an accounting firm by the Company shall be approved by
the general meeting, and the Board of Directors shall not appoint an accounting firm before the
resolution is made by the general meeting.
The Company guarantees to provide true and complete accounting vouchers, accounting
books, financial accounting reports and other accounting materials to the appointed accounting
firm, and shall not refuse, conceal or make false reports.
The audit fee of an accounting firm shall be approved by the general meeting.
When the Company dismisses or does not renew the service of an accounting firm, it shall
give a 30-day notice to the accounting firm, and the accounting firm shall have the right to state
its opinions at the general meeting where a voting process concerning the removal of such
accounting firm is carried out.
Where an accounting firm tenders its resignation, it shall inform the general meeting of
whether there is any irregularity in the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-26 –


--- page 617 ---
MERGER, DIVISION, CAPITAL INCREASE AND REDUCTION, DISSOLUTION AND
LIQUIDATION
Merger, Division, and Capital Increase and Reduction
Merger of the Company may take the form of merger by absorption and merger by new
establishment.
When a company has another company absorbed with it, it is merger by absorption, and
the absorbed company shall be dissolved. When two or more companies merge to establish a
new company, it is merger by new establishment, and all parties being merged shall be
dissolved.
In the event of a merger, the parties to the merger shall enter into a merger agreement, and
prepare a balance sheet and an inventory of assets. The Company shall notify its creditors
within a period of 10 days since the date on which the resolution to proceed with the merger
is passed, publish announcements in Shanghai Securities News and other legal information
disclosure media or the National Enterprise Credit Information Publicity System within 30
days.
Creditors shall, within 30 days since the date of receiving the notice, or creditors who do
not receive the notice shall, within 45 days since the date of the public announcement, be
entitled to require the Company to pay off its debts in full or to provide a corresponding
guarantee.
When companies merge, the claims and debts of all the parties to the merger shall be
succeeded to by the company that continues to exist after the merger or by the newly
established company.
If the Company is to be divided, its property shall be divided accordingly.
In the event of a division, the Company shall prepare a balance sheet and an inventory of
assets. The Company shall notify its creditors within a period of 10 days since the date on
which the resolution to proceed with the division is passed, publish announcements on the
merger in Shanghai Securities News and other legal information disclosure media or the
National Enterprise Credit Information Publicity System within 30 days.
In case of reduction of registered capital, the Company shall prepare a balance sheet and
a property list.
The Company shall notify its creditors within a period of 10 days since the date on which
the resolution to proceed with the capital reduction is passed, publish announcements in
Shanghai Securities News and other legal information disclosure media or the National
Enterprise Credit Information Publicity System within 30 days. Creditors shall, within 30 days
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-27 –


--- page 618 ---
since the date of receiving the notice, or creditors who do not receive the notice shall, within
45 days since the date of the public announcement, be entitled to require the Company to pay
off its debts in full or to provide a corresponding guarantee.
When the Company reduces its registered capital, it shall reduce the amount of capital
contribution or shares accordingly based on the proportion of shares held by shareholders,
unless otherwise provided by law or the Articles of Association.
Where the merger or division of the Company results in a change in its registered
particulars, such change shall be registered with the company registry according to law. Where
the Company is dissolved, it shall cancel its registration according to law. Where a new
company is established, its establishment shall be registered according to law.
The increase or reduction of the Company’s registered capital shall be registered with the
company registry according to law.
Dissolution and Liquidation
The Company shall be dissolved if:
(I) business term specified in the Articles of Association expires or other dissolution
reasons as stipulated in the Articles of Association arise;
(II) a resolution on dissolution is passed by the general meeting;
(III) where merger or division of the Company necessitates its dissolution;
(IV) where the business license of the Company is revoked, or the Company is ordered
to close down, or its registration is canceled, according to law; or
(V) where the Company’s operations and management encounter serious difficulty, and
its continuation will cause substantial loss to the interests of the shareholders and no
solution can be found through any other channel, shareholders holding 10% or more
of the total voting rights of the Company may make requisition to the people’s court
to dissolve the Company.
If the Company has the reasons for dissolution specified in the above paragraph, it shall
publicize the reasons for dissolution through the National Enterprise Credit Information
Publicity System within 10 days.
If the Company is in the situations of the above items (I) and (II) and has not yet
distributed its property to its shareholders, it may survive by amending the Articles of
Association or by a resolution of the general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-28 –


--- page 619 ---
Amendments to the Articles of Association or resolutions of general meeting made in
accordance with the provisions of the preceding paragraph shall be approved by more than 2/3
of the voting rights held by the shareholders attending the general meeting.
If the Company is dissolved under above items (I), (II), (IV) and (V), it shall be
liquidated. The directors are the obligors of the Company’s liquidation and shall form a
liquidation team to carry out the liquidation within 15 days from the date of the occurrence of
the cause of dissolution.
The liquidation team shall consist of the directors, unless the Articles of Association
provide otherwise or the general meeting resolves to elect another person.
If the liquidation obligors fail to perform the liquidation obligation in time and causes
losses to the Company or its creditors, they shall be liable for compensation.
The liquidation team shall notify the creditors in 10 days after its establishment, and
publish announcements in Shanghai Securities News and other legal information disclosure
media or the National Enterprise Credit Information Publicity System within 60 days. The
creditors may declare their claims to the liquidation team within 30 days from the date they
receive such notice or within 45 days from the date of announcement if no such notice is
received.
If the liquidation team, having thoroughly liquidated the Company’s assets and
formulated a balance sheet and schedule of assets, discovers that the Company’s assets are
insufficient to pay its debts in full, it shall immediately apply to the people’s court for
bankruptcy liquidation.
After the people’s court accepts the bankruptcy application, the liquidation team shall
hand over the liquidation affairs to the bankruptcy administrator appointed by the people’s
court.
If the Company is declared bankrupt, the bankruptcy liquidation shall be implemented in
accordance with the laws on enterprise bankruptcy.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-29 –


--- page 620 ---
AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company will amend the Articles of Association under any of the following
circumstances:
(I) After the amendment of the Company Law or relevant laws, regulations, or the
securities regulatory rules of the place where the Company’s shares are listed, the
matters stipulated in the Articles of Association conflict with the provisions of the
amended laws, regulations or securities regulatory rules of the place where the
Company’s shares are listed;
(II) There has been a change to the Company, resulting in inconsistency with the
contents in the Articles of Association;
(III) The general meeting decides to amend the Articles of Association.
The amendment to the Articles of Association approved by way of resolution at the
general meeting shall be submitted to the relevant authorities for approval (if necessary).
Where the Company’s registered items are involved, change registration shall be made
according to law.
The Board shall amend the Articles of Association in accordance with the resolutions of
the general meeting and the approval opinions of relevant competent authorities.
If the amendments to the Articles of Association are information required to be disclosed
by laws, regulations and the securities regulatory rules of the place where the Company’s
shares are listed, they shall be announced in accordance with the applicable regulations.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-30 –


--- page 621 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of our Company
Our Company was incorporated in the PRC on October 27, 2004 under the name of
Longcheer Technology (Shanghai) Co., Ltd. (Ҧ(ɪऎ)ʮ̡), and was converted
into a joint stock limited company on May 26, 2015. Our Company completed the listing of our
A Shares on the Shanghai Stock Exchange (stock code: 603341) on March 1, 2024.
As of the date of this prospectus, our Company’s registered address and headquarters are
located at Floor 1, Building 1, 401 Caobao Road, Xuhui District, Shanghai, the PRC. Our
Company’s corporate structure and Articles of Association are governed by PRC laws and
regulations. The relevant PRC laws and regulations and a summary of the Articles of
Association are set out in “Appendix IV — Summary of Principal Laws and Regulatory
Provisions” and “Appendix V — Summary of the Articles of Association” to this prospectus,
respectively.
Our registered place of business in Hong Kong is at 46/F, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong. We have registered as a non-Hong Kong Company under
Part 16 of the Companies Ordinance on July 8, 2025. Mr. CHOW Shing Lung ( ཅ፴Ꮂ), one
of our joint company secretaries, has been appointed as the authorized representative of our
Company for the acceptance of the service of process on behalf of our Company in Hong Kong.
The address for the service of process is the same as our principal place of business in Hong
Kong.
2. Changes in the Share Capital of Our Company
Save as disclosed below, there has been no other alteration in the share capital of our
Company during the two years immediately preceding the date of this prospectus.
As approved by the fourth extraordinary Shareholders’ meeting on November 25, 2022,
and with the approval obtained from the CSRC, 60,000,000 A Shares were issued and listed on
the Shanghai Stock Exchange on March 1, 2024. Upon completion of the A-Share listing, our
Company’s total share capital increased from RMB405,096,544 to RMB465,096,544.
As approved by the seventh meeting of the fourth session of the Board on May 26, 2025,
4,285,000 A Shares underlying the 4,285,000 Restricted Shares granted under the Restricted
Share Scheme were issued and registered on July 15, 2025. Upon completion of this issuance
and registration, our Company’s total share capital increased from RMB465,096,544 to
RMB469,381,544.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 622 ---
As approved by the eleventh meeting of the fourth session of the Board on November 20,
2025, 950,000 A Shares underlying the 950,000 Restricted Shares granted under the Restricted
Share Scheme were issued and registered on December 10, 2025. Upon completion of this
issuance and registration, our Company’s total share capital increased from RMB469,381,544
to RMB470,331,544.
3. Changes in the Share Capital of Our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are set out
in Note 1 to the Accountants’ Report as set out in Appendix I to this prospectus.
On December 4, 2023, Longcheer Japan Co. Ltd. was incorporated as a limited liability
company in Japan with a registered capital of JPY5 million.
On February 5, 2024, the registered capital of Longcheer Japan Co. Ltd. was increased
from JPY5 million to JPY75 million.
On March 25, 2024, the registered capital of Huizhou Longcheer was increased from
RMB300 million to RMB600 million.
On March 26, 2024, the registered capital of Shanghai Longcheer Smart Technology was
increased from RMB370 million to RMB600 million.
On July 29, 2024, the registered capital of LONGCHEER INTELLIGENCE PTE. LTD.
was increased from US$0.1 million to US$2.2 million.
On August 15, 2024, the registered capital of Huizhou Longcheer Automotive Electronics
Co., Ltd. (ʮ̡) was increased from RMB10 million to RMB50 million.
On October 20, 2025, Haikou Longcheer was established in the PRC with a registered
capital of RMB500 million.
On November 18, 2025, LONGCHEER INTERNA TIONAL PTE. LTD. was incorporated
as a limited liability company in Singapore with an issued share capital of US$10,000.
On November 26, 2025, LONGCHEER TECHNOLOGY PTE. LTD., a company engaged
in investment holding was incorporated as a limited liability company in Singapore with an
issued share capital of US$10,000.
On December 12, 2025, LONGCHEER INTELLIGENT TECHNOLOGY (MALAYSIA)
SDN. BHD., a company engaged in manufacture, was incorporated as a limited liability
company in Malaysia with an issued share capital of MYR3,000.
Save as disclosed above, there has been no alteration in the share capital of any of our
subsidiaries during the two years immediately preceding the date of this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 623 ---
4. Resolutions of Shareholders of Our Company Passed on June 9, 2025
Written resolutions of our Shareholders were passed on June 9, 2025, pursuant to which,
among others:
(i) the issuance of H Shares with a nominal value of RMB1.00 each by our Company
and such H Shares be listed on the Stock Exchange;
(ii) the number of H Shares to be issued pursuant to the Global Offering before the
exercise of the Over-allotment Option shall not exceed 15% of the enlarged share
capital of our Company upon completion of the Global Offering, and the
Over-allotment Option shall not exceed 15% of the above number of H Shares to be
issued;
(iii) subject to the completion of the Global Offering, the Articles of Association to
become effective on the Listing Date shall be conditionally adopted, and the Board
and its authorized person have been authorized to amend the Articles of Association
in accordance with any comments from the relevant regulatory authorities; and
(iv) to authorize the Board and its authorized person to handle the matters relating to,
among others, the Global Offering, the issuance and listing of the H Shares.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
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 January 8, 2026 entered into among the
Company, Qualcomm V entures LLC, Citigroup Global Markets Asia Limited,
Haitong International Capital Limited, Guotai Junan Capital Limited, Haitong
International Securities Company Limited, Guotai Junan Securities (Hong Kong)
Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which
Qualcomm V entures LLC agreed to subscribe for H Shares at the Offer Price in the
aggregate amount of Hong Kong dollar equivalent of US$8 million;
(b) the cornerstone investment agreement dated January 8, 2026 entered into among the
Company, Guokong Xinzhi Co., Limited, Citigroup Global Markets Asia Limited,
Haitong International Capital Limited, Guotai Junan Capital Limited, Haitong
International Securities Company Limited, Guotai Junan Securities (Hong Kong)
Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which
Guokong Xinzhi Co., Limited agreed to subscribe for H Shares at the Offer Price in
the aggregate amount of HK$120,798,527;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 624 ---
(c) the cornerstone investment agreement dated January 11, 2026 entered into among
the Company, WILL semiconductor Limited, Citigroup Global Markets Asia
Limited, Haitong International Capital Limited, Guotai Junan Capital Limited,
Haitong International Securities Company Limited, Guotai Junan Securities (Hong
Kong) Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to
which WILL semiconductor Limited agreed to subscribe for H Shares at the Offer
Price in the aggregate amount of Hong Kong dollar equivalent of US$10 million;
(d) the cornerstone investment agreement dated January 11, 2026 entered into among
the Company, Hong Kong Y uto Printing Company Limited, Citigroup Global
Markets Asia Limited, Haitong International Capital Limited, Guotai Junan Capital
Limited, Haitong International Securities Company Limited, Guotai Junan
Securities (Hong Kong) Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which Hong Kong Y uto Printing Company Limited agreed to
subscribe for H Shares at the Offer Price in the aggregate amount of Hong Kong
dollar equivalent of US$10 million;
(e) the cornerstone investment agreement dated January 11, 2026 entered into among
the Company, Guotai Junan Investments (Hong Kong) Limited, Citigroup Global
Markets Asia Limited, Haitong International Capital Limited, Guotai Junan Capital
Limited, Haitong International Securities Company Limited, Guotai Junan
Securities (Hong Kong) Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which Guotai Junan Investments (Hong Kong) Limited agreed
to subscribe for H Shares at the Offer Price in the aggregate amount of Hong Kong
dollar equivalent of US$8 million;
(f) the cornerstone investment agreement dated January 11, 2026 entered into among
the Company, Endless Growth NH Limited, Citigroup Global Markets Asia Limited,
Haitong International Capital Limited, Guotai Junan Capital Limited, Haitong
International Securities Company Limited, Guotai Junan Securities (Hong Kong)
Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which
Endless Growth NH Limited agreed to subscribe for H Shares at the Offer Price in
the aggregate amount of Hong Kong dollar equivalent of US$5 million; and
(g) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 625 ---
2. Intellectual Property Rights
(a) Trademarks
Registered Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which
we consider to be or may be material to our business:
No. Trademark Owner Class
Place of
registration Expiry date
Registration
number
1. /H1118/H1118/H1118
 Company 38 PRC March 6, 2027 19047780
2. /H1118/H1118/H1118
 Company 40 PRC March 6, 2027 19048324
3. /H1118/H1118/H1118
 Company 42 PRC March 6, 2027 19048441
4. /H1118/H1118/H1118
 Company 9 PRC September 20,
2028
19047870
5. /H1118/H1118/H1118
 Company 38 PRC March 6, 2027 19046119
6. /H1118/H1118/H1118
 Company 40 PRC March 13, 2027 19048307
7. /H1118/H1118/H1118
 Company 42 PRC March 6, 2027 19048263
8. /H1118/H1118/H1118
 Company 9 PRC May 20, 2028 19048030
9. /H1118/H1118/H1118
 Company 42 PRC November 6,
2026
14695848
10. /H1118/H1118
 Company 40 PRC August 27,
2035
14695900
11. /H1118/H1118
 Company 9 PRC November 13,
2035
14696228
12. /H1118/H1118
 Company 9 PRC November 13,
2033
3338442
13. /H1118/H1118
 Company 38 PRC October 27,
2029
5386311
14. /H1118/H1118
 Company 9 PRC November 13,
2033
3338441
15. /H1118/H1118
 Company 38 PRC October 27,
2031
8764926
16. /H1118/H1118
 Company 42 PRC October 27,
2031
8764932
17. /H1118/H1118
 Company 9 PRC August 27,
2035
14696158
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 626 ---
No. Trademark Owner Class
Place of
registration Expiry date
Registration
number
18. /H1118/H1118
 Company 40 PRC August 20,
2035
14695968
19. /H1118/H1118
 Company 42 PRC August 20,
2035
14695628
20. /H1118/H1118
 Company 9 PRC November 13,
2033
3338443
21. /H1118/H1118
 Company 40 PRC August 20,
2035
14695851
22. /H1118/H1118
 Company 9 PRC November 13,
2035
14696081
23. /H1118/H1118
 Company 42 PRC December 6,
2026
14695882
24. /H1118/H1118
 Company 9, 42 Hong Kong May 21, 2035 306907627
25. /H1118/H1118 Company 9, 42 Hong Kong May 21, 2035 306907636
26. /H1118/H1118
 Company 9, 42 Hong Kong May 22, 2035 306908176
(b) Patents
Registered Patents
As of the Latest Practicable Date, we owned the following registered patents which
we consider to be or may be material to our business:
No. Patent
Type of
patent
Place of
registration Patent number Owner
Expiration
date
1. /H1118/H1118A dual touch screen device
and its response control
method (ண௪
ج)
invention PRC ZL201710867311.1 Company 2037/9/21
2. /H1118/H1118A method and device for
adjusting the backlight of a
smart device ( ɓ၇ሜື౽ঐ
ʿண௪)
invention PRC ZL202011197269.5 Company 2040/10/29
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 627 ---
No. Patent
Type of
patent
Place of
registration Patent number Owner
Expiration
date
3. /H1118/H1118A method, system and
device for providing
connecting relationships
between wearable devices
(ٙ
eӻ୕ʿண௪)
invention PRC ZL202010436938.3 Nanchang Longcheer
Smart Technology
2040/5/20
4. /H1118/H1118A method and device for
adjusting a screen display
(ʿண
௪)
invention PRC ZL201910185911.9 Shanghai Longcheer
Smart Technology
2039/3/11
5. /H1118/H1118Smart antenna system ( ౽ঐ
˂ᇞӻ୕)
invention PRC ZL202011359849.X Shanghai Longcheer
Smart Technology
2040/11/26
6. /H1118/H1118Method, device and storage
medium for determining a
target antenna (ͦᅺ˂
ண௪ʿπᎷʧሯ)
invention PRC ZL201910005297.3 Company 2039/1/2
7. /H1118/H1118A camera and smart device
(ɓ၇ᙲ྅᎘ʿ౽ঐண௪)
invention PRC ZL202010192336.8 Company 2040/3/17
8. /H1118/H1118Camera driving method and
device (ʿண
௪)
invention PRC ZL202010456690.7 Company 2040/5/25
9. /H1118/H1118Lift-to-wake method and
system for mobile devices
(ʿ
ӻ୕)
invention PRC ZL202010463246.8 Company 2040/5/26
10. /H1118/H1118A method and device for
supporting Openssl
algorithm based on the
framework of UEFI with
EDK2 (׵UEFI࿴
EDK2ܵOpenssl˙
ၾண௪)
invention PRC ZL202010698863.6 Company 2040/7/19
11. /H1118/H1118Noise canceling earphones,
electronic products, and
method based on gravity
sensors (ɢชᏐෂช
ʿ
ج)
invention PRC ZL202110982107.0 Company 2041/8/24
12. /H1118/H1118A method and device for
storing a Flash chip ( ɓ၇
Flashʿண௪)
invention PRC ZL202110070923.4 Company 2041/1/18
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 628 ---
No. Patent
Type of
patent
Place of
registration Patent number Owner
Expiration
date
13. /H1118/H1118A method, device, and
apparatus for realizing
spatial trajectory input ( ɓ၇
e
ༀໄʿண௪)
invention PRC ZL202110034342.5 Company 2041/1/10
14. /H1118/H1118Method and device for
reselection of new radio
terminals in controlling
connection recovery ( อೌᇞ
ٙ
ʿண௪)
invention PRC ZL202110341628.8 Company 2041/3/29
15. /H1118/H1118Lace-up wearable products
(ۜ)
invention PRC ZL202210149064.2 Hefei Longcheer Smart
Technology
2042/2/17
16. /H1118/H1118A circuit for power feedback
(ཥ༩)
invention PRC ZL202210138054.9 Company 2042/2/14
17. /H1118/H1118A diversity switch
component, radio frequency
device, and communication
device ( ɓ၇ʱණකᗫଡ଼΁e
ண௪)
invention PRC ZL202111071364.5 Shanghai Haocheng 2041/9/13
18. /H1118/H1118Electronic device ( ཥɿண௪) invention PRC ZL202111567241.0 Huizhou Longcheer 2041/12/20
19. /H1118/H1118Information display method,
device, apparatus, and
storage medium (ᜑͪ˙
eༀໄeண௪ʿπᎷʧሯ)
invention PRC ZL202210159923.6 Huizhou Longcheer 2042/2/21
20. /H1118/H1118V oice interrupt wake-up
circuit applied to tablets ( Ꮠ
͂ᓙఎ
፴ཥ༩)
invention PRC ZL202111397929.9 Nanchang Longcheer 2041/11/23
21. /H1118/H1118Antenna tuning impedance
control method, circuit,
device, apparatus, and
storage medium (ڜ
eཥ༩eༀ
ໄeண௪ʿπᎷʧሯ)
invention PRC ZL202210406900.0 Huizhou Longcheer 2042/4/18
22. /H1118/H1118Antenna circuits ( ˂ᇞཥ༩) invention PRC ZL202210565762.0 Huizhou Longcheer 2042/5/23
23. /H1118/H1118Optical imaging module and
virtual reality device ( Έኪϓ
྅ᅼଡ଼ʿൈᏝྼྤண௪)
invention PRC ZL202210321826.2 Nanchang Longcheer 2042/3/29
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 629 ---
No. Patent
Type of
patent
Place of
registration Patent number Owner
Expiration
date
24. /H1118/H1118SRS polling method, radio-
frequency circuit and
electronic device (SRS ቃ༔
᎖ཥ༩ʿཥɿண௪)
invention PRC ZL202210677050.8 Huizhou Longcheer 2042/6/15
25. /H1118/H1118Radio-frequency module,
signal transmitting and
receiving method, and
wireless communication
device (໮ϗ೯
ʿೌᇞஷৃண௪)
invention PRC ZL202210659530.1 Hefei Longcheer Smart
Technology
2042/6/12
26. /H1118/H1118USART-based
communication method,
system, and device ( ɓ၇ਿ
׵USARTeӻ୕
ʿண௪)
invention PRC ZL2022 11119515.4 Company 2042/9/13
27. /H1118/H1118Antenna circuit and its
control method ( ˂ᇞཥ༩ʿ
ج)
invention PRC ZL202210946596.9 Huizhou Longcheer 2042/8/8
28. /H1118/H1118Playback control method,
device, apparatus, and
storage medium for
electrostatic earphones (࢙
eༀ
ໄeண௪ʿπᎷʧሯ)
invention PRC ZL202210763174.8 Huizhou Longcheer 2042/6/30
29. /H1118/H1118An earphone charging case
connecting device and
earphone charging case ( ɓ
၇Ѐዚ̂ཥଷஹટༀໄʿЀ
ዚ̂ཥଷ)
invention PRC ZL202210930752.2 Huizhou Longcheer 2042/8/3
30. /H1118/H1118Receiving signal processing
circuit, radio-frequency
system, and communication
device (໮ஈଣཥ༩e
ண௪)
invention PRC ZL202210895231.8 Hefei Longcheer Smart
Technology
2042/7/27
31. /H1118/H1118Charging glasses case
component ( ɓ၇̂ཥ଻ᗝଷ
ʩ΁)
invention PRC ZL202211186250.X Nanchang Longcheer
Smart Technology
2042/9/27
32. /H1118/H1118A car wireless charger with
dustproof function ( ɓ၇ՈϞ
ԓ༱ೌᇞ̂ཥኜ)
invention PRC ZL202211631597.0 Huizhou Longcheer 2042/12/18
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 630 ---
No. Patent
Type of
patent
Place of
registration Patent number Owner
Expiration
date
33. /H1118/H1118Image adjustment method,
device, apparatus, and
medium based on virtual
reality technology (ൈᏝ
e
ༀໄeண௪ʿʧሯ)
invention PRC ZL202211420240.8 Huizhou Longcheer 2042/11/14
34. /H1118/H1118Virtual location processing
method and virtual device
(ʿൈᏝༀ
ໄ)
invention PRC ZL202310286576.8 Nanchang Longcheer
Smart Technology
2043/3/22
35. /H1118/H1118A printed circuit board and
mobile device ( ɓ၇ΙՏཥ༩
ձ୅ਗண௪)
invention PRC ZL202310437217.8 Nanchang Longcheer 2043/4/22
36. /H1118/H1118A watch decoration assembly
(ɓ၇˓፶ༀུʩ΁)
utility model PRC ZL202320326469.9 Hefei Longcheer Smart
Technology
2033/2/26
37. /H1118/H1118A push-button snap structure
(ᒟό̔ϔഐ࿴)
utility model PRC ZL202321153362.5 Shanghai Longcheer
Smart Technology
2033/5/11
38. /H1118/H1118A watch band assembly
structure ( ɓ၇፶੭ଡ଼ༀഐ࿴)
utility model PRC ZL202322037703.9 Nanchang Longcheer 2033/7/30
39. /H1118/H1118Optical module and VR
display device ( Έኪᅼଡ଼˸
ʿVRᜑͪༀໄ)
invention PRC ZL202311716416.9 Nanchang Longcheer 2043/12/13
40. /H1118/H1118Protective case for electronic
device and vehicle system
(ᚐಠʿԓሿӻ୕)
invention PRC ZL202410156201.4 Nanchang Longcheer 2044/2/3
41. /H1118/H1118VR headset device and
control method, controller
(VReછ
Փኜ)
invention PRC ZL202410405273.8 Nanchang Longcheer 2044/4/6
42. /H1118/H1118Watch crown (ڿutility model PRC ZL202420501449.5 Hefei Longcheer Smart
Technology
2034/3/14
43 /H1118/H1118A control system for a
Bluetooth stylus ( ɓ၇ᔝ˫˓
છՓӻ୕)
invention PRC ZL202310194224.X Company March 1,
2043
44 /H1118/H1118A smart glasses structure ( ɓ
၇౽ᅆ଻ᗝഐ࿴)
utility model PRC ZL202520319008.8 Huizhou Longcheer February 25,
2035
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 631 ---
Patents under Application
As of the Latest Practicable Date, we have applied for the registration of the
following patents which we consider to be or may be material to our business:
No. Patent application
Type of
patent
Place of
registration Patent number Applicant
Application
date
1. /H1118/H1118/H1118/H1118A UART-based single-
wire communication
method and system
between an external
device and a user device
(ɓ၇̮ટண௪ၾ͜˒ண
׵UARTڦ
ʿӻ୕)
invention PRC 202310834016.1 Company 2023/7/7
2. /H1118/H1118/H1118/H1118An application launching
method, device and
medium ( ɓ၇Ꮠ͜೻ҏ઼
eண௪ձʧሯ)
invention PRC 202310884116.5 Shanghai Longcheer
Smart Technology
2023/7/18
3. /H1118/H1118/H1118/H1118Battery charging method,
device, and electronic
device and storage
medium (e
ༀໄʿཥɿண௪eπᎷʧ
ሯ)
invention PRC 202311713988.1 Company 2023/12/13
4. /H1118/H1118/H1118/H1118Terminal devices and
search method, device,
medium and product for
low-earth orbit satellites
(ٙ݋
eༀໄeʧሯʿ
ۜ)
invention PRC 202410075156.X Company 2024/1/18
5. /H1118/H1118/H1118/H1118An encoder mounting
bracket, encoder
mounting component, and
electronic device ( ɓ၇ᇜ
eᇜᇁኜτༀ
ʩ΁ʿཥɿண௪)
invention PRC 202410314752.9 Company 2024/3/19
6. /H1118/H1118/H1118/H1118Infant and toddler care
device (ᚐண௪)
invention PRC 202410365647.8 Shanghai Longcheer
Smart Technology
2024/3/28
7. /H1118/H1118/H1118/H1118Wearable device (Ꮦ
ண௪)
invention PRC 202410493680.9 Hefei Longcheer Smart
Technology
2024/4/23
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 632 ---
No. Patent application
Type of
patent
Place of
registration Patent number Applicant
Application
date
8. /H1118/H1118/H1118/H1118Bluetooth-based
positioning method,
device, apparatus, device
and storage medium ( ਿ
e
ༀໄeண௪ʿπᎷʧሯ)
invention PRC 202410526285.6 Hefei Longcheer Smart
Technology
2024/4/29
9. /H1118/H1118/H1118/H1118Theme switching method,
smartwatch and device
(e౽ঐ˓
፶ʿༀໄ)
invention PRC 202410648528.3 Hefei Longcheer Smart
Technology
2024/5/23
10. /H1118/H1118/H1118A computer booting
method and computer ( ɓ
ʿཥ໘)
invention PRC 202410829827.7 Hefei Longcheer Smart
Technology
2024/6/25
11. /H1118/H1118/H1118Lens and head-mounted
display device ( ᗝ˪ʿ᎘
Ꮦᜑͪༀໄ)
invention PRC 2024 11119150.4 Company 2024/8/15
12. /H1118/H1118/H1118Object finding method,
device, apparatus, storage
medium, and program
product (e
ༀໄeண௪eπᎷʧሯʿ
ۜ)
invention PRC 2024 11116244.6 Company 2024/8/14
13. /H1118/H1118/H1118AR space display
method, device,
apparatus, storage
medium, and program
product (ARᜑͪ
eༀໄeண௪eπᎷ
ۜ)
invention PRC 202411469895.3 Company 2024/10/21
14. /H1118/H1118/H1118A transmitting and
receiving prediction
system and method for
regional short message
communication ( ɓ၇̏
˗೵జ˖ϗ೯ཫ಻ӻ୕ʿ
ج)
invention PRC 202411476053.0 Shanghai Longcheer
Smart Technology
2024/10/22
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 633 ---
No. Patent application
Type of
patent
Place of
registration Patent number Applicant
Application
date
15. /H1118/H1118/H1118Filming system, method,
apparatus, medium and
product for smart
eyewear (ᙲ
eண௪eʧሯ
ۜ)
invention PRC 202411566380.5 Company 2024/11/5
16. /H1118/H1118/H1118Filming method,
apparatus, electronic
device, storage medium,
and program product (ש
eༀໄeཥɿண
ۜ)
invention PRC 202411611533.3 Company 2024/11/12
17. /H1118/H1118/H1118Circuit control, electronic
device and handwriting
input system ( છՓཥ༩e
ཥɿண௪ձ˓ᄳ፩ɝӻ୕)
invention PRC 202411861662.8 Hefei Longcheer Smart
Technology
2024/12/17
18. /H1118/H1118/H1118A hardware reset circuit
for system abnormality
detection ( ɓ၇ӻ୕ମ੬
೷΁ልЗཥ༩)
utility model PRC 202423252292.6 Company 2024/12/27
19. /H1118/H1118/H1118A wearable device ( ɓ၇
Ꮦண௪)
invention PRC 202411871879.7 Shanghai Longcheer
Smart Technology
2024/12/18
20. /H1118/H1118/H1118A smart eyewear
structure ( ɓ၇౽ঐ଻ᗝ
ഐ࿴)
utility model PRC 202520319008.8 Huizhou Longcheer 2025/2/26
21. /H1118/H1118/H1118An antenna structure and
electronic device ( ɓ၇˂
ᇞഐ࿴ၾཥɿண௪)
invention PRC 202510297817.8 Shanghai Longcheer
Smart Technology
2025/3/13
22. /H1118/H1118/H1118Rotating component and
smart eyewear ( ᔷਗଡ଼΁
ʿ౽ঐ଻ᗝ)
invention PRC 202510427417.4 Huizhou Longcheer 2025/4/7
23 /H1118/H1118/H1118/H1118Screen control methods,
devices, electronic
devices, storage media
and program products ( ፃ
eༀໄeཥɿ
ண௪eπᎷʧሯʿ೻όପ
ۜ)
invention PRC 202510867190.5 Shanghai Longcheer
Smart Technology
June 26,
2025
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 634 ---
No. Patent application
Type of
patent
Place of
registration Patent number Applicant
Application
date
24 /H1118/H1118/H1118/H1118Control methods, devices,
equipment, storage
media, and software
products for display
screen (છՓ˙
eༀໄeண௪eπᎷʧ
ۜ)
invention PRC 202511092544.X Shanghai Longcheer
Smart Technology
August 5,
2025
25 /H1118/H1118/H1118/H1118Wearable devices, control
methods, apparatus,
media and products (߈
eༀ
ۜ)
invention PRC 202511524022.2 Company October 23,
2025
26 /H1118/H1118/H1118/H1118A type of smart glasses
(ɓ၇౽ঐ଻ᗝ)
invention PRC 202511315116.9 Company September
15, 2025
27 /H1118/H1118/H1118/H1118Embedded controller
hotkey voice control
method, device,
equipment, and storage
medium ( లɝόછՓኜᆠ
eༀໄe
ண௪eπᎷʧሯ)
invention PRC 202511573070.0 Shanghai Longcheer
Smart Technology
October 30,
2025
28 /H1118/H1118/H1118/H1118Communication control
methods, devices,
equipment and storage
media (eༀ
ໄeண௪ʿπᎷʧሯ)
invention PRC 202511480102.2 Shanghai Longcheer
Smart Technology
October 16,
2025
29 /H1118/H1118/H1118/H1118Charging circuit and AR
glasses ( ̂ཥཥ༩ʿAR଻
ᗝ)
invention PRC 202511595460.8 Shanghai Longcheer
Smart Technology
November 3,
2025
30 /H1118/H1118/H1118/H1118A type of smart glasses
(ɓ၇౽ঐ଻ᗝ)
invention PRC 202511869692.8 Company December 11,
2025
31 /H1118/H1118/H1118/H1118A type of smart glasses
(ɓ၇౽ঐ଻ᗝ)
invention PRC 202511869693.2 Company December 11,
2025
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 635 ---
(c) Copyrights
Software Copyrights
As of the Latest Practicable Date, we were the registered proprietor of the following
software copyrights which we consider to be or may be material to our business:
No. Subject Owner
Certification
number
Place of
registration
First published
date
1. /H1118/H1118/H1118/H1118Longcheer number
management system
application software V1.0
(၍ଣӻ୕Ꮠ͜
ழ΁V1.0)
Company 2024SR0396268 PRC January 4, 2023
2. /H1118/H1118/H1118/H1118Longcheer MTK platform
NR sar rollback
configuration automation
software V1.0 (΅
MTK ̨̻NR sar ΫৗৣໄІ
ਗʷழ΁V1.0)
Company 2023SR0708192 PRC March 31, 2023
3. /H1118/H1118/H1118/H1118Longcheer Jenkins+Pipeline
concurrent compilation
software V1.0 (΅
Jenkins+Pipeline Ի೯ᇜᙇழ
΁V1.0)
Company 2023SR1045889 PRC July 11, 2023
4. /H1118/H1118/H1118/H1118Longcheer Qualcomm
Platform based tooling
protocol software V1.3 ( Ꮂ࿩
ʈՈ՘
ᙄழ΁V1.3)
Company 2024SR0754032 PRC November 30, 2023
5. /H1118/H1118/H1118/H1118Longcheer ArtiSync
(Japanese version) intelligent
control transmission software
V1.0 (΅ArtiSyncو
౽છෂ፩ழ΁V1.0)
Company 2024SR1006140 PRC March 1, 2024
6. /H1118/H1118/H1118/H1118Nanchang Longcheer
intelligent code scanner
software V1.0 (Ꮂ࿩౽ঐ
ધᇁழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR0344586 PRC August 18, 2022
7. /H1118/H1118/H1118/H1118Longcheer intelligent visual
inspection system V1.0 ( Ꮂ࿩
౽ঐൖᙂᏨ಻ӻ୕V1.0)
Nanchang Longcheer
Smart Technology
2023SR0439270 PRC August 20, 2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 636 ---
No. Subject Owner
Certification
number
Place of
registration
First published
date
8. /H1118/H1118/H1118/H1118nRF52840 chip-based
Bluetooth wireless charging
keyboard software V1.0 ( ਿ
׵nRF52840ᔝ˫ೌᇞ
̂ᒟᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1245235 PRC August 23, 2022
9. /H1118/H1118/H1118/H1118A520 Bluetooth keyboard
software V1.0 (A520 ᔝ˫ᒟ
ᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1252499 PRC August 27, 2022
10. /H1118/H1118/H1118/H1118DA14697 chip-based
Bluetooth leather keyboard
software V1.0 (׵
DA14697ᒟ
ᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1287367 PRC August 27, 2022
11. /H1118/H1118/H1118/H1118Telink8258 chip-based
Bluetooth leather keyboard
software V1.0 (׵
Telink8258ᒟ
ᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1439243 PRC September 15, 2022
12. /H1118/H1118/H1118/H1118WNF176 chip-based POGO
keyboard software V1.0 ( ਿ
׵WNF176˪POGO ᒟᆵழ
΁ V1.0)
Nanchang Longcheer
Smart Technology
2024SR0877722 PRC March 10, 2023
13. /H1118/H1118/H1118/H1118DA14697 chip-based
Bluetooth keyboard software
V1.0 (׵DA14697ٙ
ᔝ˫ᒟᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1252088 PRC May 6, 2023
14. /H1118/H1118/H1118/H1118A320 POGO/BLE dual-mode
keyboard software V1.0
(A320 POGO/BLE ᕐᅼᒟᆵ
ழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1502998 PRC June 28, 2023
15. /H1118/H1118/H1118/H1118A610 Bluetooth keyboard
software V1.0 (A610 ᔝ˫ᒟ
ᆵழ΁V1.0)
Nanchang Longcheer
Smart Technology
2023SR1710971 PRC October 14, 2023
16. /H1118/H1118/H1118/H1118Automatic correction PCBA
tool software V1.0 (਋
PCBA ʈՈழ΁
V1.0)
Nanchang Longcheer
Smart Technology
2024SR1898050 PRC June 7, 2024
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 637 ---
Artistic Copyrights
As of the Latest Practicable Date, we were the registered proprietor of the following
artistic copyrights which we consider to be or may be material to our business:
No. Subject Owner
Certification
number
Place of
registration
First
published
date
1. /H1118/H1118/H1118Longcheer Logo
(Ꮂ࿩ᅺᗆ)
Company National
Copyright
Registration
Number ( ਷Ъ
೮ο)-2016-F-
00266081
PRC November 1,
2004
2. /H1118/H1118/H1118Longcheer Group
Red Packet
Design ( Ꮂ࿩ණ
ྡ)
Company Shandong
Copyright
Registration
Number ( ኁЪ
೮ο)-2023-F-
00010136
PRC January 1,
2022
3. /H1118/H1118/H1118Longcheer Group
Red Packet
Design ( Ꮂ࿩ණ
ྡ)
Company Shandong
Copyright
Registration
Number ( ኁЪ
೮ο)-2023-F-
00002230
PRC December
20, 2022
(d) Domain Names
As of the Latest Practicable Date, we had registered the following internet domain names
which we consider to be or may be material to our business:
No. Domain Name Owner Expiry date
1. /H1118/H1118/H1118longcheer.com Company January 27, 2031
2. /H1118/H1118/H1118longcheer.cn Company March 21, 2031
3. /H1118/H1118/H1118longcheer.net Company January 6, 2031
Save as aforesaid, as of the Latest Practicable Date, there were no other trade or service
marks, patents or other intellectual or industrial property rights which were material in relation
to our Group’s business.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 638 ---
C. EMPLOYEE INCENTIVE SCHEMES
1. Restricted Share Scheme
Our Company adopted the Restricted Share Scheme on May 26, 2025. The following is
a summary of the principal terms of the Restrictive Share Scheme in effect as of the Latest
Practicable Date.
(a) Purpose
The purpose of the Restricted Share Scheme is to further improve our Company’s
long-term incentive mechanism, attract and retain outstanding talents, effectively align the
interests of our Shareholders, our Company and employees, and enable all stakeholders to
jointly focus on the long-term development of the Company. The Restricted Share Scheme is
implemented to align the interests of the Shareholders, and in accordance with the principal of
reciprocity between earnings and contributions.
(b) Administration
The Restricted Share Scheme is subject to the approval of the Shareholders’ meeting,
administration of the Board, and the supervision of the Remuneration and Assessment
Committee of our Company.
(c) Participants
The participants of the Restricted Share Scheme include Directors, middle and senior
management, core technical personnel, and other core and key personnel determined by the
Board as requiring incentives, of our Group.
(d) Source and maximum number of the Restricted Shares
The underlying Shares for the Restricted Share Scheme shall be A Shares to be issued by
our Company. Upon adoption of the scheme, the maximum number of Restricted Shares
grantable under the Restricted Share Scheme was 5,300,000 A Shares, representing 1.13% of
the Company’s the total issued share capital as of the Latest Practicable Date.
Restricted Shares representing 4,335,000 A Shares were granted to 269 grantees on May
26, 2025, in which Restricted Shares representing 50,000 A Shares granted to four grantees
were voluntarily waived by such grantees. Subsequently on July 15, 2025, the 4,285,000 A
Shares underlying the Restricted Shares granted were issued and registered. The reserved
tranche of Restricted Shares representing 965,000 A Shares were granted to 80 grantees on
November 20, 2025, in which Restricted Shares representing 15,000 A Shares granted to a
grantee were voluntarily waived. Subsequently on December 10, 2025, the 950,000 A Shares
underlying the Restricted Shares granted were issued and registered. No further Restricted
Shares are available for further grants under the Restricted Share Scheme after the Listing.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 639 ---
(e) Date of grant and duration of the scheme
The grant date of Restricted Shares shall be determined by the Board after approval of the
Restricted Share Scheme by the Shareholders’ meeting. The grant of the Restricted Shares is
subject to the approval of the Board and shall be registered and announced within 60 days after
approval of the Restricted Share Scheme at the Shareholders’ meeting. The first tranche of
Restricted Shares was granted to the eligible participants on May 26, 2025.
The validity period of the Restricted Share Scheme shall commence from the date of
completion of the First Tranche of the grant, issuance and registration of the Restricted Shares,
and end on the date when all Restricted Shares granted under the scheme have either been fully
unlocked or repurchased, with a maximum duration of 60 months.
(f) Lock-up period and unlocking of Restricted Shares
The lock-up period for Restricted Shares shall commence from date of completion of
registration of the Restricted Shares, and the period between the date of completion of
registration and the date of unlocking of the Restricted Shares shall be 12 months, 24 months
and 36 months. During the lock-up period, the Restricted Shares granted to the participants
under the Restricted Share Scheme shall not be transferred, pledged or used for repayment of
debts. The Restricted Shares shall not be unlocked unless all the conditions set out under the
Restricted Share Scheme are fulfilled. The Restricted Shares will be unlocked in accordance
with the unlocking schedule as set out under the Restricted Share Scheme as follows:
Unlocking arrangement Period of the unlocking
Maximum
proportion of
Restricted
Shares unlocked
First unlocking period /H1118/H1118/H1118/H1118/H1118From the first trading day after
12 months to the last trading day
within 24 months from the
completion of registration of the
relevant Restricted Shares.
30%
Second unlocking period /H1118/H1118/H1118From the first trading day after
24 months to the last trading day
within 36 months from the
completion of registration of the
relevant Restricted Shares.
30%
Third unlocking period /H1118/H1118/H1118/H1118From the first trading day after
36 months to the last trading day
within 48 months from the
completion of registration of the
relevant Restricted Shares.
40%
Any Restricted Share for which the application for unlocking has not been made within
the specified period, or that cannot be unlocked due to failure to meet the unlocking conditions,
shall be repurchased by the Company in accordance with the Restricted Share Scheme.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 640 ---
(g) Conditions for the grant and unlocking of the Restricted Share Scheme
The Restricted Shares will only be granted to eligible participants if the following
conditions are fulfilled:
(i) with respect to our Company, none of the following circumstances occur: (1) an
audit report with a qualified opinion or an adverse opinion issued by a certified
public accountant on the Company’s financial accounting report for the most recent
accounting year; (2) an audit report with a qualified opinion or an adverse opinion
issued by a certified public accountant on the internal control over the Company’s
financial reporting for the most recent accounting year; (3) failure to distribute
profits in accordance with laws, regulations, the Articles of Association, or public
commitments within the most recent 36 months after the Company’s A-Share
Listing; (4) circumstances in which the implementation of equity incentives is
prohibited by laws or regulations; or (5) any other circumstances determined by the
CSRC; and
(ii) with respect to a grantee, none of the following circumstances occur: (1)
circumstances in which the participant has been regarded as an inappropriate person
by the Shanghai Stock Exchange within the last 12 months; (2) circumstances in
which the grantee has been regarded as an inappropriate person by the CSRC or its
local office within the last 12 months; (3) circumstances in which the grantee has
been administratively punished or prohibited from entering into the securities
market by the CSRC or its local office due to material breach of laws and regulations
within the last 12 months; (4) circumstances in which the grantee is not qualified to
serve as a director or senior management according to the PRC Company Law; (5)
circumstances in which the grantee is prohibited from participating in any share
incentive scheme of listed companies according to laws and regulations; or (6) any
other circumstances determined by the CSRC.
(h) Conditions for the unlocking
The Restricted Shares shall be unlocked pursuant to the following conditions:
(i) none of the following circumstances regarding the Company occur: (1) an audit
report with a qualified opinion or an adverse opinion issued by a certified public
accountant on the Company’s financial accounting report for the most recent
accounting year; (2) an audit report with a qualified opinion or an adverse opinion
issued by a certified public accountant on the internal control over the Company’s
financial reporting for the most recent accounting year; (3) failure to distribute
profits in accordance with laws, regulations, the Articles of Association, or public
commitments within the most recent 36 months after the Company’s A-Share
Listing; (4) circumstances in which the implementation of equity incentives is
prohibited by laws or regulations; or (5) any other circumstances determined by the
CSRC;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-20 –


--- page 641 ---
(ii) none of the following circumstances regarding the grantee occur: (1) circumstances
in which the participant has been regarded as an inappropriate person by the
Shanghai Stock Exchange within the last 12 months; (2) circumstances in which the
grantee has been regarded as an inappropriate person by the CSRC or its local office
within the last 12 months; (3) circumstances in which the grantee has been
administratively punished or prohibited from entering into the securities market by
the CSRC or its local office due to material breach of laws and regulations within
the last 12 months; (4) circumstances in which the grantee is not qualified to serve
as a director or senior management according to the PRC Company Law; (5)
circumstances in which the grantee is prohibited from participating in any share
incentive scheme of listed companies according to laws and regulations; or (6) any
other circumstances determined by the CSRC; and
(iii) performance assessment requirements: in accordance with the Restricted Share
Scheme, the performance assessment requirements in relation to the unlocking of the
Restricted Shares granted under the Restricted Share Scheme include three levels:
(1) the company level, measured by the company-level unlocking coefficient with
reference to the Company’s annual financial performance; (2) the department level,
measured by the achievement of departmental performance indicators in accordance
with the annual performance indicators assigned by the Company to each
department and/or the relevant agreements signed between the Company and the
grantee in each department; and (3) the individual level, measured by the
individual-level unlocking rate with reference to the annual assessment result of
each grantee.
(i) Adjustment
Subject to the other terms and conditions contained in the Restricted Share Scheme, the
number and/or grant price of Restricted Shares granted may be adjusted upon the occurrence
of certain events. These events include, as the case may be, (a) capitalization of reserves, (b)
distribution of stock dividends, (c) distribution of cash dividends, (d) share subdivision, and (e)
share issuance or share consolidation.
(j) Outstanding Restricted Shares
As of the Latest Practicable Date, the Group granted 5,235,000 Restricted Shares to 342
grantees, none of which are our Directors, senior management members or other connected
persons. All underlying A Shares under the aforesaid grants were issued and registered, and no
Shares were outstanding under the Restricted Shares granted.
As all Restricted Shares granted under the Restricted Share Scheme have been issued and
registered in full in December 2025, there will not be any dilution effect on the shareholdings
of the Shareholders nor will there be any impact on the earnings per Share arising from the
Restricted Shares granted after completion of the Global Offering. No consideration is paid for
the grant of the Restricted Shares under the Restricted Share Scheme.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-21 –


--- page 642 ---
The following table sets forth the details of the Restricted Shares granted to grantees
(none of which are our Directors, senior management members or other connected persons)
under the Restricted Share Scheme as of the Latest Practicable Date.
Grantee by
category Date of grant
Number of
grantees
Number of
Restricted
Shares
granted and
issued (3) Grant price
Lock-up
Arrangement
Approximate
percentage of
issued and
outstanding
Shares as of
the Latest
Practicable
Date
(RMB)
Employees (1)
1 to 10,000 /H1118/H1118/H1118/H1118/H1118May 26, 2025 143 1,430,000 19.34 Note 4 0.31%
November 20, 2025 63 630,000 19.34 Note 4 0.13%
10,001 to 20,000 /H1118/H1118May 26, 2025 76 1,430,000 19.34 Note 4 0.31%
November 20, 2025 16 320,000 19.34 Note 4 0.07%
20,001 to 50,000 /H1118/H1118May 26, 2025 46 1,425,000 19.34 Note 4 0.31%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342(2) 5,235,000 1.12%
Notes:
(1) No Restricted Shares were granted to our Director, senior management or other connected persons as of the
Latest Practicable Date.
(2) The total number of grantees does not equal the sum of the grantees counts listed above, as two grantees were
granted Restricted Shares in both tranches.
(3) The Restricted Shares granted have been issued and registered in full as of the Latest Practicable Date.
(4) For the lock-up arrangement of such Restricted Shares, see “— (f) Lock-up period and unlocking of Restricted
Shares” above.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


--- page 643 ---
2. Employee Stock Ownership Scheme
The following is a summary of the principal terms of the Employee Stock Ownership
Scheme which was adopted on May 26, 2025. Given the Employee Stock Ownership Scheme
does not involve issue of new Shares by our Company, the terms of the Employee Stock
Ownership Scheme are not subject to the provisions of Chapter 17 of the Listing Rules except
for the disclosure requirement under Rule 17.12 of the Listing Rules.
(a) Purpose
The purpose of the Employee Stock Ownership Scheme is to further improve the
Company’s long-term incentive mechanism, attract and retain outstanding talents, effectively
align the interests of our Shareholders, the Company and employees, enhance corporate
governance, strengthen employee cohesion and the Company’s competitiveness, motivate
employees’ enthusiasm and creativity, and promote the Company’s long-term, sustainable and
healthy development.
(b) Administration
The Employee Stock Ownership Scheme is subject to the approval of the Shareholders’
meeting and is administered by a committee (the “ Management Committee ”), the members of
which are elected by the participants of the Employee Stock Ownership Scheme. Currently, the
Management Committee includes three members, namely LV Qiang, LIU Rong and ZHANG
Lugang, each an employee of our Group. The Management Committee is responsible for
overseeing the daily operation and management of the Employee Stock Ownership Scheme.
(c) Participants
The participants of the Employee Stock Ownership Scheme include Directors,
supervisors, senior management, and core and key personnel of our Group who is important for
the Company’s overall performance and development in the medium and long term. The scope
of participants excludes independent Directors.
(d) Source and maximum number of the Shares
The A Shares for the Employee Stock Ownership Scheme will be sourced from the A
Shares repurchased by the Company through its dedicated securities account for share
repurchase. The maximum number of A Shares that can be granted under the Employee Stock
Ownership Scheme is 7,500,000, representing 1.60% of the Company’s the total issued share
capital as of the Latest Practicable Date. Among them, it is proposed that no more than
6,380,000 A Shares will be granted to no more than 29 grantees in the initial grant, accounting
for approximately 1.36% of the Company’s current total share capital as of the Latest
Practicable Date, while the remaining 1,120,000 A Shares will be reserved, accounting for
approximately 0.24% of the Company’s current total share capital as of the Latest Practicable
Date.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-23 –


--- page 644 ---
(e) Duration
The duration of the Employee Stock Ownership Scheme is 60 months, commencing from
the date on which the Company announces the transfer of the last batch of underlying A Shares
to the Employee Stock Ownership Scheme.
(f) Lock-up period and unlocking of the A Shares
The lock-up period for the A Shares under the Employee Stock Ownership Scheme shall
commence from date of announcing the transfer of the last batch of underlying A Share into
the designated securities account of the Employee Stock Ownership Scheme. Each
participants’ entitlement to the corresponding portion of A Shares held by the Employee Stock
Ownership Scheme, shall be unlocked in three tranches in the proportion of 30%, 30% and
40%, upon expiry of a period of 12 months, 24 months and 36 months from the date of
announcing, respectively. The unlocking schedule shall be subject to attainment of corporate
performance targets and personal evaluation of each participant.
Upon the expiry of the lock-up period, the A Shares shall be sold by the Management
Committee or transfer the corresponding underlying A Shares to the participants’ personal
securities accounts.
(g) Adjustment
Subject to the other terms and conditions contained in the Employee Stock Ownership
Scheme, the number and/or grant price of A Shares under the Employee Stock Ownership
Scheme may be adjusted upon the occurrence of certain events. These events include, as the
case may be, (a) capitalization of reserves, (b) distribution of stock dividends, (c) distribution
of cash dividends, (d) share subdivision, and (e) share issuance or share consolidation.
(h) Details of the number of A Shares granted
As of the Latest Practicable Date, the aggregate number of A Shares granted under the
Employee Stock Ownership Scheme was 6,270,000, representing approximately 1.33% of the
Company’s the total issued share capital as of the Latest Practicable Date.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-24 –


--- page 645 ---
As of Latest Practicable Date, there were 29 grantees in total who were granted the A
Shares under the Employee Stock Ownership Scheme, including one Director and four senior
management members who are not Directors, and 24 employees. The details of the A Shares
to the grantees under the Employee Stock Ownership Scheme are as follows:
Name of
the grantee Position Date of grant Grant price
Lock-up
arrangement
Number of
A Shares
underlying
the Scheme
granted
Approximate
percentage of
issued Shares
immediately
after the
Global
Offering (1)
(RMB)
Director and Senior Management
Ms. QIN Y anling
(ޛ)H1118/H1118/H1118/H1118/H1118/H1118
Executive
Director and
employee
representative
Director
May 26, 2025 21.32 Note 2 35,000 0.01
Mr. CHENG Lihui
(೻ኇሾ)/H1118/H1118/H1118/H1118/H1118/H1118
Deputy general
manager
May 26, 2025 21.32 Note 2 700,000 0.13
Mr. ZHENG Qi’ang
(׻)H1118/H1118/H1118/H1118/H1118/H1118
Deputy general
manager
May 26, 2025 21.32 Note 2 700,000 0.13
Mr. ZHANG
Zhijiong
(ތ)H1118/H1118/H1118/H1118/H1118/H1118
Chief financial
officer
May 26, 2025 21.32 Note 2 280,000 0.05
Mr. ZHOU
Liangliang
(մԄ૑)/H1118/H1118/H1118/H1118/H1118/H1118
Board secretary
and deputy
general
manager
May 26, 2025 21.32 Note 2 70,000 0.01
Others
Other grantees /H1118/H1118/H1118— May 26, 2025 21.32 Note 2 4,485,000 0.86
Notes:
(1) Assuming the Over-allotment Option is not exercised.
(2) For the lock-up arrangement for the A Shares granted under the Employee Stock Ownership Scheme, see “—
(f) Lock-up period and unlocking of the A Shares” above.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-25 –


--- page 646 ---
D. FURTHER INFORMATION ABOUT OUR DIRECTORS, CHIEF EXECUTIVE
AND SUBSTANTIAL SHAREHOLDERS
1. Disclosure of Interest
(a) Interests of the Directors and Chief Executive in the shares of Our Company
The following table sets out the interests of our Directors and chief executive of our
Company immediately following completion of the Global Offering (assuming the Over-
allotment Option is not exercised) in the Shares of our Company or any of our associated
corporations (within the meaning of Part XV of the SFO) which will have to be notified to us
and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including
interests and short positions in which they are taken or deemed to have under such provisions
of the SFO), or which will be required, pursuant to section 352 of the SFO, to be entered in
the register referred to therein, or which will be required to be notified to us and the Stock
Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed
Issuers contained in the Listing Rules:
(i) Interest in our Company
Immediately after the Global
Offering
Name Nature of interest
Description
of Shares
Number of
Shares
Approximate
percentage of
interest in our
Company (1)
Mr. Du /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (2)(3)
A Shares 141,638,563 27.10%
Interest of a party to an
agreement (4)
A Shares 37,415,450 7.16%
Other (5) A Shares 4,179,808 0.80%
Interest in treasury
Shares (6)
A Shares 1,229,937 0.24%
Mr. Ge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner (3) A Shares 21,443,635 4.10%
Interest in controlled
corporation (2)(7)
A Shares 111,765,359 21.39%
Interest of a party to an
agreement (4)
A Shares 45,845,019 8.77%
Other (5) A Shares 699,502 0.13%
Interest in treasury
Shares (6)
A Shares 1,229,937 0.24%
Mr. GUAN Y adong /H1118/H1118/H1118/H1118Interest in controlled
corporation (8)
A Shares 15,313,976 2.93%
Other (5) A Shares 9,102,015 1.74%
Ms. QIN Y anling /H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (9)
A Shares 3,120,095 0.60%
Other (5) A Shares 943,956 0.18%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-26 –


--- page 647 ---
Notes:
(1) Assuming the Over-allotment Option is not exercised.
(2) As of Latest Practicable Date, Kunshan Longcheer was managed by its general partner, Shanghai Xinhe, which
in turn was controlled by Mr. Du as to 51.00% and Mr. Ge as to 49.00%. Save for Mr. Du who also held 52.95%
of the partnership interest in Kunshan Longcheer, none of the limited partners held over one third of the
partnership interest in Kunshan Longcheer. Therefore, each of Mr. Du, Mr. Ge and Shanghai Xinhe is deemed
to be interested in the 95,793,544 Shares held by Kunshan Longcheer under the SFO.
(3) As of the Latest Practicable Date, Mr. Du was the general partner of Chengmai Qihe. Therefore, Mr. Du is
deemed to be interested in the 45,845,019 Shares held by Chengmai Qihe under the SFO.
(4) As of the Latest Practicable Date, pursuant to a concert party agreement dated November 1, 2021, Mr. Du and
Mr. Ge agreed to act in concert by aligning the voting rights controlled by them at the Shareholders’ meetings
of the Company. Therefore, they are deemed to be jointly interested in the aggregate number of Shares held
by each other under the SFO.
(5) Representing the relevant A Shares held by the respective Directors through the employee shareholding
platforms.
(6) As of the Latest Practicable Date, there were 1,229,937 A Shares repurchased and held in our Company’s stock
repurchase account. Our Controlling Shareholders who control more than one-third of the voting power at the
general meetings of our Company would be taken to have an interest in such repurchased A Shares held by our
Company.
(7) As of Latest Practicable Date, Mr. Ge was the executive general partner of Kunshan Qiyun. Save for Mr. Ge,
none of the other partners held over one third of the partnership interest in Kunshan Qiyun. Therefore, Mr. Ge
is also deemed to be interested in the 15,971,815 Shares held by Kunshan Qiyun under the SFO.
(8) As of Latest Practicable Date, Mr. GUAN Y adong was the general partner of each of Chengmai Y ongcan
Enterprise Management Partnership (Limited Partnership) ( ᆋᒕ͑ᐆΆุ၍ଣΥྫΆุ(Υྫ))
(“Chengmai Y ongcan ”) and Shanghai Qijing Enterprise management Partnership (Limited Partnership) ( ɪऎ
࿩ྤΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Ningbo Meishan Bonded Port Qihong Enterprise
Management Center (Limited Partnership) (೼ಥਜ࿩̾Άุ၍ଣΥྫΆุ(Υྫ)) (“ Shanghai
Qijing ”). Save for Mr. GUAN Y adong, none of the limited partners held over one third of the partnership
interest in Chengmai Y ongcan and Shanghai Qijing. Therefore, Mr. GUAN Y adong is deemed to be interested
in the 8,738,167 and 6,575,809 A Shares held by Chengmai Y ongcan and Shanghai Qijing under the SFO.
(9) As of the Latest Practicable Date, Ms. QIN Y anling was the general partners of Shanghai Qili Enterprise
Management Partnership (Limited Partnership) ( ɪऎ࿩ᎸΆุ၍ଣΥྫΆุ(Υྫ)), previously known as
Kunshan Qizhuang Investment Management Center (Limited Partnership) (ʆ࿩ѯҳ༟၍ଣʕː(Υྫ))
(“Shanghai Qili ”). Therefore, Ms. QIN Y anling is deemed to be interested in the 3,120,095 A Shares held by
Shanghai Qili.
Save as disclosed above, as of the Latest Practicable Date, none of the Directors or chief
executive or their respective spouses and children under 18 years of age had been granted by
the Company or had exercised any rights to subscribe for shares or debentures of the Company
or any of its associated corporations.
(b) Interests of the substantial Shareholders in the Shares of our Company
Save as disclosed below and in the section headed “Substantial Shareholders,”
immediately following completion of the Global Offering (assuming the Over-allotment Option
is not exercised), our Directors are not aware of any other person (not being a Director or chief
executive of our Company) who will have an interest or short position in the Shares or the
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-27 –


--- page 648 ---
underlying Shares which would fall to be disclosed to us and the Stock Exchange under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly,
interested in 10% or more of the voting power at any general meeting of our Company.
(c) Interests in Other Members of Our Group
So far as our Directors are aware, as of the Latest Practicable Date, the following persons
(excluding us) are directly and 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
members of our Group:
Name of member of our Group Name of shareholder
Approximate
percentage of
ownership
Vietnam Longcheer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Meiko Elec. Hong Kong Co., Ltd. 20%
2. Particulars of Service Contracts
Our Company has entered into a service agreement with each of the Directors. The
principal particulars of these service agreements are: (a) each of the agreement is effective
upon execution and of a term of no more than three years; and (b) each of the agreement is
subject to termination in accordance with their respective terms. The service agreements may
be renewed in accordance with our Articles of Association and the applicable laws, rules and
regulations from time to time.
Save as disclosed above, our Directors have not entered into or propose to enter into any
service contracts with any member of our Group (other than contracts expiring or determinable
by the employer within one year without the payment of compensation (other than statutory
compensation)).
3. Directors’ Remuneration
Save as disclosed in “Directors and Senior Management” of this prospectus and Note 8
to the Accountant’s Report as set out in Appendix I to this prospectus, for the three financial
years ended December 31, 2022, 2023, 2024, and the nine months ended September 30, 2025,
none of our Directors received other remunerations of benefits in kind from us.
There was no arrangement under which any Director has waived or agree to waive any
emolument during the Track Record Period.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-28 –


--- page 649 ---
4. Disclaimers
Save as disclosed in this prospectus:
(a) there is no existing or proposed service contract (excluding any contract expiring or
determinable by the employer within one year without payment of compensation
(other than statutory compensation)) between our Directors and any member of our
Group;
(b) none of our Directors or the experts named in the paragraph headed “— E. Other
Information — 9. Qualifications and Consents of Experts” in this Appendix has any
direct or indirect interest in the promotion of, or in any assets which have been,
within the two years immediately preceding the date of this prospectus, acquired or
disposed of by or leased to any member of our Group, or are proposed to be acquired
or disposed of by or leased to any member of our Group;
(c) save in connection with the Underwriting Agreements, none of our Directors nor any
of the experts named in the paragraph headed “— E. Other Information — 9.
Qualifications and Consents of Experts” in this Appendix is materially interested in
any contract or arrangement subsisting at the date of this prospectus which is
significant in relation to the business of our Group as a whole;
(d) none of our Directors and the chief executive of our Company has any interests or
short positions in the Shares, underlying Shares or debentures of our Company or its
associated corporations (within the meaning of Part XV of the SFO) which will have
to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and
8 of Part XV of the SFO (including interests and short positions which he is taken
or deemed to have under such provisions of the SFO) or which will be required,
pursuant to section 352 of the SFO, to be entered into the register referred to therein,
or will be required, pursuant to the Model Code for Securities Transactions by
Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, to be
notified to our Company and the Stock Exchange; and
(e) none of our Directors or their respective close associates or any Shareholders of our
Company (who to the knowledge of our Directors owns more than 5% of the number
of our issued shares) has any interest in our five largest suppliers or our five largest
customers.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-29 –


--- page 650 ---
E. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to be
imposed on our Company or any of the subsidiaries of our Company.
2. Litigation
As of the Latest Practicable Date, save as disclosed in this prospectus, we were not aware
of any other litigation or arbitration proceedings of material importance pending or threatened
against us or any of our Directors that would have a material adverse effect on our financial
condition or results of operations.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for
the listing of, and permission to deal in, our H Shares in issue, our H Shares to be issued
pursuant to the Global Offering (including any H Shares which may fall to be issued pursuant
to the exercise of the Over-allotment Option). All necessary arrangements have been made to
enable the securities to be admitted into CCASS.
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. Pursuant to the engagement letter entered into between the
Company and the Joint Sponsors, we have agreed to pay the Joint Sponsors a sponsor fee in
the amount of US$1,100,000 in aggregate to act as the sponsors of our Company in connection
with the proposed listing on the Hong Kong Stock Exchange.
4. Compliance Advisor
Our Company has appointed Guotai Junan Capital Limited as our Compliance Advisor in
compliance with Rule 3A.19 of the Listing Rules.
5. Preliminary Expenses
Our Company did not incur any material preliminary expenses in relation to the
incorporation of our Company.
6. No Material Adverse Change
Our Directors confirm that there has been no material adverse change in the financial or
trading position or prospects of our Group since September 30, 2025 (being the date to which
the latest consolidated financial statements of our Group were prepared).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-30 –


--- page 651 ---
7. Promoter
The promoters of our Company are as follow:
No. Name
1. Kunshan Longcheer Investment Management Center (Limited Partnership)
(ʆᎲ࿩ҳ༟၍ଣʕː(Υྫ))
2. Chengmai Qihe Enterprise Management Partnership (Limited Partnership) ( ᆋ
ᒕ࿩ͫΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan
Longfei Investment Management Center (Limited Partnership) (ҳ
༟၍ଣʕː(Υྫ))
3. Jiaxing Y unrui Huahe V enture Capital Partnership (Limited Partnership) ( ྗጳ
ථြശΥ௴ุҳ༟ΥྫΆุ(Υྫ)), previously known as Kunshan
Y unrui Investment Management Center (Limited Partnership) (ʆථြҳ
༟၍ଣʕː(Υྫ))
4. Kunshan Y uanye Investment Management Center (Limited Partnership) (ʆ
Ⴣุҳ༟၍ଣʕː(Υྫ))
5. Chengmai Y ongcan Enterprise Management Partnership (Limited Partnership)
ᆋᒕ͑ᐆΆุ၍ଣΥྫΆุ(Υྫ), previously known as Kunshan
Y ongcan Investment Management Center (Limited Partnership) (ʆ͑ᐆ
ҳ༟၍ଣʕː(Υྫ))
6. Chengmai Renxun Enterprise Management Partnership (Limited Partnership)
(ᆋᒕʠԘΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan
Renxun Investment Management Center (Limited Partnership) (ʆʠԘҳ
༟၍ଣʕː(Υྫ))
7. Chengmai Hongdao Enterprise Management Partnership (Limited Partnership)
(ᆋᒕ̾༸Άุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan
Hongdao Investment Management Center (Limited Partnership) (ʆ̾༸
ҳ༟၍ଣʕː(Υྫ))
8. Shanghai Qili Enterprise Management Partnership (Limited Partnership) ( ɪ
ऎ࿩ᎸΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan
Qizhuang Investment Management Center (Limited Partnership) (ʆ࿩ѯ
ҳ༟၍ଣʕː(Υྫ))
9. Shanghai Qizhuang Enterprise Management Partnership (Limited Partnership)
(ɪऎ࿩ѯΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan
Qizhi Investment Management Center (Limited Partnership) (ʆ࿩қҳ༟
၍ଣʕː(Υྫ))
10. Shanghai Qili Enterprise Management Partnership (Limited Partnership) ( ɪ
ऎ࿩ᘥΆุ၍ଣΥྫΆุ(Υྫ)), previously known as Kunshan Qiling
Investment Management Center (Limited Partnership) (ҳ༟၍ଣʕ
ː(Υྫ))
11. Kunshan Qiyun Investment Management Center (Limited Partnership) (ʆ
࿩ථҳ༟၍ଣʕː(Υྫ))
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-31 –


--- page 652 ---
No. Name
12. Tianjin Jinmi Investment Partnership (Limited Partnership) (Ϸҳ༟Υ
ྫΆุ(Υྫ))
13. Suzhou Industrial Park Shunwei Technology V enture Investment Partnership
(Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ(Υྫ))
14. Ma’anshan Wutong Tree Equity Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υྫ))
15. Dong Hong (ߎ)
16. Tang Hairong (ऎႂ)
Saved as disclosed in this prospectus, within the two years immediately preceding the
date of this prospectus, no cash, securities or other benefit has been paid, allotted or given nor
are any proposed to be paid, allotted or given to any promoters in connection with the Global
Offering and the related transactions described in this prospectus.
8. Agency Fees or Commissions Received
Save as disclosed in the section headed “Underwriting — Underwriting Arrangements and
Expenses” in this prospectus, within the two years immediately preceding the date of this
prospectus, no commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any share or loan capital of our Company or any of our
subsidiaries. Within the two years preceding the date of this prospectus, no commission has
been paid or is payable for subscribing or agreeing to subscribe, or procuring or agreeing to
procure the subscriptions, for any Shares in our Company.
9. Qualifications and Consents of Experts
The following are the qualifications of the experts who have given opinions or advice
which are contained in this prospectus:
Name Qualification
Citigroup Global Markets Asia
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A corporation licensed to carry on Type 1 (Dealing
in Securities), Type 2 (Dealing in Futures
Contracts), Type 4 (Advising on Securities),
Type 5 (Advising on Futures Contracts), Type 6
(Advising on Corporate Finance) and Type 7
(Providing Automated Trading Services) regulated
activities as defined under the SFO
Haitong International Capital
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A corporation licensed to carry on Type 6 (advising
on corporate finance) of the regulated activities as
defined under the SFO
Guotai Junan Capital
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A corporation licensed to carry on Type 6 (advising
on corporate finance) regulated activity as defined
under the SFO
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-32 –


--- page 653 ---
Name Qualification
Ernst & Y oung /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Registered Public
Interest Entity Auditor
Beijing DeHeng Law
Offices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal advisors to our Company as to PRC laws
Dentons Link Legal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisors to our Company as to Indian laws
Vietthink Law Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisors to our Company as to
Vietnamese laws
Hogan Lovells /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisors as to U.S. regulatory laws and
International Sanctions laws
Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co. /H1118/H1118
Industry consultant
Each of the experts named above has given and has not withdrawn its consent to the issue
of this prospectus with the inclusion of its report, letter, summary of valuations, valuation
certificates and/or legal opinion (as the case may be) and references to its name included in the
form and context in which it respectively appears.
Save as disclosed in this prospectus and in connection with the Underwriting Agreements,
none of the experts named above is interested legally or beneficially in any shares of any
member of our Group or has any right (whether legally enforceable or not) to subscribe for or
to nominate persons to subscribe for securities in any member of our Group.
10. Binding Effect
This prospectus shall have the effect, if any application is made pursuant hereto, of
rendering all persons concerned bound by all the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
11. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately, in reliance upon the exemption provided by section 4 of the Companies
Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice (Chapter 32L of the Laws of Hong Kong). In case of any discrepancies between the
English language version and Chinese language version of this prospectus, the English
language version shall prevail.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-33 –


--- page 654 ---
12. Miscellaneous
(i) Save as disclosed in this Appendix, “History and Corporate Structure” and in
connection with the Underwriting Agreements, within the two years immediately
preceding the date of this prospectus:
(a) no share or loan capital of our Company or any of our subsidiaries has been
issued nor agreed to be issued fully or partly paid either for cash or for a
consideration other than cash;
(b) no commissions, discounts, brokerage fee or other special terms have been
granted in connection with the issue or sale of any share or loan capital of our
Company or any of our subsidiaries;
(c) no share or loan capital of our Company or any of our subsidiaries is under
option or is agreed conditionally or unconditionally to be put under option; and
(d) no commission has been paid or is payable for subscribing or agreeing to
subscribe, or procuring or agreeing to procure the subscriptions of any share in
our Company or any of our subsidiaries.
(ii) There are no founder, management or deferred shares nor any debentures in our
Company or any of our subsidiaries.
(iii) There are no arrangements under which future dividends are waived or agreed to be
waived.
(iv) There are no procedures for the exercise of any right of pre-emption or
transferability of subscription rights.
(v) There have been no interruptions in our business which may have or have had a
significant effect on our financial position in the last 12 months immediately
preceding the date this prospectus.
(vi) There are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong.
(vii) Save as disclosed in “History and Corporate Structure”, no part of the equity or debt
securities of our Company, if any, is currently listed on or dealt in on any stock
exchange or trading system, and no such listing or permission to list on any stock
exchange other than the Stock Exchange is currently being or agreed to be sought.
(viii) Our Company has no outstanding convertible debt securities or debentures.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-34 –


--- page 655 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were, among other documents:
(a) the written consents referred to in “Appendix VI — Statutory and General
Information — E. Other Information — 9. Qualifications and Consents of Experts”
to this prospectus; and
(b) a copy of each of the material contracts referred to in “Appendix VI — Statutory and
General Information — B. Further Information about Our Business — 1. Summary
of Material Contracts” to this prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the Stock Exchange’s
website at www.hkexnews.hk and our Company’s website at www.longcheer.com during a
period of 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report from Ernst & Y oung, the text of which is set out in
Appendix I to this prospectus;
(c) the audited financial statements of our Group for the years ended December 31,
2022, 2023 and 2024, and the nine months ended September 30, 2025;
(d) the report on unaudited pro forma financial information of our Group from Ernst &
Y oung, the text of which is set out in Appendix II to this prospectus;
(e) the letters from Ernst & Y oung and the Joint Sponsors relating to the profit estimate
of our Group for the year ended December 31, 2025, the texts of which are set out
in Appendix IA to this prospectus;
(f) the legal opinions issued by Beijing DeHeng Law Offices, our PRC Legal Advisors,
in respect of certain matters of our Group in the PRC;
(g) the legal opinions issued by Dentons Link Legal, our legal advisors as to Indian
laws;
(h) the legal opinions issued by Vietthink Law Firm, our legal advisors as to Vietnamese
laws;
(i) the memoranda of advice issued by Hogan Lovells, our legal advisors as to U.S.
regulatory laws and International Sanctions laws;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-1 –


--- page 656 ---
(j) the industry report prepared by Frost & Sullivan, the summary of which is set forth
in the section headed “Industry Overview” of this prospectus;
(k) a copy of each of the PRC Company Law, the PRC Securities Law and the Overseas
Listing Trial Measures together with their unofficial English translations;
(l) the material contracts referred to in “Appendix VI — Statutory and General
Information — B. Further Information about Our Business — 1. Summary of
Material Contracts” to this prospectus;
(m) the written consents referred to in “Appendix VI — Statutory and General
Information — E. Other Information — 9. Qualifications and Consents of Experts”
to this prospectus; and
(n) the service contracts referred to in “Appendix VI — Statutory and General
Information — D. Further Information about our Directors, Chief Executive and
Substantial Shareholders — 2. Particulars of Service Contracts” to this prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-2 –


--- page 657 ---
上海龍旗科技股份有限公司
Shanghai Longcheer T echnology Co., Ltd.
