--- page 1 ---
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Stock Code : 1609
(A joint stock company incorporated in the People’s Republic of China with limited liability)
北京天星醫療股份有限公司
STAR SPORTS MEDICINE CO., LTD.
GLOBAL OFFERING


--- page 2 ---
IMPORTANT : If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
STAR SPORTS MEDICINE CO., LTD.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
Global Offering
Number of Offer Shares under
the Global Offering
: 8,421,850 H Shares
Number of Hong Kong Offer Shares : 842,200 H Shares (subject to reallocation)
Number of International Offer Shares : 7,579,650 H Shares (subject to
reallocation)
Offer Price : HK$98.50 per H Share, plus brokerage of
1.0%, SFC transaction levy of 0.0027%,
Hong Kong Stock Exchange trading fee
of 0.00565% and AFRC transaction levy
of 0.00015% (payable in full on
application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 1609
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners
and Joint Lead Managers
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 arisin g from or in reliance upon the whole or any part
of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Appendix VII — Documents Delivered to the Registrar of Companies and Av ailable on Display” in this prospectus,
has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) 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 o f this prospectus or any other documents
referred to above.
The Offer Price will be HK$98.50 per Offer Share unless otherwise announced.
The Overall Coordinators, on behalf of the Underwriters, may, where considered appropriate and with the consent of our Company, reduce the number of H ong Kong Offer Shares and/or the indicative
Offer Price below that is stated in this prospectus (being HK$98.50 per Offer Share) at any time prior to the morning of the last day for lodging applicat ions under the Hong Kong Public Offering.
In such case, notices of the reduction in the number of Hong Kong Offer Shares and/or the indicative Offer Price will be published on the website of our Co mpany at https://starsportmed.com
and
on the website of the Hong Kong Stock Exchange at www.hkexnews.hk as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the
last day for lodging applications under the Hong Kong Public Offering. For further details, see “Structure of the Global Offering” and “How to Apply fo r Hong Kong Offer Shares” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (on b ehalf of the Underwriters) if certain events
occur prior to 8:00 a.m. on the Listing Date. For details, see “Underwriting” in this prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be off ered, sold, pledged or otherwise
transferred within the United States, except pursuant to an available exemption from, or in a transaction not subject to, the registration requireme nts of the U.S. Securities Act. The Offer
Shares may only be offered and sold outside the United States in offshore transactions in reliance on Regulation S. No public offering of the Offer Shar es will be made in the United States.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to the Hong
Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at starsportmed.com. If you require a printed cop y of this prospectus, you may
download and print from the website addresses above.
IMPORTANT
April 24, 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 to the public in relation
to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at starsportmed.com. If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(a) apply online through the White Form eIPO service at www.eipo.com.hk ;o r
(b) apply through the HKSCC EIPO channel to electronically cause HKSCC
Nominees to apply on your behalf, including by instructing your broker or
custodian who is a HKSCC Participant to give electronic application
instructions through HKSCC’s FINI system in accordance with your instruction.
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
above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” for
further details of the procedures through which you can apply for the Hong Kong Offer
Shares electronically.
IMPORTANT
–i i–


--- page 4 ---
Y our application through the White Form eIPO service or the HKSCC EIPO channel
must be for a minimum of 50 Hong Kong Offer Shares and in one of the numbers 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.
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
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
50 4,974.67 700 69,645.36 5,000 497,466.87 70,000 6,964,536.08
100 9,949.34 800 79,594.70 10,000 994,933.73 80,000 7,959,469.80
150 14,924.00 900 89,544.03 15,000 1,492,400.59 90,000 8,954,403.53
200 19,898.67 1,000 99,493.38 20,000 1,989,867.46 100,000 9,949,337.26
250 24,873.34 1,500 149,240.06 25,000 2,487,334.31 150,000 14,924,005.88
300 29,848.01 2,000 198,986.75 30,000 2,984,801.18 200,000 19,898,674.50
350 34,822.68 2,500 248,733.43 35,000 3,482,268.03 250,000 24,873,343.13
400 39,797.35 3,000 298,480.12 40,000 3,979,734.90 300,000 29,848,011.76
450 44,772.02 3,500 348,226.81 45,000 4,477,201.77 350,000 34,822,680.38
500 49,746.68 4,000 397,973.49 50,000 4,974,668.63 421,100
(1) 41,896,659.17
600 59,696.03 4,500 447,720.17 60,000 5,969,602.36
Notes:
(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 (1) of the Global Offering, we
will issue an announcement on the website of our Company at starsportmed.com and the
website of the Stock Exchange at www.hkexnews.hk .
Date (1)
Hong Kong Public Offering commences ............................... .9:00 a.m. on
Friday, April 24, 2026
Latest time to complete electronic applications under
White Form eIPO service through the designated
website www.eipo.com.hk ....................................... 1 1:30 a.m. on
Wednesday, April 29, 2026
Application lists of the Hong Kong Public
Offering open (3) ............................................... 1 1:45 a.m. on
Wednesday, April 29, 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) giving electronic
application instructions to HKSCC
(4) ............................. .12:00 noon on
Wednesday, April 29, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to submit
HKSCC EIPO applications on your behalf through HKSCC’s FINI system in accordance with your
instruction, you are advised to contact your broker or custodian for the latest time for giving such
instructions which may be different from the latest time as stated above.
Application lists of the Hong Kong Public
Offering close (3) ............................................. .12:00 noon on
Wednesday, April 29, 2026
Announcement of:
 the level of indications of interest in the International Offering;
 the level of applications in the Hong Kong Public Offering; and
 the basis of allocations of the Hong Kong Offer Shares
to be published on the website of our Company
at starsportmed.com
(5) and the
website of the Stock Exchange
at www.hkexnews.hk ................................. n o later than 11:00 p.m. on
Monday, May 4, 2026
Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through the White Form eIPO
service or HKSCC EIPO channel:
EXPECTED TIMETABLE
–i v–


--- page 6 ---
 from the designated results of allocations
website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function from (6) ........................ 1 1:00 p.m. on
Monday, May 4, 2026
to 12:00 midnight on
Sunday, May 10, 2026
 The Stock Exchange’s website at www.hkexnews.hk
and our website at starsportmed.com (5)
which will provide links to the above
mentioned websites of the H Share Registrar .......... n o later than 11:00 p.m. on
Monday, May 4, 2026
 from the allocation results telephone
enquiry line by calling +852 2862 8555
between 9:00 a.m. and 6:00 p.m. on .................. T uesday, May 5, 2026 to
Wednesday, May 6, 2026,
Thursday, May 7, 2026 to
Friday, May 8, 2026
Share certificates in respect of wholly or partially
successful applications pursuant to the
Hong Kong Public Offering to be despatched
or deposited into CCASS on or before
(7)(8) ..................... .Monday, May 4, 2026
White Form e-Refund payment instructions/refund cheques
in respect of (i) wholly or partially successful applications
(if applicable) and (ii) wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering
to be despatched on or before
(9) ............................. T uesday, May 5, 2026
Dealings in the H Shares on the Stock Exchange
expected to commence at (8) ....................................... .9:00 a.m. on
Tuesday, May 5, 2026
(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.
(2) Y ou will not be permitted to submit your application under the White Form eIPO service through the designated
website www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted
your application and obtained an application reference number from the designated website prior to 11:30 a.m., you
will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon
on the last day for submitting applications, when the application lists close.
(3) If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme
Conditions (collectively, “Severe Weather Signal”) in force in Hong Kong at any time between 9:00 a.m. and 12:00
noon on Wednesday, April 29, 2026, the application lists will not open or close on that day. For further details, please
refer to the section headed “How to Apply for Hong Kong Offer Shares — E. Severe Weather Arrangements” in this
prospectus.
(4) Applicants who apply via HKSCC EIPO channel shall contact their broker or custodian for the earliest and latest
time for giving such instructions, as this may vary by broker or custodian.
(5) Neither of the websites nor any of the information contained on the websites forms part of this prospectus.
(6) 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 at www.iporesults.com.hk (alternatively: www.eipo.com.hk/eIPOAllotment ).
EXPECTED TIMETABLE
–v–


--- page 7 ---
(7) H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that the Global
Offering has become unconditional and the right of termination described in the section headed “Underwriting —
Underwriting Arrangements and Expenses — The Hong Kong Public Offering — Grounds for Termination” in this
prospectus has not been exercised. Investors who trade the 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) If a Severe Weather Signal in force is hoisted on Monday, May 4, 2026, the H Share Registrar will make appropriate
arrangements for the delivery of the H Share certificates to the HKSCC Depository’s service counter so that they
would be available for trading on Tuesday, May 5, 2026.
(9) Refund mechanism for surplus application monies paid by application via HKSCC EIPO channel is subject to the
arrangement between applicants and their broker or custodian.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to the
section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates and
Refund of Application Monies” in this prospectus 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) despatched to the designated 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) despatched to the address as
specified in their application instructions in the form of refund cheques 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” in this prospectus.
The above expected timetable is a summary only. For further details of the structure of the
Global Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, please refer to the sections headed “Structure of the Global Offering” and “How to Apply
for Hong Kong Offer Shares” in this prospectus.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proceed. In such case, our Company will make an announcement
as soon as practicable thereafter.
EXPECTED TIMETABLE
–v i–


--- page 8 ---
IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public Offering
and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the Hong Kong Offer Shares offered by this prospectus
pursuant to the Hong Kong Public Offering. This prospectus may not be used for the purpose
of making, and does not constitute, an offer or invitation in any other jurisdiction or in any
other circumstances. No action has been taken to permit a public offering of the Hong Kong
Offer Shares in any jurisdiction other than Hong Kong and no action has been taken to permit
the distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution
of this prospectus for purposes of a public offering and the offering and sale of the Hong Kong
Offer Shares in other jurisdictions are subject to restrictions and may not be made except as
permitted under the applicable securities laws of such jurisdictions pursuant to registration
with or authorization by the relevant securities regulatory authorities or an exemption
therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is contained in
this prospectus. Any information or representation not contained nor made in this prospectus
must not be relied on by you as having been authorized by us, any of the Joint Sponsors, the
Overall Coordinators, the Capital Market Intermediaries, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of our or their respective
directors, officers, employees, agents, or representatives of any of them or any other parties
involved in the Global Offering.
Page
Expected Timetable .................................................. i v
Contents .......................................................... v i i
Summary .......................................................... 1
Definitions ......................................................... 1 5
Glossary of Technical Terms ........................................... 2 5
Forward-Looking Statements ........................................... 2 9
Risk Factors ....................................................... 3 0
Waiver from Strict Compliance with the Listing Rules ....................... 4 9
Information about this Prospectus and the Global Offering ................... 5 4
Directors, Supervisors and Parties Involved in the Global Offering ............. 5 7
Corporate Information ............................................... 6 2
Industry Overview ................................................... 6 4
CONTENTS
– vii –


--- page 9 ---
Regulatory Overview ................................................. 8 1
History, Development and Corporate Structure ............................. 9 4
Business ........................................................... 1 1 4
Directors, Supervisors and Senior Management ............................. 1 6 7
Relationship with our Controlling Shareholders ............................ 1 8 0
Substantial Shareholders .............................................. 1 8 3
Share Capital ...................................................... 1 8 4
Financial Information ................................................ 1 8 7
Cornerstone Investors ................................................ 2 1 7
Future Plans and Use of Proceeds ....................................... 2 2 2
Underwriting ....................................................... 2 2 6
Structure of the Global Offering ........................................ 2 3 7
How to Apply for Hong Kong Offer Shares ................................ 2 4 3
Appendix I Accountants’ Report ........................................ I - 1
Appendix II Unaudited Pro Forma Financial Information ..................... II-1
Appendix III Taxation and Foreign Exchange .............................. III-1
Appendix IV Summary of Principal Legal and Regulatory Provisions ............ I V - 1
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 Available on
Display .......................................................... VII-1
CONTENTS
– viii –


--- page 10 ---
This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be important
to you. You should read the entire prospectus before you decide to invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in investing
in the Offer Shares are set out in the section headed “Risk Factors.” You should read that
section carefully before you decide to invest in the Offer Shares.
OVERVIEW
We are a China-based medical device company specializing in clinical sports medicine
solutions. We are the fourth largest sports medicine implants and instruments provider, representing
a market share of approximately 6.5% in China’s sports medicine implants and instruments market,
and the largest domestic sports medicine implants and instruments provider in China, in terms of
sales revenue in 2024, according to CIC. We offer holistic solutions for the treatment of injuries to
soft tissues of rotator cuffs, ligaments and meniscus at shoulders, knees, hips, feet/ankles, elbows,
and hands/wrist, as well as for the rehabilitation and prevention of sports-related injuries,
leveraging our self-developed medical implants, active equipment, associated medical consumables
and surgical instruments.
China’s sports medicine device industry is still at the early development stage, with significant
room for growth compared to developed countries. The China’s sports medicine device market is
projected to grow at a CAGR of 16.5% from 2024 to 2030, according to CIC. Meanwhile, domestic
sports medicine providers are expected to steadily enhance their market penetration in China’s
sports medicine device market. In addition, China’s intelligent rehabilitation solutions market is
expected to grow at a CAGR of 47.5% to reach approximately RMB22.9 billion in 2030. We intend
to capture such growth and extend our success into China’s intelligent rehabilitation solutions
market with our sports medicine prescription and rehabilitation system.
Our sports medicine product matrix mainly comprises 63 products spanning medical implants,
active equipment and associated medical consumables, as well as surgical instruments and
regenerative repair products, as of the Latest Practicable Date.
The number of hospitals that had adopted our products increased from over 1,000 as of
December 31, 2023 to over 3,000 as of December 31, 2025, among which over 1,000 were Class
III hospitals. As of December 31, 2025, we had cumulatively sold over 2.0 million units of our
products, with revenue of RMB238.5 million, RMB327.1 million and RMB402.8 million in 2023,
2024 and 2025, respectively.
OUR STRENGTHS
The following strengths underpin our success and enable us to sustainable growth: (i)
renowned brand and market recognition in China’s fast-growing sports medicine device market with
rapid global expansion; (ii) comprehensive, efficient and sustainable research and development
capabilities underpinned by multidisciplinary and synergistic technology platforms; (iii) clinically-
oriented product portfolio; (iv) proven product development and commercialization capabilities in
China and worldwide; and (v) visionary and experienced leadership and strong support from
professional investors.
See “Business — Our Strengths.”
SUMMARY
–1–


--- page 11 ---
OUR STRATEGIES
We will carry out the following strategies: (i) develop full-cycle treatment and rehabilitation
solutions, and build multidimensional technological capabilities; (ii) expand our production
capacity and improve quality control; (iii) amplify our market presence in the domestic market and
become one of the leading brands worldwide; (iv) pursue vertical integration and supply chain
upgrade through strategic investment and acquisitions; and (v) recruit and develop talent in sports
medicine.
See “Business — Our Strategies.”
OUR PRODUCTS
As of the Latest Practicable Date, our product portfolio encompassed 63 products spanning
medical implants, surgical equipment and associated medical consumables, as well as surgical
instruments and regenerative repair products. We had 27 products with Class III medical device
certificates and 25 with Class II medical device certificates as of the same date, the most among
China’s sports medical device companies, according to CIC. In addition, we secured in aggregate
over 200 regulatory approvals and registration certificates for medical devices in Europe, Southeast
Asia, the Middle East and Latin America as of the Latest Practicable Date.
The following table sets forth our revenue breakdown by product segment both in absolute
amounts and as a percentage of total revenue for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,516 78.2 249,987 76.4 310,375 77.1
Surgical equipment and associated
medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,919 21.8 76,986 23.5 92,020 22.8
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 0.0 146 0.1 356 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 100.0 327,119 100.0 402,751 100.0
Note:
(1) Others primarily comprised revenue from the sales of surgical utility carts and regenerative repair products for
joint soft tissues.
The following table sets forth a breakdown of our gross profit and gross profit margin by
product segment for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118147,356 79.0 180,958 72.4 239,270 77.1
SUMMARY
–2–


--- page 12 ---
Y ear ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
Surgical equipment and
associated medical
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,927 57.6 46,582 60.5 59,062 64.2
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 23.4 55 37.7 287 80.6
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 74.3 227,595 69.6 298,619 74.1
Gross profit margin for medical implants decreased from 79.0% in 2023 to 72.4% in 2024,
primarily due to the lower selling prices of our medical implants, resulting from the implementation
of the volume-based procurement programs since 2024. Gross profit margin for medical implants
increased from 72.4% in 2024 to 77.1% in 2025, primarily due to our effective cost management
and economies of scales in production. Specifically, we negotiated with core suppliers for favorable
procurement price. We collaborated with suppliers on raw material design and production
workflows, providing critical insights to optimize their production. We fostered robust relationships
with them while securing favorable pricing terms. We also sourced certain raw materials from
diversified suppliers to enhance our resilience against supply chain disruptions. Our robust supply
chain management enabled us to secure raw materials at competitive prices. In addition, as we
expanded our production scale and further improved production efficiency, our per-unit labor and
manufacturing costs decreased due to economies of scale and better utilization of our production
capacity. As a result of the combined effects of our favorable procurement terms and lower per-unit
production costs, the gross profit margin of our medical implants increased.
The following table sets forth a breakdown of our sales volume and average sales price by
product category for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Medical implants /H1118/H1118/H1118/H1118Sales V olume (Units) 262,000 560,110 710,425
Average Selling Price
(RMB/Unit)
711.9 446.3 436.9 (1)
Surgical equipment
and associated
medical
consumables /H1118/H1118/H1118/H1118/H1118
Sales V olume (Units) 87,098 152,266 177,133
Average Selling Price
(RMB/Unit)
596.1 505.6
(2) 519.5 (3)
Notes:
(1) The slight decrease in average selling prices of medical implants from RMB446.3 per unit to RMB436.9 per
unit primarily reflected normal market fluctuations, including adjustments in sales mix in response to normal
market demand fluctuations and periodic product promotions.
(2) The average selling price of surgical equipment and associated medical consumables decreased from
RMB596.1 per unit in 2023 to RMB505.6 per unit in 2024, primarily due to the increase in the sales of medical
consumables used for surgical equipment, which command relatively lower selling prices.
(3) The average selling price of surgical equipment and associated medical consumables increased slightly from
RMB505.6 per unit in 2024 to RMB519.5 per unit in 2025, primarily due to the increased sales of surgical
equipment that commanded relatively higher average selling prices than associated medical consumables. The
sales volume of our surgical equipment increased as we successfully expanded our customer base in overseas
markets, where new customers typically adopt our equipment at the initial stage of their engagement with us.
SUMMARY
–3–


--- page 13 ---
Since its implementation in Chinese Mainland in 2024, 14 out of 19 of our medical implants
have been included into the volume-based procurement program. For these 14 products, the average
selling prices decreased, improving the affordability and accessibility of our medical implants. As
a result, the sales volume increased significantly. In contrast, the Medical Insurance Reimbursement
Lists primarily affect patients’ out-of-pocket expenditures without directly impacting product
ex-factory prices or sales volumes.
The following chart illustrates our sports medicine product portfolio as of the Latest
Practicable Date:
Platform Category
Number of
approved
products
Number of
products under
development
R&D focus Approved ad vantageous products
Biomaterial
Platform
Suture anchor 11 -
Self-guided separable
All-suture
China’s first-to-market all-suture anchor
China’s first-to-market carbon fiber-reinforced PEEK suture anchor
China’s first-to-market PEEK composite interference screw
China’s first-to-market multi-needle and flexible meniscus repair
system
China’s first-to-market integrated cordless handheld shaver system
First domestically-produced bioabsorbable suture anchor of its kind
in China
China’s first-to-market sports rehabilitation system
China’s first-to-market all-suture buttons
First domestically-produced PEEK suture anchor of its kind in China
First domestically-produced PEEK sheath fixation system of its kind
in China
First domestically-produced bioabsorbable interference screw of its
kind in China
First domestically-produced bioabsorbable interference screws and
sheath fixation system of its kind in China
First domestically-produced adjustable suture button of its kind in
China
First domestically-produced UHMWPE suture of its kind in China
First domestically-produced all-suture meniscus repair system of its
kind in China
First domestically-produced fixed suture button of its kind in China
First domestically-produced suture button with tendon tail of its kind
in China
Interference screws system 71
Meniscus repair system 21
Suture buttons 21
Soft tissue suture system 21
Imaging and
Dynamic
Platform
Plasma RF ablation equipment 42
Integrated Cordless
Algorithm controlled
Arthroscopic surgical shaver 42
Endoscope camera system 64
Surgical instruments and medical
consumables for active equipment 20 7
Intelligent
Medicine
Platform
Surgical robot -1
AI-enabled
Digital rehabilitation systems 1-
Tissue
Engineering
Platform
PRP preparation devices 43
 Cell centrifugation
and separation
Superior
biomechanical
performance
Controllable
degradation
Enhanced tissue
regeneration
Repair scaffolds for
joint soft tissue
-9
In Total 63 32
China’s first-to-market pre-loaded all-suture anchor
China’s first-to-market pre-loaded metal suture anchor
China’s first-to-market pre-loaded PEEK suture anchor
China’s first-to-market pre-loaded bioabsorbable suture anchor
Medical Implants
Our medical implants support a wide range of surgical applications, addressing prevalent
sports-related conditions. This integrated medical implant product segment primarily includes (i)
suture anchors, (ii) interference screws and sheath fixation system, (iii) suture buttons and
high-strength sutures, and (iv) meniscus repair system.
Surgical Equipment and Associated Medical Consumables
Our surgical equipment and associated medical consumables include active equipment,
compatible medical consumables and ancillary surgical instruments, integrated to optimize
efficiency, safety and precision in surgeries. Active equipment relies on external energy sources to
function, altering energy density or converting energy for diagnostic and therapeutic purposes.
Furthermore, we offer medical consumables specifically designed for seamless compatibility with
our active equipment.
Our ancillary surgical instruments enable precise operations. Our ancillary surgical
instruments streamline preoperative preparation and accommodate diverse clinical needs through
versatile combinations.
SUMMARY
–4–


--- page 14 ---
Other Products
We are developing other sports medicine products, such as regenerative repair products for
joint soft tissues. As of the Latest Practicable Date, we have four regenerative repair products for
joint soft tissues. We are developing soft tissue repair scaffolds targeting sports-related soft tissue
damage.
Moreover, leveraging our intelligent medicine platform, we plan to integrate advanced AI
technologies into our products in the future. We are developing arthroscopic surgical robots as well
as sports medicine prescription and rehabilitation system, thereby expanding our portfolio into
out-of-hospital care.
Product Pipeline
The following chart outlines our product pipeline, showing our select products under each
product category and mapping each product category to its corresponding technology platform and
development stage.
Intelligence medicine system
Endoscope camera system
Blood and cell enrichment
separation device
Soft tissue repair scaffold
Product nameProduct category Testing phaseDesign phase Clinical phase R&D focusRegistration
phase
Multi-modal image fusion
Integrated cordless
Cell centrifugation
and separation
Superior biomechanical
performance
Controllable degradation
Enhanced tissue
regeneration
*Products listed above are
under development
Disposable blood and
cell separation device
Tendon composite reinforcement patch
Tendon repair patch kit
Regenerative meniscus repair scaffold
Regenerative ligament repair scaffold
Arthroscopic surgical robot
Cordless endoscope
camera system
See “Business — Our Products.”
OUR CORE TECHNOLOGIES
We leverage four proprietary technology platforms to deliver sports medicine solutions to
doctors and patients, aligning advanced technologies with clinical and consumer demands. In
particular, the biomaterial platform establishes an essential technological foundation for our
medical implants. Similarly, the imaging and dynamic platform constructs a foundational layer via
sophisticated imaging modalities, which directly enable our active equipment and associated
medical consumables. In addition, our emerging intelligent medicine platform aims to leverage
advanced algorithms, machine learning models and data analytics to drive personalized care.
Likewise, the tissue engineering platform establishes a foundational regenerative toolkit through
innovations in biological scaffolds.
See “Business — Our Core Technologies.”
RESEARCH AND DEVELOPMENT
Our R&D capabilities are crucial to our commitment to bringing sports medicine solutions.
During the Track Record Period, our research and development expenses were RMB35.0 million,
RMB37.3 million and RMB47.5 million in 2023, 2024 and 2025, respectively. We were recognized
as the National High-Tech Enterprise, National Technologically Advanced “Little Giant”
Enterprise, Beijing Municipal Enterprise Technology Center and Beijing Intellectual Property
Advantage Unit. We have participated in formulating a set of industry standards and applied for
over 260 patents, among which over 180 had been granted as of the Latest Practicable Date, further
enhancing our reputation for scientific excellence and innovations.
See “Business — Research and Development.”
SUMMARY
–5–


--- page 15 ---
PRODUCTION
As of the Latest Practicable Date, we have production plants in Beijing, Jiangsu and Hunan.
During the Track Record Period, all of our sports medicine products are produced in-house, and we
outsourced sterilization phase to third-party sterilization workshops to enhance the production
efficiency.
See “Business — Our Production.”
SALES AND CUSTOMERS
We primarily sell our products through distributorship. As of December 31, 2025, our
domestic distribution network included over 250 distributors across Chinese mainland. During the
Track Record Period, we also sell our products to overseas distributors. We had 24, 49 and 66
distributors overseas as of December 31, 2023, 2024 and 2025, respectively.
The following table sets forth a breakdown of our revenue by geographical regions based on
our distributors’ principal places of business, in absolute amount and as a percentage of our total
revenue for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118231,876 97.2 306,267 93.6 332,485 82.6
Other countries and regions (1) /H1118/H1118/H1118/H11186,666 2.8 20,852 6.4 70,266 17.4
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 100.0 327,119 100.0 402,751 100.0
Note:
(1) Other countries and regions mainly include France, Poland and Spain.
The following table sets forth a breakdown of our sales volume and average selling price by
geographical region for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Chinese mainland /H1118/H1118/H1118Sales V olume (Units) 339,544 675,394 763,030
Average Selling Price
(RMB)
682.9 453.5 435.7
Other countries and
regions (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales V olume (Units) 9,576 37,008 124,910
Average Selling Price
(RMB)
696.1 563.4 (2) 562.5
Notes:
(1) Other countries and regions mainly include France, Poland and Spain.
(2) The average selling price of our products in other countries and regions decreased from RMB696.1 per unit
in 2023 to RMB563.4 per unit in 2024, primarily due to our strategic initiatives to lower prices in overseas
markets to expand our presence. We adjusted our sales strategies by enhancing promotional activities, which
effectively broadened our customer base and increased sales volumes. Additionally, shifts in our product mix
contributed to this trend, with a higher proportion of sales from our medical implants, which command lower
average selling prices than surgical equipment and associated medical consumables.
SUMMARY
–6–


--- page 16 ---
Revenue generated from our five largest customers in each year of 2023, 2024 and 2025 was
RMB126.8 million, RMB188.7 million and RMB232.2 million, respectively, representing 53.1%,
57.7% and 57.7% of our total revenue in the respective periods. Revenue generated from our largest
customer in each year of 2023, 2024 and 2025 was RMB42.0 million, RMB56.9 million and
RMB83.7 million, respectively, accounting for 17.6%, 17.4% and 20.8% of our revenue in the
respective periods.
See “Business — Sales and Marketing.”
RA W MATERIALS AND SUPPLIERS
Our key raw materials include bioabsorbable materials, PEEK materials, UHMWPE yarn and
inserter components for medical implants; electronic components for active equipment; electrode
wires, ceramic bases, inner and outer tubes for associated medical consumables; and metal
components, tool handles and casings for surgical instruments. Our suppliers primarily comprise
raw material and component providers. Purchase from our five largest suppliers in each year of
2023, 2024 and 2025 was RMB38.2 million, RMB96.8 million and RMB44.5 million, respectively,
accounting for 28.4%, 44.8% and 25.2% of our total purchases in 2023, 2024 and 2025,
respectively. Purchase from our largest supplier in each year of 2023, 2024 and 2025 was RMB12.5
million, RMB52.1 million and RMB11.4 million, respectively, accounting for 9.3%, 24.1% and
6.5% of our total purchases in 2023, 2024 and 2025, respectively.
See “Business — Supply Chain Management.”
SEASONALITY
Our sales volume is typically higher in the second half of the year. This seasonality is driven
primarily by increased surgical demand during holiday seasons and a higher incidence of winter
sports related injuries in the second half of the year, which elevate procedure volumes and sports
medicine product usage. According to CIC, this seasonality is common across the sports medicine
device industry, with medical device manufacturers similarly experiencing stronger procurement
demand and sales in the second half of the year.
COMPETITION
We compete in China’s sports medicine device market. According to CIC, China’s sports
medicine device market is highly concentrated and currently dominated by international players. In
2024, the five largest sports medicine implants and instruments providers in China accounted for
approximately 59.3% of the market share in terms of sales revenue, with four of them being
international players. We ranked fourth in China’s sports medicine implants and instruments market
among all brands, representing a market share of approximately 6.5% in China’s sports medicine
implants and instruments market, and first among all domestic brands in terms of sales revenue in
2024.
Our business spans key product categories, including sports medical implants, surgical
equipment and associated medical consumables, and other sports medicine products such as
regenerative repair products for joint soft tissues. In China’s sports medical implants market, we
ranked first among domestic brands and fourth among all brands in 2024, by sales revenue, with a
market share of approximately 8.8%. In China’s surgical equipment and associated medical
consumables market, we ranked first among domestic brands and sixth among all brands in 2024
by sales revenue, with a market share of approximately 3.2%.
See “Industry Overview.”
SUMMARY
–7–


--- page 17 ---
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Dong, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang
are directly interested in 33.14%, 1.88%, 2.36% and 4.09% of the issued share capital of our
Company, respectively. The general partner of each of Tianjin Jikang, Tianjin Puhe and Tianjin
Y unkang is Tianjin Bokang, which is held as to 99% by Mr. Dong. As such, Mr. Dong, Tianjin
Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang are able to collectively control the voting
rights in approximately 41.47% of the issued share capital of our Company as of the Latest
Practicable Date.
Immediately following the completion of the Global Offering, Mr. Dong, Tianjin Bokang,
Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang will be able to control the voting rights in
approximately 35.10% of the issued share capital of our Company. Therefore, Mr. Dong, Tianjin
Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang will be regarded as a group of
Controlling Shareholders upon Listing.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Description of Major Components of Our Results of Operations
The following table sets forth a summary of our results of operations for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 327,119 402,751
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(61,234) (99,524) (104,132)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 227,595 298,619
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,834 10,097 22,728
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,108) (69,628) (80,570)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,165) (22,768) (36,706)
Research and development expenses /H1118/H1118/H1118/H1118/H1118(35,024) (37,252) (47,503)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) (13) (415)
Reversal of impairment/(impairment) of
financial assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (111) (1,642)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(486) (352) (343)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,322 107,568 154,168
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,210) (12,179) (17,198)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Non-IFRS Measure
To supplement our historical financial information, which is presented in accordance with
IFRS, we also use adjusted profit (non-IFRS measure) as additional financial measured, which are
not required by, or presented in accordance with IFRS. We believe this non-IFRS measure facilitates
comparisons of operating performance from year to year and company to company by adjusting for
potential impacts of items. We believe that this measure provides useful information to investors
and others in understanding and evaluating our consolidated results of operations. Our presentation
of adjusted profit (non-IFRS measure) may not be comparable to similarly titled measures presented
SUMMARY
–8–


--- page 18 ---
by other companies. The use of these non-IFRS measures has limitations as analytical tools, and you
should not consider them in isolation form, or as substitutes for analysis of, or our results of
operations as reported under IFRS.
The following table reconciles our adjusted profit (non-IFRS measure) for the year presented
in accordance with IFRS, which is profit for the year.
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Add:
Share award expenses
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118905 1,083 1,207
Listing expenses (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 15,449
Adjusted profit for the year (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,017 96,472 153,626
Notes:
(1) Share award expenses are non-cash in nature.
(2) Listing expenses represent expenses related to the Global Offering.
Revenue
During the Track Record Period, we recorded steady revenue growth. Our revenue increased
from RMB238.5 million in 2023 to RMB327.1 million in 2024, and further increased to RMB402.8
million in 2025, primarily due to the continuously increased sales volume of our products, which
were driven by the enhanced market recognition and improved accessibility of our medical
implants, as well as the increased adoption of our associated medical consumables used for active
equipment.
Gross Profit Margin
Gross profit margin for medical implants decreased from 79.0% in 2023 to 72.4% in 2024,
primarily due to the lower selling prices of our medical implants, which were included in the
volume-based procurement programs since 2024. Gross profit margin for medical implants
increased from 72.4% in 2024 to 77.1% in 2025, primarily due to our effective cost management
and economies of scale.
Gross profit margin for surgical equipment and associated medical consumables increased
from 57.6% in 2023 to 60.5% in 2024, primarily due to a decrease in raw material costs, as we
benefitted from favorable procurement prices, as well as the economies of scale. Gross profit
margin for surgical equipment and associated medical consumables increased from 60.5% in 2024
to 64.2% in 2025, primarily due to our effective cost management strategies and economies of scale.
Net Profit
Our profit for the year increased from RMB57.1 million in 2023 to RMB95.4 million in 2024,
and further increased to RMB137.0 million in 2025, primarily due to the increased revenue.
SUMMARY
–9–


--- page 19 ---
Discussion of Certain Key Balance Sheet Items
The following table sets forth a summary of selected information from our balance sheet as
of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,144 522,360 659,621
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,134 94,974 104,460
Total assets
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,525 127,233 130,820
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,985 18,861 23,844
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,619 395,127 528,801
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,768 471,240 609,417
Equity attributable to owners of the
parent
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 46,409 46,409
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,359 424,831 563,008
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,768 471,240 609,417
Our net assets increased from RMB374.8 million as of December 31, 2023 to RMB471.2
million as of December 31, 2024, primarily due to our profit for the year of RMB95.4 million. Our
net assets increased from RMB471.2 million as of December 31, 2024 to RMB609.4 million as of
December 31, 2025, primarily due to our profit for the year of RMB137.0 million.
As of December 31,
As of
February 28,
2023 2024 2025 2026
(RMB in thousands)
(Unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,287 57,154 64,476 71,259
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,651 19,134 40,981 39,270
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,836 12,011 14,384 21,805
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 422,934 393,433
Time deposits with original maturities
of over three months and due
within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 344,093 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846 85,033
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,144 522,360 659,621 610,800
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,900 23,550 27,765 19,742
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H111840,173 77,780 66,586 41,601
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,198 10,487 4,222 4,772
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118 – – 12,000 2,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,276 3,716 1,901 930
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 1,617 5,976 119
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,672 10,083 12,370 12,370
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,525 127,233 130,820 81,534
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,619 395,127 528,801 529,266
SUMMARY
–1 0–


--- page 20 ---
Our net current assets increased from RMB528.8 million as of December 31, 2025 to
RMB529.3 million as of February 28, 2026, primarily due to (i) a decrease in other payables and
accruals of RMB25.0 million due to the payment of employees’ annual bonus; (ii) a decrease in
interest-bearing bank borrowings of RMB10.0 million; and (iii) an increase in prepayments, other
receivables and other assets of RMB7.4 million, partially offset by a decrease in cash and cash
equivalents of RMB31.8 million, which was primarily attributable to the settlement of employees’
annual bonus.
Our net current assets increased from RMB395.1 million as of December 31, 2024 to
RMB528.8 million as of December 31, 2025, primarily due to (i) an increase in financial assets at
fair value through profit or loss of RMB422.9 million; (ii) an increase in cash and cash equivalents
of RMB26.9 million, primarily due to our continued business growth; and (iii) an increase in trade
and bills receivables of RMB21.8 million, driven by the increased sales, partially offset by a
decrease in time deposits with original maturities of over three months and due within one year of
RMB344.1 million.
Our net current assets increased from RMB334.6 million as of December 31, 2023 to
RMB395.1 million as of December 31, 2024, primarily due to (i) an increase in time deposits of
RMB344.1 million, (ii) an increase in inventories of RMB17.9 million, (iii) an increase in trade and
bills receivables of RMB16.5 million, in line with the growth in sales, and (iv) an increase in
prepayments, other receivables and other assets of RMB5.2 million, in line with our business
expansion, partially offset by (i) a decrease in cash and cash equivalent of RMB266.4 million, (ii)
an increase in other payables and accruals of RMB37.6 million, and (iii) an increase in trade
payables of RMB10.7 million for increased raw material procurement.
Summary of the Consolidated Statements of Cash Flows
The following table sets forth our cash flow for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Net cash flows from operating activities /H1118/H1118 79,856 94,515 157,116
Net cash flows used in 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(21,168) (371,252) (120,561)
Net cash flows from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,594 10,133 (9,354)
Net increase/(decrease) in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,282 (266,604) 27,201
Cash and cash equivalents at beginning of
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/H1118272,840 356,370 89,968
Effect of foreign exchange rate changes,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248 202 (323)
Cash and cash equivalents at end of
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/H1118356,370 89,968 116,846
RISK FACTORS
Our business and the Global Offering involve certain risks as set out in “Risk Factors.” Y ou
should carefully read that section in its entirety before you decide to invest in our Offer Shares.
Some of the major risks we face include: (i) our business operation is subject to complex and
evolving laws and regulations; (ii) any failure or delay to introduce new products, interruptions of
our R&D initiatives or failure for our new products to receive widespread market acceptance; (iii)
the prices of our products may face downward pressure caused by government-administered pricing
SUMMARY
–1 1–


--- page 21 ---
guidance or the volume-based procurement programs; (iv) the market size of sports medicine device
industry in China may not be as large as expected, and we face intensified competition from
international competitors; (v) ineffectiveness of distributorship; and (vi) the level of medical
insurance reimbursement patients receive for using our products.
See “Risk Factors.”
OFFERING STATISTICS
Based on the
Offer Price of
HK$98.50
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/H1118/H1118
HK$5,400.9
million
Unaudited pro forma adjusted consolidated net tangible assets per Share
as of December 31, 2025 (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/H1118HK$26.8
Notes:
(1) The calculation of market capitalization is based on 54,831,344 Shares expected to be in issue immediately
upon completion of the Global Offering.
(2) The unaudited pro forma adjusted net tangible assets per Share is calculated based on 54,831,344 Shares in
issue immediately following completion of the Global Offering. Refer to Appendix II for further information.
FUTURE PLANS AND USE OF PROCEEDS
Assuming an Offer Price of HK$98.50 per Offer Share, we estimate that we will receive net
proceeds of approximately HK$758.4 million from the Global Offering after deducting the
underwriting commissions and other estimated expenses in connection with the Global Offering. We
intend to use the net proceeds we expect to receive from the Global Offering for the purposes and
in the amounts set out below:
 Approximately 30.0%, or HK$227.5 million, will be allocated to expand our production
capacity and enhance production efficiency, enabling us to meet the rapidly growing
market demand.
 Approximately 35.0%, or HK$265.5 million, will be used for our R&D efforts in line
with our patient-oriented product strategy.
 Approximately 25.0%, or HK$189.6 million, will be used for commercialization, sales
and marketing efforts to reinforce our leadership in China and establish our presence and
brand image worldwide.
 Approximately 10.0%, or HK$75.8 million, will be used for working capital and general
corporate purposes.
See “Future Plans and Use of Proceeds.”
LISTING EXPENSES
Listing expenses consist of professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We expect to incur listing expenses of
approximately HK$71.2 million, which accounts for approximately 8.6% of the gross proceeds from
the Global Offering. We estimate the listing expenses to consist of (i) approximately HK$33.3
million in underwriting fees and (ii) HK$37.9 million in non-underwriting fees, comprising fees and
expenses for legal advisors and reporting accountants of approximately HK$24.5 million, and other
fees and expenses of approximately HK$13.4 million. Among of the total listing expenses,
SUMMARY
–1 2–


--- page 22 ---
approximately HK$38.7 million will be directly attributable to the issue of our Shares, which will
be deducted from equity upon the completion of the Global Offering, and the remaining HK$32.5
million will be expensed in our consolidated statements of comprehensive income.
DIVIDEND AND DIVIDEND POLICY
No dividends were paid or declared by our Company during the Track Record Period. We do
not have any fixed dividend policy or pre-determined dividend payout ratio. As advised by our PRC
Legal Advisor, according to the PRC Company Law, dividends may be paid only out of distributable
profit, and we may distribute after-tax profits after making up losses and appropriation of statutory
reserves. Any future determination to pay dividends, as well as the amount will be made at the
discretion of our Board of Directors which will be subject to the corporate shareholder approval
processes and may be based on a number of factors, including but not limited to our future
operations and earnings, capital requirements and surplus, cash flows and general financial
condition, contractual restrictions, taxation and other factors from time to time that the Board of
Directors may deem relevant, and will also be subject to our Articles of Association and
constitutional documents, as well as applicable laws and regulations. Any future declarations and
payments of dividends may or may not reflect the historical declarations and payments of dividends.
PRE-IPO INVESTMENTS
Since the establishment of our Group, we have attracted certain Pre-IPO Investors to raise
funds for fueling the development of our business. Our Pre-IPO Investors include a select group of
professional investment companies. For details of background of the Pre-IPO Investors and the
principal terms of the Pre-IPO Investments, see “History, Development and Corporate Structure.”
STAR MARKET LISTING APPLICATION
To explore the opportunity of establishing a capital market platform in the A-share market, in
March 2023, we entered into a guidance agreement to receive guidance from a qualified sponsor of
A-share listing. We applied for the listing of our shares on the Shanghai Stock Exchange Star
Market in September 2023 (the “ Star Market Listing Application ”). The Company received one
round of comments from the Shanghai Stock Exchange (the “ SSE”) in October 2023, requesting
supplemental explanations primarily on business disclosure, financial disclosure and historical
shareholding changes of the Company. The Company submitted its response addressing above
comments to the SSE in May 2024 and did not receive official comments from SSE thereafter.
Nevertheless, taking into consideration the then market conditions as well as the extensive period
required for approval of a listing application on the Star Market, the Company decided to facilitate
the Company’s listing process by exploring other listing venue and sought to list its H Shares on
the Stock Exchange since early 2025, and our Star Market Listing Application was officially
withdrawn by its sponsor due to the then market condition in June 2025.
To the best knowledge and belief of our Directors, our Company did not have any
disagreements or disputes with the professional parties involved in the Star Market Listing
Application, or any matters, including any major comments raised by the SSE or the CSRC relating
to the Star Market Listing Application which would materially and adversely affect our suitability
for the Listing or should be brought to the attention of the Stock Exchange or would affect the
suitability of our Company’s listing on the Stock Exchange. Based on the independent due diligence
conducted by the Joint Sponsors, having considered the conclusion and the basis of the Directors,
nothing has come to the attention of the Joint Sponsors that would reasonably cause the Joint
Sponsors to disagree with the Directors’ view above.
SUMMARY
–1 3–


--- page 23 ---
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
We have maintained stable business operation and development since December 31, 2025. Our
Directors have confirmed that up to the date of this document there has been no material adverse
change in our financial or trading position or prospects since December 31, 2025 and there has been
no event since December 31, 2025 which would materially affect the information shown in the
Accountants’ Report set out in Appendix I to this document.
SUMMARY
–1 4–


--- page 24 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain other terms are explained in
“Glossary of Technical Terms”.
“%” per cent
“Accountants’ Report” the accountants’ report of our Company from Ernst &
Y oung, the text of which is set out in Appendix I to this
prospectus
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified
person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“Articles of Association” or
“Articles”
the articles of association of our Company adopted on
August 18, 2025, which will become effective on the Listing
Date and as amended from time to time, a summary of which
is set out in “Appendix V — Summary of the Articles of
Association” to this document
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Audit Committee” the audit committee of our Board
“Board” or “Board of Directors” the board of Directors of our Company
“Business Day” a day (other than a Saturday, Sunday or public holiday) on
which banks in Hong Kong are generally open for normal
business to the public
“CAGR” compound annual growth rate
“Capital Market Intermediaries” the capital market intermediaries as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“China”, “Chinese mainland” or
“PRC”
the People’s Republic of China, and for the purpose of this
prospectus and for geographical reference only and except
where the context requires, references in this prospectus to
“China” and the “PRC” do not apply to Hong Kong, Macau
Special Administrative Region and Taiwan
“CIC” or “Industry Consultant” China Insights Industry Consultancy Limited, our industry
consultant
DEFINITIONS
–1 5–


--- page 25 ---
“CIC Report” the industry report commissioned by us and independently
prepared by CIC, summary of which is set forth in the
section headed “Industry Overview” in this prospectus
“close associate(s)” has the meaning ascribed to it under the Listing Rules
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time to
time
“Company”, “our Company” or
“the Company”
Star Sports Medicine Co., Ltd. (ʮ
̡), a limited liability company established under the laws
of the PRC on July 31, 2017 and converted into a joint stock
limited company on March 8, 2023.
“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
“Compliance Advisor” Red Sun Capital Limited
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed to it in the Listing Rules and
unless the context requires otherwise, refers to the group of
controlling shareholders of our Company, namely Mr. Dong,
Tianjin Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin
Y unkang
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1 to
the Listing Rules
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Director(s)” the director(s) of our Company
“Domestic Unlisted Share(s)” share(s) in the share capital of our Company with a nominal
value of RMB1.00 each, which is/are subscribed for or
credited as paid in Renminbi and not listed on any stock
exchange
“EIT Law” Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍ձ਷
‘), as amended, supplemented or otherwise
modified from time to time
DEFINITIONS
–1 6–


--- page 26 ---
“ESG” Environmental, Social and Corporate Governance
“Exchange Participant” a person (a) who, in accordance with the Rules of the Hong
Kong Stock Exchange, may trade on or through the Hong
Kong Stock Exchange; and (b) whose name is entered in a
list, register or roll kept by the Hong Kong Stock Exchange
as a person who may trade on or through the Hong Kong
Stock Exchange
“Extreme Conditions” extreme conditions 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
“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
“Group”, “our Group”, “we”, “our”
or “us”
our Company and our subsidiaries or, where the context so
requires, in respect of the period before our Company
became the holding company of our present subsidiaries, the
business operated by such subsidiaries or their predecessors
(as the case may be)
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024 (as
amended, supplemented or otherwise modified from time to
time)
“H Share(s)” share(s) in the share capital of our Company with a nominal
value of RMB1.00 each, which is/are to be subscribed for
and traded in HK dollars and to be listed on the Hong Kong
Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HK” or “Hong Kong” the Hong Kong Special Administrative Region of the
People’s Republic of China
“HK$” or “Hong Kong dollars” or
“HK dollars” or “cents”
Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“HKFRS” Hong Kong Financial Reporting Standards issued by the
Hong Kong Institute of Certified Public Accountants
DEFINITIONS
–1 7–


--- page 27 ---
“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 clearing participant or a
custodian participant under HKSCC to give electronic
application instructions via HKSCC’s FINI system to apply
for the Hong Kong Offer Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
the HKSCC
“HKSCC Operational Procedures” the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time to
time in force
“HKSCC Participant” a participant admitted participating in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong Offer Shares” 842,200 H Shares (subject to reallocation as described in
“Structure of the Global Offering”) initially offered by our
Company for subscription at the Offer Price pursuant to the
Hong Kong Public Offering
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for subscription
by the public in Hong Kong at the Offer Price (plus
brokerage, SFC transaction levy, AFRC transaction levy and
Hong Kong Stock Exchange trading fee), on and subject to
the terms and conditions described in “Structure of the
Global Offering — The Hong Kong Public Offering”
“Hong Kong Stock Exchange”
or “Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Takeovers Code”
or “Takeovers Code”
Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC
“Hong Kong Underwriters” the underwriters listed in “Underwriting — Hong Kong
Underwriters”, being the underwriters of the Hong Kong
Public Offering
DEFINITIONS
–1 8–


--- page 28 ---
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated April 23, 2026, relating to
the Hong Kong Public Offering and entered into by, among
others, the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Hong Kong Underwriters and
our Company as further described in the section headed
“Underwriting — Underwriting Arrangements” in this
prospectus
“Hunan Tianxing” Hunan Tianxing Bomaidi Medical Devices Co., Ltd. (˂
ʮ̡), a limited liability company
established under the laws of the PRC on June 7, 2022, and
a wholly-owned subsidiary of our Company
“IFRS Accounting Standards” the IFRS Accounting Standards, which include standards,
amendments and interpretations promulgated by the
International Accounting Standards Board (IASB) and the
IAS and interpretations issued by the International
Accounting Standards Committee (IASC)
“Independent Third Party(ies)” person(s) or company(ies) and their respective ultimate
beneficial owner(s), who/which, to the best of our Directors’
knowledge, information and belief, having made all
reasonable enquiries, is/are third party(ies) independent of
our Company and our connected persons as defined under
the Listing Rules
“International Offer Shares” 7,579,650 H Shares (subject to reallocation as described in
“Structure of the Global Offering”) initially offered by our
Company pursuant to the International Offering
“International Offering” the conditional placing of the International Offer Shares by
the International Underwriters at the Offer Price outside the
United States in offshore transactions in reliance on
Regulation S, on and subject to the terms and conditions of
the International Underwriting Agreement, as further
described in “Structure of the Global Offering — The
International Offering”
“International Underwriters” the international underwriters who are expected to enter into
the International Underwriting Agreement to underwrite the
International Offering
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering expected to be entered into on or about April 29,
2026 by, among others, our Company, the Overall
Coordinators and the International Underwriters, as further
described in “Underwriting — International Offering”
“Joint Bookrunners” the joint bookrunners as named in “Directors, Supervisors
and Parties Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
DEFINITIONS
–1 9–


--- page 29 ---
“Joint Lead Managers” the joint lead managers as named in “Directors, Supervisors
and Parties Involved in the Global Offering”
“Joint Sponsors” the joint sponsors as named in “Directors, Supervisors and
Parties Involved in the Global Offering”
“Latest Practicable Date” April 15, 2026 being the latest practicable date for the
purpose of ascertaining certain information contained in this
prospectus prior to its publication
“Listing” the listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the listing committee of the Hong Kong Stock Exchange
“Listing Date” the date, expected to be on or about Tuesday, May 5, 2026,
on which the H Shares are listed on the Stock Exchange and
from which dealings in the H Shares are permitted to
commence on the Stock Exchange
“Listing Rules” or “Hong Kong
Listing Rules”
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended or
supplemented from time to time
“Main Board” the stock market (excluding the option market) operated by
the Stock Exchange which is independent from and operated
in parallel with GEM of the Stock Exchange
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ௅)
“Mr. Dong” Mr. Dong Wenxing ( ໨˖ጳ), our Chairman of the Board,
executive Director, general manager and one of our
Controlling Shareholders
“NDRC” National Development and Reform Commission of the PRC
(ึ)
“Nomination Committee” the nomination committee of our Board
“Offer Price” HK$98.50, being the final offer price per Offer Share
(exclusive of brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee), expressed
in Hong Kong dollars, at which the Hong Kong Offer Shares
are to be subscribed for pursuant to the Hong Kong Public
Offering and the International Offer Shares are to be offered
pursuant to the International Offering
“Offer Share(s)” the Hong Kong Offer Share(s) and/or the International Offer
Share(s), as the context may require
“Overall Coordinators” the overall coordinators as named in “Directors, Supervisors
and Parties Involved in the Global Offering”
DEFINITIONS
–2 0–


--- page 30 ---
“Overseas Listing Trial Measures” the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆุ
‘) promulgated by the
CSRC on February 17, 2023
“PRC Company Law” the Company Law of the People’s Republic of China ( ʕ
‘), as amended, supplemented or
otherwise modified from time to time
“PRC Government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and instrumentalities
thereof or, where the context requires, any of them
“PRC Legal Advisor” Zhong Lun Law Firm, the legal adviser to our Company as
the laws of the PRC
“PRC Securities Law” the Securities Law of the PRC ( ʕശɛ͏΍ձ਷ᗇՎ
‘), as amended, supplemented or otherwise modified
from time to time
“Pre-IPO Investment(s)” the investment(s) in our Company undertaken by the Pre-
IPO Investors pursuant to the relevant equity transfer
agreement(s) and/or share subscription agreement(s), details
of which are set out in the section headed “History,
Development and Corporate Structure” in this prospectus
“Pre-IPO Investor(s)” the investor(s) who acquired interest in our Company
pursuant to the relevant equity transfer agreement(s) and/or
share purchase agreement(s), details of which are set out in
the section headed “History, Development and Corporate
Structure” in this prospectus
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“province” a province or, where the context requires, a provincial level
autonomous region or municipality, under the direct
supervision of the central government of the PRC
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“R&D” Research and development
DEFINITIONS
–2 1–


--- page 31 ---
“SAFE” State Administration of Foreign Exchange of the PRC ( ʕശ
ɛ͏΍ձ਷̮ි၍ଣ҅), the PRC governmental agency
responsible for matters relating to foreign exchange
administration, including local branches, when applicable
“SAMR” State Administration for Market Regulation of the PRC ( ʕ
̹ఙ္ຖ၍ଣᐼ҅) (formerly known as State
Administration for Industry and Commerce of the PRC ( ʕ
၍ଣᐼ҅)
“SA T” State Administration of Taxation of the PRC (೼ਕ
ᐼ҅)
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” or “Securities and Futures
Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended or supplemented from
time to time
“Share(s)” ordinary shares in the capital of our Company with a
nominal value of RMB1.00 each
“Shareholder(s)” holder(s) of Shares
“Sponsor-Overall Coordinators” the sponsor-overall coordinators as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
“Star (HK)” Star (HK) Medicine Co., Limited (ʮ
̡), a limited liability company established under the laws
of Hong Kong on February 7, 2024, and a wholly-owned
subsidiary of our Company
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“substantial shareholder(s)” has the meaning ascribed to it in the Listing Rules
“Suzhou Tianxing” Suzhou Xingyue Smart Healthcare Technology Co., Ltd. ( ᘽ
ʮ̡), a limited liability company
established under the laws of the PRC on April 25, 2023,
and a wholly-owned subsidiary of our Company
“Tianjin Bokang” Tianjin Bokang Technology Co., Ltd. (ʮ
̡), a limited liability company established under the law of
the PRC on October 8, 2021, and one of our Controlling
Shareholders
DEFINITIONS
–2 2–


--- page 32 ---
“Tianjin Jikang” Tianjin Jikang Enterprise Management Consulting
Partnership (Limited Partnership) (ΛੰΆุ၍ଣፔ༔
ΥྫΆุ(Υྫ)), a limited partnership established
under the laws of the PRC on October 20, 2021, and one of
our Controlling Shareholders
“Tianjin Puhe” Tianjin Puhe Enterprise Management Consulting
Partnership (Limited Partnership) (౷ΥΆุ၍ଣፔ༔
ΥྫΆุ(Υྫ)), a limited partnership established
under the laws of the PRC on November 3, 2021, and one of
our Controlling Shareholders
“Tianjin Y unkang” Tianjin Y unkang Technology Center (Limited Partnership)
(Ҧʕː(Υྫ)), a limited partnership
established under the laws of the PRC on March 25, 2020,
and one of our Controlling Shareholders
“Track Record Period” the three years ended December 31, 2023, 2024 and 2025
“U.S.” or “United States” the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
“U.S. Securities Act” the United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time, and
the rules and regulations promulgated thereunder
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“Unlisted Share(s)” ordinary Share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are not listed or traded on
any stock exchange
“US$”, “USD” or “U.S. dollars” United States dollars, the lawful currency for the time being
of the United States
“V A T” value-added tax
“White Form eIPO” the application for Hong Kong Offer Shares to be issued in
the applicant’s own name, submitted online through the
designated website at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
Unless otherwise expressly stated or the context otherwise requires, all data in this prospectus
is as of the date of this prospectus.
DEFINITIONS
–2 3–


--- page 33 ---
The English names of the PRC entities, PRC laws or regulations, and the PRC governmental
authorities referred to in this prospectus are translations from their Chinese names and are for
identification purposes. If there is any inconsistency, the Chinese names shall prevail.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
DEFINITIONS
–2 4–


--- page 34 ---
This glossary of technical terms contains explanations of certain technical terms used
in this prospectus in connection with our Company and our business. Such terminology and
meanings may not correspond to standard industry meanings or usages of those terms.
“ACL” anterior cruciate ligament, a ligament in the knee that
connects the thigh bone to the shin bone and helps stabilize
the joint
“aimer” a device or tool used to guide or align something precisely
“arthroscopic surgery” a minimally invasive procedure using a small camera and
instruments inserted through tiny incisions to diagnose or
treat joint conditions
“/H9252-TCP” a synthetic bone graft substitute used in medicine to
regenerate bone suffered from bone defects
“biodegradable” capable of being broken down, especially broken down into
innocuous products by action of microorganisms
“centrifuge” a machine that spins samples at high speed to separate
substances based on density
“Class II medical device” a device with moderate risk to the user that requires
stringent regulatory controls to ensure its safety and
effectiveness
“Class III medical device” a device with high risk to the user that requires special and
stringent regulatory controls to ensure its safety and
effectiveness
“Class III hospital” a top-tier hospital in China with comprehensive medical
services, advanced equipment and strong research
capabilities
“CNAS” China National Accreditation Service for Conformity
Assessment, an organization that accredits laboratories,
inspection bodies and certification organizations to ensure
their competence and compliance with international
standards
“CRO” contract research organization, a company that provides
support to the pharmaceutical, biotechnology, and medical
device industries in the form of research services outsourced
on a contractual basis
“cross-linking” the process of creating chemical bonds between molecules,
effectively combining them together
GLOSSARY OF TECHNICAL TERMS
–2 5–


--- page 35 ---
“CT” computed tomography, an imaging technique that uses X-
rays and computer processing to create detailed cross-
sectional views of the body
“dehydrothermal cross-linking” a physical method for enhancing the properties of
biomaterials, particularly collagen, by creating crosslinks
between molecules through a vacuum and heat-driven
process
“endoscope camera system” a visualization system comprising a camera system and a
display monitor, intended to provide real-time in vivo
imaging for minimally invasion surgery
“EU” European Union
“freeze-drying” a process that removes water from a product by freezing it
and then reducing the surrounding pressure to allow the
frozen water to sublimate. This process avoids the liquid
phase, which can be beneficial for preserving the product’s
structure and properties
“GCP” good clinical practice, an international standard for the
design, implementation, recording and reporting of clinical
trials involving human subjects. It aims to ensure the
scientific, ethical, and participant rights protection of
clinical trials, while also ensuring the accuracy and
reliability of trial data.
“GMP” good manufacturing practices, the aspect of quality
assurance that ensures that medicinal products are
consistently produced and controlled to the quality
standards appropriate to their intended use and as required
by the product specification
“high-load braided implant
preparation technology”
a method for creating strong, flexible implants using braided
materials designed to withstand high mechanical loads
“Hz” a unit of frequency that measures cycles per second in
electrical or sound signals
“interference screw” a type of surgical screw used to secure grafts in ligament
reconstruction through compression within a bone tunnel
“ISO13485” an international standard that specifies requirements for a
quality management system for medical device
manufacturing
“isotropic mechanical
performance”
uniform mechanical properties in all directions within a
material
“lasso” a looped surgical tool used to grasp, manipulate or guide
sutures during minimally invasive procedures
GLOSSARY OF TECHNICAL TERMS
–2 6–


--- page 36 ---
“ligament” a band of tough, fibrous tissue that connects bones and
stabilizes joints
“ligament reconstruction” a surgical procedure to replace or repair a damaged ligament
using grafts or synthetic materials
“meniscus” a C-shaped cartilage in the knee that cushions and stabilizes
the joint between the femur and tibia
“MRI” magnetic resonance imaging, a procedure that uses
magnetism, radio waves, and a computer to produce the
detailed image of internal structure
“NMPA” the National Medical Products Administration of the PRC
(္ຖ၍ଣ҅), and its predecessor, the China Food
and Drug Administration or CFDA (္ຖ၍ଣ
ᐼ҅)
“osteolysis” the pathological breakdown or resorption of bone tissue,
often due to disease, wear or inflammation
“PEEK” polyetheretherketone, a colorless organic thermoplastic
polymer used in engineering applications
“plasma electrode” a disposable medical consumable used to generate or direct
plasma energy in surgical or therapeutic devices
“plasma RF ablation equipment” a medical device that integrates the radio-frequency energy
with plasma technology to enable tissue ablation or
coagulation, designed to minimize the damage to
surrounding tissue
“platelet-rich plasma” or “PRP” a concentration of platelets derived from a patient’s own
blood used to promote healing and tissue regeneration
“PLGA” lactide-co-glycolide copolymer, a biodegradable polymer
commonly used in drug delivery systems and medical
implants
“RF” radiofrequency, the use of electromagnetic waves in the
frequency range of approximately 300 kHz to 1 MHz to
deliver energy for heating tissues, commonly used in
medical treatments such as ablation, pain management, and
cosmetic procedures
“RFID recognition” radio frequency identification recognition, a technology that
uses radio waves to automatically identify and track tags
attached to objects
“rotator cuff disorders” conditions affecting the rotator cuff muscles and tendons,
often causing pain, weakness or limited motion
GLOSSARY OF TECHNICAL TERMS
–2 7–


--- page 37 ---
“rotator cuff repair” a surgical procedure to fix a torn tendon in the shoulder that
helps restore the stability and mobility of the shoulder joint
“rpm” revolutions per minute, a unit of rotational speed that
measures how many full turns an object makes in one
minute
“shaver system” a powered surgical tool used to cut, remove and suction soft
or bone tissue during minimally invasive procedures in
orthopedics, ENT (ear, nose and throat) and spine surgery
“sinus tract” an abnormal channel that connects a deep infection or
abscess to the skin surface or another body cavity
“SMO” site management organization, an organization that provides
clinical trial related services to medical device companies
having adequate infrastructure and staff to meet the
requirements of the clinical trial protocol
“suture anchor” a device used to attach soft tissue to bone during surgical
repair, often in orthopedic procedures
“suture button” an orthopedic implant used for fixing bones to bones or
bones to soft tissues during ligament or tendon
reconstruction surgeries
“suture cutter” a surgical tool designed to cut sutures cleanly and precisely
during or after stitching
“suture passer” an instrument used to pass sutures through tissue during
minimally invasive or open surgery
“suture ratchet mechanism” a motion mechanism that enables the controlled tightening
and release of the suture
“tendon” a fibrous connective tissue that attaches muscle to bone and
transmits force for movement
“three-dimensional porous
structure”
complex network structures composed of pores that are
interconnected or partially interconnected
“tissue engineering” a dynamic field of biomedical research and development
that involves manipulating the growth of cells in a matrix to
create living, biocompatible tissue for therapeutic or
research purposes
“Type I collagen” the most abundant collagen in the human body, constituting
about 90% of it. Type I collagen provides strength and
support to these tissues, and its proper formation and
function are essential for maintaining tissue integrity
“Ultra-High Molecular Weight
Polyethylene” or “UHMWPE”
a durable, biocompatible polymer used in orthopedic
implants due to its wear resistance and strength
GLOSSARY OF TECHNICAL TERMS
–2 8–


--- page 38 ---
We have included in this prospectus forward-looking statements. Statements that are not
historical facts, including statements about our intentions, beliefs, expectations or predictions
for the future, are forward-looking statements.
This prospectus includes forward-looking statements. All statements other than statements of
historical facts contained in this prospectus, including, without limitation, those regarding our
future financial position, our strategy, plans, objectives, goals, targets and future developments in
the markets where we participate or are seeking to participate, and any statements preceded by,
followed by or that include the words “believe,” “expect,” “estimate,” “predict,” “aim,” “intend,”
“will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,” “could,” “would,” “continue,” or
similar expressions or the negative thereof, are forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors, some of which are
beyond our control, which may cause our actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or achievements expressed
or implied by the forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding our present and future business strategies and the environment in
which we will operate in the future. Important factors that could cause our actual performance or
achievements to differ materially from those in the forward-looking statements include, among
other things, the following:
 our ability to successfully implement our business plans and strategies;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 general political and economic conditions of jurisdictions in which we operate;
 our business operations and prospects;
 our capital expenditure plans;
 weather, natural disasters and climate change;
 the actions and developments of our competitors;
 our financial condition and performance;
 capital market developments;
 our dividend policy;
 any changes in the laws, rules and regulations of the central and local governments in
the PRC and other relevant jurisdictions and the rules, regulations and policies of the
relevant governmental authorities relating to all aspects of our business and business
plans; and
 various business opportunities that we may pursue.
FORW ARD-LOOKING STATEMENTS
–2 9–


--- page 39 ---
In addition to other information in this prospectus, you should carefully consider the
following risk factors before making any investment decision in relation to our H Shares. Any
of the following risks may materially and adversely affect our business, financial condition or
results of operations, or otherwise cause a decrease in the trading price of our H Shares and
cause you to lose part or all of the value of your investment in our H Shares. These factors
are contingencies that may or may not occur , and we are not in a position to express a view
on the likelihood of any such contingency occurring. The information given is as of the Latest
Practicable Date unless otherwise stated, will not be updated after the date hereof, and is
subject to the cautionary statements in the section headed “Forward-Looking Statements” in
this prospectus.
RISKS RELATING TO OUR BUSINESS AND OPERATIONS
Our business operation is subject to complex and evolving laws and regulations.
Securing and maintaining necessary licenses, certificates, approvals, permits and filings is
critical for producing and selling our sports medicine products. Under the relevant PRC laws and
regulations, such licenses, certificates, approvals, permits and filings primarily include Medical
Device Manufacturing Licenses for Class III and Class II Medical Devices ( ᔼᐕኜ૛͛ପ஢̙ᗇ),
Medical Device Operation License for Class III Medical Devices ( ᔼᐕኜ૛຾ᐄ஢̙ᗇ), Class I
Medical Device Production Record-Filing (ࣩClass II Medical Device Operation
Record-Filing (ࣩand Medical Device Certificates for Class I, II and III Medical
Devices ( ᔼᐕኜ૛ൗ̅ᗇ). While Class I Medical Device Production Record-Filing and Class II
Medical Device Operation Record-Filing are not subject to an expiration date, Medical Device
Manufacturing Licenses, Medical Device Operation License and Medical Device Certificates are
generally valid for a term of five years. Failure to obtain or timely renew such licenses, certificates,
approvals, permits and filings before producing or marketing our products could constitute
unlicensed operation, which, in turn, could subject us to administrative fines, confiscation of
revenue generated from such activities, as well as the seizure of our equipment and inventory. In
addition, we may be required by the relevant authorities to cease to sell our products, which could
have a material adverse effect on our business, financial condition and results of operations.
In addition, the NMPA and its provincial counterparts may impose enhanced scrutiny, which
could lengthen approval process and incur significant time, effort and expense. We must report
serious or potentially serious product incidents to the NMPA or its provincial counterparts, adding
compliance burdens. The regulatory authorities may reject submissions, slow, suspend, or halt
reviews, or even impose restrictive labeling or post-approval trial requirements. Failure to secure
or renew approvals could prevent or delay commercialization. Our product candidates may fail to
gain the necessary approval due to various reasons, such as our inability to start or complete clinical
trials, failure to prove product safety and efficacy, regulatory authorities’ disagreement with our
trial data interpretation, and requests for additional studies. Third parties, such as distributors,
suppliers, hospitals and clinical trial service providers on whom we may rely on, may be subject to
similar regulatory requirements. Any non-compliance with such regulatory requirements by these
third parties may expose us to potential penalties and administrative actions. Moreover, as we
expand internationally, we face varied regulatory regimes that may require additional testing,
validation or administrative reviews. Evolving and jurisdiction-specific regulations may increase
compliance complexity and costs, delay clinical trials and product development, and require a
substantial commitment of time and resources to obtain product clearances or approvals in multiple
territories.
Any failure or delay to introduce new products, interruptions of our R&D initiatives or failure
for our new products to receive widespread market acceptance may cause material adverse
effects to our operating results.
Sports medicine device market evolves rapidly with frequent technological advancements,
new product introductions and shifting clinical preferences. Our business substantially depends on
revenue from the successful development and commercialization of our product candidates.
Alternative treatments or competing medical devices may reduce demand for our existing offerings.
RISK FACTORS
–3 0–


--- page 40 ---
However, we cannot assure you that we will be able to successfully identify market trends or
promptly incorporate advanced technologies into our products. Any failure to anticipate industry
trends could render our existing products obsolete or less competitive, and our operating results
would suffer. Many of our products are still in clinical development or product design stages. We
have invested significant resources in upgrading existing products and advancing product
candidates. However, R&D of medical devices is inherently time-consuming, resource-intensive,
and uncertain, with no guarantee that our efforts will yield commercially viable products. Our
product R&D process may be affected by various factors, such as changes in the R&D team,
insufficient funding, R&D validation failures or clinical trial failures. Consequently, we may not be
able to successfully develop new products, or the development progress or performance of new
products may not meet expectations. Our competitors may surpass our product pipeline layout,
thereby challenging our market position. Such outcomes could also result in unrecouped
investments, limiting our ability to introduce new products and maintain technological leadership.
In addition, our R&D efforts may not yield commercially viable products due to technical
challenges, regulatory restrictions, or misaligned innovation priorities. The complexity of
forecasting hospital demand, coupled with rapidly changing clinical practices, increases the risk
that our new products may not align with market expectations, limiting their adoption. Additionally,
hospital procurement committees or doctors may prioritize competing solutions with newer features
or lower costs. Adverse effects, unexpected complications or restrictive regulatory labeling could
also diminish confidence in sports medicine products among doctors and patients, reducing the
demand for our products. On the other hand, ineffective sales and marketing strategies may fail to
convey the clinical benefits of our solutions, reducing hospital adoption. Failure to introduce
successful new products that address clinical needs could diminish our competitiveness, materially
and adversely affecting our business, financial condition and results of operations. Furthermore,
uncertainty over third-party reimbursement in China’s cost-sensitive healthcare system may further
discourage hospitals from adopting sports medicine products. Competitors introducing advanced
products more quickly or effectively could capture market share, diminishing demand for our
offerings. The significant time and financial resources devoted to research and development may
not generate adequate returns if new products fail to gain traction or become outdated due to rapid
technological shifts. These challenges could cause material and adverse effects to our business,
financial condition and results of operations.
The prices of our products may face downward pressure caused by government-administered
pricing guidance or the volume-based procurement programs, which in turn will materially
and adversely affect our profit margins.
We sell our products to distributors at the price determined by us from time to time. Our
pricing takes into account various factors, including our R&D costs, market demand and
government policies. Hospitals may gain more bargaining power depending on the availability of
alternative products, patient demand and doctor preferences, potentially leading to lower retail
prices for our products. If hospitals lower retail prices of our products, our distributors may face
reduced profitability, therefore lacking incentive to purchase and promote our products. In response,
we may be pressured to lower the prices we set for our distributors, further reducing our margins.
The PRC government has implemented policies to enhance the affordability of medical devices,
including the volume-based procurement program and pricing guidance for medical devices and
medical consumables. See “Regulatory Overview.” Since its implementation in 2024, all provinces in
Chinese Mainland had included medical implants in their volume-based procurement programs,
without a specified valid period. Such programs have resulted in significant price reductions for
certain medical consumables, with winning products’ prices typically declining by approximately
60%. There were no comparable programs for surgical equipment and associated consumables used
in sports medicine. As of December 31, 2025, 14 out of 19 of our medical implant products had been
included in these programs. As a result, the average selling price of our medical implants decreased
from RMB711.9 per unit in 2023 to RMB446.3 per unit in 2024, and further to RMB436.9 per unit
in 2025. Although such decline in average selling prices has led to the increase in our sales volume,
if our sales volumes fail to sufficiently increase to offset these price reductions, or if we cannot
achieve cost efficiencies through internal measures, our financial performance and operational results
may be adversely affected. Additionally, the PRC government’s Diagnosis-Related Groups (DRG)
and Diagnosis Intervention Packet (DIP) payment reforms reimburse hospitals at predetermined
RISK FACTORS
–3 1–


--- page 41 ---
rates rather than actual costs, incentivizing cost control and potentially reducing prices and volumes
for high-value consumables like our products. As DRG/DIP expands, hospitals may negotiate lower
prices or limit usage to stay within reimbursement caps, impacting our sales and results of
operations. As a result, these government policies may materially and adversely affect our business,
financial condition and results of operations.
The market size of sports medicine device industry in China may not be as large as expected,
and we face intensified competition from international competitors.
During the Track Record Period, we derived substantially all of our our revenue from our
sports medicine solutions. However, sports medicine in China is a recently emerging segment
within the broader medical device industry. Market demand may fall short of our expectations due
to patients’ limited awareness of the benefit of minimally invasive surgical techniques, which could
hinder our growth prospects. Furthermore, we face competition across our product lines from
international and domestic competitors, some of which have greater scale, pricing flexibility and
more established sales networks. We may not be able to compete effectively with these competitors
or maintain our market position. Additionally, heightened competition and uncertainties in domestic
substitution trends may compel us to engage in price reductions or increased spending on R&D and
marketing, both of which could erode our profit margins. If we are unable to adapt effectively to
these challenges, our business, financial condition and results of operations may suffer material
adverse effects.
Ineffectiveness of distributorship may materially and adversely affect our sales performance.
We rely on third-party distributors and their sub-distributors to sell our products in China and
overseas markets. We face competition in identifying and retaining qualified distributors, and there
is no assurance that we will recruit, retain or manage distributors. We may terminate
underperforming or breaching distributors, but replacements are costly, time-consuming, and may
not be available. If we are unable to maintain or expand our relationships with qualified distributors,
sales volumes or margins of our existing and future products may be adversely affected. In China,
hospitals procure medical devices through public tender processes, which vary across regions and
involve uncertainties in procedures, timing and outcomes. In addition, distributors may fail to
penetrate markets, comply with our strategies. Their inadequate sales networks or limited technical
knowledge of our products may further weaken promotion to doctors and hospitals. As a result of
these limitations of distributors, sales of our products may be hindered, undermining our market
presence. Furthermore, our distributors may, among other things, prioritize competing products,
allocate insufficient resources to our products, or manage demand and inventory ineffectively. We
may not have full visibility into, or control over, distributors’ or sub-distributors’ compliance with
our policies, applicable laws and industry standards. Any misconduct, non-compliance or
ineffective performance by distributors or sub-distributors could result in reduced sales, margin
pressure, disputes, regulatory penalties or reputational damage. If such events occur, our business,
financial condition and results of operations could be materially and adversely affected.
Moreover, we could be liable for legal proceedings or administrative penalties arising from
distributors’ misconduct, including violations of laws related to sales and marketing of medical
devices. If distributors engage in illegal practices, we could face damages or fines, materially
affecting our financial condition and results of operations. Negative publicity from such actions
could harm our brand, reputation, sales, or share price. Furthermore, our lack of direct control over
sub-distributors may disrupt distribution, as they could cause cannibalization or fail to comply with
policies or regulations, such as unauthorized marketing, selling outside territories, or breaching
anti-corruption laws. Non-compliance could trigger legal liabilities, product liability claims, or
hospital complaints, damaging our reputation and incurring costs, materially adversely affecting our
business, financial condition, and results of operations.
RISK FACTORS
–3 2–


--- page 42 ---
If our distributors fail to comply with the requirements of Two-Invoice System applicable to
our products, our business, financial condition and results of operations may be materially
and adversely affected.
The Two-Invoice System mandates one invoice from manufacturers to distributors and another
from distributors to medical institutions, and has been encouraged to extend to certain high-value
medical consumables. See “Regulatory Overview.” Implementation varies across Chinese
provinces. During the Track Record Period and as of the Latest Practicable Date, our medical
implant products fell under the high-value medical consumables catalogue in Fujian Province,
subject to the Two-Invoice System requirements. Our operations in other provinces were not subject
to the local Two-Invoice System requirements during the Track Record Period and as of the Latest
Practicable Date. If the Two-Invoice System extends to our other products or other regions
implement similar Two-Invoice System, we and our distributors must adapt to stricter regulations,
which may lead to additional compliance costs such as engaging qualified third-party service
providers. In addition, the further expansion of the Two Invoice System could slow hospital
coverage of our products and increases our operating costs, thereby causing material adverse effects
to our business, financial condition and results of operations. As the Two-Invoice System limits the
number of distribution layers between manufacturers and hospitals, we need to serve hospital
customers more directly in the newly applicable regions, including by strengthening our distribution
arrangements and providing more direct tendering, logistics, invoicing and after-sales support. This
may require time and additional resources and could adversely affect the speed at which our
products reach hospitals or penetrate the markets. Meanwhile, our operating costs may increase as
we incur additional expenses in sales support, distribution management, logistics and compliance.
Ineffectiveness of our products, even due to mishandling or misuse by third parties, may cause
damages to our reputation and material and adverse effects to our results of operations.
Ineffectiveness, whether due to our fault or external parties’ mishandling could result in
suboptimal treatment results, patient harm or clinical failures. For instance, improper surgical
techniques or inadequate training among physicians using our products may lead to poor
performance of our products during procedures. Misuse or mishandling by medical staff, such as
incorrect application of our products could further diminish efficacy. Additionally, patients or
doctors may attribute recovery challenges to our products, blaming them for issues caused by
external factors like patient non-compliance or procedural errors. Our products may also be
perceived as ineffective if regulators, such as the NMPA, link adverse events to similar technologies
or materials used by competitors, even without conclusive evidence tying our products to such
issues. Such real or perceived ineffectiveness could erode confidence among doctors, hospital and
patients, leading to reduced recommendations or adoption of our products. Unforeseen
complications or isolated severe adverse events, even if caused by third-party errors, could trigger
product liability claims, which incur substantial legal costs and consume management resources.
Moreover, negative publicity surrounding ineffective performance or perceived adverse events
could damage our brand reputation, invite NMPA and other regulatory scrutiny, potential product
recalls, or revocation of regulatory approvals for our products or manufacturing facilities. These
consequences could diminish our market share and weaken our competitive position, causing
material adverse effects to our business, financial condition and results of operations.
We may fail to expand into new markets of international businesses, hindering our growth
prospects.
We are expanding into markets in Europe, Middle East and Southeast Asia. In the future, we
may be subject to constantly changing international economic, regulatory, social and political
conditions, and local conditions in those foreign countries and regions. Tariffs, geopolitical tensions
or new regulations on international trade may trigger retaliatory use of local regulations, tariffs and
other restrictions on exports and imports. We may also be subject to higher taxes, tariffs, duties and
trade restrictions caused by the deteriorating trade and economic conditions, trade disputes and
changing foreign policies, laws and regulations. Accordingly, our future operations into the
RISK FACTORS
–3 3–


--- page 43 ---
overseas markets may face various risks. Such risks include, among others, changes in the country’s
political and economic condition, trade protection measures and import or export licensing
requirements, difficulties in retaining talent for foreign operations, foreign exchange, and lack of
insight of the local market. When we expand into new geographic markets, we may not be able to
compete against local competitors due to the lack of brand recognition or other factors. Developing
our brand in a new market may be time-consuming and costly, and we cannot assure you that our
branding efforts will always be effective. Any failure to address these challenges could cause
material adverse impacts on our business, financial condition and results of operations.
Any disruptions to our raw material supply and over-reliance on certain suppliers could harm
our production.
We procure various raw materials, such as polyetheretherketone and ultra-high molecular
weight polyethylene yarn, which are essential for manufacturing our sports medicine products. Our
supply chain is subject to risks from global economic conditions, price fluctuations, regional
regulatory policies, natural disasters. These factors could destabilize raw material prices or supply,
directly impacting our profit margins and production. In particular, fluctuations in raw material
prices, driven by supply chain disruptions, may lead to significant cost increases that we cannot
fully anticipate or mitigate. If suppliers face delivery disruptions, and we cannot promptly establish
stable relationships with new suppliers at a favorable procurement terms, we may struggle to secure
sufficient raw materials for R&D and production. We rely on certain suppliers for raw materials and
equipment. Purchase from our five largest suppliers in each year of 2023, 2024 and 2025 was
RMB38.2 million, RMB96.8 million and RMB44.5 million, respectively, representing 28.4%,
44.8% and 25.2% of our total purchases in 2023, 2024 and 2025, respectively. Our reliance on these
major suppliers subjects us to concentration and counterparty risk from these suppliers. We cannot
assure you that we will be able to maintain our relationships with these suppliers in the future. In
the case that our major suppliers cease to supply raw materials to us, or if their supply is disrupted
or delayed, there can be no assurance that we will be able to find alternative suppliers with similar
supply capacity on comparable commercial terms within a reasonable time period, or at all. Should
any of these occur, our business, financial condition, results of operations and profitability may be
adversely affected. Moreover, failure to secure adequate and high-quality raw materials at
acceptable prices, or at all, reduce product availability and increase costs, further reducing our
profit margins. Given the competitive nature of the sports medicine device market, centralized
procurement programs, and pricing pressures from hospitals and distributors, we may be unable to
pass on these cost increases to end-users, such as patients or hospitals, without risking reduced
demand or lost market share. These disruptions could therefore materially adversely affect our
business, financial condition and results of operations.
Disruptions in our manufacturing processes may harm our product quality, incur additional
costs and cause material adverse effects to our business operations.
Manufacturing our sports medicine products is highly complex and exacting. The intricate
nature of medical device production demand sophisticated equipment, meticulous processes and
rigorous oversight to ensure product safety and efficacy. Any disruptions to our manufacturing
processes, either caused by our mishandling of production equipment or other reasons beyond our
control, may cause product defects, product discards, product delivery, or production shortages,
thereby raising production costs, delaying regulatory approvals and triggering product recalls. As
we expand into new markets, surging demand could overwhelm our production capacity,
intensifying these risks. If defective products reach the market, we may face product liability claims
and reputational damage, which may strain our relationships with customers and business partners.
As a result, our business, financial condition and results of operations may suffer from material
adverse effects.
RISK FACTORS
–3 4–


--- page 44 ---
If we fail to expand our production capacity as planned, our business prospects could be
materially and adversely affected.
In anticipation of the surging demand for our sports medicine products, we may need to
expand the production capacity. Utilization rate of our production facilities for medical implants
was 105.6%, 102.4% and 101.1% in 2023, 2024 and 2025, respectively, while utilization rate of our
production facilities for surgical equipment and associated medical consumables was 81.4%, 95.2%
and 92.5% during the same periods. To enhance our production capacity, we need to expand our
production facilities, further upgrade our production lines and employ more workers. In addition,
advances in manufacturing techniques may render our facilities and equipment inadequate or
obsolete, and therefore we may also need to develop advanced manufacturing techniques and
process controls. If we are unable to expand our production capacity, or if the process to do so is
delayed, or if the cost of the planned expansion is not economically feasible for us, we may not be
able to meet future demand for our products. Our ability to successfully implement our expansion
plan is subject to various risks, including our ability to obtain the requisite permits, licenses and
approvals for the construction and operation of the new production lines, the risk of construction
delays, as well as our ability to timely recruit sufficient qualified staff. The expansion process may
be lengthy and costly and may divert our management attentions and development resources.
Moreover, our production expansion plan requires significant capital investment, which could
materially and adversely affect the realization of expected return on our expenditures and our
overall financial condition. If our production capacity is insufficient to meet the surging demand,
we may also engage third parties to meet such demand. As a result, we are subject to the risks of
increased pricing for our outsourced production and that the third parties may not comply with our
specifications. Our sales volumes and margins for the relevant products could be materially and
adversely affected.
We may be subject, directly or indirectly, to applicable anti-kickback, false claims laws,
physician payment transparency laws, fraud and abuse laws or similar healthcare and security
laws and regulations in China and other jurisdictions.
Our sales and marketing activities in China and other jurisdictions are governed by stringent
anti-bribery, anti-kickback, and anti-money laundering laws in relation to medical device industry.
Our operations are also subject to fraud and abuse laws or other healthcare regulations which
oversee the promotion and sale of our sports medicine products and restrict the financial
relationships we can have with healthcare providers, doctors and hospitals. We may incur additional
costs to ensure our compliance with these laws. It is also possible that the regulatory authorities in
our international markets could implement new or modified rules governing the sale of medical
devices to address bribery, corruption, or related concerns. Any such changes could result in
additional regulatory or compliance costs for us, our employees, or our distributors, or impose new
restrictions on sales and marketing activities.
Our sales may be affected by the level of medical insurance reimbursement patients receive for
using our products.
The market acceptance of our products may be influenced by the extent to which
governmental and private health insurance programs in the PRC cover treatments employing our
products. The PRC medical insurance system is evolving, and reimbursement coverage for newly
introduced medical devices may be uncertain and vary from region to region, as local government
approvals must be obtained in each geographic area. If our products are not included in relevant
health insurance programs, patients may face prohibitively high out-of-pocket expenses and thus
opt for alternative treatment methods. Hospitals, in turn, may also recommend such alternatives,
potentially reducing demand for our products, which may in turn materially and adversely affect our
business, financial condition and results of operations. In addition, the PRC government may
modify, reduce or discontinue the governmental insurance coverage available for our products.
There can be no assurance that the use of our current or future products, if approved, will continue
to be, or will be, included in the provincial price catalogs under the Medical Insurance
RISK FACTORS
–3 5–


--- page 45 ---
Reimbursement Lists and the DRG system. Furthermore, in seeking inclusion on medical insurance
reimbursement lists, we may be required to lower the prices of our medical devices, which could
reduce our profitability. Consequently, our operating results and financial condition may be
adversely affected if anticipated demand does not materialize following any price adjustments or
changes to reimbursement coverage.
Our historical financial performance may not be indicative of future performance.
During the Track Record Period, our revenue grew rapidly from RMB238.5 million in 2023
to RMB327.1 million in 2024, and further to RMB402.8 million in 2025. Accordingly, our gross
profit increased from RMB177.3 million in 2023 to RMB227.6 million in 2024, and further to
RMB298.6 million in 2025. We cannot assure you that our historical operating results, such as gross
profit, net profit, gross profit margin and net profit margin, will be indicative of our future
performance. V arious factors could affect our future results, including, among others, uncertainties
surrounding the performance of our existing and newly launched products, fluctuations in market
conditions, developments in the regulatory environment, and our ability to expand production
capacity, strengthen manufacturing capabilities and manage our distributor network effectively.
Accordingly, prospective investors should not rely on our historical operating results as a basis for
projecting our future financial or operating performance.
We heavily invested in research and development efforts and plan to continue to invest in
research and development, which may negatively impact our profitability in the short term.
We have made substantial investments in research and development. We anticipate that our
research and development expenses will continue to increase. We recorded research and
development expenses of RMB35.0 million, RMB37.3 million and RMB47.5 million in 2023, 2024
and 2025, respectively, accounting for 14.7%, 11.4% and 11.8% of our total revenue in the
respective years. However, practical challenges may arise that prevent us from successfully
commercializing any new technology or product. Furthermore, the pace of technological
advancement in our industry may surpass our ability to upgrade our technologies in an efficient and
cost-effective manner, or at all. Consequently, new industry developments could render our existing
or planned technologies, infrastructure or products obsolete or less appealing. Our revenue
generated from new products may not be sufficient to recoup the costs we spend on them, and our
financial condition may suffer material adverse effects.
If we fail to maintain inventory levels in line with the level of demand for our sports medicine
solution, we may face inventory obsolescence.
During the Track Record Period, we recorded inventory amounts of RMB39.3 million,
RMB57.2 million and RMB64.5 million as of December 31, 2023, 2024 and 2025, respectively. Our
inventory turnover days were 204 days, 184 days and 226 days in 2023, 2024 and 2025,
respectively. We are required to maintain sufficient levels of inventory to ensure the effective
operation of our business and to meet customer demand. Our internal forecasts drive decisions on
inventory levels, but these forecasts involve inherent uncertainties. If our demand forecasts are
lower than actual market demand, we may experience shortages of key medical devices or raw
materials, which may lead to lost sales opportunities. In contrast, overestimating demand could
result in excessive inventory, leading to higher storage and handling expenses. It may also increase
the likelihood of product obsolescence or force us to take write-offs, which could adversely affect
our business, financial condition and results of operations.
We have historically received government grants and subsidies for our product development
and R&D initiatives, which may not be recurring.
We obtained government grants, in the form of subsidies that are generally non-recurring in
nature. In 2023, 2024 and 2025, we recognized government grants as other income of RMB9.8
million, RMB3.6 million and RMB14.6 million, respectively. However, local governments may
reduce or terminate such grants or policies at any time in accordance with their own determinations.
RISK FACTORS
–3 6–


--- page 46 ---
Our eligibility to obtain government grants and other favorable policies depends on a variety of
factors, including how our technological improvements are assessed, the prevailing government
policies, the availability of funding among different authorities, and progress made by other peer
companies. Furthermore, certain government grants and policies are on a project basis and subject
to compliance with applicable financial incentive agreements and fulfillment of the specific
conditions of each project. The policies under which we have historically received government
grants may be discontinued by the relevant authorities at their discretion, and there is no guarantee
that we will continue to enjoy the same level of government grants and other policies in the future.
Any reduction or elimination of these programs could materially and adversely affect our business,
financial condition, results of operations and prospects.
We may face exposure to fair value changes of financial assets measured at fair value through
profit or loss, and valuation uncertainty may cause volatility in our results of operations.
From time to time, we may invest a portion of our surplus cash in financial products that are
accounted for as financial assets at fair value through profit or loss (“ FVTPL ”) under applicable
accounting standards. As a result, changes in the fair value of such financial assets are recognized
directly in profit or loss in the relevant reporting period, and therefore may affect our results of
operations and cause fluctuations in our profitability. During the Track Record Period, we recorded
fair value gains on financial assets at FVTPL of RMB1.1 million in 2025. There can be no assurance
that we will continue to record fair value gains in future periods, and we may instead record fair
value losses, which could materially and adversely affect our financial performance. Our exposure
to fair value changes may be affected by, among other things, changes in interest rates, liquidity
conditions, macroeconomic environment, market volatility, and the credit profile of the
counterparties or issuers (including banks and other financial institutions) of the relevant financial
products. In addition, the fair value of certain financial assets at FVTPL may be determined using
valuation techniques and models that require the exercise of professional judgment and the
application of certain bases and assumptions. These bases, assumptions and inputs are, by their
nature, subjective and may change over time. Accordingly, the valuation of financial assets at
FVTPL has been, and will continue to be, subject to estimation uncertainty, which may cause
significant fluctuations in the fair value gains or losses recognized in our profit or loss from period
to period, and may not reflect the amount ultimately realized upon disposal or redemption of such
financial assets. Any fair value losses, valuation adjustments, impairment or default by
counterparties or issuers, or any inability to timely dispose of or redeem such financial assets on
reasonable terms, could adversely affect our results of operations and financial condition.
We may not be able to protect our intellectual property rights or may be subject to
infringement claims of third parties’ intellectual property rights.
Our intellectual property portfolio, including patents, copyrights, trademarks and trade
secrets, is critical to our operations and growth. We face risks of third-party infringement and
potential claims that our products or technologies infringe on others’ intellectual property rights.
Unauthorized use or misappropriation of our intellectual property by employees, business partners
or competitors could also harm our competitiveness, diminish the value of our technologies and
impact our operations. We cannot fully prevent infringement with our existing measures. On the
other hand, we may inadvertently infringe on third-party intellectual property due to unawareness
of pending or issued patents or errors in assessing their validity or scope. Such claims could result
in costly damages, licensing fees or cessation of product development, thereby disrupting our R&D
progress and negatively affecting our operations. We are named as a defendant in several
intellectual property infringement claims by the same plaintiff, under which the plaintiff seeks total
damages of RMB20.5 million and injunctions requiring us to cease manufacturing and selling the
products incorporating the disputed patents. See “Business — Intellectual Property” for more
details. There is no assurance that a court would find in our favor on questions of infringement,
validity, enforceability, or priority. A court of competent jurisdiction could hold that third party
patents asserted against us are valid, enforceable, and infringed. Intellectual property litigation,
whether to enforce our rights or defend against claims, is costly and resource-intensive, diverting
management’s focus from operations and growth initiatives. In addition, negative outcomes could
harm our reputation, market position and future product development, leading to material adverse
RISK FACTORS
–3 7–


--- page 47 ---
effects to our business, financial condition and results of operations. Moreover, in the event of a
successful claim against us, we may also be ordered to pay monetary damages, pay royalties or
redesign our infringing products, which may be time-consuming and costly. In the event of an
adverse result in any such litigation, or even in the absence of litigation, we may need to obtain
licenses from third parties to advance our research or allow commercialization of our products. Any
such license might not be available on reasonable terms or at all. Even if we were able to obtain
a license, it could be non-exclusive, thereby giving other third parties access to the same
technologies licensed to us, and it could require us to make substantial licensing and royalty
payments.
Any failure to maintain the confidentiality of our trade secrets or know-hows may adversely
affect our reputation and competitiveness.
There is a risk that our employees or third parties could intentionally or inadvertently disclose
these trade secrets during the course of our business operations, thereby diminishing our
competitive strengths. Legal remedies may not adequately mitigate the damage or restore our
market position. In addition, any such legal proceedings could lead to additional expenses and
divert our management’s attention away from daily operations, thereby disrupting our business and
adversely impacting on our financial condition. We may also collaborate with third parties,
including academic institutions, hospitals and third-party trial service providers, for clinical trials
and product development. Any unauthorized disclosures by these partners could undermine our
ability to obtain patent protection for new innovations, which may undermine our competitiveness
and result in material adverse effects to our business, financial condition and results of operations.
We may engage third-party service providers for our pre-clinical research and clinical trials.
If the third parties with which we contract fail to perform in a satisfactory manner, we may
not be able to develop and commercialize our product candidates.
While we did not engage third-party service providers during the Track Record Period, we
may engage third parties, such as qualified hospitals and other third-party service providers to assist
the design, implementation and monitoring of our pre-clinical research and conducting clinical
trials. If any of these parties terminates their agreements with us, our clinical trials and development
of certain product candidates could be delayed. In addition, these third parties may not successfully
carry out their contractual obligations, meet expected timelines or follow regulatory requirements,
including clinical, laboratory and manufacturing guidelines. Furthermore, if any of these parties fail
to perform their obligations under our agreements with them in the manner specified in those
agreements, the NMPA and other comparable regulatory authorities may not accept the data
generated by our clinical trials, which would result in additional studies and clinical trials, which
increase the cost of and the development time for the relevant product candidates. If any of the
pre-clinical studies or clinical trials of our product candidates is affected by any of the
above-mentioned reasons, we will be unable to meet our development or commercialization
timelines, which would have material adverse effects on our business and prospects.
If we fail to retain or recruit our senior management and other key personnel, our
competitiveness and operating results may be adversely affected.
Our success relies heavily on retaining senior management and R&D personnel, whose
expertise drives the development and sales of our sports medicine products. Intense competition for
talent from emerging medical device companies, large multinational firms and well-funded startups
challenges our ability to attract and retain skilled R&D professionals. Losing key personnel to
competitors or failing to offer competitive compensation and benefits could weaken our product
pipeline, risk leaking proprietary technology, and hinder product development, significantly
impacting our market position. We may fail to counter more attractive offers from competitors.
Replacing executives or R&D experts is challenging and time-consuming due to the limited pool of
individuals with specialized skills and industry experience in medical devices. We may struggle to
hire, train or motivate replacements on acceptable terms or at all. We also rely on technical
consultants and scientific advisors to guide our R&D strategies. Losing key R&D personnel or
RISK FACTORS
–3 8–


--- page 48 ---
consultants could disrupt our product development, delay regulatory approvals and stall
commercialization efforts. Failing to retain a skilled R&D workforce could materially adversely
affect our business, financial condition and results of operations.
We may experience labor shortages or increases in labor costs.
Labor costs form a significant portion of our operating expenses and will continue to impact
our profitability. Factors such as labor shortages, necessitating higher salaries to attract talent or
increases in minimum, could elevate costs. High employee turnover rates in some jurisdictions
where we operate may further drive up recruitment and training expenses. Rising employee health
insurance costs could also strain our financial resources. Additionally, labor shortages or
disruptions by employees of our third-party contractors and subcontractors could interrupt our
manufacturing processes, delay production, and increase operational costs. These challenges could
reduce our ability to meet production demand efficiently, materially adversely affecting our
business, financial condition, and results of operations.
We may be subject to product liability claims.
We bear an inherent risk of product liability in connection with our sports medicine products
sold in China and overseas markets. If any of our products or product candidates cause, or are
perceived to cause, injuries in patients, or are otherwise deemed unsuitable at any stage of clinical
testing, manufacturing, marketing or sale, we could be subject to claims on grounds such as
manufacturing defects, design defects, failure to warn of potential risks, negligence, strict liability,
breach of warranties or consumer protection violations. An inability to successfully defend against
these claims or to secure indemnification from third parties could lead to significant liabilities and
might force us to limit the commercialization of our products and product candidates. Even if we
mount a successful defense, substantial financial and managerial resources would be consumed.
Moreover, product liability lawsuits, regardless of their merit or eventual outcome, could result in
decline in demand, reputation damage, regulatory investigations, litigation costs, monetary
damages, and inability to commercialize. At present, we do not carry product liability insurance. If
we are unable to obtain adequate coverage at a reasonable cost, or if policies we procure exclude
certain events, product liability claims could impede the commercialization of our products and
product candidates. We may be compelled to cover damages that surpass our coverage limits or are
not covered by insurance at all, and we might lack, or be unable to obtain, sufficient financial
resources to do so. While our agreements with third parties may provide indemnification, it may not
be able to or sufficient to protect us from liabilities.
We may be involved in litigations, legal or contractual disputes, governmental investigations
or administrative proceedings during business operations, which may divert our
management’s attention and incur substantial costs and liabilities.
We may become subject to various lawsuits, legal or contractual disputes, governmental
investigations, or administrative proceedings arising from our ordinary business activities.
Regardless of their scope or merit, such proceedings can divert our management’s attention from
business operations, require significant time and resources, exposing us to legal, contractual and
financial risks. In addition, while some cases might initially appear inconsequential, they could
escalate if circumstances change, such as a higher potential for loss, the participation of influential
parties or increased monetary stakes. If a court or tribunal rules against us or if we opt to settle, we
may face substantial damages, incur additional liabilities, or even need to curtail or cease certain
business operations. Furthermore, the negative publicity associated with legal proceedings can
tarnish our reputation, weakening the appeal of our brands and products. Any of these outcomes
could harm our business prospects, financial position and overall operating results.
RISK FACTORS
–3 9–


--- page 49 ---
Negative publicity involving us, our Shareholders, Directors, officers, employees and business
partners or general negative publicity in the medical device industry may affect our
reputation.
Negative publicity, whether accurate or not, targeting us, Controlling Shareholders, affiliates,
or entities sharing our name could tarnish our reputation, weaken our brand equity and limit growth
prospects. Unauthorized use of our brand by unrelated third parties may dilute its value and
integrity. Enforcing legal rights against such misuse, including through litigation, could incur
significant costs and divert limited resources, potentially impairing our financial performance.
Negative media coverage of our Shareholders, Directors, officers, employees, distributors,
sub-distributors, suppliers, or business partners could erode public trust in us. Non-compliance by
these parties with applicable regulations may further damage our reputation. Addressing such
controversies may demand substantial resources, and we may struggle to fully restore investor and
customer confidence. These challenges could materially adversely affect our business, financial
condition and results of operations.
Our international business may be subject to various risks arising from sanctions, export
control laws and foreign currency movement.
We may be subject to economic sanctions and export control laws and regulations in the
jurisdictions where we operate or to which we export, including those administered or enacted by
the European Union (and its member states), the United States, the United Nations and other
relevant authorities. Our overseas supply and counterparties expose us to the risk that existing or
future measures that target specific countries or regions, sectors, entities, individuals, items,
software, technology, end uses or end users could adversely affect our business. We need to invest
significant resources in implementing procedures, screening tools and training to prevent or
promptly detect all prohibited or restricted dealings, re-exports or transshipments, deemed exports,
or other activities involving sanctioned parties or destinations, or higher-risk end uses or end users.
We may also face governmental or regulatory investigations, administrative or criminal penalties,
civil fines, denial of export privileges, debarment, listing on restricted party lists, asset freezes,
restrictions on access to financial services, contract terminations, private litigation and adverse
publicity, any of which could materially and adversely affect our reputation, business, financial
condition, results of operations and prospects. Even if these claims are ultimately unsubstantiated,
responding to investigations or enforcement actions can be costly and time-consuming, divert
management attention, require enhancements to our compliance program, and disrupt relationships
with customers, suppliers, logistics providers and financial institutions. Moreover, new or expanded
sanctions or export control measures, shifts in geopolitical conditions, or heightened screening by
banks and counterparties could require us to modify, suspend or cease certain activities, terminate
or renegotiate contracts, alter supply chains or distribution arrangements, implement alternative
logistics routes, or obtain licenses or authorizations, resulting in increased costs and uncertainty. As
a result, we cannot assure you that our future business will be free from risk under current or future
sanctions and export control regimes. In addition, because a portion of revenue from our overseas
markets are denominated in foreign currencies, we are exposed to risks arising from exchange rate
fluctuations and currency controls. Adverse movements in exchange rates between the Renminbi
and other currencies in which we transact, such as the U.S. dollar, could negatively affect our
reported revenues, margins and cash flows, lead to foreign exchange losses, and increase the cost
of inputs, logistics and financing, thereby affecting our results of operations.
Our insurance coverage may be insufficient to cover the risks related to our business and
operations.
We purchase and maintain insurance policies that we believe are in line with the industry norm
and as required under the relevant laws and regulations. See “Business — Insurance.” However, we
do not have insurance coverage in some of the jurisdictions where we operate and our existing
insurance coverage may be inadequate to protect us from the liabilities we may incur. We cannot
assure you that our insurance policies will provide adequate coverage for all the risks in connection
RISK FACTORS
–4 0–


--- page 50 ---
with our business operations. If we incur substantial losses and liabilities that are not covered by
our insurance policies, we could suffer significant costs and diversion of our resources, which could
have a material and adverse effect on our financial condition, results of operations and prospects.
We may encounter risks related to our leased properties.
As of the Latest Practicable Date, three lease agreements of our leased properties had not been
registered and filed with the relevant governmental authorities in PRC. If these leases are
invalidated, we may be required to renegotiate for new leases, incurring additional costs or delays.
Failure to secure alternative arrangements could lead to operational interruptions or legal disputes,
adversely affecting our business, financial condition and results of operations. Furthermore, we
cannot assure you that we will be able to renew our leases on terms acceptable to us, or that renewal
will be possible at all. If we lose access to any leased property due to a failure to renew the lease,
termination of the lease, or non-compliance with applicable laws and regulations, we may face
penalties or be forced to relocate. Relocation could be costly, and our operations may be disrupted
or suspended if we cannot complete the relocation process, including the necessary facility
construction, in a timely manner.
We are subject to various risks relating to third-party payments.
During the Track Record Period, certain of our overseas customers settled payments with us
through third-party payors (the “ Third-Party Payment Arrangement(s) ”). In 2023, 2024 and
2025, the aggregate amount of third-party payments accounted for 0.2%, 0.3% and 0.2% of total
revenue for the respective periods. See “Business — Third-Party Payment Arrangements.” We are
exposed to risks relating to such Third-Party Payment Arrangements, including possible claims
from third-party payors for return of funds, as they were not contractually indebted to us, and
possible claims from liquidators of third-party payors. We may be also subject to the potential
money laundering risks as we have limited knowledge about the source and purpose of the funds
utilized by the third-party payors. In the event of any such claims or legal proceedings instituted
against us in respect of third-party payments, we may need to allocate significant financial and
managerial resources to defend against them, and we may be forced to comply with the court ruling
and return the payment for the products that we sold and services that we provided, which could
materially and adversely affect our financial condition and results of operations.
Failure to pay social insurance premiums and housing provident funds for and on behalf of
our employees in accordance with applicable laws and regulations may subject us to penalties.
During the Track Record Period, we used third-party agencies to manage social insurance
premiums and housing fund contributions for certain employees. This, under PRC laws, could lead
to additional payments for any outstanding contributions, late payment penalties, or enforcement
actions by governmental authorities. There remains a risk that authorities may not endorse this
arrangement. If the third-party agency does not fulfill its obligations, we could be held liable for
extra payments, late fees, or penalties, potentially harming our financial position and operating
results. In addition, during the Track Record Period, we had an immaterial shortfall in social
insurance and housing provident fund contributions for certain employees. In 2023, 2024 and 2025,
the aggregate shortfall of social insurance and housing provident fund contributions amounted to
RMB7.7 million, RMB9.0 million and RMB10.5 million, respectively. Pursuant to PRC laws and
regulations, we may be required to make outstanding contributions, pay late payment surcharges
and fines, and be subject to enforcement actions by competent authorities or the PRC courts.
Furthermore, under the Supreme People’s Court’s Interpretation (II) on Several Issues Concerning
the Application of Law in Labor Dispute Cases (ਪ
༆ᙑ(ɚ)‘) (the “ New Judicial Interpretation ”), any arrangements to wavier social insurance
contribution is deemed invalid and employees are entitled to terminate employee agreement and
seek economic compensation. See “Regulatory Overview.” As a result, we may be required by
competent authorities to pay the outstanding amount, and could be subject to late payment penalties
or enforcement application made to the court. Furthermore, as China’s labor regulations continue
to evolve, we cannot assure you that our employment practices will remain fully compliant at all
RISK FACTORS
–4 1–


--- page 51 ---
times. Any perception of non-compliance could prompt labor disputes, government investigations,
or obligations to provide additional employee compensation, any of which could materially and
adversely affect our business, financial condition, and results of operations. See “Business —
Employees.”
We are subject to evolving ESG standards.
As a medical device company, we are exposed to evolving ESG standards, regulations and
stakeholder expectations. New or more stringent environmental rules, product requirements, or
supply-chain due-diligence obligations could increase compliance costs, require process changes, or
disrupt sourcing and manufacturing. Customers and healthcare systems may increasingly prefer
medical devices developed and manufactured with lower environmental footprints, recyclable
materials, reduced packaging, or verified ethical supply chains, which may necessitate investments
in new technologies, redesigns, or supplier transitions that are costly, time-consuming, and
uncertain in outcome. Social factors, such as labor practices, workplace health and safety, product
accessibility and affordability, data privacy and cybersecurity for connected devices, and clinical
trial diversity, are also gaining scrutiny. Failure to meet stakeholder expectations could lead to loss
of business opportunities, reputational harm, or exclusion from tenders and group purchasing
contracts. Governance expectations, including board oversight of ESG, anti-corruption controls,
and transparent reporting, continue to rise; shortcomings may trigger investigations, litigation, or
contractual penalties.
Natural disasters, acts of war or terrorism, and other external events beyond our control may
have a material adverse impact on our industry, business, financial condition, and results of
operations.
Severe weather, such as tornadoes, droughts, hailstorms or other natural disasters, and
unexpected events including war, terrorism or similar disruptions may significantly hinder our
ability to conduct ordinary business operations. Such occurrences could harm our operations,
damage our property or inventory or result in substantial property losses, leading to decreased
revenue and unexpected expenses. In some jurisdictions where we operate, large-scale evacuations
or destruction of essential facilities can further disrupt banking and operational activities. Natural
disasters, pandemics, terrorism or wars may occur. These events, once materialize, may severely
impede our operations and require significant resources to address, ultimately having a material
adverse effect on our business, financial position and operating results.
RISKS RELATING TO DOING BUSINESS IN JURISDICTIONS WHERE WE OPERATE
Changes in the economic, political or social conditions or government policies in jurisdictions
where we operate could affect our business, financial condition and results of operations.
A substantial part of our assets and operations are located in China. In addition, we operate
our business in a number of other geographic markets across Europe, Middle East and Southeast
Asia. Accordingly, our business, financial condition and results of operations could also be
influenced by political, economic and social conditions in these markets. Economic growth in each
of our geographic markets has been uneven, both geographically and among various sectors within
any one of the relevant economies. Any economic downturn, whether actual or perceived, further
decrease in economic growth rates or an otherwise uncertain economic outlook in our geographic
markets or any other market in which we may operate could affect our business, financial condition
and results of operations. Changes in the economic or political environment could increase our
costs, increase our exposure to various risks, disrupt our business operations and affect our financial
performance.
RISK FACTORS
–4 2–


--- page 52 ---
Any downturn in regional or global economy, or deterioration of geopolitical environment
could affect our business, financial condition and results of operations.
The growth of the regional and global economy has slowed in recent years. It remains
uncertain whether, and for how long, the regional and global economic downturn will persist. There
are considerable uncertainties over the long-term effects of the monetary and fiscal policies adopted
by the central banks and financial authorities of some of the world’s leading economies. Regional
economic conditions are sensitive to global economic conditions, changes in domestic economic
and political policies as well as the expected overall economic growth rate. It is unclear that whether
these challenges and uncertainties will be effectively managed or resolved and what effects they
may have on the global political and economic conditions in the long term. Any economic downturn
or slowdown or negative business sentiment could have an indirect potential impact on our industry.
In addition, continued turbulence in the international markets may adversely affect our ability to
access capital markets to meet liquidity needs. As a result, our business, financial condition and
results of operations may be adversely affected.
Any uncertainties embedded in the legal systems of certain jurisdictions where we operate
could affect our business, financial condition and results of operations.
Legal systems of the jurisdictions where we operate vary significantly. Some jurisdictions
have a civil law system based on written statutes, which differ from common law system. We are
also subject to certain uncertainties embedded in the legal systems of some jurisdictions where we
operate. Laws and regulations that are recently enacted may not sufficiently cover all aspects of
economic activities in such markets. In particular, the interpretation and enforcement of these laws
and regulations are subject to future implementations, and the application of some of these laws and
regulations to our businesses is not settled. Since local administrative and court authorities are
authorized to interpret and implement statutory provisions and contractual terms, it may be difficult
to evaluate the outcome of administrative and court proceedings and the level of legal protection
we have in many of the geographic markets where we operate. Local courts may have discretion to
reject enforcement of foreign awards or arbitration awards. These uncertainties may affect our
judgment on the relevance of legal requirements and our ability to enforce our contractual rights or
claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous
legal actions, claims concerning the conduct of third parties, or threats in attempt to extract
payments or benefits from us. Furthermore, many of the legal systems in the jurisdictions where we
operate are based in part on their respective government policies and internal rules, some of which
are not published on a timely basis or at all and may have retroactive effects. There are other
circumstances where key regulatory definitions are unclear, imprecise or missing, or where
interpretations that are adopted by regulators are inconsistent with interpretations adopted by a
court in analogous cases. As a result, we may not be aware of our violation of certain policies or
rules until sometime after the violation. In addition, administrative and court proceedings in certain
of our geographic markets may be protracted, resulting in substantial costs and diversion of
resources and management attention. It is possible that a number of laws and regulations may be
adopted or construed to be applicable to us in our geographic markets and elsewhere that could
affect our businesses and operations. Scrutiny and regulations of the industries in which we operate
may further increase, and we may be required to devote additional legal and other resources to
addressing these regulations. Changes in current laws or regulations or the imposition of new laws
and regulations in the jurisdictions where we operate may slow the growth of the medical device
industry and affect our business, financial condition and results of operations.
Y ou may have limited recourse in effecting services of legal process or enforcing overseas
judgments against us, our Directors and our senior management.
A substantial part of our assets, and a majority our Directors and senior management, are
located in China. Recognition and enforcement in courts of jurisdictions outside the PRC of
judgments of a PRC court, and recognition and enforcement in the PRC of judgments of a court in
any of these jurisdictions outside the PRC, are inherently difficult. As a result, it may be difficult
RISK FACTORS
–4 3–


--- page 53 ---
and time-consuming to effect service of process upon our Directors and senior management outside
the PRC. In addition, investors may also experience difficulties in seeking recognition and
enforcing foreign judgments in the PRC if there is a lack of reciprocal recognition and enforcement
of judicial rulings and awards of other jurisdictions. Furthermore, although we will be subject to the
Listing Rules and the Takeovers Code upon the listing of our H Shares on the Stock Exchange, the
holders of H Shares will not be able to bring actions on the basis of violations of the Listing Rules
and must rely on the Stock Exchange to enforce its rules. Furthermore, the Takeovers Code does not
have the force of law and provides only standards of commercial conduct considered acceptable for
takeover and merger transactions and share repurchases in Hong Kong.
Certain of our foreign exchange transactions are subject to regulatory requirements over
foreign currency conversion.
Conversion and remittance of foreign currencies are subject to certain foreign exchange
regulations. We cannot assure you that under a certain exchange rate, we would have sufficient
foreign exchange to meet our foreign exchange needs. For example, under the PRC current foreign
exchange regulation system, foreign exchange transactions under the current account conducted by
us, including the payment of dividends, do not require advance approval from the State
Administration of Foreign Exchange (the “ SAFE ”); however, we are required to present relevant
documentary evidence of such transactions and conduct such transactions at designated foreign
exchange banks within the PRC that have the licenses to carry out foreign exchange business.
Foreign exchange transactions under the capital account, however, normally need to be approved by
or registered with the SAFE or their local branch unless otherwise permitted by law. Any
insufficiency of foreign exchange may restrict our ability to obtain sufficient foreign exchange for
dividend payments to Shareholders or satisfy any other foreign exchange obligation. If we fail to
obtain approvals from the SAFE to convert RMB into any foreign exchange for any of the above
purposes, our potential offshore capital expenditure plans and even our business may be affected.
Our payment of dividends is subject to restrictions under applicable laws and regulations, and
there is no guarantee whether we will pay dividends in the future.
Our payment of dividends is subject to restrictions under applicable laws and regulations.
Moreover, our company is required to set aside at least 10% of its after-tax profits each year, if any,
to fund certain statutory reserves, except where such reserve has reached 50% of its registered
capital. These reserves are not distributable as cash dividends. Our historical dividends may not be
indicative of our dividend policy in the future. We cannot guarantee when and in what form
dividends will be paid on our H Shares after the Global Offering. The declaration and distribution
of dividends is at the complete discretion of the Board, and our ability to pay dividends or make
other distributions to our Shareholders is subject to various factors, including our business and
financial performance, capital and regulatory requirements and general business conditions. We
may not be able to have sufficient or any profits to enable us to make dividend distributions to our
Shareholders in the future, even if our financial statements indicate that our operations have been
profitable. As a result of the above, we cannot guarantee that we will make and can make dividend
payments on our Shares in the future. See “Financial Information — Dividends and Dividend
Policy.” If we retain most, or all, of our available funds and any future earnings after the Global
Offering to fund the development and commercialization of our pipeline products and solutions, we
may not expect to pay any cash dividends in the foreseeable future. Even if our Board decides to
declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on
our future financial condition and cash flow, our capital requirements and surplus, the number of
distributions (if any) received by us from our subsidiaries, our financial condition, contractual
restrictions and other factors deemed relevant by our Board. Accordingly, the return on your
investments in our H Shares will likely depend entirely upon any future price appreciation of our
Shares. There is no guarantee that our H Shares will appreciate in value after the Global Offering
or even maintain the price at which you purchased the Shares. Y ou may not realize a return on your
investments in our Shares and you may even lose your entire investments in our Shares.
RISK FACTORS
–4 4–


--- page 54 ---
Our operations are subject to, and may be affected by, changes in tax laws and regulations in
the countries and regions where we operate.
The PRC EIT Law imposes a tax rate of 25% on business enterprises. We are entitled to
preferential tax treatment. See “Financial Information — Description of Major Components of Our
Results of Operations — 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 PRC government
may amend or restate regulations on income, withholding, value-added, and other taxes.
Non-compliance with the PRC tax laws and regulations may also result in penalties or fines imposed
by relevant tax authorities. Adjustments or changes to PRC tax laws and regulations and tax
penalties or fines could affect our businesses, financial condition and results of operations.
Non-PRC Holders of our H Shares may be subject to PRC income tax obligations.
Under the current tax laws and regulations in China, non-Chinese resident individuals and
non-Chinese resident enterprises are subject to different tax obligations with respect to dividends
paid to them by us and the gains realized upon the sale or other disposition of our H Shares. Under
IIT law, non-Chinese resident individuals are required to pay individual income tax at a rate of 20%
on interest, dividends and bonuses they obtain from China. Accordingly, we are required to
withhold such tax from dividend payments, unless applicable tax treaties between China and the
jurisdiction in which the foreign individual resides reduce or provide an exemption for the relevant
tax obligations. However, pursuant to the Circular on Certain Policy Questions Concerning
Individual Income Tax of the MOF and SA T (ഄਪ
‘) (Cai Shui Zi [1994] No. 020) issued by the MOF and SA T on May 13, 1994, dividend
income of individual foreigners from PRC enterprises with foreign investment are exempted from
individual income tax for the time being. In addition, under the IIT Law and its implementation
regulations, non-PRC resident individual holders of H shares are subject to individual income tax
at a rate of 20% on gains realized upon the sale or other disposition of H shares. However, pursuant
to the Circular of Declaring that Individual Income Tax Continues to be Exempted over Income of
Individuals from the Transfer of Shares (ஷ
‘) (Cai Shui Zi [1998] No. 61) issued by the MOF and the SA T on March 30, 1998, from January
1, 1997, the income of individuals from the transfer of the shares of listed enterprises continues to
be exempted from individual income tax. As of the Latest Practicable Date, none of the aforesaid
provisions expressly provides whether individual income tax shall be levied on non-PRC resident
individual holders in respect of transfers of shares in PRC resident enterprises listed on overseas
stock exchanges. There is no assurance that the PRC tax authorities will not change these practices,
which could result in income tax being levied on non-PRC resident individual holders on gains from
the sale of H shares. For non-Chinese resident enterprises that do not have establishments or
premises in China, and for those who have establishments or premises in China but whose income
is not related to such establishments or premises under the EIT law, dividends paid by us and gains
realized by such foreign enterprises upon the sale or other disposition of Shares are ordinarily
subject to China enterprise income tax at a rate of 20%. In accordance with the Circular on Issues
Relating to the Withholding of Enterprise Income Tax by Chinese Resident Enterprises on
Dividends Paid to Overseas Non-Chinese Resident Enterprise Shareholders of H Shares (ʕ
͏ΆุΣྤ̮H‘) issued by
the SA T, such tax rate has been reduced to 10%. If there is any development in the applicable tax
laws and regulations or in the interpretation or application of such laws and regulations, the value
of your investment in our H Shares may be materially affected.
RISK FACTORS
–4 5–


--- page 55 ---
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares, an active trading market for our H
Shares may not develop following the Global Offering and the liquidity and market price of
our H Shares may be volatile.
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 maintain following completion of the Global Offering. In addition, the Global Offering of our
H Shares is expected to be fixed by agreement between the Overall Coordinators and us and may
not be an 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 liquidity, trading volume and market price of our Shares following the Global Offering
may be volatile, which could result in 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 political uncertainties in Hong Kong
and the general market conditions of the securities in Hong Kong and elsewhere in the world. The
Hong Kong 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 suppliers,
movements or activities of key personnel, or actions taken by competitors. Moreover, the shares of
other companies listed on the Hong Kong Stock Exchange have experienced price volatility in the
past, and the price of our H Shares may change that is not directly related to our performance.
Future sales or perceived sales of substantial amounts of our H shares may have a material
adverse effect on the 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 could decline as a result of future sales of a substantial
number of our H Shares or other securities relating to our H Shares in the public market, the
issuance of new shares or other securities, or the perception that such sales or issuances may occur.
Future sales, or anticipated sales, of substantial amounts of our securities, including any future
offerings, could also materially and adversely affect our ability to raise capital at a specific time and
on terms favorable to us. In addition, our Shareholders may experience dilution of their holdings
if we issue more securities in the future. New shares or shares-linked securities issued by us may
also confer rights and privileges that take priority over those conferred by the H Shares. According
to the stipulations by the State Council’s securities regulatory authority and the Articles of
Association, our Unlisted Shares may be converted into H Shares and such converted H Shares may
be listed or traded on an overseas stock exchange, provided that prior to the conversion and trading
of such converted shares, the requisite internal approval processes (but without the necessity of
Shareholders’ approval by class) have been duly completed and the approval from the relevant PRC
regulatory authorities, including the CSRC, have been obtained. In addition, such conversion,
trading and listing must comply with the regulations prescribed by the State Council’s securities
regulatory authorities and the regulations, requirements and procedures prescribed by the relevant
overseas stock exchange. We can apply for the listing of all or any portion of our Unlisted Shares
on the Stock Exchange as H Shares in advance of any proposed conversion to ensure that the
RISK FACTORS
–4 6–


--- page 56 ---
conversion process can be completed promptly upon notice to the Stock Exchange and delivery of
shares for entry on the H Share register. This could increase the supply of H Shares in the market,
and future sales, or perceived sales, of the converted H Shares may materially and adversely affect
the trading price of H Shares.
Y ou will incur immediate and significant dilution if the Offer Price of the Offer Shares is
higher than the net tangible asset value per H Share and may experience further dilution if we
issue additional Shares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per H Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the Global
Offering will experience an immediate dilution in pro forma consolidated net tangible asset value.
There can be no assurance that if we were to immediately liquidate after the Global Offering, any
assets would be distributed to Shareholders after the creditors’ claims. To expand our business, we
may consider offering and issuing additional Shares in the future. Purchasers of the Offer Shares
may experience dilution in the net tangible asset value per Share of their Shares if we issue
additional Shares in the future at a price that is lower than the net tangible asset value per Share
at that time.
Any possible conversion of our Unlisted Shares into H Shares in the future could increase the
supply of our H Shares in the market and negatively impact the market price of our H Shares.
Subject to the completion of the filing with the State Council securities regulatory authority,
all of our Unlisted Shares may be converted into H Shares, and such converted Shares may be listed
or traded on an overseas stock exchange. Any listing or trading of the converted Shares on an
overseas stock exchange shall also comply with the regulatory procedures, rules and requirements
of such stock exchange. No class shareholder voting is required for the listing and trading of the
converted Shares on an overseas stock exchange. However, the PRC Company Law provides that
in relation to the public offering of a company, the shares of that company which are issued prior
to the public offering shall not be transferred within one year from the date of the listing. Therefore,
upon completion the requisite filing, Unlisted Shares may be traded, after the conversion, in the
form of H Shares on the Stock Exchange after one year following the Global Offering, which could
further increase the supply of our H Shares in the market and could negatively impact the market
price of our H Shares.
Our Controlling Shareholder(s) have significant influence over us and their interests may not
always be aligned with the interest of our other Shareholders.
Our Controlling Shareholders will, through their voting power at the Shareholders’ meetings
and their delegates on the Board, have significant influence over our business and affairs, including
decisions in respect of mergers or other business combinations, acquisition or disposition of assets,
issuance of additional Shares or other equity securities, timing and amount of dividend payments,
and our management. Our Controlling Shareholders may not act in the best interests of our minority
Shareholders. In addition, without the consent of our Controlling Shareholders, we could be
prevented from entering into certain transactions that could be beneficial to us. This concentration
of ownership may also discourage, delay or prevent a change in control of our Company, which
could deprive our Shareholders of an opportunity to receive a premium for the Shares as part of a
sale of our Company and may significantly reduce the price of our H Shares.
Certain facts, forecasts and other statistics obtained from government publications contained
in this document may not be reliable in terms of accuracy, competence or reliance.
Certain facts, forecasts and other statistics contained in this prospectus relating to China, the
PRC economy and the sports medicine device industry in which we operate have been derived from
various official government publications. We have taken reasonable care in the reproduction or
extraction of the official government publications for the purpose of disclosure in this prospectus.
RISK FACTORS
–4 7–


--- page 57 ---
We have no reason to believe that the information in such source materials is false or misleading
or that any fact has been omitted that would render such information false or misleading. However,
we cannot guarantee the quality or reliability of such source materials. The information from
official government sources has not been prepared or independently verified by us, the Underwriters
or any of their respective affiliates or advisors and, therefore, we make no representation as to the
accuracy of such statistics from official government sources, which may not be consistent with
other information compiled within or outside the PRC. Due to possibly flawed or ineffective
collection methods or discrepancies between published information and market practice, such
statistics from official government sources in this prospectus may be inaccurate or may not be
comparable to statistics produced with respect to other economies. Further, there is no assurance
that they are stated or compiled on the same basis or with the same degree of accuracy as the case
may be in other jurisdictions. In all cases, investors should give consideration as to how much
weight or importance they should attach to or place on such facts.
Forward-looking information in this document is subject to risks and uncertainties.
This prospectus contains forward-looking statements and information relating to us and our
operations and prospects that are based on our current beliefs and assumptions as well as
information currently available to us. When used in this prospectus, the words “anticipate,”
“believe,” “estimate,” “expect,” “plans,” “prospects,” “going forward,” “intend” and similar
expressions, as they relate to us or our business, are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future events and are subject
to risks, uncertainties and various assumptions, including the risk factors described in this
prospectus. Should one or more of these risks or uncertainties materialize, or if any of the
underlying assumptions prove incorrect, actual results may diverge significantly from the
forward-looking statements in this prospectus. Whether actual results will conform with our
expectations and predictions is subject to several risks and uncertainties, many of which are beyond
our control, and reflect future business decisions that are subject to change. In light of these and
other uncertainties, the inclusion of forward-looking statements in this prospectus should not be
regarded as representations that our plans or objectives will be achieved, and investors should not
place undue reliance on such forward-looking statements. All forward-looking statements contained
in this prospectus are qualified by reference to the cautionary statements set out in this section.
Y ou should read the entire prospectus carefully and we strongly caution you not to place any
reliance on any information contained in press articles or other media or research analyst
reports regarding us, our business, our industry and the Global Offering.
We strongly caution you not to rely on any information contained in press articles or other
media regarding us and the Global Offering. Prior to the publication of this Prospectus, there has
been press and media coverage regarding us, our business, our industry and the Global Offering.
There may be additional media coverage regarding us, our business, our industry and the Global
Offering subsequent to the date of this Prospectus but prior to the completion of the Global
Offering. 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. None of us or any other person involved in the Global Offering
has authorized the disclosure of any such information in the press or media and none of us accepts
any responsibility for any such press or media coverage or the accuracy or completeness of any such
information or publication. We make no representation as to the appropriateness, accuracy,
completeness or reliability of any such information or publication. To the extent that any such
information is inconsistent or conflicts with the information contained in this Prospectus, we
disclaim responsibility for it, and you should not rely on such information.
RISK FACTORS
–4 8–


--- page 58 ---
In preparation of the Global Offering, we have sought the following waivers from strict
compliance with certain provisions of the Listing Rules.
W AIVER IN RELATION TO MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, our Company must have sufficient management
presence in Hong Kong, which normally means that at least two executive directors must be
ordinarily resident in Hong Kong. Rule 19A.15 of the Listing Rules further provides that the
requirement in Rule 8.12 may be waived by having regard to, among other considerations, the
applicant’s arrangements for maintaining regular communication with the Hong Kong Stock
Exchange.
Given that (i) our core business operations are principally located, managed and conducted in
the PRC under the supervision of executive Directors and senior management; and (ii) our executive
Directors and senior management principally reside in the PRC, our Company considers that it
would be more practical for the executive Directors and senior management of our Company to
remain ordinarily resident in the PRC where our Group has substantial operations. For the above
reasons, we do not have, and in the foreseeable future will not have, sufficient management
presence in Hong Kong for the purpose of satisfying the requirement under Rule 8.12 of the Listing
Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has granted
us, a waiver from strict compliance with Rule 8.12 of the Listing Rules. We will ensure that there
are adequate and efficient arrangements to achieve regular and effective communication between us
and the Stock Exchange as well as compliance with the Listing Rules by way of the following
arrangements:
(a) We have appointed Mr. Dong and Mr. He Lu ( ձ༩)( “ Mr. He ”) as the authorized
representatives (the “ Authorized Representatives ”) for the purpose of Rule 3.05 of the
Listing Rules. The Authorized Representatives will act as our principal channel of
communication with the Stock Exchange and would be readily contactable by phone and
email to deal promptly with enquiries from the Stock Exchange. Each of Mr. Dong and
Mr. He ordinarily resides in Chinese mainland, and possesses valid travel documents and
is able to renew such travel documents when they expire in order to visit Hong Kong.
Accordingly, the Authorized Representatives will be able to meet with the relevant
members of the Stock Exchange to discuss any matters in relation to our Company
within a reasonable period of time. See the section headed “Corporate Information” in
this prospectus for more information about our Authorized Representatives;
(b) To facilitate communication with the Stock Exchange, we have provided the Authorized
Representatives and the Stock Exchange with the contact details of our Directors (i.e.
mobile phone number, office phone number, email address and fax number (as
applicable)). In the event that any of our Director expects to travel or otherwise be out
of office, he or she will provide the phone number of the place of his/her accommodation
to the Authorized Representatives, so that the Authorized Representatives would be able
to contact all our Directors (including the proposed independent non-executive
Directors) promptly at all times if and when the Hong Kong Stock Exchange wishes to
contact our Directors. To the best of our knowledge and information, each Director who
is not ordinarily resident in Hong Kong possesses or can apply for valid travel
documents to visit Hong Kong and can meet with the Stock Exchange within a
reasonable period after requested by the Stock Exchange;
(c) we have appointed Red Sun Capital Limited as our compliance adviser (the
“Compliance Adviser ”) in compliance with Rules 3A.19 and 19A.05 of the Listing
Rules. The Compliance Adviser will, among other things and in addition to the
Authorized Representatives, provide us with professional advice on continuing
W AIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–4 9–


--- page 59 ---
obligations under the Listing Rules and act as additional channel of communication of
our Company with the Stock Exchange during the period from the Listing Date to the
date on which our Company complies with Rule 13.46 of the Listing Rules in respect of
its financial results for the first full financial year immediately after the Listing. The
Compliance Adviser will be available to answer enquiries from the Stock Exchange and
will act as an additional channel of communication with the Stock Exchange when the
Authorized Representatives are not available; and
(d) meetings between the Stock Exchange and our Directors can be arranged through the
Authorized Representatives or our compliance, or directly with our Directors within a
reasonable time frame.
W AIVER IN RELATION TO APPOINTMENT OF JOINT COMPANY SECRETARIES
Rule 8.17 of the Listing Rules provides that our Company must appoint a company secretary
who satisfies the requirements under Rule 3.28 of the Listing Rules. According to Rule 3.28 of the
Listing Rules, our Company must appoint an individual, who, by virtue of his/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)); and
(c) a certified public accountant (as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong)).
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience”, the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles they played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
Securities and Futures Ordinance, Companies Ordinance, Companies (Winding Up and
Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Ms. Liang Xiaodan ( ૑ወʗ)( “ Ms. Liang ”) as one of the joint company
secretaries of our Company. Ms. Liang has substantial experience in handling corporate, investor
relationship management and administrative matters but personally does not process any of the
qualifications under Rules 3.28 and 8.17 of the Listing Rules and may not be able to solely fulfill
the requirements of the Listing Rules. Therefore, our Company has appointed Ms. Jian Xuegen ( ᔊ
௛Ќ)( “ Ms. Jian ”), who fully meets the requirements stipulated under Rules 3.28 and 8.17 of the
Listing Rules to act as one of our joint company secretaries and to provide assistance to Ms. Liang
for an initial period of three years from the Listing Date (the “ Waiver Period ”) to enable Ms. Liang
to acquire the “relevant experience” under Note 2 to Rule 3.28 of the Listing Rules so as to fully
comply with the requirements set forth under Rules 3.28 and 8.17 of the Listing Rules. See
“Directors, Supervisors and Senior Management” in this prospectus for further biographical details
W AIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–5 0–


--- page 60 ---
of Ms. Liang and Ms. Jian. The following arrangements have been, or will be, put in place to assist
Ms. Liang in acquiring the qualifications and experience as the company secretary of our Company
required under Rule 3.28 of the Listing Rules:
(a) Ms. Liang will attend relevant training courses, including briefings on the latest changes
to the relevant applicable Hong Kong laws and regulations and the Listing Rules which
will be organized by our Company’s Hong Kong legal advisers on an invitation basis and
seminars organized by the Stock Exchange for listed issuers from time to time;
(b) Both Ms. Liang and Ms. Jian have confirmed that each of them will be attending a total
of no less than 15 hours of training courses on the Listing Rules, corporate governance,
information disclosure, investors relation as well as the functions and duties of the
company secretary of a Hong Kong listed issuer during each financial year as required
under Rule 3.29 of the Listing Rules;
(c) Ms. Jian will assist Ms. Liang to enable her to acquire the relevant experience (as
required under Rule 3.28 of the Listing Rules) to discharge the duties and
responsibilities as the company secretary of our Company;
(d) Ms. Jian will communicate regularly with Ms. Liang on matters relating to corporate
governance, the Listing Rules and any other laws and regulations which are relevant to
our Company and its affairs. Ms. Jian will work closely with, and provide assistance to,
Ms. Liang in the discharge of her duties as a company secretary, including organizing
our Company’s Board meetings and Shareholders’ general meetings;
(e) Prior to the expiry of Ms. Liang’s initial term of appointment as the company secretary
of our Company, we will evaluate her experience in order to determine if she has
acquired the qualifications required under Rules 3.28 of the Listing Rules, and whether
on-going assistance should be arranged so that Ms. Liang’s appointment as the company
secretary of our Company continues to satisfy the requirements under Rules 3.28 and
8.17 of the Listing Rules;
(f) The Company has appointed Red Sun Capital Limited as its Compliance Adviser
pursuant to Rules 3A.19 of and 19A.05 the Listing Rules which will act as the additional
communication channel with the Stock Exchange (for a period commencing on the
Listing Date and ending on the date on which the Company complies with Rule 13.46
of the Listing Rules in respect of its financial results for the first full financial year after
the Listing Date, or until the engagement is terminated, whichever is earlier) and provide
professional guidance and advice to the Company (including Ms. Liang) as to the
compliance with the Listing Rules and all other applicable laws and regulations; and
(g) the waiver will be revoked if there are material breaches of the Listing Rules by our
Company or if Ms. Liang ceased to be assisted by a suitably qualified person who
possesses the qualifications as required under Rule 3.28 of the Listing Rules. If Ms. Jian
ceases to meet the requirements under Rule 3.28 of the Listing Rules or otherwise ceases
to serve as a joint company secretary of the Company assisting Ms. Liang during the
Waiver Period, the Company will re-apply for a waiver with the Exchange.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has granted
us, a waiver from strict compliance with Rules 3.28 and 8.17 of the Listing Rules. Such waiver will
be revoked immediately if and when (i) Ms. Liang ceases to be assisted by a person with
qualifications under Rules 3.28 and 8.17 of the Listing Rules throughout the Waiver Period, or (ii)
if there are material breaches of the Listing Rules by us. Before the end of the three-year period,
we will demonstrate and seek the Exchange’s confirmation that Ms. Liang, having had the benefit
of Ms. Jian’s assistance for three years, has acquired relevant experience within the meaning of Rule
3.28 of the Listing Rules and is capable of discharging the functions of company secretary so that
a further waiver will not be necessary.
W AIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–5 1–


--- page 61 ---
W AIVER UNDER RULE 10.04 AND CONSENT UNDER PARAGRAPH 1C(2) OF APPENDIX
F1 TO THE LISTING RULES IN RESPECT OF SUBSCRIPTIONS OF OFFER SHARES BY
EXISTING SHAREHOLDERS AS CORNERSTONE INVESTORS
Rule 10.04 of the Listing Rules provides that a person who is an existing shareholder of the
issuer may only subscribe for or purchase any securities for which listing is sought which are being
marketed by or on behalf of a new applicant either in his or its own name or through nominees if
the conditions set out in Rules 10.03(1) and (2) of the Listing Rules are fulfilled.
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that without the prior written
consent of the Stock Exchange, no allocations will be permitted to directors or existing shareholders
of the applicant or their close associates, whether in their own names or through nominees unless
the conditions set out in Rules 10.03 and 10.04 of the Listing Rules are fulfilled.
Chapter 4.2 of the Guide for New Listing Applicants provides that, among other things, that
under Rule 10.04 and paragraph 1C(2) of Appendix F1, no shares can be offered to existing
shareholders of the applicant on a preferential basis and no preferential treatment can be given to
them in the allocation of shares. Anti-dilution rights must terminate upon listing and may not
survive listing to be in line with Rule 13.36. Meanwhile, exercise of anti-dilution rights before and
in connection with the IPO is permissible if: (a) the allocation is necessary to give effect to
pre-existing contractual rights; (b) there is full disclosure of the anti-dilution rights and the number
of shares to be subscribed in the listing document and the allotment results announcement; and (c)
the additional shares will be subscribed at the IPO price.
Chapter 4.15 of the Guide for New Listing Applicants provides that the Stock Exchange will
consider giving consent and granting waiver from Rule 10.04 of the Listing Rules to an applicant’s
existing shareholders or their close associates to participate in an initial public offering if any actual
or perceived preferential treatment arising from their ability to influence the applicant during the
allocation process can be addressed.
Paragraph 13 of Chapter 4.15 of the Guide for New Listing Applicants provides that the
Exchange will ordinarily agree to grant a consent and waiver for allocation to existing shareholders
or their close associates if it is satisfied that the actual or perceived preferential treatment arising
from their ability to influence the applicant during the allocation process can be addressed.
Paragraph 16 of Chapter 4.15 of the Guide for New Listing Applicants further provides that
the Exchange will generally not presume that there is preferential treatment under the circumstances
where, among others, existing shareholders purchasing securities pursuant to an anti-dilution
provision.
As of the Latest Practicable Date, OAP IV holds approximately 9.28% of the total issued share
capital of the Company. Assuming that immediately following the completion of the Global
Offering, there will be a total number of 54,831,344 H Shares, including 46,409,494 H Shares
converted from Unlisted Shares in issue and without taking into account the Exercise of the OAP
IV Anti-Dilution Right (as defined below), OAP IV’s shareholding in the total issued share capital
of the Company will decrease to approximately 7.85% immediately following the completion of the
Global Offering.
Pursuant to the August 2025 Supplemental Agreement, OAP IV , as one of the Pre-IPO
Investors, has the right to purchase up to the number of the ordinary shares of the Company offers
in the Global Offering at the Offer Price that enables it to maintain its ownership interest percentage
in the Company (the “ OAP IV Entitled Shares ”) immediately prior to a qualified IPO (the “ OAP
IV Anti-Dilution Right ”). The OAP IV Anti-Dilution Right shall terminate immediately after the
consummation of the qualified IPO.
W AIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–5 2–


--- page 62 ---
In the Global Offering, OAP IV will exercise the OAP IV Anti-Dilution Right to subscribe for
additional Offer Shares at the Offer Price, as a cornerstone investor in the International Offering
(the “ Exercise of the OAP IV Anti-Dilution Right ”). Following the Exercise of the OAP IV
Anti-Dilution Right, OAP IV shall not own more than its percentage shareholding interest in the
Company as at immediately before the Global Offering (i.e. approximately 9.28% of the total issued
share capital of the Company). The number of OAP IV Entitled Shares OAP IV will subscribe is
397,650 Offer Shares, which enable OAP IV to maintain its ownership interest percentage in the
Company, rounded down to the nearest board lot.
Based on the following reasons and conditions, the Company has applied for, and the Stock
Exchange has granted, a waiver from strict compliance with the requirements under 10.04 of, and
a consent under Paragraph 1C(2) of Appendix F1 to, the Listing Rules, to allow OAP IV to subscribe
for Offer Shares in the Global Offering as a cornerstone investor based on the following reasons
and/or conditions:
(a) the OAP IV Anti-Dilution Right, if exercised, will be made in compliance with the
Chapter 4.15 of the Guide for New Listing Applicants:
i. the allocation to OAP IV is necessary in order to give effect to the OAP IV
Anti-Dilution Right under the August 2025 Supplemental Agreement and such
allocation will not affect the Company’s ability to satisfy the public float
requirement of Rule 8.08 (as amended and replaced by Rule 19A.13A) of the
Listing Rules;
ii. a full disclosure of the OAP IV Anti-Dilution Right and the number of shares to be
subscribed for by OAP IV will be made in the Company’s Prospectus and the
allotment results announcement and the placee lists to be submitted to the Stock
Exchange;
iii. the OAP IV Entitled Shares will be subscribed for by OAP IV at the Offer Price
and, in any event, will not result in the percentage interest held by OAP IV in the
Company increasing above the percentage interest held by OAP IV immediately
prior to the Global Offering;
(b) the subscription of the OAP IV Entitled Shares by OAP IV will not have any impact on
the Shares to be offered to the public investors in Hong Kong under the Hong Kong
Public Offering, considering that OAP IV will subscribe for the OAP IV Entitled Shares
in the International Offering at the same offer price and under substantially the same
terms and conditions as other cornerstone investors in the Global Offering.
W AIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–5 3–


--- page 63 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which all of our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules
(Chapter 571V of the Laws of Hong Kong) and the Listing Rules for the purpose of giving
information 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 is no other matter the omission of which would make any statement in this prospectus
misleading.
CSRC FILING
According to the Overseas Listing Trial Measures, we are required to complete the filing
procedures with the CSRC in connection with the proposed Listing. We submitted a filing to the
CSRC for application for the Listing, and the CSRC confirmed completion of such filing on
February 4, 2026. No other approvals from the CSRC are required to be obtained for the Listing.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering, which
forms part of the Global Offering. For applicants under the Hong Kong Public Offering, this
prospectus sets out the terms and conditions of the Hong Kong Public Offering. The Global Offering
comprises the Hong Kong Public Offering of initially 842,200 Offer Shares and the International
Offering of initially 7,579,650 Offer Shares (subject to, in each case, reallocation on the basis
referred to under the section headed “Structure of the Global Offering” in this prospectus).
The Hong Kong 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 our
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 respective directors, officers, agents, employees or advisers or any other party involved in the
Global Offering.
Neither the delivery of this prospectus nor any offering, sale or delivery made in connection
with the Offer Shares should, under any circumstances, constitute a representation that there has
been no change or development reasonably likely to involve a change in our affairs since the date
of this prospectus or imply that the information contained in this prospectus is correct as of any date
subsequent to the date of this prospectus.
See “Structure of the Global Offering” in this prospectus for details of the structure of the
Global Offering, including its conditions.
UNDERWRITING
The Listing is sponsored by the Joint Sponsors. The Hong Kong Public Offering is fully
underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting
Agreement. We expect that our Company will, on or about Wednesday, April 29, 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–5 4–


--- page 64 ---
For full information about the Underwriters and the underwriting arrangements, see
“Underwriting” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering (including its conditions) are set out in the
sections headed “Structure of the Global Offering” and “Underwriting” in this prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will
be required to, or be deemed by his/her acquisition of Hong Kong Offer Shares to, confirm that
he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares described
in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the distribution of
this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation to the
following, this prospectus may not be used for the purpose of, and does not constitute, an offer or
invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not
authorized or to any person to whom it is unlawful to make such an offer or invitation 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 Offer Shares
have not been offered and sold, and will not be offered and sold, directly or indirectly, in the PRC
or the United States.
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 and the H Shares
to be converted from Unlisted Shares. No part of our Shares or loan capital is listed on or dealt in
on any other stock exchange, and no such listing or permission to list is being or proposed to be
sought as of the Latest Practicable Date.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any 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 the listing of, and permission to deal in, the H Shares on the Hong
Kong Stock Exchange and compliance with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencement of dealings in the H Shares on the Hong Kong
Stock Exchange or on any other date as determined by HKSCC. Settlement of transactions between
participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second
settlement day after any trading day. All activities under CCASS are subject to the General Rules
of HKSCC and the HKSCC Operational Procedures in effect from time to time.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–5 5–


--- page 65 ---
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional advisers for
details of the settlement arrangements as such arrangements may affect their rights and interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this prospectus.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares will be registered on our register of members of H Share to be maintained
by our H Share Registrar, Computershare Hong Kong Investor Services Limited, in Hong Kong.
Dealings in the H Shares registered on the H Share register of members of our Company in
Hong Kong will be subject to Hong Kong stamp duty.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers as to the taxation implications of subscribing for, purchasing, holding or disposal of, and/or
dealing in the H Shares or exercising rights attached to them. None of us, the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Capital Market Intermediaries, the Underwriters, any of their respective directors,
officers, employees, partners, agents, advisers or representatives or any other person or party
involved in the Global Offering accepts responsibility for any tax effects on, or liabilities of, any
person resulting from the subscription, purchasing, holding, disposition of, or dealing in, the H
Shares or exercising any rights attached to them.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless indicated otherwise, (i) the translations between Renminbi and U.S. dollars were made
at the rate of RMB6.8582 to US$1.00; (ii) the translations between Hong Kong dollars and
Renminbi were made at the rate of RMB0.8754 to HK$1.00; and (iii) the translations between Hong
Kong dollars and U.S. dollars were made at the rate of HK$7.8344 to US$1.00.
No representation is made that the amounts denominated in one currency could actually be
converted into the amounts denominated in another currency at the rates indicated or at all.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. However, for ease of reference, the names of the PRC laws and regulations,
government authorities, institutions, natural persons or other entities (including our certain
subsidiaries) have been included in this prospectus in both Chinese and English languages. In the
event of any inconsistency, the Chinese versions shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies between totals and sums of amounts listed in any table,
chart or elsewhere in this prospectus are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–5 6–


--- page 66 ---
For further information on our Directors and Supervisors, please refer to the section
headed “Directors, Supervisors and Senior Management” of this prospectus.
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Dong Wenxing ( ໨˖ጳ) Room 501, Building 10
Yicheng Jingyuan
No. 11 Kechuang Street
Daxing District
Beijing
PRC
Chinese
M r .H eL u( ձ༩) Room 1202, Building 301
Jingsong Third District
Chaoyang District
Beijing
PRC
Chinese
Non-executive Directors
Ms. Zhang Di (ࠔ)Room 603, Building 11
Hetaoyuan North Lane
Chaoyang District
Beijing
PRC
Chinese
Mr. Chang Xi ( ੬ః) Unit 401, Building 3, No. 15
Shiyuan East District, Shunyi District
Beijing
PRC
Chinese
Mr. David Guowei Wang
(ˮ਷⒜)
45 DOGWOOD DR#106
NASHUA
NH 03062
U.S.A.
U.S.A.
Ms. Yi Lin (೙) Room 2009, Building 3. No. 18
Xinzhong Street, Dongcheng District
Beijing
PRC
Chinese
Mr. Zhou Quan ( մ⒧) Unit 801, Building 1, No. 5
Ocean View
No. 15, Deshengmen West Street
Haidian District
Beijing
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–5 7–


--- page 67 ---
Name Address Nationality
Independent non-executive Directors
Mr. Lyu Zhenlin (؍ࣈ)Room 6-1102, Jinhua Staff Compound
No. 5 Jinhua South Road
Xi’an, Shaanxi Province
PRC
Chinese
Mr. Deng Yu ( ቎ρ) No. 368, Xuefu Road
Nangang District, Harbin City
Heilongjiang
PRC
Chinese
Mr. Liu Baojie ( ᄎᘒ௫) 3904, Baguio Villa
555 Victoria Road
Pokfulam
Hong Kong
PRC
(Hong Kong)
Mr. Wang Chunfei (݆࠭)Room 2141, 14th Floor
Building 2, Guangtongyuan
No. 41 Jiaoda East Road
Haidian District
Beijing
PRC
Chinese
Supervisors
Mr. Xu Jingtao ( ஢౻ᏹ) Unit 302, Building 23, Phase I Shouzuo
Y uyuan, Daxing District, Beijing
PRC
Chinese
Mr. Y ang Tengfei (࠭)Unit 601, Building 2
Y uxin Garden Zhongli
Caiyu Town, Daxing District
Beijing
PRC
Chinese
Ms. Wang Y ali ( ˮԭᘆ) Unit 304, Building 13, Y ard 36
Y usheng Street, Caiyu Town
Daxing District
Beijing
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–5 8–


--- page 68 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Sponsor-Overall Coordinators, Overall
Coordinators, Joint Global Coordinators,
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners, Joint
Lead Managers and Capital Market
Intermediaries
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road
Central
Hong Kong
CMBC Securities Company Limited
45/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
Joint Global Coordinator, Joint Bookrunner,
Joint Lead Manager and Capital Market
Intermediary
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries
Open Securities Limited
Room 3208-09, 32/F, Tower 6
The Gateway, 9 Canton Road
Tsim Sha Tsui
Kowloon
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–5 9–


--- page 69 ---
Orient Securities (Hong Kong) Limited
28th and 29th Floor
100 Queen’s Road
Central
Hong Kong
Zheshang International Financial Holdings
Co., Limited
Room 1703-06, 17th floor
Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Legal Advisors to the Company As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
As to PRC laws:
Zhong Lun Law Firm
Floor 22-31, South Tower, Building 3
Zhengda Center, No. 20, Jinhe East Road
Beijing
PRC
As to IP laws:
Beijing Gaowo Law Firm
6th Floor, Huayi Holdings Building No.11
Caihefang Road, Haidian District
Beijing
PRC
Legal Advisors to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
DLA Piper Hong Kong
25th Floor, Three Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC laws:
Tian Yuan Law Firm
Suite 509, Tower A
Corporate Square 35
Financial Street, Xicheng District
Beijing
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–6 0–


--- page 70 ---
Auditors and Reporting Accountants Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road, Quarry Bay
Hong Kong
Industry Consultant China Insights Industry Consultancy
Limited
10F, Block B, Jing’an International Center
88 Puji Road, Jing’an District
Shanghai
PRC
Receiving Bank CMB Wing Lung Bank Limited
14/F, CMB Wing Lung Bank Building
45 Des V oeux Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–6 1–


--- page 71 ---
Head Office, Registered Office and
Principal Place of Business in the PRC
Building 1, A018, B018
No. 25, Jinghai 2nd Road
Beijing Economic and Technological
Development Zone
Beijing, PRC
Principal Place of Business in Hong Kong 40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Company’s Website starsportmed.com
(The information on the website does not form
part of this prospectus)
Joint Company Secretaries Ms. Liang Xiaodan ( ૑ወʗ)
Building 1, A018, B018
No. 25, Jinghai 2nd Road
Beijing Economic and Technological
Development Zone
Beijing, PRC
Ms. Jian Xuegen ( ᔊ௛Ќ)
A member of the Hong Kong Institute of
Certified Public Accountants and the Chinese
Institute of Certified Public Accountants
40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Authorised Representatives Mr. Dong Wenxing ( ໨˖ጳ)
Room 501, Building 10
Yicheng Jingyuan
No. 11 Kechuang Street
Daxing District
Beijing
PRC
M r .H eL u( ձ༩)
Room 1202, Building 301
Jingsong Third District, Chaoyang District
Beijing
PRC
Audit Committee Mr. Wang Chunfei (݆࠭)Chairman)
Mr. Lyu Zhenlin (؍ࣈ)
Mr. Chang Xi ( ੬ః)
Nomination Committee Mr. Deng Y u ( ቎ρ) (Chairman)
Mr. Wang Chunfei (݆࠭)
Ms. Zhang Di (ࠔ)
CORPORATE INFORMATION
–6 2–


--- page 72 ---
Remuneration and Appraisal Committee Mr. Lyu Zhenlin (؍ࣈ)Chairman)
Mr. Liu Baojie ( ᄎᘒ௫)
Mr. Dong Wenxing ( ໨˖ጳ)
Strategy Committee Mr. Dong Wenxing ( ໨˖ጳ) (Chairman)
M r .H eL u( ձ༩)
Mr. Deng Y u ( ቎ρ)
Compliance Adviser Red Sun Capital Limited
Room 310, 3/F
China Insurance Group Building
141 Des V oeux Road Central
Hong Kong
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
Principal Banker China Construction Bank Jinghailu Branch
Room 105, Chengxiang Century Plaza
No. 38 Kechuang 5th Street
Economic-Technological
Development Area
Daxing District
Beijing
CORPORATE INFORMATION
–6 3–


--- page 73 ---
The information and statistics set out in this section and other sections of this prospectus
were extracted from the CIC Report, which was commissioned by the Company, and from
various official government publications and available resources from public market
research. The Company engaged CIC to prepare the CIC Report in connection with the Global
Offering. The information from official government sources has not been independently
verified by any of the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their
respective directors and advisors, or any other persons or parties involved in the Global
Offering (other than CIC), and no representation is given as to its accuracy. For discussion
of risks related to the Group’ s industry, see “Risk Factors — Risks Relating to Our Business
and Operations” in this prospectus.
MEDICAL DEVICE MARKET IN CHINA
Overview of China’s Medical Device Market
China’s medical device market has experienced a steady growth. The market size increased
from RMB562.9 billion in 2018 to RMB1,050.2 billion in 2024, representing a CAGR of 11.0%,
and is expected to further reach RMB1,726.7 billion in 2030, representing a CAGR of 8.6%. The
temporary decline in the size of China medical device market in 2023 was attributed to reduced
sales volume in COVID-related medical devices and medical anti-corruption efforts. Driven by the
aging population, the rising prevalence of chronic diseases, increasing patient healthcare awareness,
supportive policies for domestically-produced medical devices, technological innovation, and
ongoing implementation of the volume-based procurement program and other national health
insurance programs that improve the affordability of medical devices, China’s medical device
market has a strong growth momentum in the coming years.
The following graph sets forth the actual and forecasted market size of China’s medical device
market by sales revenue for the years indicated.
China’s Medical Device Market Size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E20202018 2019 2024 202320222021
563
664
779
909
1,050 1,003 1,050
1,182
1,320
1,464 1,543
1,639
1,727
2018-2024CAGR
11.0%China medical device market 8.6%
2024-2030E
Billion RMB
Note: By sales revenue, in terms of ex-factory prices.
Source: annual reports published by market players, NMP A, National Bureau of Statistics of China, CIC
INDUSTRY OVERVIEW
–6 4–


--- page 74 ---
Growth Drivers of China’s Medical Device Market
Key growth drivers of China’s medical device market include the following:
 Aging population and rising chronic diseases . In 2024, individuals aged 65+ accounted
for over 15.6% of China’s population and are expected to increase further, driving higher
procedure volumes and sustained demand for diagnostic, surgical and rehabilitation
devices.
 Strong supportive policies and oversight . The 14th Five-Y ear Plan targets global
leadership by 2035, with policies promoting innovation, regulatory efficiency and IP
protection to support high-quality industry development.
 Improving affordability and increasing health awareness . With over 95% insurance
coverage and improving reimbursement, patients’ affordability and preventive health
awareness are rising, increasing utilization of diagnostic, surgical and rehabilitation
equipment.
Future Trends of China’s medical device market
Future trends of China’s medical device market include the following:
 Technological innovation . Advances in AI, 5G, cloud computing and bioengineering are
enabling smarter, more efficient and interoperable devices, improving clinical outcomes
and cost-effectiveness.
 Domestic substitution . V olume-based procurement has accelerated domestic substitution,
supporting competitive local manufacturers, driving consolidation and increasing market
share for cost-efficient and innovative players.
Entry Barriers of China’s Medical Device Market
Major entry barriers of the medical device market in China include the following:
 Market access and regulatory barriers . Strict licensing, GMP/ISO compliance and
clinical evaluation requirements, particularly for Class II and III devices, create high
regulatory costs and complexity for new entrants.
 Technical barriers . Medical device development requires multidisciplinary integration,
advanced manufacturing standards and long development cycles, posing significant
technical and capital challenges for new players.
 Talent barriers . The industry requires multidisciplinary expertise across R&D,
manufacturing, quality and commercialization, and the scarcity of experienced
professionals in these areas poses a significant barrier for new entrants.
 Market channel barriers . Complex hospital tendering, regulatory and service
requirements domestically, as well as distributor networks and brand recognition
overseas, create substantial market access and expansion challenges.
GLOBAL AND CHINA’S SPORTS MEDICINE DEVICE MARKET
Overview
Sports medicine is a specialized branch of medicine focused on the prevention, diagnosis,
treatment and rehabilitation of sports-related injuries. It integrates medical knowledge with exercise
science to minimize the injury risks, and manage medical issues related to exercise, including soft
tissue injuries. Sports medicine addresses the medical needs arising from daily physical activities,
emphasizing injury prevention, physical function enhancement, injury treatment, impairment
management and injury rehabilitation.
INDUSTRY OVERVIEW
–6 5–


--- page 75 ---
In China, sports medicine is classified as a tertiary discipline under Clinical Medicine,
whereas orthopedics is a tertiary discipline under Surgery. Sports medicine research encompasses
sports-related injuries, rehabilitation, sports-related diseases, physical health promotion, medical
support for physical activities, nutrition, physiology and biochemistry, doping control, psychology,
and health management. It primarily addresses the prevention, treatment and rehabilitation of soft
tissue injuries, rather than one-time high-energy trauma, while orthopedics focuses on the bones and
joint conditions. Beyond addressing different clinical problems, orthopedic surgery and sports
medicine also employ distinct treatment techniques. Orthopedics typically rely more on
comprehensive structural interventions and open surgical procedures with large incisions. In
contrast, sports medicine procedures are typically minimally invasive arthroscopic procedures that
repair or reconstruct soft tissues, such as ligaments and tendons, to restore joint function. Our
product portfolio is also fundamentally different from general orthopedics products. General
orthopaedic products, such as bone plates, intramedullary nails spine cage and joint prosthetics, are
typically large, load-bearing structures made of metal. On the other hand, our sports medicine
products, particularly medical implants such as suture anchors, suture buttons, etc., are precision-
engineered, small-sized devices designed for soft tissue fixation. They are primarily manufactured
from non-metallic biomaterials to ensure compatibility with soft tissue regeneration, rather than
mere skeletal support.
Sports medicine devices include medical devices and equipment used for surgical repair,
reconstruction, or replacement, which aid diagnostic imaging and physical therapy. They are
non-pharmacological interventions, meaning they do not include drugs but instead rely on
mechanical, physical, or biological principles.
Arthroscopy, as an important diagnostic and treatment tool in sports medicine, continues to
show great application prospects. Arthroscopy is a minimally invasive surgical procedure on a joint
in which an examination and treatment of damage is performed using an endoscope that is inserted
into the joint through a small incision. As compared to traditional open surgery, arthroscopy is less
invasive, which means procedures can be completed as out-patient surgeries giving patients the
option to be back home the same day. It can also minimize pain and the need for pain medication
post-surgery as well as reduce overall recovery time, resulting in precision, highly targeted
treatment, and rapid efficacy. Arthroscopy is the main technology used for the diagnosis and
treatment of sports medicine. During the process of diagnosis and treatment, the devices used
mainly include sports medical implants, surgical equipment and associated medical consumables,
and in some cases, sports medicine regenerative medicine devices.
The sports medicine device market can be divided into two major parts, sports medicine
implants and instruments, and sports medicine regenerative devices. The global sports medicine
device market size reached US$7.0 billion in 2024, among which over 87% were sports medicine
implants and instruments, and 13% sports medicine regenerative devices. In China’s case, the sports
medicine device market size was RMB6.2 billion in 2024, with 88%, and 12% in the two segments
respectively. China’s sports medicine device market accounted for less than 1% of China’s medical
device market in 2024, while the remainder of the market primarily consisted of other medical
device segments, including medical imaging equipment and in vitro diagnostics. Sports medicine
implants and instruments are implants, equipment as well as associated consumables that are used
in sports medicine surgeries, arthroscopic ones in most cases, to provide support and help stabilize
the joints, ligaments, tendons, and muscles that have been injured or damaged. The sports medicine
regenerative devices, which distinguish themselves from traditional implants and instruments,
contain bioactive materials to regenerate or restore soft tissues.
INDUSTRY OVERVIEW
–6 6–


--- page 76 ---
The following graph sets forth the actual and forecasted market size of China’s sports
medicine device market by sales revenue for the years indicated.
Market size of China’s sports medicine device market, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
Billion RMB2018-2024CAGR
Total
6.5% 14.3%
2024-2030E
Sports medical implants and instruments
61.8%
8.7% 16.5%
28.3%Sports medicine regenerative medicine devices
3.7
3.7
4.7
4.8
4.9
5.0
5.2
5.5
5.6
6.0
6.1
6.7
5.4
0.8
6.2
6.3
1.0
7.3
7.3
1.3
8.6
8.4
1.6
10.0
9.6
2.0
11.6
10.9
2.7
13.6
12.1
3.4
15.5
0.00.0 0.1 0.1 0.1 0.1 0.3 0.3 0.4 0.4 0.6 0.6
Note: Note: By sales revenue, in terms of ex-factory prices.
Source: annual reports, CIC
Global Sports Medicine Implants and Instruments Market Size
The global sports medicine implants and instruments market has reached the maturity stage.
The global sports medicine implants and instruments market size increased from US$5.0 billion in
2018 to US$6.1 billion in 2024, representing a CAGR of 3.4%, and is expected to further reach
US$8.8 billion in 2030, representing a CAGR of 6.2%. It experienced a temporary decline in 2020
mainly due to the large-scale lockdowns during the COVID-19 period when a significant number
of elective procedures, particularly arthroscopic surgeries, ligament reconstructions, and meniscus
repairs in sports medicine, were postponed or canceled.
The following graph sets forth the actual and forecasted market size of the global sports
medicine implants and instruments market by sales revenue for the years indicated.
Global Sports Medicine Implants and Instruments Market Size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
Billion USD2018-2024CAGR
Total
5.1% 7.1%
2024-2030E
Sports medical implants
0.8%
3.4% 6.2%
4.6%Surgical equipment and associated medical consumables
2.1 2.2 1.9 2.1 2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.9
2.9 3.1
2.7 3.2 3.4 3.7 3.9 4.2 4.5 4.8 5.1 5.5 5.95.0 5.3
4.6
5.3 5.5 5.8 6.1 6.5 6.9 7.3 7.7
8.2
8.8
Note: By sales revenue, in terms of ex-factory prices.
Source: annual reports published by market players, interviews with industry experts, CIC
INDUSTRY OVERVIEW
–6 7–


--- page 77 ---
China’s Sports Medicine Implants and Instruments Market Size
Relevant conditions for sports medicine primarily include sports-related and overuse injuries,
as well as degenerative diseases. Sports and overuse injuries arise from repetitive or excessive
strain on muscles, tendons or ligaments during daily physical activities. Degenerative diseases of
the musculoskeletal system, particularly those affecting joints, are typically caused by chronic and
repetitive motions, leading to inflammation and structural damages, which typically happen to the
elderly. In China, the relevant conditions for sports medicine reached 168.6 million cases in 2024
and is projected to exceed 200 million by 2030.
The market size of China’s sports medicine implants and instruments market increased from
RMB3.7 billion in 2018 to RMB5.4 billion in 2024, representing a CAGR of 6.5%, and is expected
to further reach RMB12.1 billion in 2030, representing a CAGR of 14.3%.
The following graph sets forth the actual and forecasted market size of the China’s sports
medicine implants and instruments market by sales revenue for the years indicated. The CAGR
between 2018 and 2023 of the China sports medical implants market was 11.0%, without
considering the unexpected policy influence of the VBP . The China’s sports medicine implants and
instruments market size declined in 2024 due to the large reduction of ex-factory prices under VBP
execution while being counterbalanced by a 20% increase of the volume of arthroscopic surgeries.
With the continuous VBP implementation, the following are expected to drive the growth in China’s
sports medicine market. The first is the increasing penetration of arthroscopic surgeries treatment.
Arthroscopic surgeries have many advantages, as the minimally invasive technology, including
small incision, minimal recovery time and little pain, etc. However, the penetration of arthroscopic
surgeries was less than 50% in patients who got sports injuries or degenerative diseases in 2024
only. With deeper understanding of the disease condition as well as improved affordability, the
penetration is expected to grow. The second is the trend of increased number of implants used per
surgery in clinical practice. Before VBP , the high prices of sports medical implants prevented
surgeons or patients from applying multiple implants and forced them to seek for more affordable
substitutes, such as sutures. The situation was improved after VBP when price was no longer a
major concern and there has been a noticeable trend of increasing implants used per arthroscopic
surgery. The combination of the above drivers is expected to drive the growth of the sports medicine
market from 2025 to 2030.
China’s Sports Medicine Implants and Instruments Market Size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
Billion RMB2018-2024CAGR
Total
4.0% 16.2%
2024-2030E
Sports medical implants
10.8%
6.5% 14.3%
11.4%Surgical equipment and associated medical consumables
1.2
3.2
1.4
3.4
1.5
3.6
1.6
3.9
1.7
4.2
1.9
3.1
2.3
3.7
2.6
4.4
2.9
5.1
3.3
6.0
3.6
6.9
4.0
7.7
4.4
3.7
2.5
4.9 5.2 5.6 6.1
5.4
4.7
7.3
8.4
9.6
10.9
12.1
6.3
Note: By sales revenue, in terms of ex-factory prices.
In 2024, the VBP scheme of sports medicine implants was executed, with reduction of ex-factory prices and modest
volume increase in the market, resulting in the overall market size decline.
Source: NMP A, interviews with industry experts, CIC
INDUSTRY OVERVIEW
–6 8–


--- page 78 ---
Competitive landscape of China’s sports medicine implants and instruments market
The sports medicine implants and instruments market in China has been dominated by
international players over the past decade. However, domestic brands have increasingly invested in
R&D to enhance product quality and effectiveness, such as by adopting advanced materials and
precision manufacturing techniques, and by developing innovative solutions tailored to local market
demand. These efforts accompanied by VBP schemes have collectively raised the domestic brands’
market acceptance among physicians and patients.
The following table sets forth the relative revenue and market share of the China’s top five
players in the sports medicine implants and instruments market.
Top 5 players in China’s sports medicine implants and instruments market, 2024
Ranking (1) Players
Domestic/
International Revenue (2) Market share
(RMB in
million)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company A International ~1,297 ~24.0%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company B International ~940 ~17.4%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company C International ~729 ~13.5%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company Domestic 350 6.5%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company D International ~330 ~6.1%
Notes:
(1) By sales revenue, in terms of ex-factory prices.
(2) The revenue is presented as domestic income inclusive of tax, while the revenue disclosed for industry players
represents their segment revenue in the respective market.
(3) The Company held a market share of 2.7% and 4.0% respectively in 2022 and 2023.
(4) Certain sports medicine implants and instruments products of all five companies in the table were included in
the VBP winning results.
Source: NMP A, interviews with industry experts, CIC
Company A, headquartered in the UK, is a global medical technology company, specializing in products for
orthopedics, sports medicine and wound management. It has been listed on the London Stock Exchange (LSE) and
the New Y ork Stock Exchange (NYSE).
Company B, headquartered in the U.S., is multinational corporation that researches, develops, manufactures, and sells
medical devices, pharmaceutical products and consumer health products. It has been listed on the NYSE.
Company C, headquartered in the U.S., is a global medical device company specializing in minimally invasive
surgical technology, particularly in orthopedics and sports medicine.
Company D, headquartered in the U.S., is a medical technology company specializing in surgical and patient care
products. It has been listed on the NYSE.
CHINA’S SPORTS MEDICAL IMPLANTS MARKET
Overview
Sports medical implants are medical devices inserted into the human body to repair the
damages and restore the functions of soft tissues such as ligaments, joints, and tendons, or to replace
these damaged soft tissues entirely. These medical implants are typically used under the
arthroscope, and are applicable in most sports-related injury cases. Key product categories include
suture anchors, interference screws and sheath fixation systems, suture buttons, high-strength
sutures and meniscus repair systems.
INDUSTRY OVERVIEW
–6 9–


--- page 79 ---
The evolution of sports medical implant materials has focused on the physicochemical
interactions between complex biological systems and implant materials.
 Traditional Metal Implants. These implants are made from metals such as titanium
alloy, which provide robust and stable mechanical support. However, they may irritate
soft tissues, cause discomfort, lead to complications, and interfere with follow-up MRI
examinations.
 Biostable Polymers. As alternatives to metals, materials such as biostable polymers, like
polyether ether ketone (PEEK), offer excellent mechanical properties and do not
interfere with imaging. Nevertheless, as they are non-degradable in the body, they may
trigger chronic inflammation and fibrotic encapsulation.
 Bioabsorbable Materials. In recent years, advancements in material science have
focused on bioabsorbable materials, which demonstrate strong biocompatibility, non-
cytotoxicity and low revision rates, without requiring secondary removal surgeries.
 All-suture Implants. Since 2020, when the first all-suture implant in China was
approved by the NMPA, this innovative all-suture form has been widely adopted. It
allows the suture to be placed in cortical bone tunnels with a smaller diameter,
decreasing bone removal and thereby reducing potential iatrogenic damage while
promoting healing effectiveness and shortening recovery time.
The following table sets forth major types of products in sports medical implants market.
Major types of products in sports medical implants market
Category Material composition Indications Key product attributes
Suture Anchors
Metal materials. (e.g., titanium alloy),
bioabsorbable materials, PEEK, all-suture
(Ultra-High Molecular Weight Polyethylene,
UHMWPE)
Fixation of soft tissues to bone
in shoulder, ankle, knee, hip,
wrist and other joints
Material/
Pull-out strength/
Torsion resistance
Interference Screws
and Sheath
Fixation System
Suture Buttons
Ultra High-Strength Sutures
Meniscus Repair System
Artificial ligament
PEEK, bioabsorbable high molecular
polymers
Fixation between soft tissue
(muscle/tendon) and bone,
especially in knee joint
Material/
Nominal diameter/
Axial pull-out force
Titanium alloy plate and UHMWPE
Reconstruction of anterior
cruciate ligament (ACL),
used for femur side fixation
Loop specifications/
Cyclic loading
UHMWPE
Used for repair and fixation of
muscles, tendons, and soft
tissues: in foot, ankle, knee,
elbow, wrist, shoulder joints
Suture length/
Roughness/
Tensile strength
Fixation components: PEEK, bioabsorbable
material
Suture materials: UHMWPE
Used for meniscus tear repair
Material/
Load limit/
Repair site displacement/
Sharpness
PET
UHMWPE
Replacing or reinforcing
damaged ligaments
Material/size/
mechanical strength/
appearance/color
Source: NMP A, Journal of Tissue Engineering and Regenerative Medicine, CIC
INDUSTRY OVERVIEW
–7 0–


--- page 80 ---
During the past years, raw material prices for sports medical implants in China fluctuated. In
particular, the price of PEEK material remained high in the early years but dropped recently due to
the growing demand out of the volume-based procurement programs and increased domestic supply,
with the average purchase price dropping from 900 thousand RMB in 2020 to 300-400 thousand
RMB in 2024 per ton by over 50%. In addition, the price of bioabsorbable polymers remained high
even after price reduction, for instance, the price of PLA decreased from 250 thousand RMB per
ton to around 150 thousand RMB per ton, given technical barriers and limited substitution and it
is expected to slightly decrease and stabilize in the following years. The price of Ultra-High
Molecular Weight Polyethylene (UHMWPE) had slight reduction from approximately 13 thousand
RMB to 11 thousand RMB from 2020 to 2024. Overall, reliance on imports and volatility in
upstream resources drove raw material costs, shaping downstream product pricing. With the
continuous domestic substitution and supply, as well as growing demand following the volume-
based procurement program implementation, the price of sports medical implants is expected to
stabilize.
China’s Sports Medical Implants Market Size
The market size of sports medical implants in China was RMB3.1 billion in 2024. In the
second half of 2024, almost all sports medical implants have been included in to the national
volume-based procurement program, which lowered the selling prices of sports medical implants,
while leading to a surge in their sales volume. The market size of China’s sports medical implants
increased from RMB2.5 billion in 2018 to RMB3.1 billion in 2024, representing a CAGR of 4.0%,
and this market is expected to further reach RMB7.7 billion in 2030, representing a CAGR of
16.2%.
The following graph sets forth the actual and forecasted market size of the China’s sports
medical implants market by sales revenue for the years indicated.
China’s sports medical implants market size,
2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
3.4 3.6
2.5
3.2
3.9 4.2
3.1
3.7
4.4
5.1
6.0
6.9
7.7
2018-2024CAGR
4.0% 16.2%
2024-2030E
Billion RMBSports medical implants market
Note: By sales revenue, in terms of ex-factory prices.
The market size of sports medical implants declined in 2024 was attributable to the execution of sports medicine
implants VBP scheme in the same year, with reduction of ex-factory prices and modest volume increase in the market,
resulting in the overall market size decline.
Source: NMP A, interviews with industry experts, CIC
INDUSTRY OVERVIEW
–7 1–


--- page 81 ---
Competitive landscape of China’s sports medical implants market
The following table sets forth the relative revenue and market share of the China’s top five
players in the sports medical implants market.
The top 5 players in China’s sports medical implants market, 2024
Ranking (1) Players
The number
of implants
types
included
into VBP
Domestic/
International Revenue (2)
Market
share
(RMB in
million)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company A 11 International ~700 ~22.4%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company B 13 International ~686 ~21.9%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company C 14 International ~438 ~14.0%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company 14 Domestic 276 8.8%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company E 10 Domestic ~184 ~5.9%
Notes:
(1) By sales revenue, in terms of ex-factory prices.
(2) The revenue is presented as domestic income inclusive of tax, while the revenue disclosed for industry players
represents their segment revenue in the respective market.
Source: NMP A, CIC
Company E, headquartered in Zhejiang Province, China, is an enterprise engaged in the R&D, production and sales
of sports medicine and minimally invasive orthopedic medical devices.
Growth Drivers of Sports Medical Implants Market in China
 Growing athletic population and aging population. According to the Healthy China Action
(2019-2030) launched by the National Health Commission, the proportion of populations
regularly participating in physical activities is targeted to reach 40% by 2030, with most
engaging in moderate- to high-intensity activities, with elevated risks for injuries. Meanwhile,
the elderly aged 65 or above accounted for more than 15.6% of China’s total population in
2024, and many suffer from chronic conditions, such as osteoarthritis or osteoporosis, which
are expected to drive the growth of the sports medical implants market.
 Advancements in surgical methods for sports medicine. Progress in surgical methods has
improved the safety, precision and ease of the use of medical implants, thereby driving the
adoption of sports medical implants. Innovations such as minimally invasive arthroscopic
tools, improved suture-passing devices and ergonomic anchor insertion systems reduce
surgical complexity, shorten operating times and lower complication risks.
 Improved sports medicine discipline construction and talent training. Currently, organizations
such as the Chinese Medical Association, the Chinese Medical Doctor Association and the
Chinese Society of Sports Science are actively promoting and leading the development of
sports medicine in China. This includes training more sports medicine physicians, treatment
specialists and other professionals.
 Timely patient consultation. Early diagnosis and timely treatment of sports-related injuries
increase the demand for sports medical implants, as prompt medical intervention can improve
outcomes, shorten recovery time, and enhance long-term musculoskeletal function. This
enhanced awareness of preventive care among patients helps to accelerate adoption of
advanced medical implants and supports the growth of the sports medical implants market.
INDUSTRY OVERVIEW
–7 2–


--- page 82 ---
CHINA’S SPORTS MEDICINE SURGICAL EQUIPMENT AND ASSOCIATED MEDICAL
CONSUMABLES MARKET
Overview
Surgical equipment for sports medicine mainly includes active equipment and surgical
instruments. Active equipment refers to any device that relies on an external energy source and
functions by converting or altering the density of that energy, according to the EU Medical Device
Regulation (MDR). In China, under the Medical Device Classification Catalogue (2017 edition),
active equipment includes high/radio frequency equipment and surgical equipment used in
arthroscopic surgeries, including surgical shaver systems, plasma ablation equipment, and
arthroscopic camera systems.
The arthroscopic camera system primarily comprises a camera host, arthroscope, camera head,
light source and power cord. The evolution of arthroscopic camera system focuses on improving the
camera resolution, advancing from HD to 4K, which enhances the visualization of fine anatomical
structures, improves surgical precision, reduces errors, and supports training, documentation, and
integration with digital platforms for real-time analytics. Surgical shavers and plasma ablation
equipment are typically used with arthroscopes for diagnosing and treating conditions such as
meniscus injuries, cruciate ligament ruptures and articular cartilage damage. Plasma ablation
equipment generates plasma, which is composed of charged particles with sufficient energy from
specific radio frequency inputs, to precisely cut, ablate or coagulate tissue at relatively low
temperatures.
Sports medicine surgical instruments, generally classified as Class I or Class II medical
devices include tools for surgeries on knee joints, shoulder, and hip joints. These include, but are
not limited to, wire graspers, positioning needles, aimer, obturators and forceps.
China’s sports medicine surgical equipment and associated medical consumables market size
The market size of sports medicine surgical equipment and associated medical consumables
in China increased from RMB1.2 billion in 2018 to RMB2.3 billion in 2024, with a CAGR of
10.8%. This market is expected to further reach RMB4.4 billion in 2030, representing a CAGR of
11.4%.
The following graph sets forth the actual and forecasted market size of the China’s sports
medicine surgical equipment and associated medical consumables market by sales revenue for the
years indicated.
China’s sports medicine surgical equipment and associated medical consumables
market size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
1.5 1.6
1.2
1.4
1.7
1.9
2.3
2.6
3.0
3.3
3.7
4.0
4.4
2018-2024CAGR
10.8% 11.4%
2024-2030E
Billion RMBSports medicine surgical equipment and associated medical
consumables market
Note: By sales revenue, in terms of ex-factory prices.
Source: NMP A, interviews with industry experts, CIC
INDUSTRY OVERVIEW
–7 3–


--- page 83 ---
Competitive landscape of China’s sports medicine surgical equipment and associated medical
consumables market
The following table sets forth the relevant revenue and market share of top ten players in
China’s sports medicine surgical equipment and associated medical consumables market.
Top 10 players in China’s sports medicine surgical equipment and
associated medical consumables market, 2024
Ranking (1) Players
Domestic/
International Revenue (2) Market share
(RMB in
Million)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company A International ~596 ~26.2%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company D International ~310 ~13.6%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company C International ~292 ~12.8%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company B International ~254 ~11.2%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company F International ~140 ~6.2%
6 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company Domestic 74 3.2%
7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company E Domestic ~46 ~2.0%
8 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company G Domestic ~35 ~1.5%
9 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company H Domestic ~33 ~1.5%
10 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company I Domestic ~30 ~1.3%
Notes:
(1) By sales revenue, in terms of ex-factory prices.
(2) The revenue is presented as domestic income inclusive of tax, while the revenue disclosed for industry players
represents their segment revenue in the respective market.
Company F, headquartered in the U.S., is a global company that develops, manufactures, and markets specialty
surgical and medical products. It has been listed on the NYSE.
Company G, headquartered in Shanghai, China, is a group company specializing in the innovative R&D,
manufacturing and sales of medical devices in the field of sports medicine.
Company H, headquartered in Beijing, China, is a group that provides products including medical implants, intelligent
surgical equipment, bio-based materials, medical services, etc.
Company I, headquartered in Beijing, China, is a group integrating the R&D, production, sales and service of sports
medical implants, surgical tools, arthroscopic equipment, sports rehabilitation equipment and equipment.
Source: NMP A, CIC
Growth Drivers of Sports Medicine Surgical Equipment and Associated Medical Consumables
Market in China
 Technological advancements in active equipment. Existing surgical equipment, such as
surgical shaver systems, are being supplanted by handheld, manually controlled systems that
enhance precision and safety during procedures. Additionally, imaging technology is
advancing to higher resolutions, from HD to 4K, which provides clearer and more accurate
color representation, and further improves surgical accuracy and patient safety.
 Supportive policies for domestically produced equipment. The Chinese government
implements various policies that support for adopting domestically produced surgical
equipment. Policies in regions such as Zhejiang Province and Hubei Province encourage
hospitals to prioritize domestically produced surgical equipment and progressively enhance
domestic equipment adoption.
INDUSTRY OVERVIEW
–7 4–


--- page 84 ---
 Enhanced penetration of sports medicine surgical equipment. The penetration rate of sports
medicine surgical equipment in China remained relatively low. However, with the
advancement of minimally invasive surgical techniques, as well as the expanding patients
suffering from sports-related injuries and a growing pool of specialized physicians, the
demand for sports medical devices is expected to rise rapidly.
GLOBAL AND CHINA’S SPORTS MEDICINE REGENERATIVE MEDICINE DEVICE
MARKET
Overview
Sports medicine regenerative medicine devices are therapies and biomaterials designed to
regenerate or restore soft tissues in joints such as ligaments, tendons, and cartilage. These devices
distinguish themselves from traditional medical devices using mechanical fixation by leveraging
biology and tissue engineering technologies, aiming to achieve the transition from repair to
regeneration.
Sports medicine regenerative medicine devices rely on the synergies of three elements:
biological scaffolds that provide degradable 3D templates of the extracellular matrix to offer
mechanical support, cells that drive new tissue formation, and bioactive molecules (e.g., growth
factors and cytokines) that guide cellular behavior and tissue remodeling. The integration of these
factors enables a synergistic regenerative approach that provides structural support, promotes
tissue-specific healing signals, and restores functional musculoskeletal tissues.
Market Size of Sports Medicine Regenerative Medicine Devices Globally and in China
The market size of global sports medicine regenerative medicine devices increased from
US$0.2 billion in 2018 to US$0.9 billion in 2024, representing a CAGR of 33.3%, and this market
is expected to further reach US$2.8 billion in 2030, representing a CAGR of 21.2%. China’s sports
medicine regenerative medicine devices market grew from RMB42.3 million in 2018 to RMB758.5
million in 2024, at a CAGR of 61.8%. Driven by accelerated R&D progress and regulatory
approvals for innovative products, the China’s sports medicine regenerative medicine devices
market is projected to expand to RMB3,380.0 million in 2030, with a CAGR of 28.3%. The
following charts set forth the market size of the global and China’s sports medicine regenerative
medicine devices market.
The following graph sets forth the actual and forecasted market size of the global sports
medicine regenerative medicine devices market by sales revenue for the years indicated.
Global sports medicine regenerative medicine devices market size,
2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
0.4 0.5
0.2 0.3
0.6 0.7
0.9
1.1
1.3
1.6
1.9
2.3
2.8
2018-2024CAGR
33.3% 21.2%
2024-2030E
Billion USDGlobal sports medicine regenerative medicine device market
Note: By sales revenue, in terms of ex-factory prices.
Source: Hand Clinics, PNAS, annual reports published by market players, interviews with industry experts, CIC
INDUSTRY OVERVIEW
–7 5–


--- page 85 ---
The following graph sets forth the actual and forecasted market size of China’s sports
medicine regenerative medicine devices market by sales revenue for the years indicated.
China’s sports medicine regenerative medicine devices market size,
2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
0.1
0.3
0.0 0.1
0.4
0.6
0.8
1.0
1.3
1.6
2.0
2.7
3.4
2018-2024CAGR
61.8% 28.3%
2024-2030E
Billion RMBChina’s sports medicine regenerative medicine device market
Note: By sales revenue (in terms of ex-factory prices)
Source: Hand Clinics, PNAS, annual reports published by market players, interviews with industry experts, CIC
The sports medicine regenerative medicine devices market in China was still in its early
development stage, with a relatively small market size and limited product variety. In 2024, the top
three competitors, in terms of sales revenue, held a combined market share of 49%, whose products
are primarily focused on PRP devices. Our company’s new sports medicine regenerative devices are
at the forefront of industry advancement and are poised to spearhead the forthcoming development
in the field of sports medicine regeneration. Compared to PRP products, emerging sports medicine
regenerative devices, such as tissue-engineered ligaments and tissue-engineered rotator cuff
patches, are highly complex and require holistic technology for bioprinting, scaffolding, and stem
cell culture with the help of specialized equipment and laboratories. This makes the process more
time-consuming and costly.
Top 3 players in China’s sports medicine regenerative medicine device market, 2024
Ranking (1) Players Domestic/International Revenue (2) Market share
(RMB in Million)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company J Domestic ~193 ~25.4%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company K International ~110 ~14.5%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company L Domestic ~70 ~9.2%
Notes:
(1) By sales revenue, in terms of ex-factory prices, The Company had its sports medicine regenerative devices
commercialized since 2025, thus no sales revenue generated in 2024.
(2) The revenue is presented as domestic income inclusive of tax, while the revenue disclosed for industry players
represents their segment revenue in the respective market.
Company J, headquartered in Shandong Province, China, its business covers the fields of orthopedic implants and
tissue repair. It has been listed on Shanghai Stock Exchange.
INDUSTRY OVERVIEW
–7 6–


--- page 86 ---
Company K, headquartered in Switzerland, it is a biotechnology company specializing in the fields of regenerative
medicine with a particular focus on the R&D, and application of Platelet-Rich Plasma (PRP) technology.
Company L, headquartered in Guangdong Province, China, it specializes in the R&D, production, and
commercialization of innovative biologic products.
Source: NMP A, CIC
Growth Drivers of China’s Sports Medicine Regenerative Medicine Devices market
The growth drivers of China’s sports medicine regenerative medicine devices market include
the following:
 Advanced biomaterials and mature tissue engineering technology. Innovative
technologies such as high-purity collagen extraction technology, platelet-rich plasma
(PRP) preparation technology, and tissue-engineered cartilage are increasingly being
integrated into clinical practice. These technologies greatly improve healing potential
for soft tissue injuries, cartilage defects, and tendon degeneration, which are common
issues in both athletes and the aging population. As clinical outcomes and safety data
accumulate, such biologic augmentation techniques is expected to gain growing market
acceptance among surgeons and patients.
 Rising degenerative disease prevalence. The rising prevalence of degenerative diseases,
such as osteoarthritis, and chronic tendon injuries, is expected to drive the development
of the sports medicine regenerative medicine devices market. These conditions are
increasingly common due to aging populations and higher obesity rate, which place
greater stress on joints, cartilage and connective tissues. Sports medicine regenerative
medicine devices offer the potential to restore tissue function, delay disease progression
and improve long-term outcomes.
 Enhanced awareness of regenerative medicine devices. Both surgeons and patients
become increasingly aware of the benefits of regenerative medicine devices in sports
medicine, which transform the traditional tissue repair method to natural restoration
approach. Accompanied with enhanced training programs, workshops and hands-on
demonstrations, surgeons are becoming more familiar with the utilization of such
devices, thus increasing patients access to advanced, tissue-restorative treatments in
sports medicine.
GLOBAL AND CHINA’S INTELLIGENT REHABILITATION MARKET
Overview
Intelligent healthcare leverages AI and big data analytics to interconnect medical resources
and patient-oriented services across prevention, diagnosis, treatment and rehabilitation.
In the field of sports medicine, surgical treatment and postoperative rehabilitation are closely
linked, forming a complete disease management process that spans diagnosis, surgery/treatment,
rehabilitation, and follow-up.
 Intelligent Treatment. Intelligent treatment focuses on precision intervention through
AI-driven diagnostics, personalized therapeutic protocols, and robotic-assisted surgery,
thereby enhancing clinical efficacy and operational efficiency. In sports medicine,
cruciate ligament surgery robots are particularly to improve the precision and
consistency of ACL/PCL surgery, covering preoperative planning, intraoperative
navigation, bone tunnel drilling and outcome validation.
 Intelligent Rehabilitation. Intelligent rehabilitation uses AI-enabled robotic devices to
support or replace manual therapy, offering restorative treatments in hospitals and at
home. This includes hospital-based robotics and software, as well as home solutions like
smart devices, exercise platforms and digital training systems. In sports medicine, the
digital exercise prescription system is an integrated solution leveraging cloud platforms,
and AI technology to enable end-to-end digital management of exercise prescriptions.
INDUSTRY OVERVIEW
–7 7–


--- page 87 ---
Market Size of Intelligent Rehabilitation Solutions
The global market for intelligent rehabilitation solutions increased from US$0.2 billion in
2018 to US$3.3 billion in 2024, representing a CAGR of 53.6%, and this market is expected to
further reach US$22.0 billion in 2030, representing a CAGR of 37.5%. China’s intelligent
rehabilitation solutions market increased from RMB0.1 billion in 2018 to RMB2.2 billion in 2024,
representing a CAGR of 67.7%, and this market is expected to further reach RMB22.9 billion in
2030, representing a CAGR of 47.5%.
The penetration rate of intelligent rehabilitation solutions within the broader the global
rehabilitation product market rose from 1.0% in 2018 to 6.9% in 2024. In contrast, the penetration
rate in China grew from 0.3% in 2018 to 2.3% in 2024. In 2030, the penetration rate in China is
expected to reach 10.8%, indicating the untapped growth potential.
The following graph sets forth the actual and forecasted market size of global intelligent
rehabilitation solutions market by sales revenue for the years indicated.
Global intelligent rehabilitation solutions market size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
0.6 1.10.2 0.4
1.7 2.4 3.3
4.8
6.9
9.6
12.9
17.1
22.0
2018-2024CAGR
53.6% 37.5%
2024-2030E
Billion USD
Global intelligent rehabilitation solutions market
Note: By sales revenue, in terms of ex-factory prices.
Source: annual reports published by market players, interviews with industry experts, CIC
The China’s intelligent rehabilitation product market in China remains highly fragmented.
Aside from the top leading player with revenue at the 100 million RMB level, most other
competitors generate only tens of million RMB revenue, reflecting the limited scale and dispersed
nature of the broader market.
INDUSTRY OVERVIEW
–7 8–


--- page 88 ---
China’s intelligent rehabilitation solutions market size, 2018-2024, 2025E-2030E
2025E 2026E 2027E 2028E 2029E 2030E2020 2024 2023202220212018 2019
0.5 0.80.1 0.3 1.1 1.5 2.2
3.5
5.3
8.0
11.6
16.4
22.9
2018-2024CAGR
67.7% 47.5%
2024-2030E
Billion RMB
China’s intelligent rehabilitation solutions market
Note: By sales revenue, in terms of ex-factory prices.
Source: annual reports published by market players, interviews with industry experts, CIC
Top 3 players in China’s intelligent rehabilitation solutions market, 2024
Ranking (1) Players Domestic/International Revenue (2) Market share
(RMB in Million)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company M Domestic ~200 ~10.0%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company N Domestic ~52 ~2.6%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company O Domestic ~25 ~1.3%
Notes:
(1) By sales revenue, in terms of ex-factory prices.
(2) The revenue is presented as domestic income inclusive of tax, while the revenue disclosed for industry players
represents their segment revenue in the respective market.
Company M, headquartered in Shanghai, China, its business covers the development and commercialization of
intelligent rehabilitation robots, and broader embodied AI robotics solutions for medical rehabilitation and related
applications.
Company N, headquartered in Shanghai, China, it focuses on the research, development and industrialization of
rehabilitation robots and intelligent rehabilitation solutions.
Company O, headquartered in Zhejiang Province, China, it covers the research and application of exoskeleton robot
technologies and other intelligent rehabilitation equipment.
Source: NMP A, CIC
Source of information
We commissioned CIC, an independent market research and consulting firm, to provide an
analysis of, and to produce a report (the “CIC Report”) on global and China’s sports medicine
device market, sports medicine regenerative medicine device market, and intelligent rehabilitation
solution market.
INDUSTRY OVERVIEW
–7 9–


--- page 89 ---
CIC provides professional services including, among others, industry consulting, commercial
due diligence and strategic consulting. We have agreed to pay a fee of RMB750,000 to CIC in
connection with the preparation of the CIC Report. The report was prepared independent of the
influence of us and other interested parties. We have extracted certain information from the CIC
Report in this section, as well as elsewhere in this Prospectus, to provide our potential investors
with a more comprehensive presentation of the industry we operate in.
In preparing the CIC Report, CIC conducted both primary and secondary research utilizing
diverse resources. Primary research involved interviewing key industry experts and leading industry
participants. Secondary research involved analyzing data from various publicly available data
sources, such as the National Bureau of Statistics, National Medical Products Administration, Food
and Drug Administration, National Health Commission of the People’s Republic of China, and
World Health Organization.
Our Directors and the Joint Sponsors have exercised reasonable care in selecting and
identifying the named information sources, compiling, extracting and reproducing the information,
and ensuring no material omission of the information.
INDUSTRY OVERVIEW
–8 0–


--- page 90 ---
REGULATIONS RELATING TO MEDICAL DEVICES ADMINISTRATION
The main regulatory authorities of the PRC’s business operations are National Medical
Products Administration (္ຖ၍ଣ҅) (“NMPA”) and its local counterparts, whose
predecessors were China Food and Drug Administration (္ຖ၍ଣᐼ҅) (“CFDA”)
and its local counterparts.
Classification of Medical Devices
According to the Regulation on the Supervision and Administration of Medical Devices (ᔼ
ᐕኜ૛္ຖ၍ଣૢԷ‘) (“Regulation on Medical Devices”) which was promulgated on January 4,
2000 and latest amended on December 6, 2024 by the State Council, the PRC implements classified
administration of medical devices which are classified as Class I, Class II and Class III based on
the degree of risks from low to high. Class III medical devices are those with high risks, such as
life sustaining, life-supporting or implantable devices, whose safety and effectiveness shall be
ensured through special measures for strict control and management.
Registration of Medical Devices
According to the Measures for the Administration of Medical Devices Registration and Filing
(‘) promulgated by the State Administration for Market
Regulation (“SAMR”) on August 26, 2021 and effective from October 1, 2021, Class III medical
devices are subject to product registration-based administration. NMPA is responsible for reviewing
the registration of both domestic and imported Class III medical devices and issuing the relevant
registration certificates.
During the Track Record Period and up to the Latest Practicable Date, our Class III medical
device products were all registered with NMPA.
Technical requirements and registration testing
As stipulated by the Measures for the Administration of Medical Devices Registration and
Filing (‘), prior to applying for the registration or filing of
medical devices, the registrant shall draw up the product technical requirements applicable to such
medical devices. The product technical requirements shall mainly include the functional and safety
indicators that can be objectively assessed for the finished medical devices products and testing
methods.
Furthermore, it is required to conduct registration testing in accordance with the product
technical requirements and submit a testing report to apply for the registration or filing of medical
devices.
Clinical evaluation
Clinical evaluation is required for the registration of medical devices, except for several
specific exemption circumstances. According to the Regulation on Medical Devices and the
Measures for the Administration of Medical Devices Registration and Filing (ᔼᐕኜ૛ൗ̅ၾ௪
‘), in the clinical evaluation, the safety and effectiveness of medical devices can be
proved through (i) clinical trials or (ii) the analysis of clinical literatures and materials, by taking
into account the product feature, clinical risk, existing clinical data, etc., and medical devices may
be exempt from clinical evaluation under any of the following circumstances: (a) the medical device
has clear working mechanisms, finalized design and mature manufacturing process, and the medical
devices of the same type that are available on the market have been used in clinic for years without
any record of serious adverse event, and the medical device will not change the general purposes
thereof; (b) the safety and effectiveness of such medical device can be proved through other
non-clinical evaluation methods. NMPA has the authority to formulate, adjust and publish the
catalog of the medical devices exempt from clinical evaluation (the “Exemption Catalog”).
REGULATORY OVERVIEW
–8 1–


--- page 91 ---
Registration process
The registrant shall apply for medical devices registration after completing the safety and
effectiveness research of the medical devices, and shall be well prepared to accept the quality
management system verification. The application documents shall include the applicable technical
requirements, registration testing report and clinical trial evaluation report (if applicable) and other
documents as required by the regulators. For medical devices which meet the requirements of
safety, effectiveness, and quality control, the medical devices regulatory authority will issue a
medical device registration certificate. The medical device registration certificate is valid for 5
years. In the event of any substantial change of the design, raw material, production process, scope
of application or use methods, etc., that may affect the safety and effectiveness of the registered
Class II and Class III medical devices, the registrant shall apply for the registration of such change;
in the event of any other change of the registered Class II and Class III medical devices thereof,
registrant shall apply for filing of such change.
Production Supervision and Quality Management
Medical Devices Production License
According to (i) the Regulation on Medical Devices, (ii) the Measures for the Supervision and
Administration of the Production of Medical Devices (‘)
promulgated by CFDA on July 30, 2014 and latest amended on November 17, 2017 and (iii) the
measures of the same name of (ii) which was promulgated by SAMR on March 10, 2022 and was
effective and replaced (ii) on May 1, 2022, the enterprises which intend to engage in the production
of Class II and Class III medical devices shall apply for medical devices production license ( ᔼᐕ
ኜ૛͛ପ஢̙ᗇ) at the provincial level of the medical product regulatory authority which will issue
to the applicant a medical device production license if the relevant requirements are satisfied. The
medical device production license is valid for five years. In the event of a change to the content of
the medical device production license, the manufacturer shall make an application to license-issuing
authority for change of licensed items or change of registered items (as the case may be). If medical
device production license needs to be renewed upon expiration, the manufacturer shall make the
application for renewal within the prescribed time limit prior to the expiry date of the medical
device production license.
As of the Latest Practicable Date, our Company held the medical device production license
issued by Beijing Medical Product Administration. Hunan Tianxing held the medical device
production license issued by Hunan Medical Product Administration.
Quality Assurance
As stipulated by the Regulation on Medical Devices and the Measures for the Supervision and
Administration of the Production of Medical Devices (‘), the
medical device manufacturing enterprises shall comply with the standards of medical devices
production and quality assurance, establish a quality assurance system and maintain its effective
operation. The medical device manufacturing enterprises shall conduct comprehensive self-
inspection on the performance of the quality assurance system on a regular basis. A medical device
manufacturer shall record the process for procurement, manufacturing or inspection of raw
materials and shall assure the record to be true, accurate and complete and be traceable.
Post-Market Quality Surveillance
In accordance with the Administration Measures for Medical Device Adverse Events
Monitoring and Re-evaluation (‘), promulgated on
August 13, 2018 and came into effect on January 1, 2019, the holder of medical device registration
certificate is obliged to collect information with respect to medical device adverse events and report
to the monitoring technical regulators timely.
REGULATORY OVERVIEW
–8 2–


--- page 92 ---
The Administrative Measures for Medical Device Recalls (‘),
which was promulgated on January 25, 2017 and came into effect on May 1, 2017, regulates that
a medical device manufacturer, as the responsible person for controlling and eliminating product
defects, shall take the initiative to recall defective products.
Sales or Distribution of Medical Devices
Medical Device Operation License
Under the Measures for the Supervision and Administration of the Operation of the Medical
Devices (‘) promulgated on July 30, 2014 and latest amended on
November 17, 2017 by CFDA and the measures of the same name of the former which was
promulgated by SAMR on March 10, 2022 and was effective and replaced the former on May 1,
2022, the enterprise to engage in the operation activities of Class III medical devices shall obtain
the medical device operation license ( ᔼᐕኜ૛຾ᐄ஢̙ᗇ) from the municipal level of medical
product regulatory authority and operation activities of medical devices include wholesale and retail
of medical devices in which the enterprises engaging are required to establish the sales record
system. The medical device operation license is valid for five years.
Centralized Procurement of Medical Devices
On July 19, 2019, the General Office of the State Council of the PRC promulgated the Notice
on Printing and Distributing the Reform Plan on Managing High-value Medical Consumables (ᗫ
ٝOne of the key tasks of the reform plan is to
improve the methods of classified and centralized procurement by, among others, (i) requiring all
the public medical institutions to purchase the high-value medical consumables on the procurement
platforms via public trading or “sunlight” procurement; and (ii) encouraging the provincial
governments to carry out the centralized procurement of the high-value medical consumables,
which are in large clinical demand, high purchase amount, mature clinical use and produced by
multiple enterprises, by means of collecting or combining the demand from multiple hospitals in
one provincial region or even several provincial regions and having volume-based negotiations with
bidders. The above task was scheduled to start in the second half of 2019 with continuous
improvement.
On April 30, 2021, eight departments of the State Council jointly promulgated the Guidance
on Centralized V olume-based Procurement and Use of High-V alue Consumables Organized by the
State (ኬจԈ‘), which provides the
overall norms and requirements on the centralized procurement by specifying that, among others,
(i) the scope of centralized procurement will include the high-value medical consumables that are
in large clinical demand, high purchase amount, mature clinical use, fully competitive market and
high level of homogenization; and (ii) the enterprises eligible to participate in the centralized
procurement shall be the registrant of medical device in the scope of centralized procurement and
shall meet the relevant requirements on quality standards, production capacity, supply stability and
enterprise credit.
Medical Insurance Reimbursement Lists
On July 21, 2023, the National Healthcare Security Administration issued the Notice on
Improving the Payment Administration of Medical Consumables under Basic Medical Insurance
(‘), urging provinces that have not
yet established the Medical Insurance Reimbursement Lists to complete the formulation thereof.
Going forward, the national authorities will gradually develop a unified national medical insurance
catalogue and expand the scope of medical consumables covered by the national catalogue in a
phased manner and promote the establishment of a collaborative implementation mechanism
aligned with policy initiatives such as the reform of Diagnosis Related Group (DRG) and
Diagnosis-Intervention Packet (DIP) payment methods.
REGULATORY OVERVIEW
–8 3–


--- page 93 ---
The reimbursement of medical devices and their associated medical consumables is generally
managed at the provincial level. Each province shall implement provincial price catalogs under the
Medical Insurance Reimbursement Lists based on the national guidelines. Taking Guangdong
Province as an example, the Guangdong Provincial Healthcare Security Administration and the
Department of Human Resources and Social Security of Guangdong Province issued the Catalogue
of Medical Consumables for Basic Medical Insurance, Work-related Injury Insurance and Maternity
Insurance of Guangdong Province (ᎈᔼ͜ঃҿͦ፽‘)
on June 14, 2022.
Two-Invoice System
In the PRC, some provinces or regions implement the “Two-Invoice System” in the
procurement of the medical consumables. According to the rules mentioned below, the “Two-
Invoice System” ( ՇୃՓ) means that in the distribution chains of the medical consumables only two
value-added tax invoices (೼೯ୃ) can be issued when the medical consumables are ultimately
sold to the public medical institutions, one is the value-added tax invoice issued by a manufacturer
or a deemed manufacturer (such as the PRC domestic general agent of the imported medical
devices) to its distributor, the other one is the value-added tax invoice issued by such distributor to
a public medical institution.
On June 24, 2016, the National Health and Family Planning Commission together with other
ministries issued the Main Points of Special Governance to Correct Medical Malpractice in the Sale
of Drugs and the Process of Providing Medical Services in 2016 (2016ਕ
ᓃ), which stipulates that the provinces (regions and municipalities) for
pilot comprehensive medical reform and the cities for pilot public hospital reform shall implement
the “Two-Invoice System” in procurement of medical consumables. Some provincial governmental
authorities also issued local regulations to require public medical institutions in their respective
administrative regions to implement the “Two-Invoice System” in the procurement process of
medical consumables, according to which, if the manufacturers or distributors of medical
consumables fail to implement the “Two-Invoice System”, they may lose the qualification to bid for,
win a bid of or distribute medical consumables and they may also be included in the bad credit
record for medical consumables procurement. On March 5, 2018, the Notice on Consolidating the
Achievements of Eliminating Drug Markup and Continuously Deepening the Comprehensive
Reform of Public Hospitals (‘)
issued by the National Health and Family Planning Commission together with seven other
departments explicitly proposed the gradual implementation of the “two-invoice system” in the
procurement and sales of high-value medical consumables.
During the Track Record Period and as of the Latest Practicable Date, our medical implant
products fell under the high-value medical consumables catalogue in Fujian Province, subject to the
Two-Invoice System requirements. In Fujian, we comply with local Two-Invoice System rules for
medical consumable sales to public medical institutions.
Diagnosis Related Group (DRG) Payment Classification System
On 2017, the MOHRSS and NHFPC, in conjunction with the MOF and the NA TCM,
established a pilot working group for payment based on DRG, and in 2017, selected some regions
to carry out pilot payment based on DRG and strengthened the technical guidance. Pursuant to
Notice on Applying for National Pilot Program of Payment by Diagnosis Related Groups (׵
‘) promulgated by the National Healthcare Security
Administration (the “NHSA”) on December 10, 2018, the NHSA is researching and formulating
diagnosis-related group (DRG) standards suitable for China’s medical service system and medical
insurance management capabilities, and has launched a pilot program of paying by DRGs in certain
cities.
REGULATORY OVERVIEW
–8 4–


--- page 94 ---
The NHSA officially released Technical Specification for National Health Insurance DRG
Grouping and Payment (ღDRGʱଡ଼ၾ˹൬Ҧஔ஝ᇍ‘) and National Health
Insurance DRG (CHS-DRG) Grouping Scheme (ღDRG (CHS-DRG)‘)o n
October 16, 2019. The data requirements for DRG grouping, data quality control, standardized
upload specifications, grouping strategies and principles, and methods for determining weights and
rates are regulated, and it is clear that the national health insurance disease DRG is a unified
standard for the national health insurance sector to carry out DRG payment work.
The Notice on the Issuance of the Subdivision Grouping Scheme (V ersion 1.0) of Healthcare
Diagnosis-Related Grouping (CHS-DRG) (ᗫʱଡ଼ (CHS-DRG) ୚
ࣩ1.0و)‘), which was promulgated by the Office of the NHSA on June 12, 2020,
explains that each pilot city should refer to the grouping results, comorbidity complication/serious
comorbidity complication table, grouping rules, and naming format of the CHS-DRG subdivision
group to develop local DRG subdivision group.
According to the Notice on the Issuance of A Three-year Action Plan for the Reform of the
DRG/DIP Payment Methods (Ι೯DRG/DIP‘)
promulgated by the NHSA on November 19, 2021, from 2022-2024, the reform of DRG/DIP
payment methods shall be comprehensively completed and medical insurance shall be promoted
with high-quality. By the end of 2024, all coordinated regions across the country will carry out the
reform of DRG/DIP payment methods, and pilot areas will be launched to continuously consolidate
the achievements of the reform. By the end of 2025, the DRG/DIP payment method will cover all
eligible medical institutions providing inpatient services, basically achieving full coverage of
disease types and medical insurance funds.
Medical Device Product Export
According to the Customs Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷ऎᗫ
‘) promulgated by the Standing Committee of the NPC (the “SCNPC”) on January 22, 1987 and
effective on July 1, 1987 and last amended on April 29, 2021, the Measures for the Record-filing
and Registration of Foreign Trade Operators (‘) promulgated by
the MOFCOM on June 25, 2004, effective on July 1, 2004 and last amended on May 10, 2021, and
the Administrative Provisions of the Customs of the People’ s Republic of China on Record-filing of
Customs Declaration Entities (‘) promulgated by
the General Administration of Customs of the PRC on November 19, 2021 and effective on January
1, 2022, any foreign trade operators engaging in the import and export of goods or technologies are
required to go through the record-filing and registration formalities with the MOFCOM or the
agency entrusted by the MOFCOM.
Pursuant to the Regulations on the Administration of Medical Device Product Export Sales
Certificates (‘) promulgated on June 1, 2015 by CFDA and
effective on September 1, 2015, if the registration certificate for a medical device and production
permit for a medical device have been obtained in China, or the medical device product registration
and production filing have been completed, the drug supervision and administration authorities may
issue a Medical Device Product Export Sales Certificate (׼t ot h e
relevant production enterprise.
REGULATIONS IN RELATION TO ANTI-UNFAIR COMPETITION
According to the Interim Provisions of the State Administration for Industry and Commerce
on Banning Commercial Bribery (‘)
(“Provisions on Banning Commercial Bribery”) issued by the former State Administration for
Industry and Commerce (၍ଣᐼ҅), which came into effect on November 15, 1996,
commercial bribery refers to the act of an operator bribing the other party’s entity or individual by
REGULATORY OVERVIEW
–8 5–


--- page 95 ---
means of property or other means for the purpose of selling or purchasing commodities, of which
other means refers to the provision of domestic and foreign travel, study tours in various names and
other means of giving benefits other than property.
According to the Guidelines on Compliance of Pharmaceutical Enterprises for Preventing
Commercial Bribery Risks (ˏ‘) (the “Commercial Bribery
Compliance Guidelines”) issued and implemented by the SAMR on January 10, 2025,
pharmaceutical enterprises are the primary responsible parties for preventing their own commercial
bribery risks.
REGULATIONS ON ENVIRONMENTAL PROTECTION
Environmental Protection
Pursuant to the Environmental Protection Law of the PRC (‘)
(the “Environmental Protection Law”) promulgated by the SCNPC on December 26, 1989, amended
on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge
pollutants during the course of operations or other activities must implement effective
environmental protection measures and procedures to control and properly handle waste gas,
wastewater, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations,
electromagnetic radiation, and other hazards produced during such activities. Environmental
protection authorities impose various administrative penalties on persons or enterprises in violation
of the Environmental Protection Law.
Pollutant Discharge Permits
According to the Administrative Measures for Pollutant Discharge Licensing (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 business
operators that are subject to pollutant discharge license management in accordance with the law
shall apply for and obtain pollutant discharge license in accordance with the law and discharge
pollutants in accordance with the provisions of the pollutant discharge license. Those without
pollutant discharge license are not allowed to discharge pollutants. Enterprises, public institutions
and other producers and business operators that are legally required to fill in pollutant discharge
registration forms shall conduct pollutant discharge registration on the national pollutant discharge
permit management information platform.
Pursuant to the Classified Management Catalog of Pollutant Discharge Permits for Stationary
Sources of Pollution (2019 Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و)‘), which
was promulgated by the Ministry of Ecology and Environment on December 20, 2019, the state
implements classified management over pollutant discharge entities, which are divided into key
management, simplified management and registration management according to the volume of
pollutants produced, the volume of emissions and the degree of environmental impact. A pollutant
discharge entity subject to registration management is not required to apply for a pollutant discharge
permit, but only need to fill in its basic information and pollution prevention and control measures
adopted on the management information platform of state pollutant discharge permits.
LA WS AND REGULATIONS ON REAL PROPERTY
State-Owned Land Use Rights
According to the Land Administration Law of the PRC (‘)
issued by the NPCSC on June 25, 1986 and implemented on January 1, 1987, and last amended on
August 26, 2019 and implemented on January 1, 2020, the Rules for Implementation of the Land
Administration Law of the PRC (ૢԷ‘) last revised on July 2,
2021 by the State Council and implemented on September 1, 2021, and the Provisional Regulations
REGULATORY OVERVIEW
–8 6–


--- page 96 ---
of the People’ s Republic of China Concerning the Grant and Transfer of the Right to Use State Land
in Urban Areas (ᕄ਷ϞɺήԴ͜ᛆ̈ᜫձᔷᜫᅲБૢԷ‘) issued by the State
Council on May 19, 1990 and implemented on the same date, and last amended on November 29,
2020 and implemented on the same date, except for assignment by the state under the law as
state-owned land use rights, the state implements a system of compensated use of state-owned land
in accordance with the law.
Real Estate
The Interim Regulations on Real Estate Registration (ʔਗପ೮াᅲБૢԷ‘) promulgated
by the State Council on November 24, 2014, taking effect on March 1, 2015 and amended on March
24, 2019 and March 10, 2024 and effective on May 1, 2024, and the Implementing Rules of the
Interim Regulations on Real Estate Registration (‘) promulgated
by the Ministry of Land and Resources on January 1, 2016 and amended on July 24, 2019 and May
21, 2024, provide that it is implemented a uniform real estate registration system and real estate
registration shall follow the principles of strict administration, stability, continuity, and convenience
for the masses.
According to the Civil Code, an owner of immovable or movable property is entitled to
possession, use, earnings, and disposal of such property in accordance with the law. Subject to the
consent of the lessor, the lessee may sublease the leased premises to a third party. Where a lessee
subleases the premises, the lease contract between the lessee and the lessor remains valid. The
lessor is entitled to terminate the lease if the lessee subleases the premises without the consent of
the lessor. In addition, if the ownership of the leased premises changes during the lessee’s
possession in accordance with the terms of the lease contract, the validity of the lease contract shall
not be affected.
On December 1, 2010, the Ministry of Housing and Urban-Rural Development promulgated
the Administrative Measures on Leasing of Commodity Housing (‘),
which became effective on February 1, 2011. According to such measures, the lessor and the lessee
are required to complete property leasing registration and filing formalities within 30 days from the
execution of the property lease agreement with the development authorities or real estate authorities
of the municipality or county where the leased property is located. If a company fails to do, it may
be ordered to rectify within a stipulated period, and if such company fails to rectify, a fine ranging
from RMB1,000 to RMB10,000 may be imposed on each lease agreement.
REGULATIONS ON INFORMATION SECURITY AND DATA PROTECTION
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the
PRC (‘), or the Personal Information Protection Law, which
became effective on November 1, 2021. The Personal Information Protection Law requires, among
others, that the processing of personal information should have a clear and reasonable purpose and
should be limited to the minimum scope necessary to achieve the processing purpose, adopt a
method that has the least impact on personal rights and interests, and shall not process personal
information that is not directly related to the processing purpose.
On June 10, 2021, the SCNPC promulgated the Data Security Law of PRC (ʕശɛ͏΍ձ
‘), or the Data Security Law, which became effective on September 1, 2021. The
Data Security Law mainly sets forth specific provisions regarding establishing basic systems for
data security management, including data classification and hierarchical protection system, risk
assessment system, monitoring and early warning system and emergency disposal system. In
addition, it clarifies the data security protection obligations of organizations and individuals
carrying out data activities and implementing data security protection responsibility. The Data
Security Law stipulates the measures to support and promote data security and development, to
establish and optimize the national data security management system and to clarify organizations’
and individuals’ responsibilities in data security.
REGULATORY OVERVIEW
–8 7–


--- page 97 ---
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC (ʕശ
‘), which became effective on June 1, 2017, according to which, network
operators shall fulfill their obligations to safeguard the security of the network when conducting
business and providing services. Those who build, operate or provide services through networks
shall take technical measures and other necessary measures according to laws, regulations and
compulsory national standards to safeguard the safe and stable operation of the networks, respond
to network security incidents effectively, prevent illegal and criminal activities, and maintain the
integrity, confidentiality and usability of network data. The network operator shall not collect
personal information irrelevant to the services it provides or collect or use the personal information
in violation of the provisions of laws and regulations or agreements concluded with its users.
On December 28, 2021, the Cyberspace Administration of China (the “CAC”) and certain
other PRC regulatory authorities published the Cybersecurity Review Measures (፬
‘), which became effective on February 15, 2022. Pursuant to the Article 2 of measures, critical
information infrastructure operators that purchase network products and services and network
platform operators engaging in data processing activities that affect or may affect national security
must be subject to the Cybersecurity Review. Pursuant to the Article 7 of measures, a network
operator who have more than 1 million users’ personal information must report to the Cybersecurity
Review Office for cybersecurity review when listing on a foreign stock exchange.
As of the Latest Practicable Date, (i) the Company had not been notified of the results of any
determination that the Company has been identified as a critical information infrastructure operator
or a network platform operator conducts any data processing activity that affects or may affect
national security by the relevant governmental authorities; (ii) the Company had not received any
notification of cybersecurity review from the relevant governmental authorities, nor had we been
involved in any investigations on cybersecurity review initiated by CAC or received any inquiry,
notice, warning, or sanctions in such respect; (iii) we had not conducted any business involving the
collection, usage, storage or processing of personal information of users through network
information technology or via internet and had not possessed personal information of more than one
million users; and (iv) our PRC Legal Advisor are of the view that the term of “listing on a foreign
stock exchange ( ਷̮ɪ̹)” under the Cybersecurity Review Measures does not include “listing in
Hong Kong”. Therefore, as advised by our PRC Legal Advisor, taking into consideration the above
and provided that there is no material change to our current business and no further rules are
introduced and no significant changes to the Cybersecurity Review Measures is made by the
relevant governmental authorities, the cybersecurity review under the article 2 and article 7 of the
Cybersecurity Review Measures shall not be applicable to us.
However, our PRC Legal Advisor cannot preclude the possibility that new rules or regulations
promulgated in the future will not impose additional compliance requirements on us. As advised by
our PRC Legal Advisor, we shall pay close attention to the law enforcement of the Cybersecurity
Review Measures and legislative development of other relevant laws and regulations as well as its
specific provisions or implementation standards, maintain ongoing dialogue with competent PRC
government authorities and consult competent PRC government authorities when necessary.
REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Trademark Law
Registered trademarks are protected under the Trademark Law of the PRC (ʕശɛ͏΍ձ
‘) promulgated on August 23, 1982, latest amended on April 23, 2019, and effective from
November 1, 2019 and related rules and regulations. Trademarks are registered with the China
National Intellectual Property Administration. Where registration is sought for a trademark that is
identical or similar to another trademark which has already been registered or given preliminary
examination and approval for use in the same or similar category of commodities or services, the
application for registration of this trademark may be rejected. Trademark registrations are effective
for 10 years, unless otherwise revoked.
REGULATORY OVERVIEW
–8 8–


--- page 98 ---
Patent Law
The Patent Law of the People’ s Republic of China (‘) promulgated
by the Standing Committee of the NPC on March 12, 1984 and most recently amended on October
17, 2020 and effective from June 1, 2021, and its implementation rules (ج
‘), which were promulgated by the China Patent Office on January 19, 1985 and most
recently amended by the State Council on December 11, 2023 and effective from January 20, 2024,
provide for three types of patents: “invention,” “utility model” and “design.” “Invention” refers to
any new technical solution in relation to a product, or a process or improvement thereof; “utility
model” refers to any new technical solution relating to the shape, structure, or their combination,
of a product, which is suitable for practical use; “design” refers to a new design that is aesthetic and
suitable for industrial application for the overall or partial shape, pattern or its combination of
products, as well as the combination of color, shape and pattern. The validity period of patent for
an “invention” is 20 years, while the validity period of patent for a “utility model” is 10 years and
that of a “design” is 15 years, from the date of application.
Domain Name
In accordance with the Administrative Measures on Internet Domain Names (ʝᑌၣਹΤ၍
‘) which was promulgated by the Ministry of Industry and Information Technology of the
People’s Republic of China on August 24, 2017 and came into effect on November 1, 2017, the
Implementing Rules for the Registration of National Top-level Domain Names (௟ॴਹΤൗ
‘) and Procedural Rules for Resolution of Disputes over National Top-level Domain
Names (‘) which were promulgated by China Internet Network
Information Center on June 18, 2019 and came into effect on the same date, the domain name
registration services shall in principle implement “first apply first register”; where the
corresponding detailed rules for domain name registration stipulate otherwise, such provisions shall
prevail. The applicant shall be deemed as domain name holder via registration. The domain name
disputes shall be accepted and solved by a domain name dispute resolution body as recognized by
the China Internet Network Information Center.
Copyright
In accordance with the Copyright Law of the People’ s Republic China (ʕശɛ͏΍ձ਷ഹ
‘) which was promulgated by Standing Committee of the National People’s Congress on
September 7, 1990 and latest amended on November 11, 2020, with latest revision effective on June
1, 2021, Chinese citizens, legal persons or organizations without legal personality enjoy copyright
over their works, whether published or not, including written works; oral works; musical, dramatic,
opera, dance, acrobatic artistic works; fine arts, architectural works; photographic works;
audio-visual works; graphic works and model works, such as engineering design plan, product
design plan, map, schematic diagram, etc.; computer software and any other intellectual
achievements which comply with the characteristics of the works. Copyright shall include the
following personal rights and property rights: publication right, right of authorship, right of
revision, right to preserve the integrity of work, reproduction right, distribution right, rental right,
exhibition right, performance right, screening right, broadcasting right, information network
transmission right, filming right, adaptation right, translation right, compilation right, and any other
rights enjoyed by a copyright holder.
Software Copyright
According to the Copyright Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷ഹЪᛆ
‘) promulgated by the SCNPC in 1990 and amended in 2001, 2010 and 2020 respectively,
Chinese citizens, legal persons or unincorporated organisations are entitled to copyright in their
works (including computer software) in accordance with the law, regardless of whether or not they
are published.
REGULATORY OVERVIEW
–8 9–


--- page 99 ---
The Regulation on Protection of Computer Software (ᚐૢԷ‘) were
promulgated by the State Council on June 4, 1991 and amended in 2001, 2011 and 2013,
respectively, with the aim of protecting the rights and interests of computer software copyright
holders, adjusting the interests and relations occurring in the development, dissemination and use
of computer software, encouraging the development and application of computer software, and
promoting the development of software industry and informatization of our national economy.
According to the Regulation on Protection of Computer Software, the PRC citizens, legal persons,
or other organisations shall, whether published or not, enjoy copyright in software developed by
them in accordance with the law. A software copyright owner may register with a software
registration institution recognised by the copyright administration department of the State Council.
The certificate of registration issued by the software registration institution shall be the preliminary
evidence of the registered matters. The software copyright of a legal person or other organisations
shall be protected for a period of 50 years, ending on December 31 of the 50th year after the first
publication of the software; however, if the software has not been published within 50 years from
the date of completion of its development, it shall no longer be protected.
REGULATIONS ON LABOR
Labor Relations
The Labor Contract Law of the People’ s Republic of China (‘)
which was promulgated by Standing Committee of the National People’s Congress on June 29,
2007, and was latest amended on December 28, 2012, with the latest revision effective on July 1,
2013, governs the establishment of labor relationships between enterprises, individual economic
organizations, private non-enterprise entities etc., in the PRC and their workers and the conclusion,
performance, variation, rescission or termination of labor contracts, specifies relevant detailed
requirements on terms and contents of labor contracts signed between the parties, and stipulates the
maximum working hours per day and week and the monthly minimum wage.
Social Insurance and Housing Provident Fund
In accordance with the Social Insurance Law of the People’ s Republic of China (ʕശɛ͏
‘) which was promulgated by Standing Committee of the National People’s
Congress on October 28, 2010 and was latest amended on December 29, 2018, with the latest
revision effective on the same date, employers are required to contribute, on behalf of their
employees, to a number of social security funds, including funds for basic pension insurance,
unemployment insurance, basic medical insurance, occupational injury insurance, and maternity
insurance. Employers failed to promptly contribute social security premiums in full amount shall be
ordered by the social security premium collection agency to make or supplement contributions
within a stipulated period, and shall be subject to a late payment fine computed from the due date
at the rate of 0.05% per day; where payment is not made within the stipulated period, the relevant
administrative authorities shall impose a fine ranging from one to three times the amount of the
amount in arrears.
In accordance with the Regulations on the Administration of Housing Provident Fund (И
၍ଣૢԷ‘) which was promulgated by the State Council on April 3, 1999, and was latest
amended on March 24, 2019, with the latest revision effective on the same date, an employer shall
make registration of contribution to the housing provident fund with the housing provident fund
management center, and go through the formalities of opening housing provident fund accounts on
behalf of its employees. And an employer fails to undertake contribution registration of housing
provident fund or fails to go through the formalities of opening housing provident fund accounts for
its employees, the housing provident fund management center shall order it to go through the
formalities within a prescribed time limit; where failing to do so at the expiration of the time limit,
a fine of not less than RMB10,000 nor more than RMB50,000 shall be imposed. An employer is
overdue in the contribution of, or underpays, the housing provident fund, the housing provident
REGULATORY OVERVIEW
–9 0–


--- page 100 ---
fund management center shall order it to make the contribution within a prescribed time limit;
where the contribution has not been made after the expiration of the time limit, an application may
be made to a people’s court for compulsory enforcement.
Pursuant to the Interpretation II of the Supreme People’ s Court of Issues Concerning the
Application of Law in the Trial of Labor Dispute Cases (΁ቇ
༆ᙑ(ɚ)‘) enacted by the Supreme People’s Court on July 31, 2025 and
implemented on September 1, 2025, any agreement between an employer and an employee for the
non-payment of social insurance or any employee undertaking to waive such payment shall be
determined as void by the people’s court.
Labor Dispatch
According to the Interim Provisions on Labour Dispatch (‘) issued on
January 24, 2014 and implemented on March 1, 2014 by the Ministry of Human Resources and
Social Security, employers may only use Dispatched workers for temporary, ancillary or substitute
positions. The aforementioned temporary positions shall mean positions lasting for no more than six
months; ancillary positions shall mean positions of non-major business that serve positions of major
business; and substitute positions shall mean positions that can be substituted by other workers for
a certain period of time during which the workers who originally held such positions are unable to
work as a result of full-time study, being on leave or other reasons. According to the Interim
Provisions on Labour Dispatch, the employers should strictly control the number of Dispatched
workers, and the number of the Dispatched workers shall not exceed 10% of the total amount of
their employees (including the aggregate number of employees and Dispatched workers). Pursuant
to the Interim Provision on Labour Dispatch, the Labour Contract Law of the PRC and the
Implementation Rules for the Labour Contract Law of the PRC, employers failing to comply with
the relevant labour dispatch requirements shall be ordered by labour administrative authorities to
rectify the non-compliance within a specified period. Failure to rectify within the stipulated period
may result in a penalty of RMB5,000 to RMB10,000 per dispatched worker exceeding the 10%
threshold.
DIVIDEND DISTRIBUTION
In accordance with the Company Law of the People’ s Republic of China (ʕശɛ͏΍ձ਷
‘), which was promulgated by the Standing Committee of the National People’s Congress
on December 29, 1993, and implemented on July 1, 1994, and last revised on December 29, 2023,
which came into effect on July 1, 2024, and the Foreign Investment Law of the People’ s Republic
of China (‘) (hereinafter referred to as “Foreign Investment Law”),
which was promulgated by the National People’s Congress of the People’s Republic of China on
March 15, 2019 and came into effect on January 1, 2020, foreign-invested enterprises in the PRC
may pay dividends only out of their accumulated profit, if any, determined in accordance with PRC
accounting standards and regulations. A PRC company, including foreign-invested enterprise, is
required to set aside as general reserves at least 10% of its after-tax profit, until the cumulative
amount of such reserves reaches 50% of its registered capital unless the provisions of laws
regarding foreign investment otherwise provided, and shall not distribute any profits until any
losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be
distributed together with distributable profits from the current fiscal year.
REGULATIONS ON FOREIGN INVESTMENT
The Foreign Investment Law was promulgated by the NPC on March 15, 2019 and came into
effect on January 1, 2020, which replaced three then existing laws on foreign investments in
Chinese mainland, namely, the PRC Sino-Foreign Equity Joint V enture Enterprise Law (ʕശɛ
‘), the Sino-Foreign Cooperative Joint V enture Enterprise Law of
PRC (‘) and the Wholly Foreign-owned Enterprise Law of
PRC (‘). The Foreign Investment Law, by means of legislation,
REGULATORY OVERVIEW
–9 1–


--- page 101 ---
establishes the basic framework for the access, promotion, protection and administration of foreign
investment in view of investment protection and fair competition. According to the Foreign
Investment Law, foreign investment shall enjoy pre-entry national treatment, except for those
foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited”
in the Special Administrative Measures (Negative List) for Foreign Investment Access (̮ਠҳ༟
݄(૶ఊ)‘), which is promulgated or approved by the State Council. To ensure
the effective implementation of the Foreign Investment Law, the Regulations on Implementing the
PRC Foreign Investment Law (ૢԷ‘), was promulgated by the
State Council on December 26, 2019 and came into effect on January 1, 2020, which further
clarified that the state encourages and promotes foreign investment, protects the lawful rights and
interests of foreign investors, regulates foreign investment administration, continues to optimize
foreign investment environment and advances a higher-level opening.
The NDRC and the MOFCOM jointly issued the Special Administrative Measures (Negative
List) for Foreign Investment Access (݄(૶ఊ)‘) (the “ Negative
List ”), on September 6, 2024 and effective on November 1, 2024, to replace the previous
encouraging catalog and negative list thereunder, pursuant to which and the Foreign Investment
Law, foreign investors shall not make investments in prohibited industries as specified in the
Negative List, while foreign investments must satisfy certain conditions stipulated in the Negative
List for investment in restricted industries. Industries not listed in the Negative List are generally
deemed “permitted” for foreign investments. As advised by our PRC legal advisor, our business are
not listed in the Negative List and not subject to the restrictions of foreign investment.
REGULATIONS ON OVERSEAS LISTING
The CSRC promulgated the Overseas Listing Trial Measures (ྤʫΆุྤ̮೯БᗇՎձɪ
‘) and five related guidelines on February 17, 2023, which came into effect on
March 31, 2023. The Overseas Listing Trial Measures introduce a new filing regime which requires
PRC domestic companies to file with the CSRC within three business days after the submission of
application for initial public offering to competent overseas regulators or overseas stock exchanges.
The Overseas Listing Trial Measures also provide that overseas listing and offering are explicitly
prohibited, if any of the following applies: (i) such securities offering and listing are explicitly
prohibited by specific laws and regulations; (ii) the proposed securities offering and listing may
endanger national security as reviewed and determined by competent authorities under the State
Council; (iii) the domestic company or its controlling shareholder(s) and the actual controller, have
committed crimes including corruption, bribery, embezzlement, misappropriation of property or
undermining the order of the socialist market economy in the past three years; (iv) the domestic
company is currently under investigations for suspicion of criminal offenses or major violations of
laws and regulations which have not definitive conclusion; or (v) there are material ownership
disputes over equity held by the domestic company’s controlling shareholder(s) or by other
shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
The CSRC and other three relevant government authorities promulgated the Provisions on
Strengthening the Confidentiality and Archives Administration of Overseas Securities Offering and
Listing by Domestic Companies (၍ଣʈ
‘) (the “Provision on Confidentiality”) on February 24, 2023, and came into effect on
March 31, 2023. Pursuant to the Provision on Confidentiality, when a domestic company or its
overseas listing entity provides or publicly discloses the documents and materials involving state
secrets and working secrets of state organs to the relevant securities companies, securities service
institutions, overseas regulatory authorities and other entities and individuals, it shall report to the
competent department with the examination and approval authority for approval, and file with the
same level secrecy administration department.
REGULATORY OVERVIEW
–9 2–


--- page 102 ---
REGULATIONS RELATING TO FULL CIRCULATION OF H SHARES
According to the Overseas Listing Trial Measures and related guidelines, “Full circulation”
represents the shareholders of domestic unlisted shares of domestic companies, which directly offer
and list securities in overseas markets, converting its domestic unlisted shares into foreign listed
shares circulating in overseas markets. “Full circulation” shall comply with relevant regulations of
the CSRC and the shareholders of domestic unlisted shares shall entrust the domestic company to
report the “Full circulation” with CSRC by filing materials on key compliance issues, including
whether the “Full circulation” has fulfilled adequate internal decision-making procedures,
necessary internal approvals and authorizations, and whether the “Full circulation” involves
approval or filing procedures set out in the laws, regulations and policies for state-owned asset
administration, industry supervision and foreign investment, and if so, whether such approval or
filing procedures have been performed.
REGULATORY OVERVIEW
–9 3–


--- page 103 ---
OVERVIEW
We are a China-based medical device company specializing in clinical sports medicine
solutions. Our history can be traced back to 2017 when our Company was founded. Upon its
incorporation, our Company was held by Ms. Nie Wei, Mr. Dong Wenxing and Mr. Chen Hao as to
55%, 35% and 10%, respectively. For details, see “— Major Shareholding Changes of our
Company”. Over the years, through patient-centric R&D strategy, we have amassed a significant
customer base, selling our products to over 3,000 hospitals across Chinese mainland and over 50
countries and regions across Europe, Middle East and Southeast Asia.
OUR KEY MILESTONES
The following table summarizes the key milestones of our business development:
Y ear Milestone
2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company was established.
Our GMP-compliant manufacturing facility in Beijing officially
commenced operations.
2018 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were certified as a Zhongguancun High-Tech Enterprise ( ʕᗫӀ
৷อҦஔΆุ).
We obtained our first medical device certification from the NMPA in
July 2018.
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We have been officially certified as a National High-Tech Enterprise
(৷อҦஔΆุ).
We recorded sales value of over RMB25 million for the year.
We were recognised as one of China’s Top 50 High-Tech and
High-Growth Enterprises (ڗ50੶).
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were awarded as a Gazelle Enterprise ( ᐙୣΆุ) in Beijing.
We commenced our overseas distribution in July 2021.
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were recognised as a National-level ’Specialised and
Sophisticated Little Giant’ Enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ).
We recorded annual sales value of over RMB100 million for our
products.
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were awarded as a National Specialized and Sophisticated
Enterprise in sport field (ॴ“ਖ਼ၚतอ”Άุ).
We were awarded the First Prize of Science and Technology Progress
Award in Shanghai (“ҦආӉᆤɓഃᆤ”).
Our Beijing Testing Centre has been officially accredited as a
CNAS-certified laboratory.
We have obtained MDSAP certification.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 4–


--- page 104 ---
Y ear Milestone
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were recognised as one of the First Batch of Typical Cases in
Developing New Quality Productive Forces (“อሯ
Է”).
We were recognised as a Beijing Municipal Enterprise Technology
Centre (“ ̏ԯ̹ΆุҦஔʕː”).
We were recognised as a Beijing Foreign-Funded R&D Center (“ ̏
೯ʕː”).
We recorded a revenue of RMB327.1 million for the year.
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were awarded the Second Prize of Beijing Science and
Technology Progress Award (“ҦආӉᆤɚഃᆤ”).
We undertook the major project of NDRC (“ɽͭධ”).
We recorded the accumulated sales volume over 2,000,000 as of
December 31, 2025.
OUR SUBSIDIARIES
We set forth below information about our subsidiaries as of the Latest Practicable Date:
Name of subsidiary Principal business
Date of
establishment
Place of
establishment Share Capital Shareholding
Hunan Tianxing /H1118/H1118/H1118/H1118/H1118/H1118R&D of medical
devices
June 7, 2022 PRC RMB2,000,000 100%
Suzhou Tianxing /H1118/H1118/H1118/H1118/H1118/H1118R&D and
manufacturing
of medical
devices
April 25,
2023
PRC RMB10,000,000 100%
Star (HK) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sale of medical
devices
February 7,
2024
Hong Kong HK$10,000 100%
MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
(1) Establishment of our Company in 2017
Our Company was established as a limited liability company under the laws of the PRC on
July 31, 2017 with an initial registered capital of RMB63,636,300. At the time of the establishment,
the capital structure of our Company was as follows:
Shareholders
Registered capital
subscribed for
Percentage of
shareholding
(RMB) (%)
Ms. Nie Wei (މ1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,000,000 55.00
Mr. Dong Wenxing ( ໨˖ጳ)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,272,700 35.00
Mr. Chen Hao ( ௓㒊)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,363,600 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/H111863,636,300 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 5–


--- page 105 ---
Notes:
(1) Ms. Nie Wei was entrusted by her relative Ms. Nie Hongxin (㒥) to hold the equity interest in the
Company (the “ Entrustment Arrangement ”) at the time of the Company’s establishment for administrative
convenience. The Entrustment Arrangement was released in May 2020 following the transfer of Shares from
Ms. Nie Wei to Anji Lianen Enterprise Management Consulting Partnership (Limited Partnership) (ࢸ
၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Anji Lianen ”) and Anji Jintian Dinghao Enterprise Management Consulting
Partnership (Limited Partnership) (၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Anji Jintian Dinghao ”),
both of which were controlled by Ms. Nie Hongxin. See “— Shareholding changes in 2019 and 2020” below.
(2) Mr. Dong subscribed for all of his registered capital in our Company through proprietary technologies, and Mr.
Chen Hao subscribed for (i) registered capital of RMB3 million in cash and (ii) registered capital of
RMB3,363,600 through proprietary technologies.
(2) Shareholding changes in 2019 and 2020
From October 2019 to April 2020, the Company underwent a series of shareholding changes.
Mr. Chen Hao transferred his 10% equity interest in the Company to Ms. Nie Wei at a consideration
of RMB7,350,000 and ceased to be a Shareholder of the Company, and Ms. Nie Wei transferred 4%
equity interest to Mr. Dong with a consideration of RMB2,442,300. In addition, the registered
capital subscribed by Mr. Dong through proprietary technologies at the time of the Company’s
establishment was canceled, and Ms. Nie Wei transferred 37.53% equity interest in the Company
to Mr. Dong in May 2020 at nil consideration in order to reflect Dr. Dong’s interest in the Company
before the above cancellation.
In March 2020, Tianjin Y unkang was established as an employee shareholding platform of our
Company, whose general partner is Tianjin Bokang, which is held as to 99% by Mr. Dong. In May
2020, Ms. Nie Wei transferred 5% equity interest in the Company to Tianjin Y unkang for employee
incentive purpose at nil consideration.
In May 2020, Ms. Nie Wei transferred 25.66% and 25.66% equity interest in the Company to
Anji Lianen and Anji Jintian Dinghao, respectively. Ms. Nie Hongxin was the general partner
holding a 99% partnership interest in Anji Lianen at nil consideration, with the remaining 1% held
by Ms. Nie Wei. She also held a 99.67% partnership interest as the general partner in Anji Jintian
Dinghao, while Zhang Xinhua ( ੵอശ) held the remaining 0.33%. As a result, Ms. Nie Wei ceased
to hold Shares in the Company on behalf of Ms. Nie Hongxin, and the Entrustment Arrangement
was released accordingly.
The above cancellation and equity transfers were approved by all the then Shareholders of the
Company. Upon the completion of the above equity transfer, our Company was held as to 43.68%,
25.66%, 25.66% and 5% by Mr. Dong, Anji Lianen, Anji Jintian Dinghao and Tianjin Y unkang,
respectively.
(3) Capital Increase and Equity Transfer in June 2020 and February 2021
In March 2020, BEST ALIVE LIMITED (ʮ̡)( “ BEST ALIVE ”) and Suzhou
Junlian Xinkang V enture Investment (Limited Partnership) ((ੰ௴ุҳ༟ΥྫΆุ(ࠢ
Υྫ)) (“ Suzhou Junlian ”) entered into a subscription agreement with the Company to subscribe
for the registered capital of the Company in two phases. BEST ALIVE and Suzhou Junlian
subscribed for an increased registered capital of RMB1,266,667 and RMB1,266,667 in our
Company at a consideration of US dollars equivalent to RMB25,000,000 and RMB25,000,000,
respectively, in June 2020, and further subscribed for an increased registered capital of
RMB1,266,666 and RMB1,266,666 in our Company at a consideration of US dollar equivalent to
RMB25,000,000 and RMB25,000,000, respectively, in February 2021.
In February 2021, Tianjin Oukang Enterprise Management Consulting Partnership (Limited
Partnership) (ᆄੰΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Tianjin Oukang ”) was established as
an investment holding platform by Mr. Dong and acquired 3.00% equity interest from Mr. Dong at
par value.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 6–


--- page 106 ---
In March 2021, Suzhou Junlian, Xiamen Defu Y uean Investment Partnership Enterprise
(Limited Partnership) (τҳ༟ΥྫΆุ(Υྫ)) (“ Xiamen Defu ”) and Ningbo
Meishan Bonded Port Qianyi Equity Investment Partnership Enterprise (Limited Partnership) (ت
ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Ningbo Qianyi ”) acquired registered capital of
RMB1,291,999.98, RMB5,167,999.92 and RMB2,153,333 in our Company from Anji Lianen, with
consideration of RMB30 million, RMB120 million and RMB50 million, respectively.
Upon completion of the above capital increases and equity transfers, the capital structure of
our Company was as follows:
Shareholders
Registered capital
subscribed for
Percentage of
shareholding
(RMB) (%)
Mr. Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,382,400 35.72
Tianjin Y unkang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,900,000 4.41
Tianjin Oukang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,216,000 2.82
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,498,400 42.95
Anji Jintian Dinghao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,750,800 22.64
Anji Lianen /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,137,467 2.64
Xiamen Defu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,168,000 12.00
Suzhou Junlian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,825,333 8.88
BEST ALIVE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,533,333 5.88
Ningbo Qianyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,333 5.00
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/H111843,066,666 100.00
(4) Capital Increase and Equity Transfer in December 2021
In December 2021, OAP IV (HK) Limited (̬ಂ(ಥ)ʮ̡)( “ OAP IV ”)
subscribed for an increased registered capital of RMB2,746,133 in our Company at a consideration
of RMB127,529,411. In addition, OAP IV acquired registered capital of RMB1,216,000 and
RMB344,533 in our Company from Tianjin Oukang and Anji Lianen, with consideration of
RMB56,470,589 and RMB16,000,000, respectively.
In addition, for the purpose of incentivizing Mr. Dong for his contributions to the Company
since its establishment, in December 2021, all the then Shareholders approved the following
transfer of the registered capital in our Company with nil consideration:
Transferor Transferee
Registered capital
transferred
(RMB)
Anji Lianen /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Jikang 307,028.1
Anji Jintian Dinghao /H1118/H1118/H1118/H1118Tianjin Jikang 564,033
Xiamen Defu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Puhe 413,440
Suzhou Junlian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Puhe 306,026.98
BEST ALIVE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Puhe 202,667
Ningbo Qianyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Puhe 172,267
Note:
(1) The general partner of both Tianjin Jikang and Tianjin Puhe is Tianjin Bokang. Mr. Dong is the sole limited
partner of both Tianjin Jikang and Tianjin Puhe.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 7–


--- page 107 ---
Upon completion of the above capital increases and equity transfers, the capital structure of
our Company was as follows:
Shareholders
Registered capital
subscribed for
Percentage of
shareholding
(RMB) (%)
Mr. Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,382,400 33.58
Tianjin Y unkang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,900,000 4.15
Tianjin Puhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094,400.9 2.39
Tianjin Jikang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118871,061.1 1.90
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,247,862 42.01
Anji Jintian Dinghao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,186,767 20.05
Anji Lianen /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118485,906 1.06
Xiamen Defu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,754,560 10.38
OAP IV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,306,666 9.40
Suzhou Junlian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,519,306 7.68
BEST ALIVE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,330,666 5.09
Ningbo Qianyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,981,066 4.32
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/H111845,812,799 100.00
(5) Equity Transfer in January 2022
In January 2022, 3W Rivus Fund (“ 3W Fund ”) (formerly known as “ 3W Healthcare Fund ”)
acquired a registered capital of RMB485,906 in our Company from Anji Lianen at a consideration
of RMB19,180,500. Upon completion of the above acquisition, Anji Lianen ceased to be a
Shareholder of the Company.
(6) Capital Increase and Equity Transfer in January 2023
In January 2023, Beijing Y ahui Jinlin V enture Capital Partnership (Limited Partnership) ( ̏
ԯඩ౉ᎀᎌ௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Y ahui Jinlin ”), Beijing Jianxing Healthcare Industry
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)) (“ Jianxing Healthcare ”), Galaxy Y uanhui Investment Co., Ltd (ʮ̡)
(“Galaxy Yuanhui ”), Langma No. 61 (Shenzhen) Entrepreneurship Investment Center (Limited
Partnership) (ီʬɤɓ໮(ଉέ)௴ุҳ༟ʕː(Υྫ)) (“ Langma No. 61 ”), Langma No. 62
(Shenzhen) Entrepreneurship Investment Center (Limited Partnership) (ီʬɤɚ໮(ଉέ)௴ุҳ
༟ʕː(Υྫ)) (“ Langma No. 62 ”), Suzhou Junlian, Ningbo Xianda V enture Investment
Partnership Enterprise (Limited Partnership) (΋༺௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Ningbo
Xianda ”), Taizhou Sida V enture Capital Partnership (Limited Partnership) (༺௴ุҳ༟Υྫ
Άุ
(Υྫ)) (“ Taizhou Sida ”) and Khorgos Dadao V enture Capital Co., Ltd. (౶༺Ց௴
ʮ̡)( “ Khorgos Dadao ”) subscribed for a total increased registered capital of
RMB596,695 in our Company at a total consideration of RMB45 million.
In addition, in January 2023, Y ahui Jinlin, Jianxing Healthcare, Galaxy Y uanhui, Langma No.
61, Langma No. 62, Ningbo Xianda, Taizhou Sida, Khorgos Dadao, Suzhou Junlian, BEST ALIVE,
Xiamen Defu and Ningbo Qianyi acquired a total registered capital of RMB6,910,434 in our
Company from Anji Jintian Dinghao at a total consideration of RMB255 million.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 8–


--- page 108 ---
Upon completion of the capital increases and equity transfers, the capital structure of our
Company was as follows:
Shareholders
Registered capital
subscribed for
Percentage of
shareholding
(RMB) (%)
Mr. Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,382,400 33.14
Tianjin Y unkang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,900,000 4.09
Tianjin Puhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094,401 2.36
Tianjin Jikang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118871,061 1.88
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,247,862 41.47
Xiamen Defu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,938,004 10.64
Suzhou Junlian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,504,897 9.71
BEST ALIVE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,503,228 5.39
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,008,125 15.10
OAP IV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,306,666 9.28
Anji Jintian Dinghao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,276,333 4.90
Ningbo Qianyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,057,501 4.43
Y ahui Jinlin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,873,568 4.04
Jianxing Healthcare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,405,177 3.03
Galaxy Y uanhui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,170,980 2.52
Ningbo Xianda /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118702,588 1.51
3W Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118485,906 1.05
Langma No. 61 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118351,294 0.76
Langma No. 62 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118351,294 0.76
Taizhou Sida /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,828 0.48
Khorgos Dadao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,368 0.02
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/H111846,409,494 100.00
(7) Conversion into a Joint Stock Limited Company in March 2023
In March 2023, our Company was converted into a joint stock company with limited liability,
through which each registered capital in our Company was converted into one Share.
MAJOR ACQUISITION, DISPOSALS AND MERGERS
We did not carry out any major acquisitions, disposals or mergers during the Track Record
Period and up to the Latest Practicable Date that needs to be disclosed under Rule 4.05A of the
Listing Rules.
PRE-IPO INVESTMENTS
The following table summarizes the key terms of the Pre-IPO Investments to our Company
made by the Pre-IPO Investors:
Name of Pre-
IPO Investors
Investment
round
Date of
agreement
Date of
settlement of
consideration
Amount of
registered capital
subscribed for Consideration
Cost per
Share
Discount
to the Offer
Price (1)
Shareholding
in our
Company
upon Listing
BEST ALIVE /H1118/H1118Series A March 25,
2020
August 10,
2020
RMB1,266,667 U.S. dollars
equivalent to
RMB25,000,000
RMB19.74 77.11% 4.57%
Series A March 25,
2020
May 7, 2021 RMB1,266,666 U.S. dollars
equivalent to
RMB25,000,000
RMB19.74 77.11%
Series C January 13,
2023
February 21,
2023
RMB172,562 USD1,000,000 RMB39.29 (2) 54.43%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–9 9–


--- page 109 ---
Name of Pre-
IPO Investors
Investment
round
Date of
agreement
Date of
settlement of
consideration
Amount of
registered capital
subscribed for Consideration
Cost per
Share
Discount
to the Offer
Price (1)
Shareholding
in our
Company
upon Listing
Suzhou Junlian /H1118Series A March 25,
2020
April 15, 2020 RMB1,266,667 RMB25,000,000 RMB19.74 77.11% 8.22%
Series A March 25,
2020
January 29,
2021
RMB1,266,666 RMB25,000,000 RMB19.74 77.11%
Series A February 18,
2021
March 15,
2021
RMB1,291,999.98 RMB30,000,000 RMB23.22 73.07%
Series B+ December 15,
2022
January 17,
2023
RMB923,956 RMB21,500,000 RMB23.27 (3) 73.01%
Series C January 13,
2023
January 17,
2023
RMB22,100 RMB1,666,700 RMB75.42 12.53%
Series C January 13,
2023
January 17,
2023
RMB39,535 RMB1,553,333 RMB39.29 (2) 54.43%
Xiamen Defu /H1118/H1118Series A February 18,
2021
March 18,
2021
RMB5,167,999.92 RMB120,000,000 RMB23.22 73.07% 9.01%
Series B+ December 15,
2022
February 22,
2023
RMB183,444 RMB6,000,000 RMB32.71 (3) 62.07%
Ningbo Qianyi /H1118Series A February 18,
2021
March 16,
2021
RMB2,153,333 RMB50,000,000 RMB23.22 73.07% 3.75%
Series B+ December 15,
2022
February 7,
2023
RMB76,435 RMB2,500,000 RMB32.71 (3) 62.07%
OAP IV /H1118/H1118/H1118/H1118Series B November 21,
2021
December 29,
2021
RMB4,306,666 RMB200,000,000 RMB46.44 (3) 46.14% 7.85%
3W Fund /H1118/H1118/H1118/H1118Series B November 21,
2021
February 25,
2022
RMB485,906 RMB19,180,500 RMB39.47 (3) 54.23% 0.89%
Y ahui Jinlin /H1118/H1118/H1118Series C December 27,
2022
January 30,
2023
RMB176,798 RMB13,333,333 RMB75.42 12.53% 3.42%
December 27,
2022
February 8,
2023
RMB1,696,770 RMB66,666,667 RMB39.29 (2) 54.43%
Jianxing
Healthcare /H1118/H1118
Series C December 27,
2022
January 31,
2023
RMB132,599 RMB10,000,000 RMB75.42 12.53% 2.56%
December 27,
2022
January 31,
2023
RMB1,272,578 RMB50,000,000 RMB39.29 (2) 54.43%
Galaxy Y uanhui /H1118Series C December 27,
2022
December 28,
2022
RMB110,499 RMB8,333,333 RMB75.42 12.53% 2.14%
December 27,
2022
February 10,
2023
RMB1,060,481 RMB41,666,667 RMB39.29 (2) 54.43%
Langma No. 61 /H1118Series C January 13,
2023
January 16,
2023
RMB33,150 RMB2,500,000 RMB75.42 12.53% 0.64%
January 13,
2023
January 16,
2023
RMB318,144 RMB12,500,000 RMB39.29 (2) 54.43%
Langma No. 62 /H1118Series C January 13,
2023
January 16,
2023
RMB33,150 RMB2,500,000 RMB75.42 12.53% 0.64%
January 13,
2023
January 16,
2023
RMB318,144 RMB12,500,000 RMB39.29 (2) 54.43%
Ningbo Xianda /H1118Series C January 13,
2023
January 16,
2023
RMB66,299 RMB5,000,000 RMB75.42 12.53% 1.28%
January 13,
2023
January 16,
2023
RMB636,289 RMB25,000,000 RMB39.29 (2) 54.43%
Taizhou Sida /H1118/H1118Series C January 13,
2023
January 16,
2023
RMB21,216 RMB1,600,000 RMB75.42 12.53% 0.41%
January 13,
2023
January 16,
2023
RMB203,612 RMB8,000,000 RMB39.29 (2) 54.43%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 100 –


--- page 110 ---
Name of Pre-
IPO Investors
Investment
round
Date of
agreement
Date of
settlement of
consideration
Amount of
registered capital
subscribed for Consideration
Cost per
Share
Discount
to the Offer
Price (1)
Shareholding
in our
Company
upon Listing
Khorgos Dadao /H1118Series C January 13,
2023
January 16,
2023
RMB884 RMB66,667 RMB75.42 12.53% 0.02%
January 13,
2023
January 16,
2023
RMB8,484 RMB333,333 RMB39.29 (2) 54.43%
Notes:
(1) Calculated based on the assumption that the Offer Price is HK$98.50 per H Share.
(2) The subscription prices were different from other Pre-IPO Investors in the same round of financing as such registered
capital of our Company subscribed by the respective Pre-IPO Investors was acquired from Anji Jintian Dinghao.
(3) The cost per Share of the Series B+ Investor Suzhou Junlian is differed from other Series B+ Investors of the
Company because Suzhou Junlian was granted a warrant in Series A financing to subscribe additional registered
capital in subsequent financings of the Company. Suzhou Junlian exercised the warrant in the Series B+ financing,
and the subscription prices were approved by the general meeting of the Company.
(4) The cost per Share of the Series B Investors, being OAP IV and 3W Fund, were different as OAP IV subscribed both
new Shares and acquired Shares from existing Shareholder, while 3W Fund acquired Shares from existing Shareholder
only. Therefore, the cost per share for the Pre-IPO Investment by OAP IV , being RMB46.44, is higher than the
Pre-IPO Investment by 3W Fund, being RMB39.47.
Principal terms of the Pre-IPO Investments and Pre-IPO Investors’ Rights
The table below sets forth the other principal terms of the Pre-IPO Investments:
Use of proceeds from the
Pre-IPO Investments /H1118/H1118/H1118/H1118/H1118
We utilized the proceeds from the Pre-IPO Investments for
the principal business of our Group, including but not
limited to the growth and expansion of our Group’s
business and the general working capital purposes. As of
the Latest Practicable Date, the net proceeds raised from
the Pre-IPO Investments have been fully utilized.
Basis of determination of the
consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The considerations for the Pre-IPO Investments were
determined based on arm’s length negotiation amongst the
respective Pre-IPO Investors and our Group after taking
into consideration of the timing of the investments, the
status of our business operations and the prospects of the
Company.
Lock-up Period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pursuant to the applicable PRC law, within the 12 months
following the Listing Date, all existing Shareholders
(including the Pre-IPO Investors) cannot dispose of any of
the Shares held by them.
Strategic Benefits from
Pre-IPO Investments /H1118/H1118/H1118/H1118/H1118
At the time of the Pre-IPO Investments, our Directors were
of the view that our Company would benefit from the
additional capital provided by the Pre-IPO Investors’
investments in our Company, insights for industry, advice
on business expansion or strategic direction that the
Pre-IPO Investors may bring to our Company.
Our Directors are also of the view that the Pre-IPO
Investors’ investments in our Company demonstrated their
confidence in our Group’s operations and served as an
endorsement of our Company’s performance, strengths and
prospects.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 101 –


--- page 111 ---
Special Rights
In connection with the pre-IPO investments, pursuant to the Shareholders’ agreements dated
March 25, 2020, February 18, 2021, November 21, 2021, December 27, 2022 and January 13, 2023,
respectively (collectively, the “ Shareholders’ Agreements ”), the Pre-IPO Investors had been
granted certain special rights against our Company, including, among others, (i) pre-emptive rights;
(ii) liquidation preference rights; (iii) independent audit rights; (iv) dividend rights; (v) redemption
rights; (vi) drag-along rights; (vii) tag-along rights; (viii) anti-dilution rights; (ix) first refusal rights
(x) most-favoured-nation treatment; (xi) quorum rights; and (xii) information rights. Pre-IPO
investors have only exercised quorum rights and information rights, while all other special rights
have not been exercised.
(1) Pursuant to the special rights termination agreements dated January 30, 2023 (the
“January 2023 Supplemental Agreement ”) entered into in preparation for the
Company’s application for listing on the STAR Market, the redemption rights granted by
our Company under the Shareholders’ Agreements have been irrevocably terminated and
shall be void ab initio . As such, the Group did not record any redemption financial
liabilities on its balance sheet as at December 31, 2023. There was no material financial
impact on the financial position and performance of the Group throughout the Relevant
Period. For details, please refer to note 28 to the Accountants’ Report set out in
Appendix I to this prospectus.
(2) Pursuant to subsequent special rights termination agreements dated August 22, 2023 (the
“August 2023 Supplemental Agreement ”):
a. other than the redemption rights which had already been rendered void ab initio
pursuant to the January 2023 Supplemental Agreement, all other special rights
previously granted by the Company under the Shareholders’ Agreements
(including (i) pre-emptive rights; (ii) liquidation preference rights; (iii)
independent audit rights; (iv) dividend rights; (v) drag-along rights; (vi) tag-along
rights; (vii) anti-dilution rights; (viii) first refusal rights (ix) most-favoured-nation
treatment; (x) quorum rights; and (xi) information rights) have been irrevocably
terminated and shall be void ab initio . However, the exercising of quorum rights
and information rights before their termination shall still be effective, while such
quorum rights and information rights cannot be exercised again following their
termination. The exercise of certain special rights before their termination would
not affect that the other special rights which had not been exercised before to be
irrevocably terminated and deemed void ab initio pursuant to the August 2023
Supplemental Agreement; and
b. provided that, pursuant to the Shareholders’ Agreements and August 2023
Supplemental Agreement, if the STAR Market Listing Application were
withdrawn, rejected or returned, the Controlling Shareholders shall be obliged in
respect of the dividend rights, anti-dilution rights and most-favoured-nation
treatment.
Due to the withdrawal of the Star Market Listing Application the aforesaid obligations
became applicable to, and were resumed by the Controlling Shareholders. Our directors
confirm that the aforesaid dividend rights, anti-dilution rights and most-favoured-nation
treatment rights have not been exercised.
(3) Pursuant to the supplemental agreement on August 15, 2025 (the “ August 2025
Supplemental Agreement ”) entered into between the Company and the then
Shareholders, all such resumed special rights, in respect of which only the Controlling
Shareholders were subject to obligations, will cease to be effective upon Listing and
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 102 –


--- page 112 ---
shall not resume under any condition after Listing. In addition, certain Pre-IPO Investors
were also granted anti-dilution rights pursuant to the August 2025 Supplemental
Agreement which shall cease to be effective upon Listing.
Article 143 of the Civil Code of the People’s Republic of China (Պ)
stipulates that a civil legal act is valid if it is conducted by parties with the requisite capacity for
civil conduct, is based on genuine intent, and does not contravene mandatory provisions of laws,
administrative regulations, or public order and morals. Adhering to the principle of autonomy of
will, the Company and the Pre-IPO Investors explicitly agreed that redemption rights and
liquidation preference rights were irrevocably terminated and deemed void ab initio . Through the
execution of the Supplemental Agreements, while the clauses concerning the redemption rights and
liquidation preference rights have never been exercised, both parties agreed to terminate these
clauses and to treat them as having no legal effect from the time of their execution, thereby restoring
the rights and obligations of both parties to the status quo ante as if such clauses had never been
agreed upon. This arrangement does not violate any mandatory provisions of laws, administrative
regulations, or public order and morals, and is thus legally valid. Based on the above,
notwithstanding that quorum rights and information rights have been exercised, the PRC Legal
Advisors are of the view that (1) the redemption rights and liquidation preference rights agreed
upon by the Company and the Pre-IPO Investors have been irrevocably terminated and shall be
deemed void ab initio ; (2) the arrangement under the August 2023 Supplemental Agreement,
pursuant to which the obligations of the Company in relation to the special rights, including, among
others, (i) pre-emptive rights; (ii) liquidation preference rights; (iii) independent audit rights; (iv)
dividend rights; (v) drag-along rights; (vi) tag-along rights; (vii) anti-dilution rights; (viii) first
refusal rights; and (ix) most-favoured-nation treatment, were rendered void ab initio , is legally
binding; and (3) the exercise of the quorum rights and information rights prior to their termination
shall remain valid and effective; however, such quorum rights and information rights cannot not be
exercised again following their termination. The prior exercise of certain special rights would not
affect the irrevocable termination and the rendering void ab initio of the other special rights that had
not been exercised, and the quorum rights and information rights ceased to be effective upon the
execution of the August 2023 Supplemental Agreement. According to the provisions of the
Company Law of the People’s Republic of China (جrights such as a
company’s use of capital reduction to address shareholders’ intended exercise of redemption rights
or the use of liquidation to address shareholders’ intended exercise of liquidation preferences rights
must be reviewed and approved by the shareholders’ meeting before they become effective. Prior
to obtaining approval from the shareholders’ meeting, such rights cannot be legally enforced
through the court.
Joint Sponsors’ Confirmation
The Joint Sponsors confirm that the Pre-IPO Investments are in compliance with Chapter 4.2
of the Guide for New Listing Applicants.
In particular, in confirming that the redemption rights and liquidation preferences rights
granted by the Company to the Pre-IPO Investors had been irrevocably terminated and shall be void
ab initio , the Joint Sponsors have conducted due diligence work including, among others: (i)
reviewing the share subscription agreements and Shareholders’ agreements entered into by our
Company and the then Shareholders from November 2021 to January 2023, as well as the executed
Supplemental Agreements, (ii) reviewing the legal opinion issued by the PRC Legal Advisors, and
(iii) discussing with the PRC Legal Advisors and the Joint Sponsors’ PRC legal advisors to
understand the treatment of the redemption rights and liquidation preferences rights granted by the
Company in the Supplemental Agreements under PRC laws. Based on the due diligence work
conducted, nothing has come to the Joint Sponsors’ attention that would cause them to cast doubt
on the Company’s and the PRC Legal Advisors’ views above.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 103 –


--- page 113 ---
Compliance with the Pre-IPO Investment Guidance
On the basis that (i) the considerations for the Pre-IPO Investments were irrevocably settled
no less than 28 clear days before the date of our first submission of the listing application to the
Stock Exchange in relation to the Global Offering; and (ii) the redemption rights and liquidation
preference rights granted to the Pre-IPO Investors have been irrevocably terminated and shall be
deemed void ab initio before the Company filed its listing application to the Stock Exchange, the
Joint Sponsors confirm that the Pre-IPO Investments are in compliance with the guidance in
Chapter 4.2 of the Guide for New Listing Applicants issued by the Stock Exchange.
Information about our Pre-IPO Investors
Set out below is a description of our Pre-IPO Investors as of the Latest Practicable Date. To
the best knowledge of our Directors, each of the following Pre-IPO Investors is an Independent
Third Party.
OAP IV
OAP IV is a Hong Kong limited company. OAP IV is wholly owned by OrbiMed Asia Partners
IV , L.P . (“OrbiMed IV ”). OrbiMed Asia GP IV , L.P . is the general partner of OrbiMed IV , and none
of the limited partners holds 30% or more of the partnership interests in OrbiMed IV . OrbiMed
Advisors IV Limited is the general partner of OrbiMed Asia GP IV , L.P . OrbiMed Advisors IV
Limited has six (6) directors: Sven H. Borho, Carl L. Gordon, David P . Bonita, W. Carter Neild,
Sunny Sharma, and David G. Wang ( ˮ਷⒜). None of the shareholders holds 30% or more of
interest in OrbiMed Advisors IV Limited.
Suzhou Junlian and BEST ALIVE
Suzhou Junlian is a limited partnership incorporated in the PRC on March 13, 2018. Its
general partner is Lhasa Junqi Enterprise Management Co., Ltd. (ʮ̡)
(“Lhasa Junqi ”). None of the limited partners holds 30% or more of limited partnership interests
in Suzhou Junlian. Lhasa Junqi is wholly owned by Legend Capital Co., Ltd. (΅
ʮ̡), which is, in turn, controlled as to 80% by Beijing Juncheng Hezhong Investment
Management Partnership (Limited Partnership) ( ̏ԯё༐Υ଺ҳ༟၍ଣΥྫΆุ(Υྫ))
(“Beijing Juncheng ”). The general partner of Beijing Juncheng is Junqi Jiarui Enterprise
Management Co., Ltd. (ʮ̡)( “ Junqi Jiarui ”).
BEST ALIVE is a limited liability company established in Hong Kong on March 27, 2017. Its
principal business is equity investment.
Both Junqi Jiarui and BEST ALIVE are investment vehicles of Legend Capital ( ёᑌ༟͉),
which is ultimately held as to 40% by Mr. CHEN Hao ( ௓ख), with the remaining 60% ultimately
held by Li Jiaqing (ᅅ), Zhu Linan (یand Wang Nengguang ( ˮঐΈ), each holding 20%
equity interest and each being an Independent Third Party.
Xiamen Defu
Xiamen Defu is a limited partnership incorporated in the PRC on November 13, 2020. Its
general partner is Xiamen Defu Investment Consulting Partnership (Limited Partnership) (ᅃ
၅ҳ༟ፔ༔ΥྫΆุ(Υྫ)) (“ Defu Consulting ”) holding 0.0004% partnership interest, which
is ultimately controlled by Hou Ming (׼ڨan Independent Third Party. The limited partner of
Xiamen Defu include Y antai Defu Phase III Equity Investment Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)) (“ Y antai Defu ”) and Jinan Defu
Phase III Equity Investment Fund Partnership (Limited Partnership) (Υ
ྫΆุ(Υྫ)) (“ Jinan Defu ”) holding 61.68% and 38.32% partnership interest, respectively,
whose general partner are both Defu Consulting.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 104 –


--- page 114 ---
Ningbo Qianyi
Ningbo Qianyi is a limited partnership incorporated in PRC on June 20, 2018. Its general
partner is Zhang Y ang (ݱholding 2.63% partnership interests, and its sole limited partner is
Zhang Y ouquan ( ੵʾΌ) holding 97.37% partnership interest, each being an Independent Third
Party.
Yahui Jinlin
Y ahui Jinlin is a limited partnership incorporated in the PRC on July 7, 2020. Its general
partner is Ningbo Meishan Bonded Port Area Y ahui Xinhui Investment Management Center
(Limited Partnership) (೼ಥਜඩ౉㒥ිҳ༟၍ଣʕː(Υྫ)) holding 1%
partnership interests whose general partner is Beijing Y ahui Asset Management Co., Ltd. ( ̏ԯඩ
ʮ̡) which is held as to 95% by its sole ultimate beneficial owner, an Independent
Third Party. None of the limited partners holds 30% or more of limited partnership interests in
Y ahui Jinlin.
Jianxing Healthcare
Jianxing Healthcare is a limited partnership incorporated in PRC on December 18, 2018. Its
general partners are CCB International Industry Fund Management (Beijing) Co., Ltd. (ვ਷ყପ
၍ଣ(̏ԯ)ʮ̡) and Beijing Xinhangcheng Fund Management Co., Ltd. (ਿ
ʮ̡), each being a state-owned enterprise holding 2.08% partnership interests. The
limited partners of Jianxing Healthcare holding 30% or more partnership interest include Beijing
Xingchan Fund Management Center (Limited Partnership) (၍ଣʕː(Υྫ)) and
Tianjin Nord Investment Co., Ltd. (ʮ̡), each being a state-owned enterprise
holding 42.5% and 33.33% partnership interest in Jianxing Healthcare, respectively.
Galaxy Yuanhui
Galaxy Y uanhui is a limited liability company established in the PRC on December 10, 2015.
It is wholly owned by China Galaxy Securities Co., Ltd. (ʮ̡)( “ Galaxy
Securities ”), a company listed on the Shanghai Stock Exchange (stock code: 601881.SH) and the
Hong Kong Stock Exchange (stock code: 6881).
Ningbo Xianda, Taizhou Sida and Khorgos Dadao
Ningbo Xianda is a limited partnership incorporated in the PRC on June 29, 2021. Taizhou
Sida is a limited partnership incorporated in the PRC on March 2, 2022. Khorgos Dadao is a limited
liability company established in the PRC on February 28, 2017. The general partner of Ningbo
Xianda and the sole shareholder of Khorgos Dadao is Tianjin Haida V enture Capital Management
Co., Ltd. (ʮ̡)( “ Tianjin Haida ”), which is ultimately controlled by
Wang Wengang (࡝an Independent Third Party. The general partner of Taizhou Sida is
Hangzhou Haida Bicheng V enture Capital Management Partnership (Limited) Partnership (ψऎ
༺̀ϓ௴ุҳ༟၍ଣΥྫΆุ(Υྫ)) (“ Haida Bicheng ”), whose general partner is Wang
Wengang, since December 2025 before which the general partner of Taizhou Sida was Tianjin
Haida. None of the limited partners holds 30% or more of limited partnership interests in either of
Ningbo Xianda, Taizhou Sida and Haida Bicheng.
3W Fund
3W Fund is a company incorporated under the laws of the Cayman Islands with limited
liability. 3W Fund is managed by 3W Fund Management Limited (“ 3WFM ”) as its investment
manager, which is an investment management firm with expertise in equity investments. 3WFM is
licensed by the Hong Kong SFC to carry out type 9 (asset management) regulated activity. No single
investor holds 30% or more interests in 3W Fund.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 105 –


--- page 115 ---
Langma No. 61 and Langma No. 62
Langma No. 61 is a limited partnership incorporated in the PRC on October 20, 2021. Langma
No. 62 is a limited partnership incorporated in the PRC on January 7, 2022. The general partner of
both Langma No. 61 and Langma No. 62 is Everest V enture Capital Investment Co., Ltd. (ࢤ
ʮ̡)( “ Everest Venture Capital ”), which is held as to 95% by Mr. Xiao Jiancong
(ᑋ), an Independent Third Party. None of the limited partners holds 30% or more of interest
in Langma No. 61 or Langma No. 62.
CAPITALIZATION OF OUR COMPANY
The table below is a summary of the capitalization of our Company as of the date of this
prospectus and immediately upon completion of the Global Offering and the Conversion of Unlisted
Shares into H Shares:
As of the Latest Practicable
Date
Immediately following the
completion of the Global
Offering and the Conversion of
Unlisted Shares into H Shares
No. Name of Shareholder
Registered
capital
subscribed for
Approximate
Shareholding
Percentage
Number of H
Shares Held
Approximate
Shareholding
Percentage
(RMB) (%) (RMB) (%)
1. Mr. Dong 15,382,400 33.14 15,382,400 28.05
2. Tianjin Y unkang 1,900,000 4.09 1,900,000 3.47
3. Tianjin Puhe 1,094,401 2.36 1,094,401 1.99
4. Tianjin Jikang 871,061 1.88 871,061 1.59
Subtotal 19,247,862 41.47 19,247,862 35.10
5. Xiamen Defu 4,938,004 10.64 4,938,004* 9.01
6. Suzhou Junlian
(1) 4,504,897 9.71 4,504,897 8.22
7. BEST ALIVE (1) 2,503,228 5.39 2,503,228 4.57
Subtotal (1) 7,008,125 15.10 7,008,125 12.78
8. OAP IV (4) 4,306,666 9.28 4,306,666* 7.85
9. Anji Jintian Dinghao 2,276,333 4.90 2,276,333* 4.15
10. Ningbo Qianyi 2,057,501 4.43 2,057,501* 3.75
11. Y ahui Jinlin 1,873,568 4.04 1,873,568* 3.42
12. Jianxing Healthcare 1,405,177 3.03 1,405,177* 2.56
13. Galaxy Y uanhui 1,170,980 2.52 1,170,980* 2.14
14. Ningbo Xianda
(2) 702,588 1.51 702,588* 1.28
15. Taizhou Sida (2) 224,828 0.48 224,828* 0.41
16. Khorgos Dadao (2) 9,368 0.02 9,368* 0.02
Subtotal (2) 936,784 2.01 936,784 1.71
17. Langma No. 61 (3) 351,294 0.76 351,294* 0.64
18. Langma No. 62 (3) 351,294 0.76 351,294* 0.64
Subtotal (3) 702,588 1.52 702,588 1.28
19. 3W Fund 485,906 1.05 485,906* 0.89
20. Investors from the Global
Offering
(4) – – 8,421,850* 15.36
Total 46,409,494 100.00 54,831,344 100.00
Notes:
* Denotes Shares held in public hands
(1) Suzhou Junlian and BEST ALIVE are under the same control of Chen Hao ( ௓ख), Li Jiaqing (ᅅ), Zhu Linan
(یand Wang Nengguang ( ˮঐΈ). See “History, Development and Corporate Structure – Information about our
Pre-IPO Investors.”
(2) For relationship of Ningbo Xianda, Taizhou Sida and Khorgos Dahao, see “History, Development and Corporate
Structure – Information about our Pre-IPO Investors – Ningbo Xianda, Taizhou Sida and Khorgos Dahao”
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 106 –


--- page 116 ---
(3) Langma No. 61 and Langma No. 62 are under the same control of Everest V enture Capital, which is held as to 95%
by Mr. Xiao Jiancong (ᑋ). See “History, Development and Corporate Structure – Information about our Pre-IPO
Investors.”
(4) 397,650 Offer Shares will be placed to OAP IV , as one of our cornerstone investors, which placement has been
included as part of the Global Offering. As such, OAP IV is also regarded as an investor from the Global Offering.
Please see “Cornerstone Investors — The Cornerstone Investors” for further details.
PUBLIC FLOAT AND FREE FLOAT
Public Float Requirements
Immediately upon completion of the Global Offering (assuming the Full Circulation
Application of the Company is completed), the Company will have 54,831,344 H Shares, among
which:
(a) the 26,255,987 H Shares to be converted from Unlisted Shares pursuant to the Full
Circulation Application of the Company and listed on the Stock Exchange (representing
approximately 47.88% of our total issued Shares upon Listing) will not be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules after the
Listing as such Shares are being held by our Controlling Shareholders, Suzhou Junlian
and BEST ALIVE (which are under the same control and will collective hold
approximately 12.78% of the total issued Shares upon Listing), our core connected
persons;
(b) the 20,153,507 H Shares to be converted from Unlisted Shares pursuant to the Full
Circulation Application of the Company and listed on the Stock Exchange (representing
approximately 36.76% of our total issued Shares upon Listing), and held by existing
Shareholders except for the Controlling Shareholders, Suzhou Junlian and BEST
ALIVE, will be counted towards the public float for the purpose of Rule 8.08 of the
Listing Rules after the Listing as these entities are not core connected persons of our
Company upon Listing nor are they accustomed to take instructions from the Company’s
core connected persons in relation to the acquisition, disposal, voting or other
disposition of their Shares and their acquisition of Shares were not financed directly or
indirectly by the Company’s core connected persons; and
(c) the 8,421,850 H Shares to be issued pursuant to the Global Offering will be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, the total number of the H
Shares expected to be held by the public represents approximately 52.12% of the total issued share
capital of our Company, thereby satisfying the public float requirement of 25% under Rule 8.08(1)
(as amended and replaced by Rule 19A.13A) of the Listing Rules.
Free Float Requirements
Pursuant to the applicable PRC law, within the 12 months following the Listing Date, all
existing Shareholders (including the Pre-IPO Investors) cannot dispose of any of the Shares held by
them. In addition, each of the cornerstone investors has agreed that it will not, directly or indirectly,
at any time during the six months from the Listing Date, dispose of any of the Offer Shares they
have purchased pursuant to the relevant cornerstone investment agreements. As such, H Shares held
by the existing Shareholders as of the date of this prospectus and the H Shares purchased by the
cornerstone investors pursuant to the relevant cornerstone investment agreements shall not be
counted towards the free float of the H Shares of the Company at the time of Listing. The free float
of the Company is expected to be no less than 10% of the total issued share capital of the Company,
thereby satisfying the free float requirement under Rule 8.08A (as amended and replaced by Rule
19A.13C) of the Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 107 –


--- page 117 ---
OUR EMPLOYEE SHAREHOLDING PLATFORM
In recognition of the contributions of our employees and to incentivize them to further
promote our development, Tianjin Y unkang was established as our employee shareholding platform
in the PRC on March 25, 2020.
As of the Latest Practicable Date, all of the awards underlying an aggregate of 1,900,000
Shares of the Company for employee incentive purpose have been fully granted, and these
employees had been registered as the limited partners of Tianjin Y unkang. Except for the tranches
granted in 2020 and 2021 that vested immediately upon the grant date, all remaining tranches under
the incentive plan are subject to the applicable performance period and will vest upon the
satisfaction of predetermined conditions.
Tianjin Y unkang is held as to 0.10% by Tianjin Bokang as its general partner, which is held
as to 99% by Mr. Dong and 1% by Ms. Zhang Di. There are 33 limited partners of Tianjin Y unkang,
among whom Mr. Dong held 64.77% partnership interest, while our executive Director Mr. He Lu,
our Supervisors Mr. Xu Jingtao, Mr. Y ang Tengfei and Ms. Wang Y ali, and our chief operating
officer and deputy general manager Mr. Liu Shaobin, held 5.67%, 1.13%, 1.13%, 0.57% and 2.27%
partnership interest in Tianjin Y unkang, respectively. The remaining partnership interests are held
by 27 limited partners, all of whom are Independent Third Parties. As all the awards had already
been fully issued, there will be no dilution effect upon the vesting of the awards, nor will it have
any impact on the earnings per share of the Company. The details of the awards granted to these
employees are listed below.
No. Name Position(s)
Partnership
Interests Held
Granting time
of awards
Vesting time of
awards
(RMB) %
General Partner
Tianjin Bokang / 1,900 0.10 /
Limited Partners
1 /H1118/H1118Dong Wenxing ( ໨˖
ጳ)
Chairman, executive
Director and general
manager
1,230,563 64.77 May 20, 2020 May 20, 2020
2 /H1118/H1118He Lu
(ձ༩)
Executive Director,
chief financial
officer, board
secretary, deputy
general manager
107,667 5.67 December 10,
2021
December 10,
2021
February 28,
2023
February 27,
2027
3 /H1118/H1118Hou Suhua
(९ശ)
Compliance director 64,600 3.40 December 10,
2021
December 10,
2021
February 28,
2023
February 27,
2027
July 14, 2025 July 13, 2029
4 /H1118/H1118Li Y uan
(ҽధ)
Commercial director 53,834 2.83 December 10,
2021
December 10,
2021
February 28,
2023
February 27,
2027
5 /H1118/H1118Xu Lei
(஢ᆾ)
Sales and marketing
director
53,833 2.83 December 10,
2021
December 10,
2021
February 28,
2023
February 27,
2027
6 /H1118/H1118Liu Shaobin
(ᄎˇⅳ)
Deputy general
manager, chief
operating officer
43,067 2.27 February 28,
2023
February 27,
2027
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 108 –


--- page 118 ---
No. Name Position(s)
Partnership
Interests Held
Granting time
of awards
Vesting time of
awards
(RMB) %
7 /H1118/H1118Xu Jingtao
(஢౻ᏹ)
Human resources
manager, chairman of
the supervisory board
21,534 1.13 February 28,
2023
February 27,
2027
8 /H1118/H1118Huo Shibai
(˦⇘ͣ)
Regional sales and
marketing manager
21,533 1.13 December 10,
2021
December 10,
2021
9 /H1118/H1118Zhou Wenzhong ( մ˖
׀)
Regional sales and
marketing manager
21,533 1.13 December 10,
2021
December 10,
2021
10 /H1118Zhao Hu
(ډ)
R&D manager 21,533 1.13 December 10,
2021
December 10,
2021
11 /H1118Y ang Tengfei
(࠭)
R&D manager 21,533 1.13 December 10,
2021
December 10,
2021
12 /H1118Zheng Aiyu
(ቍฌρ)
Production manager 21,533 1.13 December 10,
2021
December 10,
2021
13 /H1118Wu Dingding (ɕɕ) Finance manager 21,533 1.13 February 28,
2023
February 27,
2027
14 /H1118Liang Xiaodan ( ૑ወ
ʗ)
(1)
Legal manager,
compliance and
securities
representative
17,227 0.91 July 14, 2025 July 13, 2029
September 12,
2025
September 11,
2029
15 /H1118Wang Dongyang (؇
ݱ)
Regional sales and
marketing manager
12,920 0.68 December 10,
2021
December 10,
2021
16 /H1118Zhao Quan
(ႻΌ)
R&D engineer 10,767 0.57 December 10,
2021
December 10,
2021
17 /H1118Qi Weina
(ࢆ)
Quality manager 10,767 0.57 December 10,
2021
December 10,
2021
18 /H1118Hu Zhipei
(қ੃)
Regional sales and
marketing manager
10,767 0.57 December 10,
2021
December 10,
2021
19 /H1118Y an Zhiqiang ( ₢қ੶) Production supervisor 10,767 0.57 December 10,
2021
December 10,
2021
20 /H1118Wang Y ali
(ˮԭᘆ)
Human Resources
supervisor
10,767 0.57 December 10,
2021
December 10,
2021
21 /H1118Su Wei
(۾)
R&D supervisor 10,767 0.57 December 10,
2021
December 10,
2021
22 /H1118Jia Jing
(༠౺)
R&D supervisor 10,767 0.57 December 10,
2021
December 10,
2021
23 /H1118Song Tielin
(҂᚛⵵)
Manufacturing
supervisor
10,767 0.57 December 10,
2021
December 10,
2021
24 /H1118Zou Lili
(ཅኇᘆ)(1)
General manager of
international business
division
10,767 0.57 September 12,
2025
September 11,
2029
25 /H1118Xu Zhixu
(ϛ)
R&D engineer 10,767 0.57 December 10,
2021
December 10,
2021
26 /H1118Zhao Songtao (ᏹ) Quality supervisor 10,767 0.57 December 10,
2021
December 10,
2021
27 /H1118Li Fei
(ҽി)
Regional sales and
marketing manager
10,767 0.57 December 10,
2021
December 10,
2021
28 /H1118He Zichen
(൭૔ೠ)
Sales and marketing
manager
6,460 0.34 December 10,
2021
December 10,
2021
29 /H1118Zhou Mi
(մ੗)
Sales and marketing
manager
6,460 0.34 December 10,
2021
December 10,
2021
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 109 –


--- page 119 ---
No. Name Position(s)
Partnership
Interests Held
Granting time
of awards
Vesting time of
awards
(RMB) %
30 /H1118Wang Suidong (؇Sales and marketing
manager
6,460 0.34 December 10,
2021
December 10,
2021
31 /H1118Liu Junxian
(ᄎѩሬ)
Product manager 5,383 0.28 December 10,
2021
December 10,
2021
32 /H1118Qiao Jing
(ఐ᎑)
R&D supervisor 5,383 0.28 December 10,
2021
December 10,
2021
33 /H1118Jin Wanpeng
(ຬᘄ)
Quality supervisor 4,307 0.23 December 10,
2021
December 10,
2021
Note:
(1) Ms. Liang Xiaodan and Ms. Zou Lili acquired 0.34% and 0.57% partnership interests from Mr. Y ang Zhenhong and
Mr. Quan Li, each being a former employee of the Company, in September 2025, respectively.
STAR MARKET LISTING APPLICATION
To explore the opportunity of establishing a capital market platform in the A-share market, in
March 2023, we entered into a guidance agreement to receive guidance from a qualified sponsor of
A-share listing. We applied for the listing of our shares on the Shanghai Stock Exchange Star
Market in September 2023 (the “ Star Market Listing Application ”). The Company received one
round of comments from the Shanghai Stock Exchange (the “ SSE”) in October 2023, pursuant to
which the SSE requested the Company to provide supplemental explanations primarily on business
disclosure, financial disclosure and historical shareholding changes, as well as to clarify the
compliance of the overall circumstances relating to these matters with the PRC laws and
regulations. As advised by our PRC Legal Advisors, the comments in relation to compliance with
PRC laws and regulations had been addressed. Our Directors confirm that all the comments and
enquiries raised by the SSE have been resolved and addressed through the responses submitted to
the SSE in May 2024, and that the Company has not received any further official comments
thereafter. Nevertheless, taking into consideration the then market conditions as well as the
extensive period required for approval of a listing application on the Star Market, the Company
decided to facilitate the Company’s listing process by exploring other listing venue and sought to
list its H Shares on the Stock Exchange since early 2025, and our Star Market Listing Application
was officially withdrawn by its sponsor due to the then market condition in June 2025.
To the best knowledge and belief of our Directors, our Company did not have any
disagreements or disputes with the professional parties involved in the Star Market Listing
Application, or any matters relating to the Star Market Listing Application which would materially
and adversely affect our suitability for the Listing or should be brought to the attention of the Stock
Exchange or would affect the suitability of our Company’s listing on the Stock Exchange. As
advised by our PRC Legal Advisors, there were no major comments in relation to compliance with
PRC laws and regulations raised by the SSE and/or the CSRC that would affect the Company’s
suitability for listing on the Exchange. Our Directors believe that there were no major comments
raised by the SSE and/or the CSRC that would affect the Company’s suitability for listing on the
Exchange. Based on the above, and the independent due diligence work of the Joint Sponsors,
including, among others, (a) discussion with the Company regarding, among others, the details of
the Start Market Listing Application and the reasons for not proceeding with the A-share listing
plan, (b) the interviews with the Company’s previous sponsor, auditors and PRC legal advisors
engaged by the Company in connection with the Start Market Listing Application, (c) the review
of the Star Market Listing Tutoring Reports prepared by the previous sponsor; the comment letter
from the Shanghai Stock Exchange in October 2023; and the responses submitted to the Shanghai
Stock Exchange by the Company and the previous sponsor in May 2024, and (d) the review of
independent background search and litigation search results, having considered the conclusion and
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 1 0–


--- page 120 ---
the basis of the Directors, nothing has come to the attention of the Joint Sponsors that would
reasonably cause the Joint Sponsors to disagree with the Directors’ view that (a) there were no
major comments raised by the SSE and/or the CSRC that would affect the Company’s suitability for
listing on the Exchange, (b) all the comments and enquiries raised by the SSE have been resolved
and addressed through the responses submitted to the SSE in May 2024, and that the Company has
not received any further official comments thereafter and (c) the Company did not have any
disagreements or disputes with the professional parties involved in the Star Market Listing
Application, or any matters relating to the Star Market Listing Application which would materially
and adversely affect the Company’s suitability for the Listing or should be brought to the attention
of the Stock Exchange or would affect the suitability of the Company’s listing on the Stock
Exchange.
We are now seeking to list our H Shares in Hong Kong as we consider that the Stock Exchange
is an internationally recognized and reputable stock exchange, which is able to provide an
appropriate platform for us to introduce our business to a wider range of investors.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 111 –


--- page 121 ---
CORPORATE AND SHAREHOLDING STRUCTURE
The following diagram sets forth the corporate structure of our Group immediately before the completion of the Global Offering:
Our Company
(PRC)
Hunan
Tianxing
(PRC)
Suzhou
Tianxing
(PRC)
100% 100%
Mr. Dong Tianjin
Bokang The Same Group of
UBOs
Tianjin
Jikang(1)
Tianjin
Yunkang(1)
Tianjin
Puhe(1)
33.14%
GP GP GP
1.88% 4.09% 2.36%
99%
Suzhou
Junlian
9.71%
BEST
ALIVE
5.39%
Anji Jintian
Dinghao(2)
4.90%
Other Pre-IPO
Investors
38.52%
Star (HK)
(Hong Kong)
100%
Our Controlling Shareholders
Notes:
(1) The general partner of each of Tianjin Jikang, Tianjin Y unkang and Tianjin Puhe is Tianjin Bokang, which is held as to 99% by Mr. Dong and 1% by Ms. Zhan g Di, our Non-Executive
Director. Mr. Dong is the sole limited partner of both Tianjin Jikang and Tianjin Puhe. Tianjin Y unkang is an employee shareholding platform with 33 li mited partners and Tianjin Bokang
as its sole general partner, among which Mr. Dong held 64.77% partnership interest, our executive Director Mr. He Lu, our Supervisors Mr. Xu Jingtao, M r. Y ang Tengfei and Ms. Wang
Y ali, and our chief operating officer and deputy general manager Mr. Liu Shaobin, held 5.67%, 1.13%, 1.13%, 0.57% and 2.27% partnership interest, res pectively, with the remaining
partnership interest held by our employees or former employees. None of the other limited partners hold 5% or more in Tianjin Y unkang or served as a Dire ctor, Supervisor or senior
management of the Company. For further details, see “History, Development and Corporate Structure — OUR EMPLOYEE SHAREHOLDING PLA TFORM.”
(2) Anji Jintian Dinghao is controlled by Ms. Nie Hongxin who is the general partner with 99.67% partnership interest, with the remaining 0.33% held by Zhang Xinhua, an Independent Third
Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 1 2–


--- page 122 ---
The following diagram sets forth the corporate structure of our Group immediately after the completion of the Global Offering:
Our Company
(PRC)
Hunan
Tianxing
(PRC)
Suzhou
Tianxing
(PRC)
100% 100%
Mr. Dong Tianjin
Bokang
Tianjin
Jikang(1)
Tianjin
Yunkang(1)
Tianjin
Puhe(1)
28.05%
GP GP GP
1.59% 3.47% 1.99%
99%
Anji Jintian
Dinghao(2)
4.15%
Other Pre-IPO
Investors
32.60%
Other Public
Shareholders
15.36%
Star (HK)
(Hong Kong)
100%
Our Controlling Shareholders
Suzhou
Junlian
8.22%
BEST
ALIVE
4.57%
The Same Group of
UBOs
Notes (1) to (2): Please refer to the shareholding and corporate structure immediately prior to the completion of the Global Offering.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 1 3–


--- page 123 ---
OVERVIEW
We are a China-based medical device company specializing in clinical sports medicine
solutions. We are the fourth largest sports medicine implants and instruments provider, representing
a market share of approximately 6.5% in China’s sports medicine implants and instruments market,
and the largest domestic sports medicine implants and instruments provider in China, in terms of
sales revenue in 2024, according to CIC. We offer holistic solutions for the treatment of injuries to
soft tissues of rotator cuffs, ligaments and meniscus, as well as for the rehabilitation and prevention
of sports-related injuries, leveraging our self-developed medical implants, active equipment,
associated medical consumables and surgical instruments.
China’s sports medicine device industry is still at the early development stage, with significant
room for growth. Against the global sports medicine device market size of US$7.0 billion in 2024
by sales revenue, China’s sports medicine device market was only RMB6.2 billion in the same year
with a market share by domestic brands of about 35%. The sports medicine device market has
experienced one of the most rapid growth among all medical device segments, with China’s sports
medicine device market projected to grow at a CAGR of 16.5% from 2024 to 2030, according to
CIC. Meanwhile, benefiting from supportive government policies for domestically produced
medical devices and the rapid technological advancement of domestic brands, domestic sports
medicine providers are expected to enhance their market penetration in China’s sports medicine
device market. Leveraging our industry expertise, established customer bases and extensive sales
network, we intend to capture such growth and extend our success into China’s intelligent
rehabilitation solutions market with our sports medicine prescription and rehabilitation system.
We have four proprietary technology platforms: biomaterial platform, imaging and dynamic
platform, intelligent medicine platform, and tissue engineering platform. These platforms operate
underpin our diversified product portfolio. Our biomaterial platform and imaging and dynamic
platform together support the R&D of medical implants, surgical equipment and associated medical
consumables and deliver intraoperative solutions for arthroscopy. Our intelligent medicine platform
enables us to expand into the intelligent rehabilitation market, laying the foundation for our
arthroscopic surgical robots that enhance operative precision, as well as our sports medicine
prescription rehabilitation systems that optimize injury prevention and rehabilitation. Meanwhile,
our tissue engineering platform focuses on regenerative repair products for joint soft tissues to
further promote tissue healing and improve clinical outcomes.
Our sports medicine product matrix mainly comprises 63 products spanning medical implants,
active equipment and associated medical consumables, as well as surgical instruments and
regenerative repair products, as of the Latest Practicable Date, providing clinical sports medicine
solutions. We had 27 products with Class III medical device certificates and 25 with Class II
medical device certificates as of the same date, the most among China’s sports medical device
companies, according to CIC.
We have achieved deep market penetration in China during the Track Record Period: the
number of hospitals that had adopted our products increased from over 1,000 as of December 31,
2023 to over 3,000 as of December 31, 2025, among which over 1,000 were Class III hospitals. As
of December 31, 2025, we had cumulatively sold over 2.0 million units of our products, with
revenue of RMB238.5 million, RMB327.1 million and RMB402.8 million in 2023, 2024 and 2025,
respectively. Our net profit increased RMB57.1 million in 2023 to RMB95.4 million in 2024, and
further increased to RMB137.0 million in 2025, representing a growth of 43.6%. Since initiating our
global commercial expansion, we have successfully secured, in aggregate, over 200 regulatory
approvals and registration certificates for medical devices across over 50 countries and regions in
Europe, Southeast Asia, the Middle East and Latin America, covering all of our products. Our
overseas revenue experienced significant growth from RMB6.7 million in 2023, RMB20.9 million
in 2024, to RMB70.3 million in 2025, representing a CAGR of 224.7%.
BUSINESS
–1 1 4–


--- page 124 ---
OUR STRENGTHS
Renowned brand and market recognition in China’s fast-growing sports medicine device
market with rapid global expansion
We are China-based sports medicine device provider with our products sold in over 50
countries. We address the growing clinical demand and expand our sales presence into the overseas
markets, capitalizing on expanding sports participation, aging demographics and the emerging trend
shifting toward minimally invasive surgical procedures. In 2024, we ranked first among domestic
brands and ranked fourth among all brands in China’s sports medicine device market by sales
revenue, according to CIC.
China’s sports medicine device industry is still at the early development stage, with relatively
low penetration rate of clinical treatment and rehabilitation options for sports-related injuries
compared to mature markets in developed countries. This market is expected to grow rapidly, driven
by (i) growing athletic population; (ii) expanding aging demographics; (iii) rising awareness for
preventive and rehabilitative care; and (iv) increasing penetration of arthroscopic surgeries and
other minimally invasive surgical procedures. In addition, on the demand side, sports medicine
products are becoming increasingly affordable for patients in China due to their increasing
disposable income, diversified commercial health insurance options and favorable government
initiatives such as the volume-based procurement program.
We are well positioned to capitalize on the growth momentum of China’s sports medicine
device industry to achieve sustainable and rapid growth, leveraging our competitive barrier
established through our multidisciplinary technology platforms and diverse product matrix.
We experienced rapid growth overseas. Our overseas expansion targets markets where patients
already demonstrate high acceptance of and familiarity with sports medicine products, such as EU,
enabling efficient education and faster adoption. With proven capability in technological
advancement, product development, global market penetration and commercial scalability, we are
well positioned to capture on the above immense industry development opportunities and continue
to experience rapid sustainable growth.
Comprehensive, efficient and sustainable research and development capabilities underpinned
by multidisciplinary and synergistic technology platforms
We have developed four scalable core technology platforms, namely, biomaterial platform,
imaging and dynamic platform, intelligent medicine platform and tissue engineering platform.
These platforms underpin the development of product matrix spanning the entire sports medicine
cycle of prevention, treatment and rehabilitation.
Biomaterial Platform
Our biomaterial platform focuses on developing advanced biomaterials used for medical
implants. Leveraging this platform, we have developed three key technologies: functionally graded
bioabsorbable material synthesis and processing technology, high-load braided implant preparation
technology and ultra-high-temperature polymer precision injection molding technology for thin-
walled complex structures. These technologies were recognized by the Ministry of Industry and
Information Technology as being “Internationally Advanced.”
Imaging and Dynamic Platform
Our imaging and dynamic platform enables our products to generate clear and precise imaging
and power equipment. This platform has yielded primarily four key technologies: intelligent
power-controlled shaver technology, low-temperature plasma ablation technology, 4K imaging
technology and integrated cordless technology. These technologies have been adopted by our
shavers, display system and ablation equipment, thereby enhancing operational convenience and
surgical precision.
BUSINESS
–1 1 5–


--- page 125 ---
Intelligent Medicine Platform
We have developed our intelligent medicine platform that aims to use AI technologies to
facilitate surgical procedures, optimize prescription and tailor rehabilitation programs in the future.
Our algorithm-based rehabilitation motion capture, recognition, and real-time guidance and
correction technology utilizes 3D spatial machine vision to monitor patients’ movement trajectories
and postures in real time. It analyzes parameters via AI algorithms, providing instant feedback and
corrections to fix wrong actions and boost training results, and accelerating recovery. Our CT, MRI,
and CT & MRI multimodal image fusion technology enables precise surgical planning and real-time
navigation for robotic-assisted surgeries. Our algorithm-based automatic segmentation and 3D
reconstruction technology for medical imaging utilizes AI algorithms trained on extensive datasets
to process CT images with high precision.
Tissue Engineering Platform
Our tissue engineering platform enables clinical solutions that extend beyond the traditional
mechanical repairs to natural restoration of human tissues, thereby ensuring more effective
treatment and rehabilitation of sports-related related injuries. We have successfully developed a
high-purity extraction technology for insoluble Type I collagen while preserving its three-
dimensional porous structure. The extracted collagen exhibits high biocompatibility and low
immunogenicity, while also supporting cell adhesion, migration, and differentiation. In addition, we
are one of the first to evenly disperse extracted collagen in an acidic solution to form a stable
suspended liquid, then process it through a sequence of steps to produce high-strength biological
scaffolds with precisely engineered microstructures. These scaffolds feature an aligned microporous
structure, tunable degradation rates, and adjustable plasticity, strength, pore size, and porosity to
match specific application requirements. Their physicochemical and biomechanical properties
closely mimic native tissues. The scaffolds can be loaded with blood and PRP (platelet-rich
plasma). By tailoring scaffold architecture to the injury severity, we ensure a tissue-like
microenvironment near the wound.
Clinically-oriented product portfolio providing diverse sports medicine solutions
Our four scalable core technology platforms empower a diverse product matrix. As of the
Latest Practicable Date, we had 63 approved products, including 27 products with Class III medical
device certificates, 25 products with Class II medical device certificates and 11 products with Class
I medical device certificates. We also have a robust pipeline with over 30 products under
development.
Leveraging our biomaterial platform, we have developed a series of products featuring high
biodegradability, robust mechanical strength and superior biocompatibility, including 11 products
that were first of their kind to receive medical device certificates in China among players
worldwide, and ten products that were first domestically produced products of their kind to receive
medical device certificates.
Our imaging and dynamic platform enables us to launch a series of imaging devices and
dynamic surgical equipment. Our shaving power system designed for intraoperative imaging
diagnostics, and have demonstrated commercially validated excellence in stability, ease-of-use,
precision, and safety. Our dynamic surgical equipment includes our plasma surgical equipment,
which is engineered for intraoperative tissue vaporization and coagulation and incorporates
advanced technology. Through this platform, we have also developed active equipment for
intraoperative bone and soft tissue resection and abrasion procedures.
Leveraging our intelligent medicine platform, we were among the first in China to launch the
development of sports medicine systems and arthroscopic surgical robots. Arthroscopic surgeons
with these products may significantly shorten their learning curves due to these products’ highly
intelligent and convenient operational features. Furthermore, built on our tissue engineering
BUSINESS
–1 1 6–


--- page 126 ---
platform, we are developing advanced regenerative biomaterials. Our meniscus repair scaffolds and
ligament repair scaffolds on our pipeline are on track to become one of the first products of their
kind to receive medical device certificates in China.
Proven product development and commercialization capabilities in China and worldwide
We have established deep collaborations with leading clinical centers and principal
investigators. Our products enjoy significant market recognition, currently serving over 3,000
healthcare facilities in China, including more than 1,000 Class III hospitals. Since initiating our
international expansion in 2023, we have achieved remarkable growth in global markets. As of the
Latest Practicable Date, our products have obtained over 200 medical device registrations or
certificates in aggregate across more than 50 countries and regions in Europe, Southeast Asia, the
Middle East, and Latin America, covering all of our products. These international regulatory
approvals demonstrate our proven worldwide product development and sales capabilities.
Visionary and experienced leadership and strong support from professional investors
Our CEO, Dr. Wenxing Dong, is a leading expert in sports medicine. Dr. Dong gained deep
academic, regulatory and commercial expertise in the sports medicine and intelligent rehabilitation
industry, having a doctorate degree in advanced manufacturing from Harbin Institute of Technology
as well as past professional experience as a former reviewer at the Center for Medical Device
Evaluation of the China Food and Drug Administration (္ຖ၍ଣᐼ҅ᔼᐕኜ૛Ҧஔ
ᄲ൙ʕː) and as the deputy general manager at Changchun SinoBiom (໋௹ီ). His mixed
experience in technology development, regulatory environment, and commercialization in the field
of sports medicine has contributed to our success in capturing market demands to achieve market
leadership. Our core management team has an average of over ten years of industry experience.
We are also backed by a deep bench of professional investors whose scale, focus, and track
records amplify our growth momentum. Our key investors include OAP IV , Suzhou Junlian and
Xiamen Defu. OAP IV is the world’s leading healthcare-focused investment fund, spanning
early-stage enterprises to large-scale public companies. Suzhou Junlian is a leading Chinese firm
specializing in early-stage venture and growth-stage private equity. Xiamen Defu is a top-value
healthcare investor. This powerful shareholder base provides not only stable and lasting capital
support, but also sector expertise, global networks and strategic guidance, enabling us to accelerate
innovation, scale efficiently and pursue sustainable growth.
OUR STRATEGIES
Develop full-cycle treatment and rehabilitation solutions, and build multidimensional
technological capabilities spanning biomaterials to intelligence technologies.
Leveraging our four core technology platforms, we intend to focus on optimizing existing
technologies to enhance product performance while expanding into innovative fields. Our R&D
priorities include developing diversified high-value biomaterials, including bio-composite materials
and regenerative biomaterials for advanced medical applications, such as soft tissue repair
scaffolds. We also plan to accelerate the innovation of intelligent active equipment, with particular
emphasis on cordless and multi-functional capabilities. This includes advancing our integrated
cordless equipment and integrating intelligent technologies across our product portfolio.
Building on our established expertise in sports medicine, we plan to implement a three-
pronged growth strategy to diversify our product matrix and solidify our market leadership.
 Full-cycle coverage : Leveraging our accumulated technology expertise in sports
medicine, we plan to develop new products to cover the full cycle of prevention,
treatment and rehabilitation of sports-related injuries.
BUSINESS
–1 1 7–


--- page 127 ---
 Use case expansion : We also intend to launch new consumer-facing products, expanding
the application of our products from in-hospital clinical use cases to out-of-hospital
consumer use cases.
 Intelligence : Driven by clinical insights and powered by AI technology, we plan to build
a next-generation portfolio of intelligent treatment systems that combine our material
science expertise with digital innovation, positioning us at the forefront of intelligent
sports medicine solutions.
Expand our production capacity and improve quality control to better satisfy market needs
We plan to acquire new production facilities and construct new production lines, purchase
precision manufacturing equipment, implement production line automation upgrades, and more
heavily invest in manufacturing workforce to expand the production capacity of our sports medicine
products. Utilizing digital information systems, we plan to further improve our production planning
accuracy, enhance quality control capabilities throughout the manufacturing process, and optimize
logistics efficiency, thereby further strengthening our quality control and supply chain systems. We
believe our commitment to expanding production capacity and improving quality control
capabilities enable us to better address and satisfy growing market needs in the sports medicine and
intelligent rehabilitation industry worldwide.
Amplify our market presence in the domestic market and become one of the leading brands
worldwide, further expanding our brand recognition
We aim to develop diversified marketing strategies to solidify our “STAR” brand image. We
intend to broaden our extensive distribution channels: leveraging our strong partnerships with
leading clinical centers and PIs, we plan to promote product access to in-hospital patients while
actively expanding our out-of-hospital market presence. We also plan to accelerate global market
access by continuously advancing overseas product registrations, certifications, and sales network
development. We plan to establish our “STAR” brand as a leading premier sports medicine brand
in China and as a top-tier brand globally.
Pursue vertical integration and supply chain upgrade through strategic investment and
acquisitions
We plan to pursue targeted investments and acquisitions to achieve vertical integration across
our value chain, which we believe enhance our ability to offer products centered around our four
core technology platforms and covering the full “prevention-treatment-rehabilitation” cycle. By
consolidating upstream and downstream capabilities, we aim to create synergistic effects
throughout the entire industrial chain from raw materials to end products. This not only optimizes
our operational efficiency but also drives comprehensive upgrading of the sports medicine supply
chain in China.
Recruit and develop talent in sports medicine
We are committed to building a world-class team to drive innovation in sports medicine. We
plan to focus on recruiting, cultivating, and retaining top-tier professionals to support the further
R&D of our four core technology platforms and product matrix, improve our manufacturing
efficiency and quality, expand our sales channels and optimize our commercial operations. We plan
to establish targeted recruitment programs to attract industry experts from leading medical
institutions and global corporations, while implementing a structured talent development system
featuring specialized technical training for engineers and scientists, leadership programs for
management-track professionals, and competitive compensation aligned with global medical
technology standards.
BUSINESS
–1 1 8–


--- page 128 ---
OUR PRODUCTS
We are a China-based medical device company specializing in providing clinical sports
medicine. We have developed a diverse, clinically-oriented sports medicine product portfolio that
encompasses medical implants, active equipment, associated medical consumables and surgical
instruments for minimally invasive surgical procedures. Our solutions enable patients to achieve
swift recovery with exceptional outcomes, while empowering physicians to perform surgical
procedures with enhanced convenience and efficiency.
Our product portfolio covers the key steps of the sports medicine cycle with a market share
of approximately 6.5% of China’s sports medicine implants and instruments market in terms of sales
revenue in 2024, according to CIC. As of the Latest Practicable Date, our product portfolio
encompassed 63 products spanning medical implants, surgical equipment and associated medical
consumables, as well as surgical instruments and regenerative repair products. Our medical
implants are critical for tissue repair and restoration, while our surgical equipment, mainly active
equipment streamlines operations and improves precision for minimally invasive surgeries. Our
medical consumables compatible with surgical equipment, including disposable shaver blade and
plasma electrode, along with other surgical instruments, such as suture passer, aimer, suture cutter
and lasso, facilitate the use of our surgical equipment and further enhance operational efficiency.
Meanwhile, our regenerative repair products for joint soft tissues, featuring Disposable Platelet-
Rich Plasma (PRP) Preparation kit and its compatible desktop centrifuge, address advanced clinical
needs and transform the traditional soft tissue repair processes. Committed to continuous
innovation, our pipeline of over 30 products includes upgraded medical implants and surgical
equipment that iterate our existing offerings, alongside advanced innovations such as sports
medicine and rehabilitation medicine systems and soft tissue repair scaffolds.
We had 27 products with Class III medical device certificates and 25 with Class II medical
device certificates as of the Latest Practicable Date, the most among China’s sports medical device
companies, according to CIC. 11 of our products were the first of their kind to receive medical device
certificates in China, and ten of them were the first of their kind to be domestically produced. In
addition, we secured, in aggregate, over 200 regulatory approvals and registration certificates for
medical devices in Europe, Southeast Asia, the Middle East and Latin America as of the Latest
Practicable Date, covering all of our products. We have amassed a significant customer base, selling
our products to over 3,000 hospitals across Chinese mainland and over 50 countries and regions.
We leverage four proprietary technology platforms to deliver sports medicine solutions to
doctors and patients, aligning advanced technologies with clinical and consumer demands. These
platforms consist of proprietary technologies and scientific advancements, which form the core
infrastructure for our principal product categories such as medical implants, active surgical
equipment, sports medicine surgery, prescription and rehabilitation system, as well as regenerative
medicine devices.
 Biomaterial platform : the biomaterial platform specializes in developing medical
implants based on biocompatible materials, ensuring biocompatibility, reliability and
performance in sports-related injury treatment applications.
 Imaging and dynamic platform : the imaging and dynamic platform advances active
equipment, associated medical consumables and surgical instruments through high-
resolution imaging, dynamic and plasma ablation technologies, enabling highly precise
and minimally invasive procedures like arthroscopy.
 Intelligent medicine platform : we plan to leverage AI technologies to deliver
personalized solutions across prevention, treatment and rehabilitation in the future,
using data-driven insights to enhance diagnostic precision, optimize surgical planning
and tailor rehabilitation programs. This technology platform lays the foundation for our
arthroscopic surgical robot, while enabling out-of-hospital products such as sports
medicine prescription and rehabilitation system, thus expanding our reach into
rehabilitation.
 Tissue engineering platform : to further diversify our offerings, we established the tissue
engineering platform grounded in the principles of regenerative medicine and tissue
engineering. This platform advances key technologies such as degradation rate control
of scaffolds and enhanced scaffold loading capacity for growth factors and seeded cells.
BUSINESS
–1 1 9–


--- page 129 ---
Compared with traditional treatments, these approaches may deliver better therapeutic
outcomes by promoting the repair and regeneration of damaged tissues. By promoting
natural tissue restoration, our tissue engineering platform supports the development of
regenerative repair products for joint soft tissues that enhance recovery and long-term
joint stability.
The following table sets forth our revenue breakdown by product segment both in absolute
amounts and as a percentage of total revenue for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,516 78.2 249,987 76.4 310,375 77.1
Surgical equipment and associated
medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,919 21.8 76,986 23.5 92,020 22.8
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 0.0 146 0.1 356 0.1
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 100.0 327,119 100.0 402,751 100.0
Note:
(1) Others primarily comprised revenue from the sales of surgical utility carts and regenerative repair products for joint
soft tissues.
The following chart illustrates our sports medicine product portfolio as of the Latest
Practicable Date:
Platform Category
Number of
approved
products
Number of
products under
development
R&D focus Approved ad vantageous products
Biomaterial
Platform
Suture anchor 11 -
Self-guided separable
All-suture
China’s first-to-market all-suture anchor
China’s first-to-market carbon fiber-reinforced PEEK suture anchor
China’s first-to-market PEEK composite interference screw
China’s first-to-market multi-needle and flexible meniscus repair
system
China’s first-to-market integrated cordless handheld shaver system
First domestically-produced bioabsorbable suture anchor of its kind
in China
China’s first-to-market sports rehabilitation system
China’s first-to-market all-suture buttons
First domestically-produced PEEK suture anchor of its kind in China
First domestically-produced PEEK sheath fixation system of its kind
in China
First domestically-produced bioabsorbable interference screw of its
kind in China
First domestically-produced bioabsorbable interference screws and
sheath fixation system of its kind in China
First domestically-produced adjustable suture button of its kind in
China
First domestically-produced UHMWPE suture of its kind in China
First domestically-produced all-suture meniscus repair system of its
kind in China
First domestically-produced fixed suture button of its kind in China
First domestically-produced suture button with tendon tail of its kind
in China
Interference screws system 71
Meniscus repair system 21
Suture buttons 21
Soft tissue suture system 21
Imaging and
Dynamic
Platform
Plasma RF ablation equipment 42
Integrated Cordless
Algorithm controlled
Arthroscopic surgical shaver 42
Endoscope camera system 64
Surgical instruments and medical
consumables for active equipment 20 7
Intelligent
Medicine
Platform
Surgical robot -1
AI-enabled
Digital rehabilitation systems 1-
Tissue
Engineering
Platform
PRP preparation devices 43
 Cell centrifugation
and separation
Superior
biomechanical
performance
Controllable
degradation
Enhanced tissue
regeneration
Repair scaffolds for
joint soft tissue
-9
In Total 63 32
China’s first-to-market pre-loaded all-suture anchor
China’s first-to-market pre-loaded metal suture anchor
China’s first-to-market pre-loaded PEEK suture anchor
China’s first-to-market pre-loaded bioabsorbable suture anchor
BUSINESS
– 120 –


--- page 130 ---
Medical Implants
Medical implants are used to repair, stabilize, or reconstruct damaged joints and soft tissues,
addressing injuries to soft tissues of rotator cuffs, ligaments and meniscus. These implants treat
prevalent sports-related conditions, ensuring compatibility with arthroscopic techniques for
consistent surgical outcomes and effective rehabilitation. According to CIC, the market size of
China’s sports medical implants market in terms of revenue was RMB3.1 billion in 2024, and is
expected to grow to RMB7.7 billion in 2030 at a CAGR of 16.2%. Our medical implants primarily
include (i) suture anchors, (ii) interference screws and sheath fixation system, (iii) suture buttons
and high-strength sutures, and (iv) meniscus repair system.
Suture Anchors
Suture anchors secure soft tissues, such as tendons or ligaments, to bone, provide stable
fixation by embedding into the bone and allowing sutures to hold the tissue in place, promoting
healing and restoring joint function. During the Track Record Period, we sold 125.6 thousand, 277.8
thousand and 365.2 thousand units of suture anchors in 2023, 2024 and 2025, respectively. The
following table sets forth our main suture anchor products:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Bioabsorbable
Suture Anchor /H1118/H1118
Class III
Medical
Device
Certificate
2021 Our bioabsorbable suture anchor, the
first domestically produced product
of its kind in China, is composed of
poly (lactide-co-glycolide) (PLGA)
and /H9252-tricalcium phosphate ( /H9252-TCP).
The PLGA and /H9252-TCP composites
promote faster and healthier bone
growth while reducing inflammation
and complications, with superior
breakage resistance and reliable
fixation compared to similar
products.
All-Suture Anchor /H1118
Class III
Medical
Device
Certificate
2020 Our all-suture anchor, the first of its
kind in China to receive medical
device certificate, is crafted from
ultra-high molecular weight
polyethylene fibers. Compared to
similar products, it offers superior
fixation strength and comparable
fatigue resistance with lower
dynamic fatigue displacement,
ensuring robust soft tissue-to-bone
fixation while reducing bone
removal by about 60%.
PEEK Suture
Anchor /H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2019 Our PEEK suture anchor is made from
high-performance PEEK material.
Compared to similar products, it
requires less effort to insert, offers
greater resistance to breakage, and
provides superior fixation strength.
BUSINESS
– 121 –


--- page 131 ---
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Carbon Fiber-
Reinforced PEEK
Suture Anchor /H1118/H1118
Class III
Medical
Device
Certificate
2024 Our carbon fiber-reinforced PEEK
suture anchor, the first of its kind in
China to receive medical device
certificate, is made from high-
strength PEEK material reinforced
with carbon fiber, ensuring strong
and reliable fixation of tendons and
ligaments to bone.
Interference Screws and Sheath Fixation System
Our interference screws are essential for securely fixing tendon or ligament grafts within bone
tunnels during arthroscopic surgeries like ACL reconstruction, by compressing the graft against the
bone wall to promote stability, bone-graft integration and natural healing. When combined with a
protective sheath in our interference screws and sheath fixation system, offer adjustable fixation for
bone-tendon-bone or soft tissue grafts, allowing for precise tensioning and reduced risk of graft
damage. During the Track Record Period, we sold 15.3 thousand, 30.2 thousand and 22.4 thousand
units of interference screws and sheath fixation systems in 2023, 2024 and 2025, respectively. The
following table sets forth our main interference screws and sheath fixation systems:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Bioabsorbable
Interference
Screw /H1118/H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2021 Our bioabsorbable interference screw,
the first domestically produced of its
kind in China, is made from 70%
PLGA and 30% /H9252-TCP . With a two-
to-three-year degradation cycle, it
promotes bone growth, reduces
inflammation and enhances natural
tissue healing.
Bioabsorbable
Interference
Screws and
Sheath Fixation
System /H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2023 Our bioabsorbable interference screws
and sheath fixation system, the first
domestically produced of its kind in
China, can be used with the
interference screw to ensure strong
fixation and promote healing.
PEEK Screws and
Sheath Fixation
System /H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2019 Our PEEK screws and sheath fixation
system, the first domestically
produced of its kind in China, is
crafted from high-performance
PEEK material, ensuring easy
insertion and superior fixation.
BUSINESS
– 122 –


--- page 132 ---
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
PEEK Composite
Interference
Screw /H1118/H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2023 Our PEEK composite interference
screw, the first of its kind in China
to receive medical device
certification, is features enhanced
bone integration, ensuring strong
and reliable fixation of tendons and
ligaments to bone and supporting
secure graft attachment.
Suture Buttons and High-Strength Sutures
Suture buttons are used for ligament reconstruction and fixation, particularly in procedures
such as ACL repairs, where they achieve secure suspension of the graft from the cortical bone
surface to restore joint stability and function. High-strength sutures offer reliable tissue fixation by
securely closing wounds or attaching soft tissues. During the Track Record Period, we sold 94.1
thousand, 187.1 thousand and 216.5 thousand units of suture buttons and high-strength sutures in
2023, 2024 and 2025, respectively. The following table sets forth our main suture button and
high-strength suture products:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Adjustable Suture
Button /H1118/H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2018 Our adjusted suture button, the first
domestically produced of its kind in
China, allows surgeons to fine-tune
the loop size for optimal graft
tensioning. This design reduces the
gap between the ligament and bone
tunnel, promoting better tendon-bone
healing and stable fixation.
Fixed Suture
Button /H1118/H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2018 Our fixed suture button, the first
domestically produced of its kind in
China, uses continuous braided loop
design for superior tensile strength
and less displacement.
Ultra-High
Molecular Weight
Polyethylene
(UHMWPE)
Suture /H1118/H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2021 Our UHMWPE suture, the first
domestically produced of its kind in
China, is made from ultra-high
molecular weight polyethylene fiber
using core braiding technology for
superior strength, flexibility,
abrasion resistance, and easy
knot-tying.
BUSINESS
– 123 –


--- page 133 ---
Meniscus Repair Systems
Meniscus repair systems are integrated medical devices designed to treat tears in the
meniscus. During the Track Record Period, we sold 24.1 thousand, 62.1 thousand and 104.8
thousand sets of meniscus repair systems in 2023, 2024 and 2025, respectively. The following table
sets forth our main meniscus repair systems:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
All-Suture
Meniscus Repair
System /H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2024 Our meniscus repair system, the first
domestically produced of its kind in
China, is made from ultra-high
molecular weight polyethylene
fibers, acting as a suture closure
device for minimally invasive soft
tissue repair in percutaneous or
endoscopic surgeries.
AccurFix All-Inside
Meniscus Repair
System /H1118/H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2020 This meniscus repair system is
available in upward bend, straight
and downward bend puncture angles,
with fixation options in two-needle
system. It accommodates various
meniscus locations and surgical
needs, supporting precise suturing.
Multi-needle and
flexible Meniscus
Repair System /H1118/H1118
Class III
Medical
Device
Certificate
2025 Our multi-needle and flexible meniscus
repair system is the first product of
its kind to receive medical device
certificate in China. Our multi-
needle, flexible meniscal suture
system features a multi-angle
flexible needle guide and a directed
multi-needle configuration, enabling
flexible access to target tear surfaces
within confined visual fields and
complex anatomy, achieving multi-
point, equal-tension and evenly
spaced fixation.
During the Track Record Period, our suture anchor products typically had a guidance price
range from RMB360 per unit to RMB1,080 per unit; our interference screws and sheath fixation
systems typically had a guidance price range from RMB430 per unit to RMB720 per unit; the
guidance price of our suture button products and high-strength suture products generally ranged
from RMB90 per unit to RMB980 per unit; and our meniscus repair systems generally had a
guidance price range from RMB400 per set to RMB1,220 per set.
Our medical implants segment experienced substantial growth during the Track Record
Period, reflected in a sharp rise in sales volumes across all products. This expansion was fueled by
escalating market demand and enhanced accessibility. Notably, from 2023 to 2024, our implant
sales volumes surged, which stemmed largely from the inclusion of our products in a volume-based
procurement program. By lowering prices on select medical devices, this program has made
BUSINESS
– 124 –


--- page 134 ---
high-quality implants more affordable and accessible, driving broader adoption of sports medicine
products. As a result, we have achieved rapid business growth by leveraging our diversified product
portfolio, robust market recognition, and reputation for quality among both patients and physicians.
Surgical Equipment and Associated Medical Consumables
Our surgical equipment and associated medical consumables include active equipment,
compatible medical consumables and ancillary surgical instruments. Active equipment relies on
external energy sources to function, altering energy density or converting energy for diagnostic and
therapeutic purposes. Furthermore, we offer medical consumables specifically designed for
seamless compatibility with our active equipment.
Designed to address specific anatomical sites, our ancillary surgical instruments include knee
joint basic toolkits, shoulder joint basic instrument kits, shoulder dislocation instruments, meniscus
tools, hip joint positioning devices, disposable arthroscopic puncture devices and arthroscopic
surgical drill bits. Together, these surgical instruments streamline preoperative preparation and
accommodate diverse clinical needs through versatile combinations.
During the Track Record Period, we sold 10.4 thousand, 17.0 thousand and 26.9 thousand sets
of surgical equipment in 2023, 2024 and 2025, respectively. In the meantime, we sold 76.7
thousand, 135.3 thousand and 150.2 thousand units of medical consumables in 2023, 2024 and
2025, respectively.
The following table sets forth our main surgical equipment and associated medical
consumables:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Plasma RF Ablation
Equipment /H1118/H1118/H1118/H1118
Class III
Medical
Device
Certificate
2022 The equipment comprises a host
controller and disposable plasma
surgical electrode knife. Through
ionization to form cold plasma, the
equipment achieves precise tissue
vaporization and coagulation, while
enabling rapid hemostasis to
minimize bleeding.
Arthroscopic
Surgical Shaver /H1118
Class II
Medical
Device
Certificate
2018 Our arthroscopic surgical shaver,
comprising a host controller, handle,
foot switch and cable, works with
disposable shaver blades to cut and
grind bone or soft tissue. It
facilitates precise tissue resection
and debris removal for conditions
such as meniscus tears, ACL defects
and ligament injuries in knee and
shoulder joints.
BUSINESS
– 125 –


--- page 135 ---
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Arthroscopic
Camera System /H1118
Class II
Medical
Device
Certificate
2022 Our arthroscopic camera system,
comprising a camera host, high-
resolution camera and accessories,
enables high-resolution image
acquisition, processing, storage and
display for arthroscopic surgeries
and diagnostics. It facilitates precise
visualization of joint structures,
supporting accurate diagnosis and
treatment. By offering real-time,
high-clarity imaging, it enhances
surgical precision.
Disposable Shaver
Blade /H1118/H1118/H1118/H1118/H1118/H1118
Class II
Medical
Device
Certificate
2018 Our disposable shaver blade, composed
of an inner and outer tube,
integrates seamlessly with
arthroscopic surgical shavers to
precisely resect and grind bone and
soft tissues.
Plasma electrode /H1118/H1118
Class III
Medical
Device
Certificate
2022 Our plasma electrode is designed to
used in tandem with our RF plasma
ablation equipment for tissue
ablation and coagulation. Using a
bipolar configuration, it delivers
energy to the surgical site,
energizing sodium ions in normal
saline to generate a localized plasma
field that enables precise ablation
and coagulation while minimizing
thermal impact on surrounding
tissues.
During the Track Record Period, our active equipment typically had a price range from
RMB11,640 per set to RMB145,740 per set; our associated medical consumables generally had a
price range from RMB310 per unit to RMB670 per unit; and our ancillary surgical instruments
typically had a price range from RMB170 per unit to RMB5,150 per unit.
Other Products
We are developing other sports medicine products, such as regenerative repair products for
joint soft tissues. Recognizing the limitations of conventional surgical methods, which focus on
repair rather than regeneration of damaged soft tissues, we plan to develop regenerative repair
products for joint soft tissues that enable true tissue restoration. This regenerative therapy approach
restores native tissue functionality rather than merely patching and repairing defects.
As of the Latest Practicable Date, we have four regenerative repair products for joint soft
tissues based on our tissue engineering platform: our disposable PRP preparation kit and desktop
centrifuge. We are developing soft tissue repair scaffolds targeting sports-related soft tissue
damage.
BUSINESS
– 126 –


--- page 136 ---
The following table sets forth our other sports medicine products:
Product Name Product Picture
Certificate
Category
Y ear of
Receiving the
Certificate Product Description
Disposable PRP
Preparation Kit /H1118/H1118
Class III
Medical
Device
Certificate
2024 Our disposable PRP preparation kit
extracts and prepare PRP from a
patient’s blood, delivering rich
growth factors.
Desktop Centrifuge /H1118/H1118
Class I
Medical
Device
Certificate
2024, 2025 The desktop centrifuge is designed to
separate platelets from plasma and
adjust platelet concentration,
enabling efficient, accurate and safe
preparation of PRP .
Product Pipeline
Our product pipeline spans treatment, prevention and rehabilitation. Our pipeline includes
commercialized products with regulatory approvals across multiple markets and next-generation
innovations currently undergoing registration testing, product validation and design development.
The following chart outlines our product pipeline, showing select products under each product
category and mapping each product category to its corresponding technology platform and
development stage, while highlighting our strategic focus on integrated, patient-centric care.
Intelligence medicine system
Endoscope camera system
Blood and cell enrichment
separation device
Soft tissue repair scaffold
Product nameProduct category Testing phaseDesign phase Clinical phase R&D focusRegistration
phase
Multi-modal image fusion
Integrated cordless
Cell centrifugation
and separation
Superior biomechanical
performance
Controllable degradation
Enhanced tissue
regeneration
*Products listed above are
under development
Disposable blood and
cell separation device
Tendon composite reinforcement patch
Tendon repair patch kit
Regenerative meniscus repair scaffold
Regenerative ligament repair scaffold
Arthroscopic surgical robot
Cordless endoscope
camera system
Advanced Medical Implants
Self-Guided Separable Suture Anchor
Our self-guided separable suture anchor integrates advanced anchor locking, suture control,
modular assembly and implant enhancement technologies to deliver a fixation solution. Its locking
structure minimizes initial fixation looseness, while the suture ratchet mechanism continuously
adjusts tension to reduce attenuation. In addition, the modular shell design improves component
placement accuracy and limits operational errors, and the integrated suture management eliminates
winding and retrieval steps for streamlined use. Through these structural innovations and process
optimizations, the self-guided separable suture anchor enhances surgical precision, efficiency and
safety, ensuring more effective tissue repair. Our self-guided separable suture anchor substantially
reduces reliance on disposable insertion drivers, thereby reducing medical waste and supporting
environmentally sustainable practice. As of the Latest Practicable Date, we had obtained
the medical device certificate for our self-guided separable suture anchor, aiming for
commercialization.
BUSINESS
– 127 –


--- page 137 ---
Fiber-Based All-Suture Button
Our fiber-based all-suture button is a fully flexible suture button woven from fiber materials,
designed to provide suspension fixation in arthroscopic surgeries. It addresses key challenges of
traditional metallic buttons, such as rigidity that limits adaptability and causes imaging artifacts
during MRI scan, by offering a compact and shape-adaptive structure. This all-fiber design replaces
metal components with soft, biocompatible fibers, eliminating metal artifacts for clear post-
operative MRI scans and reducing complications like tissue irritation. Its offers superior flexibility
for conforming to anatomical contours, enhanced wear resistance through specialized braiding, and
improved imaging compatibility, ensuring better surgical outcomes, faster recovery and improved
joint stability. As of the Latest Practicable Date, we had obtained medical device certificate for our
fiber-based all suture button in Chinese mainland, aiming for commercialization. We also plan to
obtain required certificate for this product in EU.
Cordless Surgical Equipment
4K Cordless Medical Endoscope Camera System
Our 4K cordless medical endoscope camera system integrates 4K ultra-high-definition
imaging with cordless transmission to deliver precise diagnostic views in arthroscopy. Compared to
conventional wired endoscope, the cordless design eliminates cable entanglements, reducing safety
risks and streamlining operating room procedures. Additionally, its miniaturized, portable form
factor supports convenient transport and boosts overall surgical efficiency, making it a powerful
tool for modern, minimally invasive diagnostics and interventions. As of the Latest Practicable
Date, this product is undergoing the product validation stage. We aim to receive the medical device
certificate for 4K cordless medical endoscope camera system in 2026. We plan to obtain required
certificate for this product in Chinese mainland and EU.
High-Definition Cordless Medical Endoscope Camera System
Our high-definition cordless medical endoscope camera system employs advanced cordless
technology to eliminate cable restrictions, thereby expanding its range of applications and fulfilling
the goals of portability, convenience, and flexibility. Compared to existing domestic endoscope
camera systems, the cordless design simplifies cleaning and sterilization procedures by removing
cable clutter, ultimately enhancing medical safety. As of the Latest Practicable Date, this product
is undergoing the product validation stage. We aim to receive the medical device certificate for
high-definition cordless medical endoscope camera system in 2026. We plan to obtain required
certificate for this product in Chinese mainland and EU.
Sports Medicine Surgery, Prescription and Rehabilitation Systems
Arthroscopic Surgical Robot
We are developing an arthroscopic surgical robot, in arthroscopic surgeries, incorporating
advanced motion-tracking technology that synchronizes with human movements to enhance
procedural precision. It facilitates accurate graft fixation for arthroscopic, a critical procedure for
restoring knee stability in patients with ligament ruptures. By leveraging real-time motion tracking,
this robot ensures optimal outcomes in complex knee surgeries. As of the Latest Practicable Date,
our arthroscopic surgical robot is undergoing product validation. We aim to receive the medical
device certificate for arthroscopic surgical robot in 2027. We plan to obtain required certificate for
this product in Chinese mainland.
Sports Medicine Prescription and Rehabilitation System
We are also developing a sports medicine prescription and rehabilitation system that delivers
daily, personalized rehabilitation exercise prescriptions to patients, replacing static diagrams or text
instructions with real-time video guidance tailored to individual recovery needs. By employing
algorithms to analyze patient movements, this system ensures rehabilitation exercises are performed
BUSINESS
– 128 –


--- page 138 ---
correctly, while enabling physicians to remotely monitor progress via a backend interface and adjust
subsequent prescriptions, enhancing rehabilitation outcomes. As of the Latest Practicable Date, we
had obtained the medical device certificate for our sports medicine prescription and rehabilitation
system.
Soft Tissue Repair Scaffolds
Our soft tissue repair scaffolds promote tissue in growth and healing, addressing limitations
of traditional implants that may not fully integrate with the body or require removal. Capitalizing
on our PRP preparation kit that provides rich growth factors to be combined with biomaterials to
enhance cell proliferation and vascularization, we aim to develop advanced regenerative repair
products that accelerate soft tissue regeneration. As of the Latest Practicable Date, our soft tissue
repair scaffolds are at the product design stage.
Ligament Repair Scaffold
Our ligament repair scaffold is crafted from high-purity Type I collagen through processes like
freeze-drying and dehydrothermal cross-linking, holding a three-dimensional porous structure with
directional alignment. In clinical applications, it is implanted at the ligament rupture site along with
seed cells and growth factors, promoting cell migration and differentiation within the scaffold to
generate new tissue over time and restore ligament function. This scaffold facilitates ligament’s
natural regeneration, mitigating complications and enhancing long-term joint stability for patients.
We aim to receive the medical device certificate for our ligament repair scaffold in 2027. We plan
to obtain required certificate for this product in Chinese mainland.
Collagen-based Meniscus Repair Scaffold
Our collagen-based meniscus repair scaffold is crafted with high-purity Type I collagen and
possesses a three-dimensional porous structure with optimal mechanical strength. Its high porosity
and spacious internal structure retain autologous bone marrow stem cells and PRP factors within the
pores, promoting cell migration and differentiation to facilitate natural tissue regeneration when
implanted at the injury or defect site. By guiding cell growth and forming initial tissue repair before
collagen absorption, it effectively restores meniscus function and stability. We aim to receive the
medical device certificate for our collagen-based meniscus repair scaffold in 2028. We plan to
obtain required certificate for this product in Chinese mainland.
OUR CORE TECHNOLOGIES
Our four technology platforms underpin continuous technological advancement, which is
translated into products that address clinical needs and align with the market trends.
Biomaterial Platform
Functionally Graded Bioabsorbable Material Synthesis and Processing Technology
Our proprietary functionally graded bioabsorbable material synthesis and processing
technology integrates PLGA and modified /H9252-TCP composites. This creates materials that degrade
at controlled rates while maintaining compressive strength aligned with natural bone healing. This
technology overcomes challenges of low strength and mismatched degradation for PLGA and
/H9252-TCP , ensuring isotropic mechanical performance and complete degradation within two to three
years, minimizing adverse reactions like sinus tract formation or osteolysis. This technology
enhances implant reliability by promoting seamless tissue integration and faster recovery, reducing
the need for secondary surgeries and improving overall patient outcomes in sports medicine
applications.
BUSINESS
– 129 –


--- page 139 ---
High-Load Braided Implant Preparation Technology
High-load braided implant preparation technology utilizes 100% ultra-high molecular weight
polyethylene fibers, designed through advanced simulations and specialized braiding techniques to
create strong, flexible implants that minimize tissue damage. Leveraging custom braiding
equipment, this technology produces high-strength, flat-round variable-diameter polyethylene
sutures, and achieving superior mechanical performance. This technology enhances the tensile
strength and abrasion resistance of our medical implant products, ensuring reliable fixation in
high-stress environments while improving flexibility for easier handling during surgeries.
Ultra-High-Temperature Polymer Precision Injection Molding Technology for Thin-Walled
Complex Structures
Ultra-high-temperature polymer precision injection molding technology employs PEEK’s
high-temperature properties, using advanced heating and microfluidic techniques to create
thin-walled, complex implant structures. By optimizing molding conditions and using custom
equipment, this technology ensures defect-free implants with high strength and biocompatibility,
eliminating issues like porosity or cracking, which enhance bone and soft tissue fixation in sports
medicine surgeries with reliable performance and minimal tissue damage.
Imaging and Dynamic Platform
4K Imaging Technology
Our 4K imaging technology integrates a display, image processing system, light source, and
recording workstation into a streamlined design, capturing arthroscopic signals through an optical
system, converting them into digital form by the sensor through analog-to-digital conversion, and
processing them with advanced signal amplification, filtering, and encoding for high-quality output
at 3840×2160P resolution with a 60Hz scanning frequency. This technology delivers clear images,
vivid colors and enhanced depth of field, with features like automatic white balance, brightness
adjustment and multi-mode settings for different surgery scenarios, enabling precise visualization
and reduced latency in surgical procedures. This technology has been incorporated into our
arthroscopic camera system.
Intelligent Power-Controlled Shaver Technology
Intelligent power-controlled shaver technology integrates a stable drive circuit, user-friendly
software, high-speed motor with gearbox and sealed handle design to deliver precise, high-speed
performance up to 12,500 rpm, with features like adjustable speed, controllable reciprocating
motion, speed memory and durability against repeated high-temperature sterilization. Its
technological strengths include micro-level tolerance in shaver blades’ inner and outer tubes for
precise, smooth cutting, a disposable shaver blade designed for efficient tissue cutting and
resection, a high-definition IPS display, voice alerts to prevent errors and a blade with RFID
recognition, enhancing surgical safety and flexibility in surgery. This technology powers our
arthroscopic surgical shaver.
Low-Temperature Plasma Ablation Technology
Low-temperature plasma ablation technology acts on the conductive solution around
electrode, inducing ionization and generating low-temperature plasma at a temperature range of 40
to 70°C, which precisely cuts and removes tissue while enabling controlled heating for blood
clotting and tissue tightening, all with minimal harm to surrounding areas. Its strengths include
smooth and accurate tissue removal, low heat to protect tissue health, as well as built-in safety
features such as short-circuit prevention and handle controls, which are enhanced by smart foot
pedal recognition for ease of use. This technology drives our plasma surgical equipment and
disposable radiofrequency plasma surgical electrode, improving arthroscopic surgeries for
conditions like meniscus tears and ligament injuries in sports medicine with high precision and
safety.
BUSINESS
– 130 –


--- page 140 ---
Integrated Cordless Technology
Our integrated cordless technology integrates various components into one cordless, portable
and miniaturized equipment, which enhances surgery precision and intraoperational flexibility. Our
cordless surgical equipment allows surgeons to freely operate complex surgeries within a limited
room, reduces room clutter, improves surgeon mobility, and minimizes infection risks through
easier sterilization.
Intelligent Medicine Platform
CT, MRI, and CT & MRI Multimodal Image Fusion Technology
Our CT, MRI, and CT & MRI multimodal image fusion technology employs non-rigid
registration algorithms to precisely align the detailed bone geometry captured by CT scans, which
excel in visualizing dense structures like skeletal frameworks, with the soft tissue morphology
revealed by MRI, renowned for its superior contrast in ligaments, tendons, and cartilage without
ionizing radiation. By integrating deep learning algorithms to capture regional texture features and
applying weighted fusion modules, this technology generates high-resolution 3D images that
simultaneously display bone and soft tissue with exceptional clarity, overcoming the limitations of
individual modalities where CT may obscure soft tissues and MRI can distort bone edges due to
magnetic field variations. This fusion not only enhances diagnostic accuracy for complex
sports-related injuries but also supports precise surgical planning, and we plan to incorporate it into
our ACL reconstruction surgical robot to enable real-time navigation, improve graft placement, and
reduce procedural risks, aligning with global trends in robotic-assisted orthopedics.
Algorithm-Based Rehabilitation Motion Capture, Recognition and Real-Time Guidance and
Correction Technology
Our algorithm-based rehabilitation motion capture, recognition, and real-time guidance and
correction technology utilizes 3D spatial machine vision to monitor patients’ movement trajectories
and postures in real time. It analyzes parameters via AI algorithms, providing instant feedback and
corrections to fix wrong actions and boost training results. Applied to our sports medicine
prescription and rehabilitation system, this technology enhances recovery for sports-related injuries
and offers personalized guidance.
Tissue Engineering Platform
High Purity Type I Collagen Extraction Technology
We extract the high-purity, insoluble Type I collagen derived from bovine Achilles tendon
through a series of chemical processes, including physical crushing, deactivation, impurity removal,
and high-pH adjustment. The collagen retains its complete three-dimensional porous structure and
demonstrates good biocompatibility, making it an ideal material for preparing scaffolds used in
tissue repair and regeneration.
Biological Scaffold Manufacturing Technology
Through this technology, we evenly disperse the extracted collagen in an acidic solution to
form a suspended liquid and then perform a series of processes to obtain biological scaffolds,
including filtration, concentration, lyophilization, cross-linking, packaging and sterilization. The
resulting biological scaffolds feature a specially designed microstructure and defined strength.
Cell and Growth Factor Attachment Technology
Our cell and growth factor attachment technology enables efficient, gentle and stable loading
of therapeutic cells and bioactive molecules onto biological scaffolds to enhance joint and soft
tissue regeneration. Cells and growth factors are anchored on the biological scaffolds to preserve
bioactivity. The resulting scaffold features robust cell adhesion and targeted growth factor
presentation, driving faster tissue integration and improved repair outcomes.
BUSINESS
– 131 –


--- page 141 ---
Fully Automated Disposable PRP and Blood Separation Technology
Our fully automated disposable PRP and blood separation technology processes bone marrow
blood containing PRP through centrifugal separation, utilizing laser-based automatic layering
identification to precisely detect the platelet or stem cell layer. In a completely enclosed
environment, it automates blood collection, centrifugation, identification of PRP , and concentration
adjustment, minimizing manual intervention risks, boosting preparation efficiency, and yielding
higher concentrations of separated products compared to traditional methods. This innovation
addresses key challenges in regenerative repair products for joint soft tissues, where studies show
that automated PRP systems can produce much higher platelet concentrations than manual
techniques, enhancing therapeutic efficacy for tissue repair. Applied to our PRP preparation kit, it
supports the development of regenerative therapies by providing consistent, high-quality growth
factors for integration with scaffolds, promoting faster healing in ligament and meniscus injuries.
RESEARCH AND DEVELOPMENT
Our R&D capabilities are crucial to our commitment to bringing new sports medicine
solutions. During the Track Record Period, our research and development expenses were RMB35.0
million, RMB37.3 million and RMB47.5 million in 2023, 2024 and 2025, respectively. We are
well-recognized for our R&D capabilities. We received the First Prize of Science and Technology
Progress Award in Shanghai and Second Prize of Science and Technology Progress Award in
Beijing. See “— Awards and Recognitions.” Additionally, we collaborated with the Beijing Science
and Technology Commission on research in medical implants and regenerative repair products for
joint soft tissues, including the design, research and development of a next-generation
bioabsorbable interference screws, as well as a non-dissolvable Type I collagen-based ligament
repair scaffold. Pursuant to such arrangement, the Beijing Science and Technology Commission
provides funding sourced from the PRC government to sponsor the research projects and supervises
the overall progress thereof. The funding is intended to integrate our expertise in sports medicine
products and market insights with the hospitals’ clinical experience and physicians’ resources.
Under the collaboration, we are responsible for providing our products, such as medical implants,
for use in the research and participating in the design of the research projects alongside the
hospitals. The hospitals, on the other hand, are responsible for deploying qualified professionals to
facilitate the research activities and contributing to the research design. This collaborative
framework enables us to advance innovation in sports medicine through combined industry and
clinical capabilities. We have participated in formulating a set of industry standards and applied for
over 260 patents, among which over 180 had been granted as of the Latest Practicable Date, further
enhancing our reputation for scientific excellence and innovations.
As of December 31, 2025, our R&D center had 81 professionals with deep experience in the
field of sports medicine and orthopedics, including 28 with master’s degrees or above. Our R&D
department drives the full-cycle development of sports medicine products, encompassing market
analysis, project initiation, design planning, development, verification and validation.
Product Design and Pre-Clinical Trial Process
Prior to formulating a development plan, our R&D center collaborates with marketing
personnel to conduct market research to gather feedback on patient needs and current solutions.
Upon approval of the project initiation application, our R&D center formulates a development plan,
outlining project objectives, technical requirements, team responsibilities, key tasks for each phase,
resource allocations, and risk management strategies. A review meeting evaluates design and
development capabilities, manufacturing capacity, quality assurance processes, and resource
availability. In addition, we collaborate closely with Class III hospitals, leveraging their extensive
clinical experience and market insights to refine innovations and address complex needs of medical
professionals and patients. After formulating the development plan, our R&D center coordinates
departments to manage progress and conducts rigorous validation through prototype testing,
comparisons with established designs and simulations, documenting outcomes and implementing
necessary adjustments. After internal validation, our R&D center compiles technical requirement
documents and prepares samples for regulatory testing. After this process, our R&D center
BUSINESS
– 132 –


--- page 142 ---
collaborates with sales and marketing team to establish strategies and criteria to verify that final
products meet patient requirements and intended clinical applications. We determine whether
clinical trials and required based on product characteristics and medical device registration
regulations. For products exempt from trials or evaluated using data from comparable devices, we
conduct comparative analyses per the Technical Guidelines for Medical Device Clinical Evaluation,
compiling clinical evidence through assessments of application scope, technical features and
biological properties. At the registration stage, we submit medical device registration applications
in accordance with statutory requirements. The NMPA reviews safety, effectiveness and quality
control based on scientific and regulatory standards.
Clinical Trial
Our clinical trial process primarily includes: (i) clinical protocol planning to define product
purpose, indications, target patients and performance criteria; (ii) regulatory consultation with the
NMPA and relevant provincial authorities; (iii) clinical trial preparation; (iv) clinical trial
execution; and (v) trial review and oversight, including record review, compliance monitoring, issue
remediation and confirmation of data integrity.
The salient terms of our agreement with CROs primarily include: (i) the CROs are typically
responsible for managing the overall execution of clinical trials, including recruitment, monitoring
and data collection; (ii) fees are typically paid based on project milestones; (iii) we hold all
intellectual property rights in the research results, reports and publications arising from clinical
trials; (iv) the CROs are required to strictly maintain confidentiality regarding trial-related
information; (v) this agreement may be terminated by mutual consent or by us upon written notice
if the CRO fails to meet agreed service quality requirements.
The salient terms of our agreement with SMOs primarily include: (i) the SMOs typically
deliver clinical research coordinator services and typically cannot subcontract without our written
approval; (ii) the SMO is paid a service fee based on project milestones, and the fees are calculated
by the type of services provided and the working hours; (iii) we hold all intellectual property rights
in the research results, reports and publications arising from clinical trials; (iv) the SMOs are
required to strictly maintain confidentiality regarding trial-related information; (v) this agreement
may be terminated by mutual consent or by us upon written notice if the SMO fails to meet agreed
service quality requirements.
During the Track Record Period, we did not engage any CROs or SMOs as we did not conduct
any clinical trials.
OUR PRODUCTION
Production Facilities
As of Latest Practicable Date, we have production plants in Beijing, Jiangsu and Hunan, with
a total site area of 7,963 sq.m. The table below sets forth the basic information about our production
plants:
Production Plants Location
Y ear of
Commencement
of Production
Leased/
Owned Site Area Products Manufactured Designed Capacity
(sq.m.)
Beijing Production
Plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beijing 2018 Leased 6,482 Medical implants, active
equipment, medical consumables
and surgical instruments
1.1 million units
(1)
Jiangsu Production
Plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jiangsu 2025 Leased 1,243 Medical implant, medical
consumables and surgical
instruments
N/A
(2)
BUSINESS
– 133 –


--- page 143 ---
Production Plants Location
Y ear of
Commencement
of Production
Leased/
Owned Site Area Products Manufactured Designed Capacity
(sq.m.)
Hunan Production
Plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hunan 2022 Leased 238 Active equipment 300 units
Notes:
(1) The designed capacity of our Beijing Production Plant of 1.1 million units represents the maximum production
capacity that we may achieve under optimal conditions. Our actual production capacity may fluctuate or differ from
the designed capacity due to various factors, including the availability of production equipment and personnel, as well
as our production scheduling and planning in anticipation of market demand.
(2) Jiangsu Production Plant is used for intermediary processing, and it would not directly contribute to designed capacity
of finished products.
We deploy rigorous quality control standards for our production to meet the regulatory
requirements and internal quality standards of our products. Our products have also received GMP ,
ISO13485 and other certifications, meeting the national, international and industry quality
standards. During the Track Record Period, we did not experience any material disruptions in
production. For risks relating to the potential disruptions to our production, see “Risk Factors —
Risks Relating to Our Business and Operations — Disruptions in our manufacturing processes may
harm our product quality, incur additional costs and cause material adverse effects to our business
operations.”
The following table sets forth the production capacity, production volume and utilization rate
by product type during the Track Record Period:
Y ear ended December 31,
2023 2024 2025
Medical Implants
Production capacity (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118287,788 602,723 716,954
Production volume /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118303,886 616,927 725,137
Utilization rate (2) (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105.6 102.4 101.1
Surgical Equipment and Associated
Medical Consumables
Production capacity (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,993 185,876 200,253
Production volume /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,241 176,956 185,219
Utilization rate (2) (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881.4 95.2 92.5
Notes:
(1) The designed production capacity represents the maximum annual production output at the bottleneck of the
production process assuming: (i) sufficient labor is available at all times; (ii) 288 working days for the entire
year for production; and (iii) no major equipment breakdown.
(2) Utilization rate is calculated based on the actual production volume for the relevant period divided by the
designed production capacity for the relevant period, multiplied by 100%.
Production Expansion Plan
We plan to expand our production capacity through building new production plants, procuring
additional production equipment and upgrading our existing production equipment. Furthermore,
the introduction of new products necessitates additional production capacity to meet demand and
maintain competitive lead times. Specifically, we plan to acquire additional production plants and
construct new production lines for medical implants and intermediary processing, thereby
BUSINESS
– 134 –


--- page 144 ---
enhancing our overall production capacity. Our planned production plant in Beijing is expected to
increase our overall designed production capacity by 2.0 million units annually. Our production
plant in Jiangsu Province is expected to improve the production efficiency of raw materials and
components used for our products, thereby further increasing our overall designed production
capacity by approximately 0.26 million units annually. By developing in-house capabilities for
certain components used in our products, the Jiangsu plant is expected to reduce procurement costs
and improve profitability. We also plan to upgrade of our existing production plants to enhance our
production efficiency, which is expected to reduce our production costs and enhance production
capacity. See “Future Plans and Use of Proceeds — Use of Proceeds.”
Production Process
We employ specialized manufacturing techniques for each product category, adhering to
stringent regulatory standards and registration requirements to ensure clinical reliability and patient
safety. During the Track Record Period, we outsourced sterilization phase to third-party sterilization
workshops to enhance production efficiency and leverage their expertise in sterilization. According
to CIC, this outsourcing production arrangement is in line with the industry norm.
The salient terms with our third-party sterilization workshops are set forth as below:
 Duration . We typically enter into a two-year term agreement with sterilization
workshops.
 Service Scope . Our sterilization workshops shall provide routine sterilization services
for our products.
 Service Fees . Sterilization services are charged based on the volume of products.
 Payment and Credit Terms . Sterilization service fees are typically settled on a monthly
basis, and we are typically granted with a credit term up to 20 days.
 Termination . The agreement may be terminated upon the mutual consent by both parties.
We have taken several measures to ensure the service quality of sterilization workshops: (i)
we require all third-party sterilization service providers to hold ISO11135 certification, and we
conduct on-site audits to confirm required capabilities and process control; (ii) prior to commencing
their services, our sterilization workshops confirm and issue a Sterilization Process V alidation
Report, and we define parameter ranges, sterility assurance levels and other requirements in the
sterilization service agreements; and (iii) we review complete records for each sterilized product
provided by the workshops, conducting sample tests to ensure these products’ compliance with our
quality standards.
Medical Implant Production
We manufacture our medical implants using high quality materials, assemble them in
controlled environments, and subject them to cleaning, sterilization, inspection and packaging
procedures to ensure product safety, quality and traceability.
Active Equipment Production
For the production of our active equipment, we begin by selecting medical-grade raw
materials and electronic components to ensure the reliability of the equipment’s performance.
During the PCB design and production stage, we design, assemble and test the core electronic board
of our devices, install the required software, and package the finished products with full labeling
and traceability. Key safety and performance tests are conducted to ensure product quality and
compliance.
BUSINESS
– 135 –


--- page 145 ---
Medical consumables
We manufacture medical consumables used with our active equipment by selecting qualified
raw materials, assembling components in controlled environments, and conducting testing to ensure
performance and regulatory compliance. The finished consumables are then cleaned, sterilized and
packaged in sterile, tamper-evident materials under regulated storage conditions prior to
distribution.
SUPPLY CHAIN MANAGEMENT
Supplier Selection and Management
Our key products rely on a diverse range of raw materials including bioabsorbable materials,
PEEK materials, UHMWPE yarn and inserter components for medical implants; electronic
components such as chips, lenses and display screens for active equipment; electrode wires, ceramic
bases, inner and outer tubes for associated medical consumables; and metal components, tool
handles and casings for surgical instruments.
During the Track Record Period, we purchased UHMWPE through Supplier C. We did not
procure from or sell products to the United States during the Track Record Period and up to the
Latest Practicable Date, and our procurement of such material was not affected by any sanctions,
export controls or trade restrictions. However, as our UHMWPE was shipped from the United
States, the price of this product was affected by the tariffs imposed by China on all imports from
the United States during in 2025. Specifically, China’s imposition of tariff across U.S. imported
goods resulted in an increase of 9.5% in the purchase price of our UHMWPE. During the Track
Record Period, the purchase of UHMWPE that were subject to tariffs amounted to RMB10.4
million, RMB18.1 million and RMB10.7 million in 2023, 2024 and 2025, respectively, accounting
for 23.0%, 24.5% and 14.8% of the total raw material costs in the respective periods. In the event
we face supply chain disruption, we are capable of sourcing UHMWPE from domestic suppliers at
comparable quality and sufficient quantity. For any risks relating to our raw material supply and
sanctions laws, please see “Risk Factors — Risks Relating to Our Business and Operations — Any
disruptions to our raw material supply and over-reliance on certain suppliers could harm our
production;” and “Risk Factors — Risks Relating to Our Business and Operations — Our
international business may be subject to various risks arising from sanctions, export control laws
and foreign currency movement.”
The salient terms with our suppliers are set forth as below:
 Term. We typically do not establish fixed terms with our suppliers.
 Payment. We are required to settle payments upon acceptance of goods, with suppliers
generally allowing payment terms of 30 to 90 days.
 Logistics. Suppliers bear the logistics costs and are obligated to provide transportation
services that meet our specified requirements.
 Confidentiality. Suppliers are prohibited from disclosing procurement details, including
product types, quantities and parameters, to third parties, and they are liable for any
losses resulting from breaches of this confidentiality obligation.
 Obligations. Suppliers are responsible for any economic losses arising from defects in
their products.
 Warranty. Suppliers typically provide a warranty of 12 months. During the warranty
period, suppliers offer free repair, exchange and product return services to us upon our
request.
BUSINESS
– 136 –


--- page 146 ---
 Product Return. We may request product return upon finding any quality issue during
our inspection. Our suppliers may provide products for exchange, but we may request
product return if we find quality issues during the re-inspection.
 Termination . We may terminate the supply agreement if: (i) both parties agree to
terminate the agreement; (ii) we provide a written notice 30 days prior to the
termination; (iii) either party faces liquidation and provides prompt notice to the other;
and (iv) other conditions agreed within this agreement or required by the laws and
regulations.
We have taken the following measures to manage fluctuations in raw materials prices: (i) we
have entered into long-term agreements with our core suppliers; (ii) leveraging our market
leadership in the sports medicine device industry, we possess strong bargaining power over our raw
materials suppliers; and (iii) we have retained multiple suppliers for some of our core raw materials
to diversify our supply sources and maintain resilience against supply chain disruptions. During a
downward price cycle, we may adopt a staged procurement approach by appropriately reducing the
purchase volume of each individual order while increasing procurement frequency, thereby
lowering our average procurement cost over time and reducing the risk of accumulating substantial
inventory purchased at peak prices. Where raw materials are subject to significant price volatility
and we assess that prices are approaching a trough, we may, after prudent evaluation, lock in prices
by negotiating with high-quality suppliers to enter into long-term supply agreements and/or adopt
forward price-locking arrangements to secure lower-cost supply. During the Track Record Period,
we did not experience any material breaches of agreements or disputes with suppliers nor did we
experience any material shortages or disruptions of supplies of raw materials.
Major Suppliers
Our suppliers primarily comprise raw material and component providers. Purchase from our
five largest suppliers in each year of 2023, 2024 and 2025 was RMB38.2 million, RMB96.8 million
and RMB44.5 million, respectively, accounting for 28.4%, 44.8% and 25.2% of our total purchases
for the same year, respectively. Purchase from our largest supplier in each year of 2023, 2024 and
2025 was RMB12.5 million, RMB52.1 million and RMB11.4 million, respectively, accounting for
9.3%, 24.1% and 6.5% of our total purchases in 2023, 2024 and 2025, respectively.
The following tables set forth details about our five largest suppliers in each year of 2023,
2024 and 2025:
Y ear ended December 31, 2023
Supplier Background
Products/Services
provided
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Purchase
amount
Percentage
of our total
purchases
(RMB in
thousands)
Supplier A /H1118/H1118A private company established in
Guangdong Province, China, primarily
engaging in the manufacturing and
distribution of precision tools and
equipment.
Tools and accessories 30 days
since
acceptance
2017 12,478 9.3%
Supplier C /H1118/H1118A European company, primarily engaging in
the development and production of
biomedical materials and solutions for
the healthcare industry.
Biomedical materials 30 days
since
acceptance
2017 10,364 7.7%
BUSINESS
– 137 –


--- page 147 ---
Supplier Background
Products/Services
provided
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Purchase
amount
Percentage
of our total
purchases
(RMB in
thousands)
Supplier E /H1118/H1118A private company established in Jiangsu
Province, China, primarily engaging in
the design, manufacturing and
distribution of medical devices and
equipment.
Medical device
components
30 days
since
invoicing
2019 5,790 4.3%
Supplier D /H1118/H1118A public company established in Beijing,
China, primarily engaging in the
research, production and sale of medical
devices and healthcare solutions.
Rental services for the
lands used for
production plant
and R&D center
Prepayment 2017 5,142 3.8%
Supplier F /H1118/H1118A private company established in
Guangdong Province, China, primarily
engaging in the manufacturing,
distribution and sale of medical devices
and related healthcare products.
Medical device
components
Prepayment 2021 4,395 3.3%
Total /H1118/H1118/H1118/H1118 38,169 28.4%
Y ear ended December 31, 2024
Supplier Background
Products/Services
provided
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Purchase
amount
Percentage
of our total
purchases
(RMB in
thousands)
Supplier G /H1118/H1118A private company established in Jiangsu
Province, China, primarily engaging in
the construction, engineering and project
management of infrastructure and
building projects.
Construction services Payment by
milestone
2024 52,147 24.1%
Supplier C /H1118/H1118A European company, primarily engaging in
the development and production of
biomedical materials and solutions for
the healthcare industry.
Biomedical materials 30 days
since
acceptance
2017 18,145 8.4%
Supplier A /H1118/H1118A private company established in
Guangdong Province, China, primarily
engaging in the manufacturing and
distribution of precision tools and
equipment.
Tools and accessories 30 days
since
acceptance
2017 15,358 7.1%
Supplier H /H1118/H1118A private company established in Singapore,
primarily engaging in the production and
distribution of biobased chemicals and
materials.
Biomedical materials Prepayment 2022 6,023 2.8%
Supplier I /H1118/H1118A private company established in Jiangsu
Province, China, primarily engaging in
the design, manufacturing and sale of
medical devices and equipment.
Tools and accessories 30 days
since
invoicing
2023 5,160 2.4%
Total /H1118/H1118/H1118/H1118 96,833 44.8%
BUSINESS
– 138 –


--- page 148 ---
Y ear ended December 31, 2025
Supplier Background
Products/Services
provided
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Purchase
amount
Percentage
of our total
purchases
(RMB in
thousands)
Supplier A /H1118/H1118A private company established in
Guangdong Province, China, primarily
engaging in the manufacturing and
distribution of precision tools and
equipment.
Tools and
accessories
30 days since
acceptance
2017 11,447 6.5%
Supplier C /H1118/H1118A European company primarily engaging in
the development and production of
biomedical materials and solutions for
the healthcare industry.
Biomedical
materials
30 days since
acceptance
2017 10,657 6.0%
Supplier I /H1118/H1118A private company established in Jiangsu
Province, China, primarily engaging in
the design, manufacturing and sale of
medical devices and equipment.
Tools and
accessories
30 days since
invoicing
2023 8,516 4.8%
Supplier J /H1118/H1118A private company established in Jiangsu
Province, China, primarily engaging in
the production and processing of special
stainless steel materials for industrial
applications.
Tools and
accessories
30 days since
invoicing
2019 7,264 4.1%
Supplier D /H1118/H1118A public company established in Beijing,
China, primarily engaging in the
research, production and sale of medical
devices and healthcare solutions.
Rental services Prepayment 2017 6,633 3.8%
Total /H1118/H1118/H1118/H1118 44,517 25.2%
As of the Latest Practicable Date, none of our Directors, their associates or any of our
shareholders (who owned or to the knowledge of Directors had owned more than 5% of our issued
share capital) had any interest in any of our five largest suppliers in each year during the Track
Record Period. None of our top five suppliers was our customer in each year during the Track
Record Period.
Warehousing and Logistics
During the Track Record Period and as of the Latest Practicable Date, we operated our own
warehouse to store raw materials, work-in-progress and finished products. During the Track Record
Period and as of the Latest Practicable Date, the majority of our product transportation was provided
by independent third-party logistics service providers. We had two, two and two logistics service
providers for the sales of our products, and two, two and two logistics service providers for
procurement of raw materials in 2023, 2024 and 2025, respectively. While our suppliers are
generally responsible for the logistics costs associated with delivering raw materials, we bear such
costs for raw materials procured from overseas suppliers in order to achieve cost efficiency. This
logistics arrangement is in line with the industry norm, according to CIC. In the meantime, we had
two logistics providers for procurement of raw materials in each period during the Track Record
Period. We typically enter into service agreements with logistics service providers with competent
qualification, service ability and competitive price.
BUSINESS
– 139 –


--- page 149 ---
The key terms of the agreements which we enter into with our logistics service providers are
set forth below:
 Duration. The agreements typically have a term of one year.
 Obligations. The logistics service providers agree to provide services in compliance with
the applicable storage requirements, and we guarantee that our products do not comprise
any prohibited items.
 Pricing. Pricing is determined based on the size and weight of the packages, as well as
the delivery destination.
 Payment . We typically make payments to the logistics service providers on a monthly
basis.
 Insurance . We may elect to purchase insurance for our products. The compensation
amount is based on the claimed value of the products.
During the Track Record Period, we did not have any disputes with the logistics service
providers.
Inventory Management
Our inventory primarily includes raw materials, work-in-progress, semi-finished goods,
finished goods, materials consigned for processing and goods in transit. We have implemented
rigorous measures to maintain adequate inventory levels while minimizing the risks of material
degradation. Our digital management system streamlines and optimizes procurement, inbound
logistics, storage and outbound distribution. To further enhance inventory accuracy and
accountability, we have established a comprehensive auditing framework that includes monthly,
quarterly and annual stocktaking plans carried out in strict accordance with established protocols.
This structured approach ensures high reconciliation rates between physical stock and system
records. During the Track Record Period, we did not encounter any significant inventory shortages.
In planning our production process and inventory levels, we take into account our historical
sales performance, anticipated market demand, production lead times and the characteristics of our
product portfolio, such as products’ shelf life or required storage condition. Our inventory
comprises a mix of products with and without defined shelf-life requirements. Our medical implants
typically have a shelf life of three to five years, depending on their input materials, while our other
products have no defined shelf life. For those products subject to shelf-life management, we
maintain batch traceability and apply first-expiry-first-out principle that accelerates the inventory
rotation based on the products’ remaining shelf life, supported by our system controls and periodic
reviews, to ensure product performance and sterility, and minimize obsolescence risk. As of
December 31, 2023, 2024 and 2025, our inventory balance was RMB39.3 million, RMB57.2 million
and RMB64.5 million, respectively, and our inventory turnover days were 204 days, 184 days and
226 days in 2023, 2024 and 2025, respectively. The increase in inventory turnover days in 2025 was
primarily attributable to the advance procurement of raw materials and the buildup of production
to support the anticipated increase in market demand. We regularly monitor inventory aging and
assess potential impairment based on historical turnover and expected usage, and did not record any
material inventory write-downs or losses due to expiration during the Track Record Period.
SALES AND MARKETING
We primarily sell our products to distributors specializing in selling medical devices, who in
turn sell our products to hospitals. During the Track Record Period, all of our revenue were
generated from the sales of our products to distributors. As of December 31, 2025, our domestic
distribution network included over 250 distributors across Chinese mainland.
BUSINESS
– 140 –


--- page 150 ---
We also conduct our overseas sales through a distributor model. We conduct rigorous due
diligence to ensure all overseas distributors possess appropriate qualifications, such as commercial
registration certificates and operate in compliance with applicable local laws and regulations,
including anti-bribery, anti-kickback and anti-corruption laws. We evaluate and select overseas
distributors based on their channel capabilities, financial strength, professional expertise and
reputation, as well as the depth and quality of their relationships with local hospitals and medical
institutions, after-sales service capacity, tendering and market-access experience, and documented
compliance systems. These compliance and performance obligations are also expressly set out in
our distribution agreements, and we may terminate distribution agreements if our overseas
distributors violate any of these obligations. Following onboarding, we monitor whether distributors
effectively promote our brands and products based on various factors, such as hospital coverage,
tender wins and complaint handling. We typically grant a credit term of 30 to 90 days to overseas
distributors. During the Track Record Period, we had 24, 49 and 66 distributors overseas in 2023,
2024 and 2025, respectively.
Distributorship is critical for our sales strategy since distributors’ expertise in selling medical
devices and their robust relationships with hospitals can facilitate the expansion of our market
coverage. We sold our products to over 3,000 hospitals across Chinese Mainland and to over 50
countries and regions in Europe, mainly including France, Poland and Spain, as well as Middle East
and Southeast Asia, as of the Latest Practicable Date. According to CIC, our sales and distribution
approach is in line with industry norms in the medical devices sales.
Terms and Conditions of Distributorship
We typically enter into standard distribution agreements, which are sales and purchase
agreements in nature. Under these agreements, we sell products to distributors and recognize
revenue when they accept products upon delivery.
The salient terms of our standard distribution agreements are set forth as below:
 Term. We typically enter into distributorship agreements with a one-year term for
domestic distributors and longer term for overseas distributors, renewable upon mutual
agreement.
 Selling Restriction . Each distributor is authorized to sell designated products to
specified hospitals within assigned territories. We strictly prohibit distributors from
selling unauthorized products or outside of their designated hospitals and assigned
territories.
 Sales Target . We generally establish monthly or quarterly sales targets, with the option
to terminate the distributorship agreement if a distributor consistently fails to meet these
targets over a specified period. We provided sales rebates to distributors that met their
sales targets, in the form of discounts which could be applied to the distributors’
purchases in the following year. We have ceased providing sales rebates since 2024.
 Payment . Our distributors are typically required to pay upon placing orders. According
to CIC, payment upon placing orders is in line with the industry practice.
 Product Return and Exchange Policy . Our distributors may return or exchange products
only with our prior approval. The aggregate amount of returns and exchanges under a
distribution contract shall not exceed the agreed return and exchange level, being the
ratio of the aggregate return and exchange amount to the total contract amount. During
the Track Record Period, the contractually agreed return and exchange level was
typically between 1.5% to 3.0%. We generally accept returns or exchanges of products
BUSINESS
– 141 –


--- page 151 ---
due to defects or where the aggregate amount of returns and exchanges does not exceed
the agreed level. Distributors must purchase exchange products in a contractually agreed
amount. According to CIC, our product return and exchange policy is in line with the
industry norm.
 Anti-Bribery and Anti-Kickbacks . We mandate strict compliance by distributors with all
applicable laws, regulations, and industry standards, reserving the right to terminate the
distributorship agreement in the event of violations.
 Termination. We may terminate the distributorship agreement if: (i) the distributor
appoints sub-distributors without our consent; (ii) the distributor faces liquidation or its
management and control changes materially; (iii) the distributor sells fraudulent or
expired products; or (iv) we are unable to supply our products due to the termination of
collaboration with our upstream suppliers.
Our distributors sell products to sub-distributors at prices specified in the price policy
provided by us, while determining the sales prices for our products within the sub-distributors’
respective territories based on local tender prices. Sub-distributors are required to adhere to the
pricing policy of our distributors and our pricing strategies within their authorized areas, and are
subject to supervision by us and our distributors. In the event that a sub-distributor engages in
pricing practices that disrupt the market prices of our products, we may require rectification,
terminate their distribution rights or terminate distributorship with the distributors who engage
them.
Distributor Management
We select distributors by assessing their qualifications of selling medical devices, market
expertise, distribution networks in healthcare and sports medicine device industry, track record of
sales performance and regulatory compliance. Our distributors also provide technical services such
as pre-surgical consultations, product transportation and equipment sterilization. Our sales and
marketing team verifies distributors’ credentials, approving only distributors who meet our
standards to expand into new markets or further penetrate our existing ones. Our sales and
marketing team conducts detailed background checks on each distributor and periodically performs
on-site visits to certain distributors to verify their licenses and permits. We provide training,
technical support, and conduct period assessment of their performance. We promptly terminate
distributorship agreements with any distributors that fail to renew their required licenses and
permits, thereby ensuring ongoing compliance with relevant laws and regulations. To the best of our
knowledge, as of the Latest Practicable Date, all of our distributors were Independent Third Parties.
During the Track Record Period, there was no employment, financing or family relationship
between our distributors and us or our subsidiaries, our shareholders, directors or senior
management, or any of their respective associates.
To prevent channel cannibalization and stuffing, we define exclusive geographical regions or
designated hospitals and product scopes in distribution agreements, ensuring organized market
coverage and minimizing overlap. We implement territorial restrictions that assign each distributor
sales rights within a specified area or hospital, as outlined in the agreement and authorization letter,
with strict prohibitions on sales beyond these boundaries; primary distributors oversee sub-
distributors to enforce compliance, typically limiting authorization to one distributor or sub-
distributor per hospital. We also enforce product scope limitations, specifying categories each
distributor may handle. Our sales and marketing teams conduct regular hospital visits to monitor
inventory levels, track product movements, assess performance, gather physician feedback, and
detect deviations from agreements, maintaining a disciplined and efficient distribution network.
Distributors procure our products based on the market demand. Under our standard
distribution contracts, distributors may return and exchange products in accordance with the
contractually agreed product return and exchange level. During the Track Record Period and up to
BUSINESS
– 142 –


--- page 152 ---
the Latest Practicable Date, we had not experienced any material product return from the
distributors caused by product defects. Distributors engage sub-distributors to leverage sub-
distributors’ local expertise, expanding their market reach in certain specialized regions and
broadening patient access to our products. During the Track Record Period, we had 342, 584 and
741 sub-distributors in 2023, 2024 and 2025, respectively. The substantial increase in the number
of sub-distributors during the Track Record Period was primarily attributable to the growing market
demand for our products, which led to an increase in the need for distributors to engage
sub-distributors to enhance market coverage and service quality in regions that did not implement
Two-Invoice System. During the Track Record Period and up to the Latest Practicable Date, to the
best knowledge of our Directors, all of our distributors and sub-distributors possessed the Medical
Device Operation Permits and Record-Filings. We do not have contractual relationships with
sub-distributors engaged by our distributors, while distributors may not appoint sub-distributors
without our consent. We may terminate distributorship if our distributors appoint sub-distributors
without our prior consent. We rely on our distributors to supervise their respective sub-distributors
and to ensure these sub-distributors possess all required licenses and certifications for distributing
medical devices. For risks in relation to our distributorship and subdistributors, see “Risk Factors
— Risks Relating to Our Business and Operations — Ineffectiveness of distributorship may
materially and adversely affect our sales performance”. Specifically, we may impose penalties on
distributors for violations by their sub-distributors and regularly monitor our product movements to
ensure that sub-distributors comply with the internal distribution arrangements. During the Track
Record Period and up to the Latest Practicable Date, none of our distributors and their
sub-distributors sold our products outside of our authorized scope.
Distributor Movements
During the Track Record Period, we optimized the distribution network to align seamlessly
with our business development. The table below sets forth the total number of domestic distributors
and their movements for the periods indicated:
For the Y ear ended December 31,
2023 2024 2025
Number of distributors as of the
beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181 183 228
Addition of new distributors (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870 119 72
Terminated distributors (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 74 28
Inactive distributors (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186–3
Number of distributors at the end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118183 228 269
Notes:
(1) New distributors refer to distributors who did not enter into the distributorship agreement nor had any
transactions with us in the preceding financial year, but enter into the distributorship agreement with us and
began transactions with us during this period.
(2) Terminated distributors refer to distributors who entered into the distributorship agreement and had
transactions with us in the immediately preceding financial year but did not enter into the distributorship
agreement nor had any transactions with us in this period;
(3) Inactive distributors refer to distributors who entered into the distributorship agreement and had transactions
with us in the immediately preceding financial year, but did not have any transactions with us in this period,
despite our contractual relationship with them during this period.
BUSINESS
– 143 –


--- page 153 ---
The table below sets forth the total number of overseas distributors and their movement during
the Track Record Period:
For the Y ear ended December 31,
2023 2024 2025
Number of distributors as of the
beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882 44 9
Addition of new distributors (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 34 29
Terminated distributors (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124
Inactive distributors (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278
Number of distributors at the end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 49 66
Notes:
(1) New distributors refer to distributors who did not enter into the distributorship agreement nor had any
transactions with us in the preceding financial year, but enter into the distributorship agreement with us and
began transactions with us during this period.
(2) Terminated distributors refer to distributors who entered into the distributorship agreement and had
transactions with us in the immediately preceding financial year but did not enter into the distributorship
agreement nor had any transactions with us in this period;
(3) Inactive distributors refer to distributors who entered into the distributorship agreement and had transactions
with us in the immediately preceding financial year, but did not have any transactions with us in this period,
despite our contractual relationship with them during this period.
During the Track Record Period, we terminated 171 distributors in total, primarily due to
contract expiration, their failure to meet sales target or their changes of business.
During the Track Record Period and up to the Latest Practicable Date, we had no material
unresolved disputes or lawsuits with terminated distributors. During the Track Record Period and
up to the Latest Practicable Date, we were not aware of any potential abuse or improper use of our
name by distributors which could adversely affect our reputation, business operation or financial
condition.
Two-Invoice System
We manage our distributorship under China’s Two-Invoice System, which was introduced in
2016. The policy limits transactions to two invoices, one from the manufacturer to the distributor
and another from the distributor to healthcare facilities, thereby reducing intermediary layers. It
applies to high-value medical consumables sold to public medical institutions. See “Regulatory
Overview — Two-Invoice System” for more details. During the Track Record Period, our sales of
implants and medical consumables for active equipment in Fujian Province were subject to the
Two-Invoice System and were fully compliant with all applicable requirements under the
Two-Invoice System.
The Two-Invoice System is mandated in select provinces and municipalities for public
medical institutions since 2018, with private institutions encouraged to adopt it. In these regions
mandating the Two-Invoice System, we engage distributors to sell our products directly to hospitals
and require them to refrain from engaging any sub-distributors without our consent. Our distributors
focus on channel development and customer maintenance with our support, while we engage
third-party technical service providers for technical support and surgical follow-ups, such as
surgical support and cleaning. To ensure ongoing compliance with the Two-Invoice System, we
have implemented comprehensive internal control measures, including but not limited to: (i)
conducting background checks and qualification reviews to verify that our distributors hold valid
licenses and certifications; (ii) specifying geographical markets for distribution in our agreements
BUSINESS
– 144 –


--- page 154 ---
with distributors and requiring their compliance with applicable laws and regulations relating to
medical device distribution, such as the Two-Invoice System requirements, together with provisions
for terminating such cooperation in the event of any violations, including unauthorized engagement
of sub-distributors in regions implementing the Two-Invoice System; (iii) scrutinizing transaction
invoices, including cross-verification of first-tier and second-tier invoices to confirm direct
compliance with the one-distributor-to-one-invoice requirement and to detect any irregularities in
the distribution chain; and (iv) requiring distributors to provide records of the final sales
destinations. In addition, in Fujian Province, all distributors are required to upload both the first
invoice and the second invoice to the local medical insurance system. Settlement is then processed
directly by the local medical insurance bureau to the distributors. This regulatory mechanism
effectively eliminates any possibility of distributors violating the Two-Invoice System in such
regions. These multilayered controls, reinforced by the statutory prohibitions and system-enforced
safeguards under the Two-Invoice System, ensure strict regulatory adherence.
To facilitate our service quality while ensuring our compliance with the Two-Invoice System,
we engage third-party technical service providers for technical support and surgical follow-ups for
the use of our products. Following the implementation of the Two-Invoice System, the traditional
multi-tiered distribution model is restricted, and our distributors are generally precluded from
providing extensive value-added services alongside product distribution. Our engagement of
third-party technical service providers bifurcates the operational workflows under our
distributorship. Specifically, we rely on distributors to manage product sales, while designating
third-party service providers to manage logistics and deliver value-added services, such as
intra-operative technical guidance and post-operative follow-ups under separate commercial
arrangements. According to CIC, this arrangement is in line with the industry norm.
Salient terms of our agreement with these technical service providers are set forth as below:
 Duration . We typically enter into a one-off service agreement.
 Service Scope . Our technical service providers agree to provide: (i) surgical follow-ups
to ensure the effectiveness and safety of surgeries using our products; (ii) delivery,
storage, packaging and sterilization of our products; (iii) training for technical
professionals and provision of auxiliary surgical equipment and instruments; and (iv)
evaluation and monitoring of the surgical process.
 Fees . Fees are negotiated on a case-by-case basis based on the types of services.
 Anti-Corruption, Anti-Kickback and Anti-Bribery . We require our technical service
providers to comply with all applicable anti-corruption, anti-kickback and anti-bribery
laws, and we may terminate the agreement upon discovery of any violations.
During the Track Record Period and up to the Latest Practicable Date, as advised by our PRC
Legal Advisor, our distributorship complied with the Two-Invoice System in applicable regions in
all material aspects.
Pricing
Our pricing reflects production costs, market potential, clinical value, and research and
development expenses. Regulatory and policy frameworks also play a critical role in shaping our
pricing strategy, including the volume-based procurement program, Medical Insurance
Reimbursement Lists, and DRG system.
BUSINESS
– 145 –


--- page 155 ---
V olume-based Procurement Program
The nationwide volume-based procurement program, overseen by the National Healthcare
Security Administration, is a centralized procurement program of high-value medical consumables
through competitive bidding. For medical devices, such as medical implants, surgical equipment
and associated medical consumables, this program mandates public medical institutions to conduct
rigorous evaluation of price, quality, clinical efficacy, and reputation of providers. Bidding often
requires significant price reductions to meet hospital budgets. As a result, we need to lower prices
for our products to win bids, which has driven substantial sales volume growth and market
penetration.
Since its implementation in 2024, all provinces in Chinese Mainland had included medical
implants in their volume-based procurement programs, without a specified valid period. As of
December 31, 2025, 14 out of 19 of our medical implant products had been included in these
programs. As a result, the average selling price of our medical implants decreased from RMB711.9
per unit in 2023 to RMB446.3 per unit in 2024 and further decreased to RMB436.9 per unit in 2025.
Such decline in average selling price attributable to the volume-based procurement programs has
encouraged mass adoption of our medical implants, leading to an increase in sales volume from 262
thousand units in 2023 to 560.1 thousand units in 2024 and further increased to 710.4 thousand units
in 2025. The change in approach for the 2025 volume-based procurement program, which allows
multiple products of the same kind to be included, is not expected to have any additional material
impact on our average selling price or sales volume. This is because all industry players are
expected to lower their selling prices to align with the price ceiling set by such programs, and we
believe we are well-positioned to stand out in the competition due to our diverse product portfolio,
long-standing market recognition and ability to manage costs effectively to maintain sufficient
profitability even after adjusting the prices of our medical implants. Our Directors are of the view
that the impact of the volume-based procurement programs on our product pricing will be mitigated
going forward, as we have already made adjustments in 2024 and improved our cost management,
as evidenced by our relatively stable pricing in 2024 and 2025.
Medical Insurance Reimbursement Lists
The Medical Insurance Reimbursement Lists are administered primarily at the provincial level
in China, under which medical devices and related medical consumables included in provincial
catalogs are eligible for reimbursement under public medical insurance schemes. Each province has
implemented provincial price catalogs under the Medical Insurance Reimbursement Lists, with
different levels of coverage and scope, with some devices being fully reimbursable and others being
partially reimbursable.
All of our products have been included in the Medical Insurance Reimbursement Lists. For
sports medicine products, the inclusion in the Medical Insurance Reimbursement Lists enhances
patient access by reducing the patients’ out-of-pocket expenses for these products. During the Track
Record Period, the overall pricing of our products was not materially affected by the Medical
Insurance Reimbursement List. The inclusion of our products in the Medical Insurance
Reimbursement Lists is not expected to directly affect the prices or sales volume of our products
as the provincial catalogs affect only the out-of-pocket expenditures of patients, thereby indirectly
influencing the patients’ product selection decisions. Furthermore, all of our medical implants and
surgical equipment have been included in provincial catalogs and are eligible for partial or full
reimbursement upon their introduction to the market, ensuring reimbursement coverage. Our
Directors are of the view that the Medical Insurance Reimbursement List is not expected to have
any direct impacts on the selling price of our products going forward, as such program reimburses
patients’ out-of-pocket expenditure for our products in full or in partial. The level of reimbursement
may affect the sales volume of our products as it may affect patients’ willingness to pay for our
products. The current reimbursement level is expected to encourage the adoption of our products,
thereby driving increase in sales volume.
BUSINESS
– 146 –


--- page 156 ---
DRG System
The DRG system, implemented nationwide, is a medical reimbursement mechanism that
standardizes hospital payments based on patient treatments by assigning fixed reimbursement
amounts to specific diagnosis categories, including particular types of surgical procedures. Under
the DRG system, reimbursements are made to hospitals on a per-case basis and bundle the overall
costs of treatment, including diagnostics, medical devices, consumables and post-operative care,
into a predetermined reimbursement amount per case. In the context of sports medicine, surgeries
using high value medical devices such as arthroscopic systems are covered by DRG. For sports
medicine products, DRG policies cap the reimbursement amounts payable for certain procedures,
such as meniscus repair.
The DRG system does not have any direct impact on the pricing or sales volumes of our
products because it does not prescribe, regulate or directly alter the prices of individual medical
devices or consumables. Instead, it standardizes the reimbursement amount payable to hospitals for
a specified category of treatment. In practice, hospitals may consider DRG reimbursement levels
when managing the overall costs of these procedures. In developing our pricing policies, we take
into account such reimbursable amount under the DRG system. During the Track Record Period, the
overall pricing for our products was not materially affected by the DRG system. All of our products
have been incorporated into the DRG framework since its first implementation in 2019 and
subsequently upon commercialization of new products. Our Directors are of the view that the DRG
program is not expected to have direct impacts on the prices of our products or sales volume going
forward, as (i) this program affects only patients’ out-of-pocket expenditure of the specified
surgical procedure, rather than the products used in the procedure; and (ii) we have already taken
into account the reimbursable amount payable to hospitals under the DRG system as an indirect
factor when our products were incorporated into the DRG system in 2019.
Overall, our pricing may be affected, to varying degrees, by regulations and policies such as
volume-based procurement program, Medical Insurance Reimbursement Lists and DRG system.
While volume-based procurement program has a relatively direct impact on our pricing, the impact
of Medical Insurance Reimbursement List and DRG system are indirect. Going forward, we will
continue to monitor policy developments and make appropriate pricing and cost-management
adjustments, with a view to maintaining competitiveness, supporting sales volume growth and
preserving profitability.
Major Customers
Our customers primarily comprise distributors who in turn sell our products to hospitals.
Revenue generated from our five largest customers in each year of 2023, 2024 and 2025 was
RMB126.8 million, RMB188.7 million and RMB232.2 million, respectively, accounting for 53.1%,
57.7% and 57.7% of the total revenue in 2023, 2024 and 2025, respectively. Revenue generated
from our largest customer in each year of 2023, 2024 and 2025 was RMB42.0 million, RMB56.9
million and RMB83.7 million, respectively, accounting for 17.6%, 17.4% and 20.8% of our revenue
in 2023, 2024 and 2025, respectively.
Under our sales agreements, customers typically make payments upon placing orders for our
products, with the payment amount determined by the volume of products they procure. We may
grant credit terms of 30 to 90 days to distributors overseas or as required by applicable regulations.
BUSINESS
– 147 –


--- page 157 ---
The following tables set forth details about our five largest customers in each year of 2023,
2024 and 2025:
Y ear ended December 31, 2023
Customer Background Products purchased
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Sales
amount
Percentage
of our total
revenue
(RMB in
thousands)
Customer F /H1118A private company established in
Guangdong, China, primarily
engaging in the manufacture and
sales of medical equipment and
devices.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2023 42,009 17.6%
Customer E /H1118A private company established in
Shanghai, China, primarily
engaging in supply chain and
logistics management for the
healthcare and medical device
industries.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2022 34,870 14.6%
Customer G /H1118A private company established in
Beijing, China, primarily
engaging in the development,
production and distribution of
medical devices.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2023 19,582 8.2%
Customer C /H1118A private company established in
Shandong, China, primarily
engaging in the manufacture and
distribution of orthopedic
medical devices and related
services.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2021 16,250 6.8%
Customer D /H1118A private company established in
Fujian, China, primarily
engaging in the distribution and
sales of medical devices and
equipment.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2021 14,103 5.9%
Total /H1118/H1118/H1118/H1118 126,814 53.1%
BUSINESS
– 148 –


--- page 158 ---
Y ear Ended December 31, 2024
Customer Background Products purchased
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Sales
amount
Percentage
of our total
revenue
(RMB in
thousands)
Customer F /H1118A private company established in
Guangdong, China, primarily
engaging in the manufacture and
sales of medical equipment and
devices.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2023 56,883 17.4%
Customer E /H1118A private company established in
Shanghai, China, primarily
engaging in supply chain and
logistics management for the
healthcare and medical device
industries.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2022 49,202 15.0%
Customer I /H1118A private company established in
Jiangxi, China, primarily
engaging in the manufacture and
distribution of pharmaceutical
products and related healthcare
services.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2024 28,812 8.8%
Customer J /H1118A private company established in
Shanghai, China, primarily
engaging in the development,
production and sales of
advanced medical devices and
equipment.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2024 28,627 8.8%
Customer C /H1118A private company established in
Shandong, China, primarily
engaging in the manufacture and
distribution of orthopedic
medical devices and related
services.
Surgical instruments,
medical implants,
active equipment and
associated medical
consumables
Prepayment 2021 25,174 7.7%
Total /H1118/H1118/H1118/H1118 188,698 57.7%
BUSINESS
– 149 –


--- page 159 ---
Y ear ended December 31, 2025
Customer Background Products purchased
Payment Method/
Credit Terms
Y ear of
commencement
of business
relationship
Sales
amount
Percentage
of our total
revenue
(RMB in
thousands)
Customer K /H1118A private company established in
Guangdong, China, primarily
engaging in the import, export
and distribution of medical
devices and healthcare products.
Surgical instruments,
medical implants,
active equipment and
associated
consumables
Prepayment 2025 83,725 20.8%
Customer N /H1118A private company established in
Shanghai, China, principally
engaged in technology
promotion and application
services, as well as sales of
medical devices.
Surgical instruments,
medical implants,
active equipment and
associated
consumables
Prepayment 2025 51,861 12.9%
Customer M /H1118A private company established in
Shanghai, China, primarily
engaging in the sales of medical
devices and equipment.
Surgical instruments,
medical implants,
active equipment and
associated
consumables
Prepayment 2025 51,124 12.7%
Customer I /H1118A private company established in
Jiangxi, China, primarily
engaging in the manufacture and
distribution of pharmaceutical
products and related healthcare
services.
Surgical instruments,
medical implants,
active equipment and
associated
consumables
Prepayment 2024 23,768 5.9%
Customer O /H1118A private French company
headquartered in the Toulouse
area, France, principally
engaged in the manufacturing of
visualization systems for
arthroscopy and laparoscopy
procedures, together with related
sports medicine implants.
Surgical instruments,
medical implants,
active equipment and
associated
consumables
90 days since
delivery
2022 21,677 5.4%
Total /H1118/H1118/H1118/H1118 232,155 57.7%
As of the Latest Practicable Date, none of our Directors, their associates or any of our
shareholders (who owned or to the knowledge of Directors had owned more than 5% of our issued
share capital) had any interest in any of our five largest customers in each year during the Track
Record Period. None of our top five customers was a supplier in each year during the Track Record
Period.
SEASONALITY
Our sales volume is typically higher in the second half of the year. This seasonality is driven
primarily by increased surgical demand during holiday seasons and a higher incidence of winter
sports related injuries in the second half of the year, which elevate procedure volumes and sports
medicine product usage. According to CIC, this seasonality is common across the sports medicine
device industry, with medical device manufacturers similarly experiencing stronger procurement
demand and sales in the second half of the year.
BUSINESS
– 150 –


--- page 160 ---
QUALITY CONTROL
We have established a complete quality management system in accordance with ISO 13485,
the EU Medical Device Regulation (MDR), the Medical Device Single Audit Program (MDSAP)
and Good Manufacturing Practice (GMP) requirements to ensure that production activities are
effectively executed and standardized. We have adopted a set of structured internal control
procedures, such as document and record management, organizational responsibilities, production
and environmental controls, product traceability, nonconformance handling, and corrective and
preventive actions. We have implemented oversight mechanisms covering design and development,
supplier management, customer feedback, risk management, post-market supervision and
regulatory reporting. We also regularly conduct internal audits and management reviews to assess
operation of the system performance and promote continuous improvement. These measures
collectively ensure that our quality management system remains adequate, complete, applicable,
and responsive and complies with applicable regulatory requirements applicable in different regions
where we operate. We have been awarded CNAS laboratory accreditation, confirming that our
production systems meet internationally recognized standards.
During the production process, our production operators strictly adhere to the established
workflows and internal policies. Inspection and testing are conducted by our production and quality
control personnel in accordance with strict quality control requirements. Any non-conformities
identified during production or inspection are promptly addressed. Our technical team conducts root
cause analysis to identify potential issues and implements continuous improvement measures to
gradually enhance product quality. During the Track Record Period, we did not experience any
product-related claims, accidents or recalls. For any risks relating to such claims, accidents or
recalls, see “Risk Factors — Risks Relating to Our Business and Operations — We may be subject
to product liability claims.”
Upon receipt of a complaint, our sales or customer service personnel promptly record detailed
information, and forward such information to the quality control department. The quality team
identifies the root cause and formulates corrective and preventive measures. We subsequently
communicate the resolution to the customer and monitor the effectiveness of the measures. During
the Track Record Period, we had not encountered any customer complaints that would have a
material adverse effect on our business operations or financial performance.
THIRD-PARTY PAYMENT ARRANGEMENT
Background
During the Track Record Period, certain of our overseas customers (the “ Relevant
Customer(s) ”) settled their payments with us through third-party payors (the “ Third-Party
Payor(s) ,” and such arrangement(s), the “ Third-Party Payment Arrangement(s) ”). The number of
Relevant Customers was one, five and three, in 2023, 2024 and 2025, respectively, and the number
of Third-Party Payors was one, four and three for the same periods. The aggregate amount of
third-party payments (the “ Third-Party Payments ”) we received was RMB0.4 million, RMB0.8
million and RMB0.7 million in 2023, 2024 and 2025, respectively, which accounted for 0.2%, 0.3%
and 0.2% of our total revenue for the relevant periods. The total revenue attributable to the
Third-Party Payments was the same as the above aggregate Third-Party Payments amount for the
corresponding year, respectively, and such revenue constituted an immaterial proportion of our total
revenue for each year during the Track Record Period. No individual Relevant Customer made
material contribution to our revenue during the Track Record Period. To the best knowledge of our
Directors, none of the Relevant Customers or their respective Third-Party Payors had any other past
or present relationship (whether business, employment, family, trust, fund flow, financing or
otherwise) with us, our subsidiaries, shareholders, directors or senior management, or any of their
respective associates. While we did not obtain any confirmation from the Relevant Customers and
the Third-Party Payors that we would not be obliged to return the payments, we received the
confirmation of the payment and the authorizations from the Relevant Customers for such payment
arrangement. During the Track Record Period and up to the Latest Practicable Date, we had not
received any claims from the Third-Party Payors or their liquidators.
BUSINESS
– 151 –


--- page 161 ---
During the Track Record Period and up to the Latest Practicable Date, we had not proactively
initiated any Third-Party Payment Arrangements, nor had we participated in any other forms of such
arrangements. In addition, we had not provided any discount, commission, rebate, or other benefits
to any of the Relevant Customers or the Third-Party Payors to facilitate or encourage the
Third-Party Payment Arrangements. The payment, the pricing terms and other general commercial
terms of the Relevant Customers are generally the same as our other overseas customers. As advised
by our PRC Legal Advisor, our Third-Party Payment Arrangements do not constitute circumvention
of laws and regulations in China, primarily based on the grounds: (i) these arrangements are
initiated by the relevant Third-party Payment Customers for the purpose of genuine business
transactions; and (ii) we have never proposed or initiated any Third-Party Payment Arrangements
for the purpose of circumventing relevant laws and regulations. During the Track Record Period and
up to the Latest Practicable Date, as confirmed by the Directors, (i) we had not encountered any
disputes with, nor received any refund request from, any Relevant Customer or Third-Party Payor,
and (ii) we had not been subject to any disputes or administrative penalties by the relevant
government authorities with respect to the Third-party Payment Arrangements.
As advised by our PRC Legal Advisor, the risk that the Third-Party Payment Arrangements
being recognized as acts of covering up or concealing the proceeds of any offence, as well as the
source and nature of such incomes generated from therefrom under Article 191 of the Criminal Law
of PRC and being categorized as conducts constituting the Crime of Money Laundering,
subsequently facing associated criminal penalties, is relatively low, and the risk that the possible
claims from Third-Party Payors for the return of funds is relatively low based on the following
grounds: (i) all the Third-Party Payments were related to genuine transactions and were made by
bank transfers; (ii) the amount of Third-Party Payments received by us from Third-Party Payors
corresponded with the transaction amount; (iii) all relevant transactions involving Third-Party
Payments were completed with the agreed-upon amount specified in respective agreements; (iv)
even if we are required to refund the payable amounts, we can pursue recourse against the Relevant
Customers for the payable amounts pursuant to the agreements executed with such customers; (v)
we have not encountered any incidents demanding us to return payment in relation to relevant
transactions; and (vi) nothing came to our attention that would cause our Directors to doubt the
genuineness of relevant transactions or the good faith of relevant parties involved. Based on the
foregoing, our Directors believe that the risk of possible claims from Third Party Payors for the
return of funds is low.
Reasons for Utilizing Third-Party Payment Arrangements
According to CIC, it is a relatively common practice in the medical device industry for PRC
medical device providers to settle payments from overseas customers from Third-Party Payors. This
practice is common for, amongst others, the following reasons: (i) these transactions are commonly
denominated in U.S. dollars, which may pose difficulties to customers located in countries with
strict foreign exchange regulations or customers who may not have free and unrestricted access to
U.S. dollars; and (ii) some customers may arrange their related parties or third parties to settle their
payments for their internal operational and financial management practice and/or for their own
convenience. During the Track Record Period, our Relevant Customers utilized Third-Party
Payment Arrangements mainly because (i) some Relevant Customers located in countries with strict
foreign exchange regulations and restrictions may face difficulties remitting payments abroad;
therefore they may arrange Third Party Payments to be made by Third-Party Payors to settle the
payments with us; and (ii) some Relevant Customers may arrange their related parties or third
parties for their own funding arrangements and/or for convenience, which is commercially
justifiable. During the Track Record Period, Third-Party Payors were mainly the authorized
payment agencies or connected parties of Relevant Customers located in countries with strict
foreign exchange regulations and restrictions. Third-Party Payments attributable to them were
RMB0.4 million, RMB0.8 million and RMB0.7 million in 2023, 2024 and 2025, respectively.
BUSINESS
– 152 –


--- page 162 ---
Internal Control Measures for Third-Party Payment Arrangements
We have updated our internal policies which strictly prohibit Third-Party Payment
Arrangements. Upon receipt of funds, we verify that the payer’s identity matches that of the
contractual counterparty; if there is any discrepancy, the payment will be rejected and refunded. In
addition, we have informed our employees about the risks of third-party payment arrangements and
our strengthened internal control measures, requiring all our employees to reject or return any
payments made in such arrangements that do not comply with the aforementioned procedures.
Cessation of Third-Party Payment Arrangements
We have ceased all Third-Party Payment Arrangement in August 2025, and we do not expect
to have such Third-Party Payment Arrangements going forward. Considering that our revenue
generated from Third-Party Payment Arrangements as a percentage of our total revenue was
immaterial, our Directors confirm that the Third-Party Payment Arrangements would not have any
material adverse impact on our business, financial conditions or results of operations.
COMPETITION
We compete in China’s sports medicine device market. According to CIC, China’s sports
medicine device market is highly concentrated, and currently dominated by international players.
In 2024, the five largest sports medicine implants and instruments providers in China accounted for
approximately 59.3% of the market share in terms of sales revenue, with four of them being
international players. We ranked fourth in China’s sports medicine implants and instruments market
among all brands, representing a market share of approximately 6.5% in China’s sports medicine
implants and instruments market, and first among all domestic brands, in terms of sales revenue in
2024. According to CIC, the markets for sports medical implants and sports medicine surgical
equipment and associated medical consumables are both highly concentrated, with the top five
players in sports medical implant market accounting for approximately 73.0% and top ten players
in sports medicine surgical equipment and associated medical consumable market accounting for
approximately 79.5% of the market share by sales revenue in 2024. In China’s sports medical
implants market, we ranked first among domestic brands and fourth among all brands in 2024 by
sales revenue, with a market share of approximately 8.8%. In China’s surgical equipment and
associated medical consumables market, we ranked first among domestic brands and sixth among
all brands in 2024 by sales revenue, with a market share of approximately 3.2%. Our strong market
position reflects our ability to consistently deliver sports medicine solutions that meet the needs of
the Chinese healthcare system. However, the industry in which we operate is highly competitive.
We face competition from both domestic medical device manufacturers who are rapidly developing
and international competitors who have long operating histories, greater financial resources or more
established brand recognition. See “Risk Factors — Risks Relating to Our Business and Operations
— The market size of sports medicine device industry in China may not be as large as expected,
and we face intensified competition from international competitors.”
INTELLECTUAL PROPERTY
Intellectual property rights are important to our business. As of December 31, 2025, we had
51 trademarks, 10 copyrights, two material domain names and 178 registered patents, including 64
invention patents, 86 utility model patents and 26 design patents in China, as well as two invention
patents overseas. During the Track Record Period, we co-owned one patent with a hospital. As of
December 31, 2025, this patent had not been commercialized, and we had not entered into any
profit-sharing arrangement with the hospital. As such, our Directors are of the view that the
co-owned patent in question would not have any material impact on our business operations.
BUSINESS
– 153 –


--- page 163 ---
We seek to protect our proprietary technology and processes by (i) entering into
confidentiality agreements or terms with our key R&D members and other employees who may
have access to such information; (ii) provide training to our employees; and (iii) maintaining
physical security of our premises and physical electronic security of our IT system.
We are currently involved in three patent infringement lawsuits filed by a competitor in the
sports medicine field (the “ Plaintiff ”), before the Beijing Intellectual Property Court on September
4, 2025.
Two of the lawsuits relate to our meniscus repair system. The Plaintiff alleges the
infringement of two separate PRC invention patents, namely ZL201410000387.0 entitled “Tissue
Repair Device” and ZL201410000386.6 entitled “Tissue Repair Device”. In each of these two
lawsuits, the Plaintiff seeks economic damages of RMB9.7 million plus reasonable legal expenses
of RMB0.3 million (totaling RMB10.0 million per case) and an injunction requiring us to cease
manufacturing and selling the allegedly infringing meniscus repair system until technical
adjustments are made to avoid infringement. Another lawsuit relates to our all-suture anchor
product and alleges infringement of PRC invention patent ZL201280006593.1 entitled “Tissue
Repair”. In this lawsuit, the Plaintiff seeks economic damages of RMB0.5 million and a similar
injunction requiring us to cease manufacturing and selling the allegedly infringing all-suture anchor
product until technical adjustments are made. In addition, none of such patents constitutes a core
technology of our products or is otherwise critical to our overall product portfolio.
On September 29, 2025, we filed our statements of defense, applications for suspension of
proceedings and other procedural documents in each case. Concurrently, on September 25, 2025, we
filed requests with the China National Intellectual Property Administration (the “ CNIPA”) for
invalidation of all three patents in their entirety on multiple grounds, including lack of novelty, lack
of inventive step, insufficient disclosure, unclear claims and amendments exceeding the original
scope, supported by substantive evidence. The requests for invalidation have been accepted by the
CNIPA. The Beijing Intellectual Property Court is reviewing our applications to suspend the
infringement proceedings pending the outcome of the CNIPA invalidation decisions. All three
lawsuits are awaiting scheduling of hearings.
Based on detailed technical comparisons conducted by our IP litigation counsel, our products
do not fall within the protection scope of the asserted patent claims, as key technical features of our
meniscus repair system and all-suture anchor product materially differ from the claimed features.
Our IP litigation counsel has further advised that, based on the evidence prepared and submitted,
there is a high likelihood that one or more of the asserted patents will be partially or wholly
invalidated, as our invalidation requests are supported by grounds including, among others, lack of
novelty and/or inventiveness, insufficient disclosure and/or lack of support and/or lack of clarity of
the claims, amendments exceeding the original scope, and, for certain asserted claims, the absence
of necessary technical features. Accordingly, our IP litigation counsel is of the view that the
likelihood of us being found liable in these proceedings is remote, and these proceedings are not
expected to have any material adverse effect on our business operations or financial performance.
See “Risk Factors — Risks Relating to Our Business and Operations — We may not be able to
protect our intellectual property rights or may be subject to infringement claims of third parties’
intellectual property rights.”
Even in the unlikely event of adverse rulings, the maximum financial exposure is estimated
at approximately RMB4.6 million in aggregate across the three lawsuits, as the court is unlikely to
grant full economic damages sought by the Plaintiff, based on low profits, minimal patent
contribution and duplicative claims by the Plaintiff. Furthermore, we would be able to continue
manufacturing the disputed products as we have completed the technical adjustment and launched
upgraded products as part of our ongoing R&D strategy and routine product iteration in March,
2025, thereby avoiding any disruption to our operations. None of our other products incorporate the
disputed patents. Based on the advice from our IP litigation counsel, we believe that we have a valid
defense against the allegation and, accordingly, we have not provided for any claims arising from
these litigations, other than the related expenses.
BUSINESS
– 154 –


--- page 164 ---
INFORMATION TECHNOLOGY
Our key information technology systems include: ERP system to centralize business
operations, integrating financial auditing and supply chain management to ensure accurate financial
reporting and streamline workflows; CRM system to streamline the entire sales process, including
customer management, opportunity tracking, contract and order administration, invoicing and
payment collection; and OA system to streamline administrative processes and enhance workplace
efficiency. During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any information technology system failure or downtime that had a material adverse
effect on our business operations.
DATA PRIV ACY AND PROTECTION
We collect certain demographic and transactional information from patients through
collaborative hospitals during clinical trials. However, we do not store any personal data for our
clinical trials or training for our surgery, prescription and rehabilitation systems. The data we
collected through clinical trials was limited to what was necessary for conducting clinical trials of
the relevant products, including patient-related biochemical tests, MRI scans, surgical use of the
trial product, as well as postoperative recovery and follow-up examinations with Ethics Committee
approvals. Through collaborative hospitals, we have also obtained consent from the patients on the
collection of data and informed consent by the patients prior to the data collection. The data we
utilized to train our systems are de-identified data from third-party sources. As our transactions are
exclusively with enterprise customers, which only involve general corporate information or
transactional data, our activities do not involve the collection or processing of personal data. In
addition, we were not involved in any cross-border data transfer during the Track Record Period and
up to the Latest Practicable Date, and we are not an operator of a network platform or an operator
of a critical information infrastructure under the Cybersecurity Review Measures. We have
established data protection policies that address all aspects of data management, including access
control, data sharing, backup and disaster recovery, safeguarding company assets and preventing
unauthorized access or disclosure. A centralized data management framework has been established
to enforce these measures, supported by training programs designed to enhance employee awareness
of data security and ensure strict compliance with privacy regulations in daily operations. As
advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable
Date, we had complied with the laws and regulations related to data security and privacy in all
material aspects, and we did not experience any material data leakage, data breach or data loss
during the Track Record Period and up to the Latest Practicable Date. Our Directors has confirmed
that our internal control measures regarding data security and data privacy are adequate.
Under our policies, all company data, including sensitive operational and production
information, is classified as proprietary and subject to strict protection. Employees are explicitly
prohibited from sharing or disclosing such information without proper authorization. Access to
databases is restricted to authorized personnel, with user permissions and activities carefully
monitored to maintain accountability. Daily data backups are conducted, with off-site storage
ensuring data availability and business continuity in the event of a breach or other disaster.
Additionally, we have implemented rigorous password protocols, system vulnerability assessments
and intrusion detection measures to safeguard data integrity and prevent unauthorized access.
During the Track Record Period and up to the Latest Practicable Date, we had not experienced any
material violation of any mandatory requirements under applicable laws and regulations in respect
of the collection, storage, use and protection of personal data.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Overview
We are committed to Environmental, Social, and Governance (“ ESG”) principles. We will
establish an ESG policy, which will outline, among others, (i) appropriate risk governance on ESG
matters, (ii) ESG strategy formation procedures, (iii) ESG risk management and monitoring, (iv) the
identification of key performance indicators (“ KPI”) and (v) the relevant measurements and
mitigating measures.
BUSINESS
– 155 –


--- page 165 ---
We have formed an ESG working group to (i) assist our Board in implementing the ESG
Policy, targets, and strategies; (ii) perform materiality assessments of ESG-related risks; (iii) collect
ESG data from various parties for ESG reporting; and (iv) monitor the implementation of measures
to mitigate our Group’s ESG-related risks. The ESG working group will report annually to our
Board. We are committed to enhancing the professional capabilities of our ESG working group
members in ESG-related matters. Our members already possess substantial knowledge reserves and
work experience in areas such as human resource management and corporate governance.
During the Track Record Period and up to the Latest Practicable Date, we have not faced any
material claims, penalties, or accidents related to health, work safety, social, or environmental
protection, and as advised by our PRC Legal Advisor, we have complied with relevant PRC laws
and regulations about health, work safety, social, or environmental protection in all material
respects.
Materiality Assessment
We undertake ESG materiality assessments to identify issues with potentially significant
impact on our business. For each material topic, we evaluate risks, opportunities, and impacts,
assess their significance, and develop response strategies.
Our ESG risk management framework includes the following key processes: (i) risk
identification and assessment, combining data collection, expert interviews, and analytical tools,
ranking them by severity using quantitative and qualitative criteria; (ii) risk monitoring and
management, adopting targeted strategies based on category and severity, with a dynamic system
that employs periodic data analysis and standardized reporting to track risks in real time, optimize
controls, and update management; and (iii) risk mitigation and response, devising preventive and
emergency plans.
Our ESG working group, under the guidance of the Board, adheres to the double materiality
principle, fully considering factors such as financial impacts, stakeholder concerns, regulatory
requirements, and industry trends that affect the importance of ESG risks, to comprehensively
assess the potential impacts of ESG issues on our enterprise value creation and financial
performance, as well as our significant impacts on the economy, environment and society. We have
established a risk matrix assessment model, quantifying ESG risk indicators across two dimensions:
likelihood of occurrence and degree of impact. Additionally, we formulated scoring criteria that
incorporate both quantitative values and qualitative descriptions. We rank all topics by their risk
values to form a risk priority list, designating those with risk scores greater than 12 as “material
risk” topics, which are then included in our priority management scope and reported to the Board.
We have identified highly material topics including waste management, where improper
handling of pathogen-containing medical waste risks fines, legal actions, reputational harm, or
elevated costs amid stricter standards, addressed via standardized procedures from waste creation
to disposal and employee training; product safety and quality, where inconsistent materials or
results could spark disputes, lawsuits, or brand damage, mitigated through robust quality
frameworks, sophisticated monitoring, and testing enhancements; supply chain management, where
supply disruptions, quality problems, or price swings might interrupt production, managed by
improved supplier assessments with ESG factors, ongoing audits, and enduring contracts; and R&D
and innovation, where inadequate funding or market uptake may postpone advancements and cost
recoupment, tackled via enhanced interdepartmental teamwork, streamlined commercialization
routes, and detailed market studies and trials.
BUSINESS
– 156 –


--- page 166 ---
Business Ethics
We strictly comply with the Criminal Law of the People’s Republic of China, the Anti-Unfair
Competition Law of the People’s Republic of China and other relevant laws and regulations, and
have formulated internal control measures such as the Anti-Commercial Bribery and Anti-
Corruption Basic Guidelines, the Internal Audit System and the Company Whistleblower
Management System. During the Track Record Period and up to the Latest Practicable Date, we had
not been involved in any corruption litigation cases. According to our PRC Legal Advisors, we had
complied with applicable anti-bribery, anti corruption and anti-kickback laws in all material aspects
during the Track Record Period and up to the Latest Practicable Date. The following table sets forth
key metrics evaluating our business ethics during the Track Record Period.
Types of Training Unit
For the year ended December 31,
2023 2024 2025
Anti-corruption training for
employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sessions 1 1 1
Hours 0.5 0.5 0.7
Anti-corruption training for
Directors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sessions 1 1 1
Hours 0.5 0.5 1
Environmental Matters
Climate-Related Risks
We recognize that climate-related risks, particularly those arising from extreme weather
conditions such as typhoons and floods, may pose significant challenges to our operations. To
mitigate these risks, we have developed contingent plans aimed at minimizing potential losses and
ensuring the safety of our employees and the continuity of our business operations.
Strategies for Addressing Climate-Related Risks
We strictly comply with the PRC Energy Conservation Law, the PRC Environmental
Protection Law and other relevant laws and regulations, and have formulated the Energy Saving and
Environmental Protection Management System. Additionally, we have formulated the Energy
Conservation and Environmental Protection Management System, which sets out clear provisions
on the use of eco-friendly materials, optimization of energy-saving processes, application of
renewable energy, management of packaging waste and utilization of recyclable components. The
system mandates the prioritization of eco-friendly materials and requires relevant departments to
incorporate such materials and solutions in new product designs; it also proposes energy efficiency
optimization measures for high-energy consumption equipment and promotes automated energy-
saving technological upgrades, while planning the adoption of photovoltaic power generation and
other renewable energy sources to reduce reliance on traditional energy. In respect of packaging
management, the system requires the recycling and reuse of packaging materials, coupled with
process improvements to enhance resource recovery and utilization rates. Under our management’s
leadership, we identify, monitor, and assess environmental and climate-related risks that may
impact our business operations and financial performance. These risks are integrated into our
broader planning processes to enable proactive and responsible decision-making.
Our management evaluates the likelihood and severity of environmental risks, while relevant
departments implement sustainable measures across operations. Our Directors oversee these efforts
as part of our risk management framework, and we plan to establish an ESG sub-committee to
further enhance our ESG practices and initiatives.
BUSINESS
– 157 –


--- page 167 ---
We strictly comply with national environmental standards to manage waste gas, solid waste
and wastewater. During the Track Record Period, accredited third-party institutions conducted
regular evaluations of our pollution levels and environmental impacts. Our operations strictly
adhered to national standards regarding the air pollution, wastewater discharge and hazardous waste
disposal. In particular, (i) for water pollutants, primarily domestic sewage, we discharge into the
public septic system within the industrial park. After sedimentation treatment, the wastewater is
conveyed through the municipal sewage pipeline network to a wastewater treatment facility for final
processing; (ii) for air pollutants, mainly organic exhaust gases generated during operations, we
utilize activated carbon filtration prior to emission to ensure compliance with environmental
standards; and (iii) for solid waste, including general production waste, domestic refuse, and
hazardous waste, we implement a comprehensive waste management system. General solid waste
and domestic refuse are collected centrally and cleared daily, with recyclable materials recovered.
Hazardous waste is handled and disposed of by qualified third-party service providers licensed for
hazardous waste management.
We conduct periodic environmental assessments to ensure compliance with regulations and
internal policies. We regularly upgrade waste gas and wastewater treatment facilities and solid
waste storage sites. Internal policies also require ongoing monitoring and enforcement of waste
management practices across all levels of the organization.
Looking ahead, we are committed to strengthening environmental initiatives by closely
monitoring wastewater discharge, power usage, and greenhouse gas emissions to ensure strict
compliance with relevant regulations. We plan to reduce our environmental footprint by prioritizing
eco-conscious suppliers and logistics providers who adhere to sustainable practices. By fostering
partnerships with environmentally responsible stakeholders, we aim to limit emissions across our
supply chain and promote sustainable operations. These efforts underscore our dedication to
long-term, environmentally friendly growth and sustainability objectives.
Metrics and Targets
We set targets for each material KPI at the start of every financial year, aligning with
Appendix C2 of the Listing Rules and other applicable regulations following our listing.
The following table sets forth our greenhouse gas emissions during the Track Record Period.
Types of Greenhouse
Gases Unit
For the year ended December 31,
2023 2024 2025
Scope 1 Greenhouse Gas
Emissions (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes of CO 2 equivalent 7.0 8.5 8.5
Scope 2 Greenhouse Gas
Emissions (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes of CO 2 equivalent 491.8 697.8 835.7
Scope 3 Greenhouse Gas
Emissions (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes of CO 2 equivalent 414.5 439.6 477.6
Total Greenhouse Gas
Emissions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes of CO 2 equivalent 913.3 1,145.9 1,321.8
Greenhouse Gas Emissions
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes of CO 2
equivalent/RMB million
3.8 3.5 3.3
Notes:
(1) Our Scope 1 greenhouse gas emissions mainly arise from gasoline usage in company vehicles.
(2) Our Scope 2 greenhouse gas emissions mainly arise from electricity consumption.
(3) Our Scope 3 greenhouse gas emissions include Category 6 Business Travel and Category 7 Employee
Commuting, calculated based on the amounts spent on employees’ business travel and commuting distances.
BUSINESS
– 158 –


--- page 168 ---
We have set a target for greenhouse gas emissions intensity, which will not exceed the 2024
level over the next three years. The following table sets forth our energy and water consumption
during the Track Record Period.
Energy Types Unit
For the year ended December 31,
2023 2024 2025
Gasoline /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tonnes 2.3 2.8 2.8
Purchased Electricity /H1118/H1118/H1118/H1118kWh 916,458 1,300,433.6 1,557,394.0
Total Comprehensive
Energy Consumption (1) /H1118
Tonnes of standard coal
equivalent
116.1 164.0 196.6
Comprehensive Energy
Consumption Intensity /H1118/H1118
Tonnes of standard
coal/RMB million
0.5 0.5 0.5
Total Water Consumption /H1118Tonnes 2,326 2,312 5,740.8
Total Water Consumption
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes/RMB million 9.8 7.1 14.3
Note:
(1) The calculation coefficient for the our total comprehensive energy consumption is based on GB/T 2589-2020
General Principles for Calculation of Comprehensive Energy Consumption.
Our total water consumption increased significantly from 2024 to 2025, primarily because (i) the employee
headcount rose in 2025, directly driving higher domestic water demand; (ii) the total output increased
compared to 2024, with significant growth in water consumption for cleaning processes and other
production-related activities; and (iii) a higher proportion of low-value product output in 2025 intensified
water usage intensity in cleaning and processing stages, resulting in a higher increase rate in water
consumption compared to production growth.
The following table sets forth our packaging material usage during the Track Record Period.
We actively monitor and plan to adopt mature new technologies, processes and materials, while
promoting the recycling of packaging materials to continuously optimize usage efficiency and
elevate our overall standards of energy conservation and environmental protection.
Packaging Materials
Usage Unit
For the year ended December 31,
2023 2024 2025
Packaging Materials
Usage /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes 54 100 101
Packaging Materials Usage
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes/RMB million 0.2 0.3 0.3
Our packaging materials usage intensity increased significantly over the Track Record Period,
primarily attributable to the changes in product sales structure, where the proportion of relatively
low-value products in total production output increased, leading to an overall rise in packaging
material usage.
The following table sets forth our medical waste emission during the Track Record Period.
Waste Types Unit
For the year ended December 31,
2023 2024 2025
Total Hazardous Waste /H1118/H1118/H1118Kilograms 6.0 9.0 17.0
Hazardous Waste Intensity /H1118Kilograms/RMB million 0.03 0.03 0.04
Total Non-Hazardous
Waste /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes 27.8 33.0 27.9
Non-Hazardous Waste
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes/RMB million 0.1 0.1 0.1
Domestic Sewage /H1118/H1118/H1118/H1118/H1118/H1118Tonnes 2,320 2,306 5,712
BUSINESS
– 159 –


--- page 169 ---
Our total hazardous waste increased from 9.0kg in 2024 to 17.0kg in 2025, primarily
attributable to an increase in discarded printer toner cartridges. Specifically, we ceased leasing
printers in 2025 and purchased some printers instead. As a result, we became responsible for the
disposal of toner cartridges, whereas such disposal had previously been handled by the lessor. Our
domestic sewage emission increased significantly during 2025, primarily due to the rise in the total
water consumption. By monitoring our energy and water usage, as well as our direct and indirect
GHG emissions, we aim to manage our environmental footprint effectively while accommodating
continual business development.
Corporate Social Responsibility
We comply with the PRC Law on Prevention and Control of Occupational Diseases, the PRC
Production Safety Law, the PRC Labor Law and other relevant laws and regulations, and have
formulated internal management systems such as the Employee Occupational Health Management
Protocols. We establish annual production safety objectives, which include the Safety Committee
issuing annual production safety responsibility letters, achieving zero fatalities from accidents,
100% coverage of Level 3 safety education. We regularly conduct risk inspections, supervision of
rectifications, employee health checks, employee safety training and other activities, while linking
these occupational health indicators to management performance, thereby providing employees
with compliant work environments and protective measures and safeguarding the life and health
rights of employees. During the Track Record Period and up to the Latest Practicable Date, we had
not experienced any work-related fatalities, achieving 100% coverage of Level 3 safety education.
As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest
Practicable Date, we are in compliance with applicable occupational health and safety laws in all
material aspects.
EMPLOYEES
As of December 31, 2025, we had 384 employees, the majority of whom are based in Chinese
mainland. The following table sets forth a breakdown of our full-time employees by business
function as of the same date:
Business Function
Number of
Employees
Percentage of total
employees
(%)
Research and Development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 21.1
Production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137 35.7
Sales and Marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129 33.6
Administrative and Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 9.6
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/H1118384 100.0
The following table sets forth a breakdown of our full-time employees by gender and
employee turnover rate during the Track Record Period.
Metrics Unit
For the year ended December 31,
2023 2024 2025
Male Employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Persons 171 186 189
Female Employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Persons 131 167 195
Employee Turnover Rate /H1118/H1118/H1118/H1118/H1118% 1 91 81 8
We employ specialized industry channels, internal referrals, mainstream platforms, on-campus
recruitment and government talent programs to attract high-quality talent across various levels and
specializations. We strive to motivate our employees by offering competitive salaries,
comprehensive benefits packages, transparent performance-based promotion mechanisms and
BUSINESS
– 160 –


--- page 170 ---
merit-based incentive schemes tied to individual performance. We place strong emphasis on
employee training to promote professional growth and align individual development with our
overall business objectives. We and our subsidiaries do not have labor unions. We have maintained
a good relationship with our employees and did not have any material labor dispute during the Track
Record Period.
Social Insurance and Housing Provident Funds
As required by the laws and regulations in the PRC, we participate in a range of employee
social security programs, including the housing provident fund, pension insurance, medical
insurance, unemployment insurance, maternity insurance and work-related accident insurance.
During the Track Record Period, we did not make adequate contributions and failed to make
any contributions to the social insurance and housing provident funds with respect to certain of our
employees as required by the relevant PRC laws and regulations, primarily because (i) certain
employees were unwilling to pay the social insurance and housing provident funds in full as it
requires additional contributions from employees themselves; (ii) the relevant registration
procedures had not been completed for certain of our newly-hired employees; (iii) certain
employees were rehired after their retirement; and (iv) certain employees voluntarily gave up
contributing to housing provident funds. In 2023, 2024 and 2025, the aggregate shortfall of social
insurance and housing provident fund contributions amounted to RMB7.7 million, RMB9.0 million
and RMB10.5 million, respectively. See “Risk Factors — Risks Relating to Our Business and
Operations — Failure to pay social insurance premiums and housing provident funds for and on
behalf of our employees in accordance with applicable laws and regulations may subject us to
penalties.” We will make adequate contribution to the social insurance and housing provident funds
in time under the request of relevant governmental authorities.
Based on interviews with the relevant competent authorities, if we settle the shortfall in our
contributions to the social insurance and housing provident funds and the relevant late fees within
the time frame stipulated by the relevant competent authorities, the risk of administrative penalties
being imposed on us by the relevant competent authorities is remote. Our PRC Legal Advisor has
confirmed that we had not been subject to any administrative penalties for failure to pay the full
amount of social insurance contributions or housing provident fund during the Track Record Period.
Furthermore, there were no instances where social insurance or housing provident fund authorities
required us to make full retroactive payments for all employees. Additionally, our PRC Legal
Advisor’s interviewed with the relevant competent authorities, who had confirmed that (i) even in
the event of an employee complaint regarding social insurance and housing provident fund, the
authorities are unlikely to mandate full payments for the historical amounts; (ii) and for housing
provident fund complaints, mediation procedures would precede any investigation. 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.
Furthermore, in light of the Article 19(1) of the New Judicial Interpretation, effective as of
September 1, 2025, any agreement to waive the full payment of social insurance would be deemed
invalid, and the employee is entitled to terminate the employment agreement and seek economic
compensation from the employer. See “Regulatory Overview.” During the Track Record Period and
up to the Latest Practicable Date, we did not enter such agreement with any of our employees, and
we are not subject to the effects of the Article 19(1) of the New Judicial Interpretation. Our
Directors are of the view, and the PRC Legal Advisor concurs that the New Judicial Interpretation
will not have a material adverse effect on our business, financial condition or results of operations,
taking into account that (i) the implementation of the New Judicial Interpretation will not affect our
compliance status, as the aforementioned judicial interpretation does not repeal the social insurance
laws and regulations currently in force of the PRC; (ii) the New Judicial Interpretation does not
create any new basis for reassessing contribution shortfalls or exposing us to increased penalties;
and (iii) no pending litigation or arbitration of the Company is applicable to the aforementioned
judicial interpretations.
BUSINESS
– 161 –


--- page 171 ---
We engaged third-party agencies to make social insurance and housing provident fund
contributions for certain of our employees during the Track Record Period, because we had not
established subsidiaries or branches at certain cities where we had employees. In 2023, 2024 and
2025, the contributions made by the third-party agencies amounted to RMB4.2 million, RMB4.9
million and RMB5.4 million, respectively, and the potential shortfalls were RMB3.2 million,
RMB3.8 million and RMB4.5 million during the same periods, respectively. As advised by our PRC
Legal Advisor, if the validity of such arrangements is challenged by relevant competent authorities,
we might be subject to additional contributions, late payment fees and/or penalties or be ordered to
rectify such practice. The risk of facing significant penalties due to the third-party human resource
agency arrangement, or experiencing material adverse effects on our financial condition or overall
results of operations, is considered relatively low. We may continue to engage third-party agencies
to make social insurance and housing provident fund contributions on our behalf after Listing, as
we may not establish subsidiaries or branches in all cities where our employees are located given
our extensive nationwide operations. Nevertheless, we undertake to rectify any such arrangements
as required by the relevant competent authorities and will make the relevant payments if required
by the competent authorities to compensate the relevant expenses.
A confirmation letter was issued by the third-party agency to verify the payment locations and
number of employees, affirming that all social insurance and housing provident fund contributions
were fully borne by us and paid on time and in full, with no disputes or controversies involving our
employees. Additionally, confirmation documents issued from the competent authorities, along with
our PRC Legal Advisor’s searches of public information, indicate that we had not been subject to
any administrative penalties for engaging third-party agencies to pay social insurance or housing
provident fund during the Track Record Period.
Based on the foregoing, and as advised by our PRC Legal Advisor, neither our partial failure
to pay in full the social insurance and housing provident fund contributions for certain employees
nor our engagement of third-party agencies to handle these contributions has a material adverse
effect on our business operations.
Labor Dispatch
According to Interim Provisions on Labor Dispatch (‘), an employer
may employ dispatched workers in temporary, auxiliary or substitutable positions only and shall
strictly control the number of dispatched workers employed which shall not exceed 10% of the total
number of its workers. A penalty ranging from RMB5,000 to RMB10,000 per dispatched worker
exceeding the 10% threshold may be imposed for any non-compliance that is not rectified within
a prescribed time period. During the Track Record Period, the percentage of dispatched workers did
not exceed 10% of the total number of our workers. The number of employees under labor dispatch
agreement was one, nil, nil and nil, and the corresponding expenses under labor dispatch agreement
were RMB 0.35 million, nil and nil, in 2023, 2024 and 2025, respectively. As of the Latest
Practicable Date, we had ceased entering into the labor dispatch agreement. Considering our
remedial actions, provided that (i) there are no material changes to the current laws, regulations and
policies governing labor dispatch arrangements, and (ii) no material collective employee complaints
or related litigation/arbitration proceedings initiated against us, our PRC Legal Advisor is of the
view that the likelihood that we would be subject to material administrative penalties due to our
non-compliance with the labor dispatch regulations is low.
INSURANCE
Our principal insurance policies primarily include business operation insurance, vehicle
insurance, employee social insurance, and accident insurance for our sales personnel. In line with
general market practices, we do not maintain certain policies that are not available in the locations
wherein we operate, or that are not generally required by laws. See “Risk Factors — Risks Relating
to Our Business and Operations — Our insurance coverage may be insufficient to cover the risks
related to our business and operations.” We believe that our insurance coverage is adequate for our
business, and, according to CIC, our insurance coverage is sufficient and in line with industry
practice, which Joint Sponsors concur. We expect to continue to review and assess our risk portfolio
and make necessary and appropriate adjustment to our insurance plans to align with our needs and
with industry practice. During the Track Record Period, we did not make any material insurance
claims in relation to our business.
BUSINESS
– 162 –


--- page 172 ---
PROPERTIES
Our headquarter office is located in Beijing, China. As of the Latest Practicable Date, we
owned one property with an aggregate gross floor area of approximately 24,803.5 sq.m. in Suzhou,
Jiangsu, which is primarily used for production purpose. As advised by our PRC Legal Advisor, we
had obtained all the relevant property ownership and title certificate for this property under the PRC
laws and regulations as of the Latest Practicable Date. As of the same date, we leased eight
properties in the PRC with an aggregate gross floor area of approximately 8,148.3 sq.m., which
were primarily used for production, office and warehousing purposes. The existing leases generally
have a term ranging from half a year to four years.
As of the Latest Practicable Date, three lease agreements of our leased properties had not been
registered and filed with the relevant land and real estate management departments in the PRC. See
“Risk Factors — Risks Relating to Our Business and Operations — We may encounter risks related
to our leased properties.” We will be subject to a maximum potential fine of RMB30.0 thousand if
any penalty is imposed for our failure to register and file with the relevant authorities. As of the
Latest Practicable Date, we had not received any order from the relevant authorities requiring
registration of these lease agreements, and no administrative penalty had been imposed on us for
non-registration. In addition, our Controlling Shareholder, Mr. Dong has undertaken that, if we are
unable to use the leased properties during the lease term due to ownership defects, failure to register
the leases, or other issues, or if we incur any related liabilities or losses, he will bear all resulting
economic losses and promptly secure alternative premises to prevent any additional costs or losses
to us and our subsidiaries. Mr. Dong has further undertaken that, after bearing such expenses, will
not exercise any right of recourse against us, our subsidiaries, or our other shareholders for these
costs. As advised by our PRC Legal Advisor, considering that the potential administrative penalties
for the non-registration of these three lease agreements are immaterial, together with Mr. Dong’s
undertakings, the non-registration of lease agreements for these three leased properties will not
cause material adverse effects to our business operations.
Our corporate headquarters is located at Beijing, China. As of December 31, 2025, none of the
properties owned or leased by us had a carrying amount of 15% or more of our consolidated 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.
LICENSES, PERMITS AND APPROV ALS
We are required to obtain a number of licenses, permits, approvals and certificates for our
business in PRC. As advised by our PRC Legal Advisor, we had duly obtained the requisite licenses,
permits, approvals and certificates from applicable authorities which are material to our operations,
and such licenses, permits, approvals and certificates are valid and subsisting during the Track
Record Period and up to the Latest Practicable Date. We renew the licenses, permits, approvals and
certificates from time to time to comply with the relevant laws and regulations. As advised by our
PRC Legal Advisor, there is no material legal impediment to renewing our licenses, permits,
approvals and certificates required for our operations. The following table sets forth the details of
the material licenses and permits in PRC held by our Company as of December 31, 2025:
License/Permits Issuing Authorities Certificate No. Expiration Date
Class I Medical Device
Production Record-
Filing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beijing Economic-
Technological
Development Area
Administration for
Market Regulation
20180007 V alid without an
expiration date
BUSINESS
– 163 –


--- page 173 ---
License/Permits Issuing Authorities Certificate No. Expiration Date
Class II Medical Device
Operation Record-
Filing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beijing Economic-
Technological
Development Area
Administration for
Market Regulation
20210271 V alid without an
expiration date
Medical Device
Manufacturing License /H1118
Beijing Municipal Medical
Products Administration
20180031 August 15, 2028
Medical Device
Operation License /H1118/H1118/H1118/H1118
Beijing Economic-
Technological
Development Area
Administration for
Market Regulation
20220047 October 27, 2027
We have obtained all required licenses, permits, approvals and certificates for sales of our
medical devices overseas from all relevant jurisdictions. The following table sets forth the key
licenses, permits, approvals and certificates we have obtained for the sales of our medical devices
in overseas jurisdictions:
Certificate/License Name Jurisdiction Issuing Authority
Certificate/License
No. Validity Period
ISO 9001:2015
Certificate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Germany TÜV Rheinland Cert
GmbH
11001832351 January 1, 2025 –
December 31, 2027
EN ISO 13485:2016
Quality Management
System Certificate /H1118/H1118/H1118/H1118
Germany TÜV Rheinland LGA
Products GmbH
SX 2060986-1 December 29, 2024 –
December 28, 2027
EU Quality Management
System Certificate /H1118/H1118/H1118/H1118
Croatia UDEM Adriatic d.o.o. M.2024.MDR.1050 September 23, 2024 –
September 22, 2028
GMDN Registration /H1118/H1118/H1118/H1118the United
Kingdom
Medicines & Healthcare
products Regulatory
Agency (MHRA)
27236 December 7, 2022 and
without an indicated
expiration date
Medical Device
Registration Certificate /H1118
Malaysia Medical Device Authority
(MDA)
GB5986825-219764 December 15, 2025 –
December 14, 2030
Medical Device Filing
Certificate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Switzerland Swiss Agency for
Therapeutic Products
(Swissmedic)
CHRN-AR-
20002937-MF-
00085
May 6, 2025 –
May 5, 2030
LEGAL PROCEEDINGS AND COMPLIANCE MATTERS
During the Track Record Period and up to the Latest Practicable Date, we had not been and
were not a party to any material legal, arbitral or administrative proceedings, and we were not aware
of any pending or threatened legal, arbitral or administrative proceedings against us or our Directors
that could, individually or in the aggregate, have a material adverse effect on our business, financial
condition and results of operations.
During the Track Record Period and up to the Latest Practicable Date, we had not been and
were not involved in any non-compliance incidents that led to fines, enforcement actions or other
penalties that could, individually or in the aggregate, have a material adverse effect on our business,
financial condition or results of operations. Our Directors are of the view that, we had complied,
in all material respects, with all relevant laws and regulations in the jurisdictions we operate in
during the Track Record Period and up to the Latest Practicable Date.
BUSINESS
– 164 –


--- page 174 ---
Environmental-Related Matters Before the Track Record Period
On January 3, 2018, the Beijing Economic-Technological Development Area Environmental
Protection Bureau approved our construction project for the production from an environmental
protection perspective upon implementation of the required environmental measures. Following the
issuance of our medical device manufacturing license, we did not conduct separate environmental
acceptance check procedures for the Phase I Project, as the construction site for Phase I Project
overlapped with the subsequent Phase II Project, and the production scope of the Phase II Project
fully encompassed that of the Phase I Project. We therefore commenced production in 2019 without
standalone acceptance check for the Phase I Project, while completing overall environmental
acceptance check for the Phase II Project, which fully included the Phase I Project’s production
scope. In June 2023, we initiated and completed the acceptance check for the Phase I Project.
During the Track Record, we did not receive any administrative penalties from relevant authorities
in respect of environmental protection matters. As a result, as advised by our PRC Legal Advisors,
we and our Directors are of the view that this matter will not have any material adverse impact on
our production and operations.
A W ARDS AND RECOGNITIONS
The following table sets out major awards and recognitions we received as of the Latest
Practicable Date:
Y ear Awards/Recognition Awarding Authority
2025 /H1118/H1118/H1118Second Prize of Beijing Science and
Technology Progress Award
Beijing Municipal People’s
Government
2024 /H1118/H1118/H1118Technologies recognized as
“Internationally Advanced”
Ministry of Industry and Information
Technology of the PRC
2024 /H1118/H1118/H1118First Batch of Typical Cases in
Developing New Quality
Productive Forces
New Quality Productive Forces
Promotion Center of the Ministry
of Science and Technology of the
PRC
2024 /H1118/H1118/H1118Beijing Municipal Enterprise
Technology Center
Beijing Municipal Bureau of
Economy and Information
Technology
2024 /H1118/H1118/H1118Beijing Foreign-Funded R&D Center Beijing Municipal Science and
Technology Commission
2024 /H1118/H1118/H1118National Technologically Advanced
“Little Giant” Enterprise in the
Sports Field
General Administration of Sport of
the PRC
2023 /H1118/H1118/H1118First Prize of Shanghai Science and
Technology Progress Award
Shanghai Municipal People’s
Government
2023 /H1118/H1118/H1118Beijing Intellectual Property
Advantage Entity
Beijing Intellectual Property Office
2022 /H1118/H1118/H1118National Technologically Advanced
“Little Giant” Enterprise
Ministry of Industry and Information
Technology of the PRC
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management
To monitor the ongoing implementation of our risk management policies and corporate
governance measures after the Listing, we have adopted or will continue to adopt risk management
measures such as (i) establishing an Audit Committee to review and supervise our financial
reporting process and internal control system; (ii) adopting various policies to ensure compliance
BUSINESS
– 165 –


--- page 175 ---
with the Listing Rules; (iii) providing anti-corruption and anti-bribery compliance training
periodically to our senior management and employees to enhance their knowledge and compliance
with applicable laws and regulations, and include relevant policies against noncompliance in
employee handbooks; (iv) organizing training sessions for our Directors and senior management in
respect of the relevant requirements of the Listing Rules and duties of directors of companies listed
in Hong Kong; (v) enhancing our reporting and records system for production facilities; and (vi)
providing enhanced training programs on quality assurance and product safety procedures.
Internal Control
We have developed internal control policies and guidelines that define standards for
identifying control deficiencies, conducting audits, and managing follow-up actions. In addition, we
engaged an independent internal control consultant (the “ IC Consultant ”) to assess the
effectiveness of our internal control systems under the COSO enterprise-level framework. Based on
this review, the IC Consultant recommended enhancements in several areas, which include
conflict-of-interest management, policies and procedures regarding anti-bribery, anti-corruption,
anti-money-laundering, sanctions compliance, succession planning for key positions, enterprise risk
management and ESG integration, distributor management and human resources administration. In
response, we have undertaken a series of improvements, including formalizing and updating our
compliance and operational policies, strengthening risk-management and governance processes,
and reinforcing distributor oversight and human-resources practices. After our implementation of
improvement measures, our IC Consultant did not raise any major findings or recommendations
upon completion of their follow-up review. We have implemented comprehensive measures
addressing conflicts of interest, insider trading, confidentiality, and business ethics for employees,
business partners, and other stakeholders to ensure ethical conduct and governance, including (i)
regular audits focused on ethics and regulatory policies, (ii) ongoing training to raise employee
awareness, and (iii) multiple reporting channels such as designated emails and direct access to
internal audit department. Additionally, we have implemented a compliance policy for sanctions and
export controls, outlining procedures for risk screening, reporting, governance, and inquiries, which
are integrated into our business processes, especially during new engagements.
Based on the foregoing and (i) the agreed review scope and work procedures, (ii) the absence
of high-risk issues identified during the review, and (iii) the remediation of all findings by us as of
the Latest Practicable Date, the IC Consultant did not identify any material internal control
deficiencies after the follow-up assessment.
BUSINESS
– 166 –


--- page 176 ---
OVERVIEW
Our Board consists of eleven Directors, including two executive Directors, five non-executive
Directors and four independent non-executive Directors. Our Directors are appointed for a term of
three years, which is renewable upon re-election and re-appointment upon the expiry of their term.
DIRECTORS
The following table sets forth certain information regarding our Directors:
Name Age Position(s)
Date of
joining our
Group
Date of
appointment
as a Director
Roles and
responsibilities
Relationship
with other
Directors,
Supervisors
and senior
management
Executive Directors
Mr. Dong Wenxing
(໨˖ጳ) /H1118/H1118/H1118/H1118/H1118/H1118
44 Chairman of the
Board, executive
Director, chief
executive officer
and general
manager
July 2017 June 6, 2020 Responsible for the
overall strategic
planning and
business
development, as
well as making
major operational,
R&D decisions of
the Company
None
M r .H eL u( ձ༩) /H1118/H111837 Executive Director,
chief financial
officer, secretary
of the Board and
deputy general
manager
September
2021
December 21,
2021
Responsible for
overseeing the
financial
operations and
corporate
governance of the
Company
None
Non-executive Directors
Ms. Zhang Di
(ࠔ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Non-executive
Director
June 2020 June 6, 2020 Providing
professional
opinion and
judgement to the
Board
None
Mr. Chang Xi
(੬ః) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Non-executive
Director
June 2020 June 6, 2020 Providing
professional
opinion and
judgement to the
Board
None
Mr. David Guowei
Wang ( ˮ਷⒜) /H1118/H1118
63 Non-executive
Director
November
2021
November 21,
2021
Providing
professional
opinion and
judgement to the
Board
None
Ms. Yi Lin (೙) /H1118/H111843 Non-executive
Director
November
2021
November 21,
2021
Providing
professional
opinion and
judgement to the
Board
None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 167 –


--- page 177 ---
Name Age Position(s)
Date of
joining our
Group
Date of
appointment
as a Director
Roles and
responsibilities
Relationship
with other
Directors,
Supervisors
and senior
management
Mr. Zhou Quan
(մ⒧) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
50 Non-executive
Director
June 2020 June 6, 2020 Providing
professional
opinion and
judgement to the
Board
None
Independent non-executive Directors
Mr. Lyu Zhenlin
(؍ࣈ)H1118/H1118/H1118/H1118/H1118/H1118
62 Independent
non-executive
Director
March 2023 March 1, 2023 Providing
independent
opinion and
judgement to the
Board
None
Mr. Deng Y u ( ቎ρ) /H111843 Independent
non-executive
Director
March 2023 March 1, 2023 Providing
independent
opinion and
judgement to the
Board
None
Mr. Liu Baojie ( ᄎᘒ
௫) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
61 Independent
non-executive
Director
August 2025 August 18,
2025
Providing
independent
opinion and
judgement to the
Board
None
Mr. Wang Chunfei
(݆࠭)H1118/H1118/H1118/H1118/H1118/H1118
45 Independent
non-executive
Director
August 2025 August 18,
2025
Providing
independent
opinion and
judgement to the
Board
None
Executive Directors
Mr. Dong Wenxing ( ໨˖ጳ), aged 44, is our founder, the Chairman of the Board, an
executive Director, chief executive officer and the general manager of our Company.
Prior to founding our Group, Mr. Dong served as an engineer at Beijing Xinghang
Electromechanical Equipment Factory (ঘዚཥண௪ᅀ) from July 2009 to August 2010, a
reviewer at the Center for Medical Device Evaluation of the China Food and Drug Administration
(္ຖ၍ଣᐼ҅ᔼᐕኜ૛Ҧஔᄲ൙ʕː) from September 2010 to September 2015, and
the deputy general manager at Changchun SinoBiom (ʮ̡) from
September 2015 to May 2017.
Mr. Dong obtained a bachelor’s degree in material forming and control engineering from
Xi’an University of Technology ( Гτଣʈɽኪ) in Shaanxi Province, the PRC, a master’s degree
in materials processing engineering from Beijing University of Technology ( ̏ԯʈุɽኪ)i n
Beijing, the PRC, an executive master’s degree in business administration (EMBA) from Peking
University ( ̏ԯɽኪ) in Beijing, the PRC, and a doctorate degree in advanced manufacturing from
Harbin Institute of Technology (ဧᏵʈุɽኪ) in Heilongjiang Province, the PRC.
M r .H eL u( ձ༩), aged 37, is an executive Director, chief financial officer, secretary of the
Board and deputy general manager of our Company.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 168 –


--- page 178 ---
Prior to joining our Group, Mr. He served as a senior auditor in the audit department of
PricewaterhouseCoopers Zhong Tian LLP (הfrom October 2011 to July
2014. He served as a senior associate in China International Capital Corporation Limited ( ʕ਷਷
ʮ̡) (listed on the Hong Kong Stock Exchange (3908.HK) and on the Shanghai
Stock Exchange (601995.SH)) from November 2014 to September 2021.
Mr. He obtained a bachelor’s degree in economics with a major in financial engineering and
a bachelor’s degree in management with a major in accounting from the University of Science and
Technology Beijing (Ҧɽኪ) in Beijing, the PRC. He also obtained a master’s degree in
management with a major in accounting from Tsinghua University ( ૶ശɽኪ) in Beijing, the PRC.
Non-executive Directors
Ms. Zhang Di (ࠔ)aged 43, is a non-executive Director of our Company.
Ms. Zhang served as an editor in the Institute of Technical Information for Building Materials
Industry (הsince 2009.
Ms. Zhang obtained a bachelor’s degree in materials science and engineering from Zhongyuan
University of Technology (ʈኪ৫) in Henan Province, the PRC, and a master’s degree in
materials science from Beijing University of Technology ( ̏ԯʈุɽኪ) in Beijing, the PRC.
Mr. Chang Xi ( ੬ః), aged 43, is a non-executive Director of our Company.
Mr. Chang worked as a senior manager at Harbin Hafei Automobile Industry Group Co., Ltd.
(ʮ̡) from August 2006 to May 2014. Since May 2014, he has been
employed as an R&D Engineer at BAIC Research Institute Co., Ltd. (ʮ̡).
Mr. Chang obtained a bachelor’s degree in material forming and control engineering from
Xi’an University of Technology ( Гτଣʈɽኪ) in Shaanxi Province, the PRC.
Mr. David Guowei Wang ( ˮ਷⒜), aged 63, is a non-executive Director of our Company.
Mr. Wang served as a managing director at WI Harper Group from April 2006 to July 2011.
Since August 2011, he has served as a partner and a senior managing director of Asia at OrbiMed
Advisors LLC.
Mr. Wang obtained a bachelor’s degree in basic medicine in Peking Medical University ( ̏ԯ
ɽኪ) (currently known as Peking University Health Science Center ( ̏ԯɽኪᔼኪ௅)) in
Beijing, the PRC, and a doctoral degree in developmental biology from the California Institute of
Technology in the United States.
Ms. Yi Lin (೙), aged 43, is a non-executive Director of our Company.
Ms. Yi served as an auditor at PricewaterhouseCoopers Zhong Tian LLP (ࠇ
הfrom September 2006 to August 2011. Since September 2011, she has held various roles
including partner and supervisor at GL Capital Group ( ᅃ၅༟͉) and its affiliated enterprises.
Ms. Yi obtained a bachelor’s degree in English from University of International Business and
Economics (ɽኪ) in Beijing, the PRC, and a Master of Business Administration
degree from Guanghua School of Management at Peking University ( ̏ԯɽኪΈശ၍ଣኪ৫)i n
Beijing, the PRC.
Mr. Zhou Quan ( մ⒧), aged 50, is a non-executive Director of our Company.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 169 –


--- page 179 ---
Mr. Zhou served as a database technician at Lantu Bioinformatics Ltd (ʮ
̡) from March 2005 to September 2006, and a senior analyst at Morningside Group Hong Kong
Limited (ʮ̡) from December 2007 to September 2010. Since September 2010,
he has successively served as an investment director and a managing director at Legend Capital
Management Co., Ltd. (ʮ̡), and has also served as a director of certain
pharmaceutical companies, pursuant to appointments made by Legend Capital ( ёᑌ༟͉) in respect
of its investments, including its investment in our Company through Suzhou Junlian and BEST
ALIVE.
Mr. Zhou obtained a bachelor’s degree in cell biology from University of Science and
Technology of China (ኪҦஔɽኪ) in Anhui Province, the PRC, a master’s degree in
neurobiology from the National University of Singapore ( อ̋ս਷ͭɽኪ) in Singapore, and a
master’s degree in finance from China Europe International Business School ( ʕᆄ਷ყʈਠኪ৫)
in Shanghai, the PRC.
Independent non-executive Directors
Mr. Lyu Zhenlin (؍ࣈ)aged 62, is an independent non-executive Director of our
Company.
Since June 1990, he has been serving as a faculty member and professor at Xi’an University
of Technology ( Гτଣʈɽኪ).
Mr. Lyu obtained a bachelor’s degree in foundry, a master’s degree in foundry, and a doctoral
degree in materials science from Xi’an Jiaotong University ( Гτʹஷɽኪ) in Shaanxi Province,
the PRC.
Mr. Deng Yu ( ቎ρ), aged 43, is an independent non-executive Director of our Company.
Mr. Deng served as a project manager at Leveking Biotech Co., Ltd. (ҦϞ
ʮ̡) from 2008 to 2010, a manager at the patent agency department at Wuxi Friends Intellectual
Property Agency Co., Ltd. (ʮ̡) (currently known as Jiangsu Sunshine
Huiyuan Intellectual Property Operation Co., Ltd. (ʮ̡)) from
2010 to 2014. Since 2014, he has been serving as the general manager of Harbin Sunshine Huiyuan
Intellectual Property Agency Co., Ltd. (ʮ̡).
Mr. Deng obtained a bachelor’s degree in bioengineering from Northeast Agricultural
University (ุ༵̏ɽኪ) in Heilongjiang Province, the PRC, a master’s degree in fermentation
engineering from Jiangnan University (ɽኪ) in Jiangsu Province, the PRC, and a doctoral
degree in food science from Northeast Agricultural University (ุ༵̏ɽኪ) in Heilongjiang
Province, the PRC. He also obtained an Executive Master of Business Administration (EMBA)
degree in business administration for senior executives from Guanghua School of Management,
Peking University ( ̏ԯɽኪΈശ၍ଣኪ৫) in Beijing, the PRC.
Mr. Liu Baojie ( ᄎᘒ௫), aged 61, is an independent non-executive director of the Company.
Mr. Liu has over 30 years of experience in investment and investment banking services. He
has served as Director of Huaneng Invesco Private Equity Management Company ( ശঐ౻නӷ෍ਿ
ʮ̡) since 2011 and as its Chief Executive Officer from 2011 to 2023. From 2010 to
2011, he served as Director and General Manager of Shenzhen Detong Richland Investment
Company ( ଉέ̹ᅃΝబտҳ༟ʮ̡). From 2007 to 2009, he was Senior Vice President of
CitySpring Infrastructure Management Pte Ltd (ணҳ༟ʮ̡) in Singapore. In
2007, he served as Managing Director at Bank of America. From 2002 to 2006, he served at ICEA
Capital Limited (ʮ̡), a subsidiary of ICBC, where he held the position of
Managing Director. From 1994 to 2002, he served in the Investment Banking Department of
JPMorgan Chase & Co. (ɽஷණྠ), where he held the positions of Vice President and Chief
Representative in Shanghai. From 1993 to 1994, he was Associate in the Futures and Options
Department at Merrill Lynch (ᗇՎ). From 1987 to 1990, he began his financial services career
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 170 –


--- page 180 ---
at the Industrial and Commercial Bank of China ( ʕ਷ʈਠვБ) in Shenzhen. Mr. Liu also served
as an independent non-executive director of China Merchants China Direct Investments Limited (ם
ʮ̡, stock code: 0135.HK) from 2009 to 2022.
Mr. Liu obtained a Master of Business Administration degree from the University of Utah,
United States, in 1993.
Mr. Wang Chunfei (݆࠭,)aged 45, is an independent non-executive Director of our
Company.
Mr. Wang served as an independent director at Elec-tech International Co., Ltd. ( τᏏᅃႴᆗ
ʮ̡) (listed on the Shenzhen Stock Exchange (002005.SZ)) from June 2019 to May
2024, Beijing JenKem Technology Co., Ltd. (ʮ̡) (listed on the Shanghai
Stock Exchange (688356.SH)) since September 2019, Aerospace Nanhu Electronic Information
Technology Co., Ltd. (ʮ̡) (listed on the Shanghai Stock
Exchange (688552.SH)) since November 2019, Beijing NoHolds Technology Co., Ltd. ( ̏ԯፕͫ
ʮ̡) (listed on the Shanghai Stock Exchange (688315.SH)) since June 2022,
Ji’an Rural Commercial Bank Co., Ltd. (ʮ̡) from June 2024 to
January 2025, and Jiangxi Rural Commercial Bank Co., Ltd. (ʮ̡)
since April 2025. Mr. Wang has worked at the School of Accounting, Central University of Finance
and Economics (ኪ৫) since July 2012, and has successively served as a lecturer,
professor, and doctoral advisor.
Mr. Wang obtained a doctorate degree in management from Guanghua School of Management,
Peking University ( ̏ԯɽኪΈശ၍ଣኪ৫) in Beijing, the PRC. He was a visiting scholar at the
University of Wisconsin—Madison in the United States from August 2017 to August 2018. Mr.
Wang is a Certified Public Accountant in the PRC.
SUPERVISORS
The Supervisory Committee currently consists of three Supervisors. The Supervisors are
appointed for a term of three years and are eligible for re-election upon expiry of their term of
office. The following table sets out information in respect of our Supervisors:
Name Age Position
Date of
joining our
Group
Date of
appointment
as supervisor Responsibilities
Mr. Xu Jingtao
(஢౻ᏹ)/H1118/H1118/H1118/H1118/H1118/H1118
40 Chairperson of the
Supervisory
Committee
June 2022 March 1,
2023
Overseeing the
operations and
financial activities
of the Group
Mr. Y ang Tengfei
(࠭)H1118/H1118/H1118/H1118/H1118
34 Supervisor December
2017
March 1,
2023
Overseeing the
operations and
financial activities
of the Group
Ms. Wang Y ali
(ˮԭᘆ) /H1118/H1118/H1118/H1118/H1118
43 Supervisor July 2017 March 1,
2023
Overseeing the
operations and
financial activities
of the Group
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 171 –


--- page 181 ---
Mr. Xu Jingtao ( ஢౻ᏹ), aged 40, is the Chairperson of the Supervisory Committee.
Mr. Xu has served as the director of the human resources department of the Company since
June 2022, responsible for human resources, administration and IT management.
Prior to joining our Group, Mr. Xu served as a chief at FIH Precision Electronics (Langfang)
Co., Ltd. ( బɻੰၚ੗ཥɿ(఼ѥ)ʮ̡) primarily responsible for recruitment management from
July 2008 to January 2012, a manager at CapitalBio Corporation (ʮ̡) primarily
responsible for recruitment and training management from January 2012 to July 2014. He served
as the director of human resources department at B.J.ZH.F. Panther Medical Equipment Co., Ltd ( ̏
ʮ̡) from August 2014 to April 2022.
Mr. Xu obtained a bachelor’s degree in human resources management from Xi’an
Technological University ( Гτʈุɽኪ) in Shaanxi Province, the PRC, and a master’s degree in
human resources management from Renmin University of China ( ʕ਷ɛ͏ɽኪ) in Beijing, the
PRC.
Mr. Y ang Tengfei (࠭)aged 34, is a Supervisor of our Company.
Mr. Y ang served as an R&D engineer of the Company from December 2017 to December
2020, and an R&D Director since December 2020.
Prior to joining our Company, Mr. Y ang served as an R&D engineer at Guangzhou Xiongjun
Intelligent Technology Co., Ltd. (ʮ̡) from July 2017 to December 2017.
Mr. Y ang obtained a bachelor’s degree in biomedical engineering and a master’s degree in
biomedical instrumentation from Henan University of Science and Technology (Ҧɽኪ)i n
Henan Province, the PRC.
Ms. Wang Y ali ( ˮԭᘆ), aged 43, is a Supervisor of our Company.
Ms. Wang has served as the director of the human resources department of the Company since
July 2017.
Prior to joining our Group, Ms. Wang worked in Huaxing Experimental School ( ശጳྼ᜕ኪ
ࣧfrom September 2002 to July 2009, and served as a human resources and administration
specialist at Beijing Baofengyuan Light Steel Colorplate Co. Ltd. (ʮ̡)
from December 2009 to July 2014. She then served as a senior human resources specialist at Beijing
Tianlong Yihang Auto Parts Co., Ltd. (ʮ̡) from July 2014 to March
2016, and a human resources and administration manager at Beijing Kenuo Boiler Co., Ltd. ( ̏ԯ
ʮ̡) from April 2016 to June 2017.
Ms. Wang obtained a bachelor’s degree in civil engineering from Hebei University of
Technology (̏ʈุɽኪ) in Hebei Province, the PRC.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 172 –


--- page 182 ---
SENIOR MANAGEMENT
The following table provides information about members of our senior management:
Name Age Position(s)
Date of
joining our
Group
Date of
appointment
as senior
management
Roles and
responsibilities
Relationship
with other
Directors,
Supervisors
and senior
management
Mr. Dong Wenxing
(໨˖ጳ) /H1118/H1118/H1118/H1118/H1118/H1118
44 Chairman of the
Board, executive
Director, chief
executive officer
and general
manager
July 2017 July 31, 2017 Responsible for the
overall strategic
planning and
business
development, as
well as making
major operational,
R&D decisions of
the Company
None
M r .H eL u( ձ༩) /H1118/H111837 Executive Director,
chief financial
officer, secretary
of the Board and
deputy general
manager
September
2021
December 1,
2021
Responsible for
overseeing the
financial
operations and
corporate
governance of the
Group, and
making day-to-
day operational
decisions
None
Mr. Liu Shaobin
(ᄎˇⅳ) /H1118/H1118/H1118/H1118/H1118/H1118
52 Chief operating
officer and
deputy general
manager
June 2022 March 1,
2023
Responsible for
overseeing the
business
operations of the
Group
None
Mr. Dong Wenxing ( ໨˖ጳ) is the chairman of the Board, an executive Director, the chief
executive officer and the general manager of our Company. See “— Directors — Executive
Directors” in this section for his biographical details.
M r .H eL u( ձ༩) is an executive Director, chief financial officer, secretary of the Board and
deputy general manager of our Company. See “— Directors — Executive Directors” in this section
for his biographical details.
Mr. Liu Shaobin ( ᄎˇⅳ), aged 52, is the chief operating officer and deputy general manager
of our Company.
Prior to joining our Group, Mr. Liu served as a technician at Xi’an Qing’an Aviation Electrical
Co., Ltd. (ཥंʮ̡) from July 1994 to September 1999, and an engineer at Hangzhou
Amphenol Phoenix Telecom Parts Co., Ltd. (ʮ̡) from October
1999 to March 2006. He then served as the head for technology R&D and production at Prima
(Suzhou) Electronic Technology Co., Ltd.( ౷лီ(ᘽψ)ʮ̡) from March 2006 to
March 2008, and the head for production at Johnson & Johnson Medical (Suzhou) Limited. ( ੶͛
(ᘽψ)ʮ̡) from March 2008 to April 2010. He served as the Deputy general
manager of the industrial management department at Beijing Naton Technology Group Co., Ltd. ( ̏
ʮ̡) from April 2010 to June 2022.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 173 –


--- page 183 ---
Mr. Liu obtained a bachelor’s degree in mechanical manufacturing, design and technology
from Shaanxi Mechanical Institute ( ৯Гዚ૛ኪ৫) (currently known as Xi’an University of
Technology ( Гτଣʈɽኪ)) in Shaanxi Province, the PRC.
INTERESTS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Saved as disclosed above, none of our Directors, Supervisors and senior management had been
a director of any public company the securities of which were listed on any securities market in
Hong Kong or overseas in the three years immediately preceding the date of this Prospectus. Save
as disclosed herein, to the best knowledge, information and belief of the Directors having made all
reasonable inquiries, there are no other matters with respect to the appointment of our Directors and
Supervisors that need to be brought to the attention of the Shareholders, nor is there any information
relating to our Directors and Supervisors that is required to be disclosed pursuant to Rules
13.51(2)(h) to (v) of the Listing Rules.
As of the Latest Practicable Date, saved as disclosed above, none of our Directors,
Supervisors or senior management were related to other Directors, Supervisors or senior
management of our Company.
JOINT COMPANY SECRETARIES
Ms. Liang Xiaodan ( ૑ወʗ) served as one of our joint company secretaries with effect from
the Listing Date. Ms. Liang currently also serves as the legal affairs director and securities affairs
representative of our Company. She served as a lawyer at Beijing Tianyuan Law Firm (ԫ
הfrom January 2019 to August 2022. Ms. Liang obtained master’s degree in law from China
University of Political Science and Law (ɽኪ).
Ms. Jian Xuegen ( ᔊ௛Ќ) was appointed as our company secretary with effect from
August 1, 2025 and was re-designated as one of our joint company secretaries with effect from the
Listing Date. Ms. Jian currently serves as an assistant vice president of SWCS Corporate Services
Group (Hong Kong) Limited (ਕණྠ(ಥ)ʮ̡). She is a member of the Hong
Kong Institute of Certified Public Accountants and the Chinese Institute of Certified Public
Accountants. She holds a bachelor’s degree in accounting from South China University of
Technology (ଣʈɽኪ).
BOARD COMMITTEES
Our Board delegates certain responsibilities to various committees. In accordance with the
relevant PRC laws and regulations and the Corporate Governance Code and the Listing Rules, our
Company has formed four Board committees, namely the Audit Committee, the Strategy
Committee, the Remuneration and Evaluation Committee and the Nomination committee.
Audit Committee
We have established Audit Committee in compliance with the Corporate Governance Code set
out in Appendix C1 to the Listing Rules. The Audit Committee consists of three Directors, namely
Mr. Wang Chunfei, Mr. Lyu Zhenlin and Mr. Chang Xi. Mr. Wang Chunfei currently serves as the
chairperson of the Audit Committee. The primary duties of the Audit Committee include, but are not
limited to, the following:
 monitoring and evaluating the work of external auditors, make recommendations on the
appointment and replacement of external auditors;
 monitoring and evaluating the internal audit work, coordinating internal and external
audits;
 reviewing the financial information and its disclosures of our Company;
 monitoring and evaluating the internal control work of our Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 174 –


--- page 184 ---
 coordinating the communication between the management, internal audit department and
relevant departments and external auditors; and
 addressing other matters authorized by the Board.
Remuneration and Appraisal Committee
We have established a Remuneration and Appraisal Committee with written terms of reference
in compliance with the Corporate Governance Code set out in Appendix C1 to the Listing Rules.
The Remuneration and Appraisal Committee consists of three Directors, namely Mr. Lyu Zhenlin,
Mr. Liu Baojie and Mr. Dong Wenxing. Mr. Lyu Zhenlin serves as the chairperson of the
Remuneration and Appraisal Committee. The primary duties of the Remuneration and Appraisal
Committee include, but are not limited to, the following:
 reviewing and approving remuneration proposals of members of our senior management
in accordance with our Company’s policies and objectives as approved by our Board
from time to time;
 making recommendations to our Board concerning our Company’s policy and structure
for all Directors’ and senior management remuneration and on the establishment of a
formal and transparent procedure for developing remuneration policy, including, but not
limited to, performance evaluation standards, procedures and evaluation systems;
 conducting the evaluation of the annual performance of all Directors and senior
management;
 monitoring remuneration payable to all Directors and senior management;
 reviewing and/or approving matters relating to share schemes under Chapter 17 of the
Listing Rules; and
 addressing other matters authorized by the Board.
Nomination Committee
We have established a Nomination Committee with written terms of reference in compliance
with the Corporate Governance Code set out in Appendix C1 to the Listing Rules. The Nomination
committee consists of three Directors, namely Mr. Deng Y u, Mr. Wang Chunfei and Ms. Zhang Di.
Mr. Deng Y u serves as the chairperson of the Nomination committee. The Nomination Committee
is responsible for formulating the selection criteria and procedures for Directors and senior
management, screening and reviewing candidates and their qualifications, and making
recommendations to the Board on the following matters:
 nominating individuals for appointment as Directors or recommending the removal of
existing Directors;
 appointing or removing members of senior management;
 reviewing and making recommendations to the Board on the composition and number of
our Board with reference to our Company’s business activities, the scale of assets and
shareholding structure;
 reviewing the selection criteria and procedures applicable to Directors and senior
management, and making recommendations to our Board on the formulation and
refinement of such selection criteria and procedures;
 identifying individuals suitably qualified to become a member of our Board and senior
management;
 reviewing the qualifications and suitability of candidates nominated for directorships
and senior management, and making recommendations to our Board regarding the
appointment of such candidates;
 addressing other matters authorized by our Board.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 175 –


--- page 185 ---
Strategy Committee
We have established a Strategy Committee with written terms of reference. The Strategy
Committee consists of three Directors, namely Mr. Dong Wenxing, Mr. He Lu and Mr. Deng Y u. Mr.
Dong Wenxing serves as the chairperson of the Strategy Committee. The primary duties of the
Strategy Committee include, but are not limited to, the following:
 reviewing and making recommendations on the Company’s long-term strategic
development plans;
 reviewing and making recommendations on major investment and financing proposals
that require approval by the Board;
 reviewing and making recommendations on major capital operations and asset
management projects that require approval by the Board;
 reviewing and making recommendations on other significant matters that may affect the
Company’s development;
 inspecting the implementation of the above-mentioned matters;
 addressing other matters as authorized by the Board.
REMUNERATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
We offer our Directors, Supervisors and senior management members, who are also the
Company’s employees, remuneration in the form of salaries, allowances and benefits in kind and
performance related bonuses, share award expense and pension scheme contributions. Our
independent non-executive Directors receive fixed allowances with reference to the internal policies
of the Company.
For the years ended December 31, 2023, 2024 and 2025, the aggregate amount of
remuneration paid or payable to our Directors amounted to RMB2.6 million, RMB3.2 million and
RMB3.2 million, respectively. Under the arrangement currently in force, we estimate the total
remuneration before taxation, including estimated share-based remuneration, to be accrued to our
Directors for the year ending December 31, 2026 to be approximately RMB3.5 million. The actual
remuneration of Directors in 2026 may be different from the expected remuneration.
The total emoluments for the five highest paid individuals (including directors), amounted to
RMB5.4 million, RMB6.7 million and RMB8.1 million, for the years ended December 31, 2023,
2024 and 2025, respectively.
During the Track Record Period, no remuneration was paid to our Directors or any of the five
highest paid individuals as an inducement to join, or upon joining, our Group. During the Track
Record Period, no compensation was paid to, or receivable by, any of our Directors, former
directors or the five highest paid individuals for the loss of office as director of any member of our
Group or of any other office in connection with the management of the affairs of any member of
our Group. None of our Directors waived any emoluments during the Track Record Period. Save as
disclosed above, no other payments have been paid, or are payable, by our Company or any of our
subsidiaries to our Directors or the five highest paid individuals during the Track Record Period.
Our Board will review and determine the remuneration and compensation packages of our
Directors, Supervisors and senior management and will, following the Listing, receive
recommendations from our Remuneration and Evaluation Committee which will take into account
salaries paid by comparable companies, time commitment and responsibilities of our Directors,
Supervisors and senior management and the performance of our Group.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 176 –


--- page 186 ---
CORPORATE GOVERNANCE
Our Company is committed to achieving high standards of corporate governance with a view
to safeguarding the interests of our Shareholders. To accomplish this, our Company complies or
intends to comply with the corporate governance requirements under the Corporate Governance
Code set out in Appendix C1 to the Listing Rules after the Listing.
Our Directors recognize the importance of incorporating elements of good corporate
governance in the management structures and internal control procedures of our Group to achieve
effective accountability. Our Company intends to comply with all code provisions in the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules after the Listing except for Code
Provision C.2.1 of Part 2 of the Corporate Governance Code, which provides that the roles of
chairman of the board and chief executive officer should be separate and should not be performed
by the same individual.
The roles of chairman of the Board and chief executive officer of the Company are currently
performed by Mr. Dong Wenxing. In view of Mr. Dong’s substantial contribution to our Group since
our establishment and his extensive experience, we consider that having Mr. Dong acting as both
our chairman and chief executive officer will provide strong and consistent leadership to our Group
and facilitate the efficient execution of our business strategies. We consider it is appropriate and
beneficial to our business development and prospects that Mr. Dong continues to act as both our
chairman and chief executive officer after the Listing, and therefore currently do not propose to
separate the functions of chairman and chief executive officer.
While this would constitute a deviation from Code Provision C.2.1 of Part 2 of the Corporate
Governance Code, the Board believes that this arrangement will not impair the balance of power
and authority between the Board and the management of our Company, given that: (i) there are
sufficient checks and balances in the Board, as a decision to be made by our Board requires approval
by at least a majority of our Directors, and our Board comprises four independent non-executive
Directors, which is in compliance with the requirement under the Listing Rules; (ii) Mr. Dong and
other Directors are aware of and undertake to fulfill their fiduciary duties as Directors, which
require, among other things, that he/she acts for the benefit and in the best interests of our Company
and will make decisions for our Group accordingly; and (iii) the balance of power and authority is
ensured by the operations of the Board which comprises experienced individuals who meet
regularly to discuss issues affecting the operations of our Company. Moreover, the overall strategic
and other key business, financial, and operational policies of our Group are made collectively after
thorough discussion at both Board and senior management levels. The Board will continue to review
the effectiveness of the corporate governance structure of our Group in order to assess whether
separation of the roles of chairman of the Board and chief executive officer is necessary.
BOARD DIVERSITY POLICY
In order to enhance the effectiveness of our Board and to maintain the high standard of
corporate governance, we have adopted a board diversity policy which sets out the objective and
approach to achieve and maintain diversity of our Board. Pursuant to the board diversity policy, we
seek to achieve Board diversity through the consideration of a number of factors when selecting the
candidates to our Board, including, but not limited to, gender, skills, age, professional experience,
knowledge, cultural background, education background, ethnicity and length of service. The
ultimate decision of the appointment will be based on merit and the contribution which the selected
candidates will bring to our Board.
Our board currently consists of two female Directors and nine male Directors. Our Directors
have a balanced mix of knowledge and skills, including overall management and strategic
development, engineering, finance and corporate governance in addition to industry experience
relevant to our Group’s operations and business. They obtained degrees in various majors including
engineering, biology and automation. This diverse academic background allows the Board to
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 177 –


--- page 187 ---
approach challenges and opportunities from multiple angles, fostering innovative solutions and
comprehensive strategies. We have four independent non-executive Directors with different
industry backgrounds, representing more than one third of the members of our Board. Furthermore,
our Board has a diverse age and gender representation. 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.
Our Nomination Committee is responsible for reviewing the structure and diversity of the
Board and selecting individuals to be nominated as Directors. After the Listing, our Nomination
committee will monitor and evaluate the implementation of the board diversity policy from time to
time to ensure its continued effectiveness, and, when necessary, make any revisions that may be
required and recommend any such revisions to our Board for consideration and approval. The
Nomination Committee will also include in annual reports a summary of the board diversity policy,
including any measurable objectives set for implementing the board diversity policy and the
progress on achieving these objectives.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not have
any interest in a business which competes or is likely to compete, either directly or indirectly, with
our Company’s business which would require disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to under
Rule 3.09D of the Listing Rules on August 13, 2025 and (ii) understands the requirements under the
Listing Rules that are applicable to him or her as a director of a listed issuer under the Listing Rules
and the possible consequences of making a false declaration or giving false information to the Stock
Exchange.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his/her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he/she has
no past or present financial or other interest in the business of the Company or its subsidiaries or
any connection with any core connected person of the Company under the Listing Rules as of the
Latest Practicable Date and (iii) that there are no other factors that may affect his/her independence
at the time of his/her appointment.
COMPLIANCE ADVISOR
We have appointed Red Sun Capital Limited as our Compliance Advisor pursuant to Rules
3A.19 of the Listing Rules. The Compliance Advisor will provide us with guidance and advice as
to compliance with the Listing Rules and other applicable laws, rules, codes and guidelines.
Pursuant to Rule 3A.23 of the Listing Rules, the Compliance 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 and share repurchases;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 178 –


--- page 188 ---
(c) where we propose to use the proceeds of the Global Offering in a manner different from
that detailed in this Prospectus or where our business activities, developments or results
deviate from any forecast, estimate or other information in this Prospectus; and
(d) where the Hong Kong Stock Exchange makes an inquiry to our Company regarding
unusual movements in the price or trading volume of its listed securities or any other
matters in accordance with Rule 13.10 of the Listing Rules.
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 Hong Kong 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 continuing
requirements under the Listing Rules and applicable laws and regulations.
The term of the appointment of our Compliance Advisor will commence on the Listing Date
and is expected to end on the date on which our Company complies with Rule 13.46 of the Listing
Rules in respect of our financial results for the first full financial year commencing after the Listing.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 179 –


--- page 189 ---
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Dong, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang
are directly interested in 33.14%, 1.88%, 2.36% and 4.09% of the issued share capital of our
Company, respectively. The general partner of each of Tianjin Jikang, Tianjin Puhe and Tianjin
Y unkang is Tianjin Bokang, which is held as to 99% by Mr. Dong. As such, Mr. Dong, Tianjin
Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang are able to collectively control the voting
rights in approximately 41.47% of the issued share capital of our Company as of the Latest
Practicable Date.
Immediately following the completion of the Global Offering, Mr. Dong, Tianjin Bokang,
Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang will be able to control the voting rights in
approximately 35.10% of the issued share capital of our Company. Therefore, Mr. Dong, Tianjin
Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang will be regarded as a group of
Controlling Shareholders upon Listing.
NO COMPETITION
Each of Tianjin Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang is a shareholding
platform. Save and except for the interest held in our Company, each of our Controlling
Shareholders confirms that as of the Latest Practicable Date, he/she/it did not have any interest in
any business which competes or is likely to compete, directly or indirectly, with our business and
would require disclosure under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable of
carrying on our business independently from our Controlling Shareholders and their respective
close associates upon Listing.
Management Independence
Our business is managed and operated by our Board and senior management. Upon Listing,
the Board consists of 11 Directors, including two executive Directors, five non-executive Directors
and four independent non-executive Directors. Mr. Dong, the Chairman of the Board and an
executive Director, is also a member of the Controlling Shareholders as detailed above. Our
Directors consider that our Board and senior management team are able to manage our business
independently from the Controlling Shareholders for the following reasons:
(a) each of Tianjin Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang does not have
any business other than its shareholding directly or indirectly in the Company. As such,
there will be no conflict of interest between the business of the Company and the
Controlling Shareholders. Except for Mr. Dong who serves as a Director and the general
manager of Tianjin Bokang, our executive Directors and all our senior management
members do not hold any management position and/or directorship in any of the
Controlling Shareholders or its close associates as of the Latest Practicable Date;
(b) our daily management and operations are carried out by a 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. For details of the industry experience of our senior management team, please
refer to the section headed “Directors, Supervisors and Senior Management” in this
prospectus;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 180 –


--- page 190 ---
(c) each Director is aware of his/her fiduciary duties as a director which require, among
other things, that he/she acts for the benefit and in the interest of our Company and does
not allow any conflict between his/her duties as our Director and his/her personal
interests. In the event that there is a potential conflict of interest arising out of any
transaction to be entered into between our Group and a Director and/or his/her associate,
he/she 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 the interested
Director, and shall abstain from voting and shall not be counted towards the quorum for
the voting;
(d) our Board has a balanced composition of executive Directors and independent
non-executive Directors which ensures the independence of our Board in making
decisions affecting our Company. Specifically, (i) our independent non-executive
Directors are not associated with our Controlling Shareholders or each of their close
associates; (ii) our independent non-executive Directors account for more than one-third
of the Board; and (iii) our independent non-executive Directors individually and
collectively possess the requisite knowledge and experience as independent directors of
listed companies and will be able to provide professional advice to our Company. In
conclusion, our Directors believe that our independent non-executive Directors are able
to bring impartial and sound judgment to the decision-making process of our Board and
protect the interest of our Company and our Shareholders as a whole; and
(e) we will establish corporate governance measures and adopt sufficient and effective
control mechanisms to manage potential conflicts of interest, if any, between our Group
and our Controlling Shareholders, which would support our independent management.
For details, please see “— Corporate Governance” in this section.
Operational Independence
Our Group do not rely on our Controlling Shareholders and their respective close associates
for our business development, staffing, administration, finance, internal audit, information
technology, sales and marketing, or company secretarial functions. We have our own departments
specializing in these respective areas which have been in operation and are expected to continue to
operate separately and independently from our Controlling Shareholders and their respective close
associates. In addition, we have our own headcount of employees for our operations and
management for human resources.
Our Group have independent access to suppliers and customers and an independent
management team to handle our day-to-day operations. We are also in possession of all relevant
licenses, certificates, facilities and intellectual property rights necessary to carry on and operate our
principal businesses and we have sufficient operational capacity in terms of capital and employees
to operate independently. Based on the above, our Directors believe that we are able to operate
independently of our Controlling Shareholders and their respective close associates.
Financial Independence
Our Group has an independent financial system and makes financial decisions according to
our Group’s own business needs. We have internal control and accounting systems and an
independent finance department in charge of our treasury function. We do not expect to rely on our
Controlling Shareholders and their respective close associates for financing after Listing as we
expect that our working capital will be funded by the cash, cash equivalent on hand as well as the
proceeds from the Global Offering. As such, our Company’s financial functions, such as cash and
accounting management, invoices and bills, operate independently of our Controlling Shareholders
and their respective close associates.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 181 –


--- page 191 ---
As of the Latest Practicable Date, there was no outstanding loan or guarantee provided by our
Controlling Shareholders and their respective close associates.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of, and do not place undue reliance on our Controlling Shareholders and their
respective close associates upon Listing.
CORPORATE GOVERNANCE
Our Directors recognize the importance of good corporate governance to protect the interests
of our Shareholders. Our Company would adopt the following corporate governance measures to
manage potential conflict of interests between our Group and our Controlling Shareholders:
(a) where a Shareholders’ meeting is held for considering proposed transactions in which
our Controlling Shareholders or any of their close associates has a material interest, our
Controlling Shareholders shall abstain from voting on the relevant resolutions and shall
not be counted in the quorum for the voting;
(b) where a Board meeting is held for the matters in which a Director has a material interest,
such Director shall abstain from voting on the relevant resolutions and shall not be
counted in the quorum for the voting;
(c) in the event that our independent non-executive Directors are requested to review any
conflict of interest between our Group and our Controlling Shareholders, our Controlling
Shareholders shall provide the independent non-executive Directors with all necessary
information and our Company shall disclose the decisions of the independent non-
executive Directors either in its interim and annual reports or by way of announcements;
(d) our Directors (including the independent non-executive Directors) will seek independent
and professional opinions from external advisors at our Company’s cost as and when
appropriate in accordance with the Corporate Governance Code and Corporate
Governance Report as set out in Appendix C1 to the Listing Rules;
(e) any transactions between our Company and its connected persons shall be in compliance
with the relevant requirements of Chapter 14A of the Listing Rules, including the
announcement, annual reporting and independent shareholders’ approval requirements
(if applicable) under the Listing Rules;
(f) we have appointed Red Sun Capital Limited as our compliance advisor, which will
provide advice and guidance to us in respect of compliance with the applicable laws and
the Listing Rules, including various requirements relating to directors’ duties and
corporate governance.
Based on the above, our Directors are satisfied that the corporate governance measures are
sufficient to manage conflicts of interest that may arise between our Group and our Controlling
Shareholders, and to protect our minority Shareholders’ interests after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 182 –


--- page 192 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and the Conversion of Unlisted Shares into H Shares, the following persons are expected
to have an interest in the Shares or underlying Shares of our Company which would fall to be
disclosed to us pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are,
directly or indirectly, interested in 10% or more of the nominal value of any class of our share
capital carrying rights to vote in all circumstances at general meetings of our Company:
Name of shareholder Nature of interest
Shares held as of the Latest
Practicable Date (1)
Shares held following the
completion of the Global
Offering (2)
Number Percentage Number Percentage
Mr. Dong (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 15,382,400 33.14% 15,382,400 28.05%
Interest in
controlled
corporation
3,865,462 8.33% 3,865,462 7.05%
Tianjin Y unkang
(3) /H1118/H1118/H1118/H1118Beneficial interest 1,900,000 4.09% 1,900,000 3.47%
Tianjin Puhe (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 1,094,401 2.36% 1,094,401 1.99%
Tianjin Jikang (3) /H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 871,061 1.88% 871,061 1.59%
Suzhou Junlian (4) /H1118/H1118/H1118/H1118/H1118Beneficial interest 4,504,897 9.71% 4,504,897 8.22%
BEST ALIVE (4) /H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 2,503,228 5.39% 2,503,228 4.57%
Xiamen Defu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 4,938,004 10.64% 4,938,004 9.01%
OAP IV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial interest 4,306,666 9.28% 4,704,316 (5) 8.58%
Notes:
(1) The calculation is based on the total number of 46,409,494 Unlisted Shares in issue as at the Latest Practicable
Date, which will all be converted into H Shares upon completion of the Global Offering.
(2) The calculation is based on the assumption that immediately following the completion of the Global Offering,
there will be a total number of 54,831,344 H Shares, including 46,409,494 H Shares converted from Unlisted
Shares in issue.
(3) As of the Latest Practicable Date, Mr. Dong, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang are directly
interested in 33.14%, 1.88%, 2.36% and 4.09% of the issued share capital of our Company, respectively. The
general partner of each of Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang is Tianjin Bokang, which is held
as to 99% by Mr. Dong. As such, Mr. Dong, Tianjin Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang
are able to collectively control the voting rights in approximately 41.47% of the issued share capital of our
Company.
(4) Suzhou Junlian and BEST ALIVE are under the same control.
(5) OAP IV , as one of our Cornerstone Investors, will subscribe 397,650 Offer Shares. Please see “Cornerstone
Investors — The Cornerstone Investors” for further details.
For details of the substantial shareholders who 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 any member of our Group other than our Company, see “Further Information
about Our Directors and Substantial Shareholders — 4. Disclosure of Interests of Substantial
Shareholders” in Appendix VI to this prospectus.
Save as disclosed herein, our Directors are not aware of any persons who will, immediately
following completion of the Global Offering, without taking into account the Offer Shares that may
be taken up under the Global Offering, have interests or short positions in Shares or underlying
Shares which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of
the SFO or, will be, directly or indirectly, interested in 10% or more of the nominal value of any
class of share capital carrying rights to vote in all circumstances at general meetings of our
Company.
SUBSTANTIAL SHAREHOLDERS
– 183 –


--- page 193 ---
OUR SHARE CAPITAL
Immediately before the Global Offering
As of the Latest Practicable Date, the registered share capital of our Company was
RMB46,409,494 comprising 46,409,494 Shares with a nominal value of RMB1.00 each.
Upon the Completion of the Global Offering
Immediately after the Global Offering and Conversion of Unlisted Shares into H Shares, the
share capital of the Company will be as follows:
Description of Shares Number of Shares
Approximate % of the
enlarged issued share
capital after the
Global Offering
H Shares converted from Unlisted Shares /H1118/H1118/H1118/H111846,409,494 84.64%
H Shares to be issued pursuant to the Global
Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,421,850 15.36%
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/H111854,831,344 100%
RANKING
Upon the completion of the Global Offering, we would have only one class of Shares.
H Shares are all ordinary Shares in the share capital of our Company. Apart from certain qualified
domestic institutional investors in the PRC, the qualified PRC investors under the Shanghai-Hong
Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect and other persons who are
entitled to hold our H Shares pursuant to relevant PRC laws and regulations or upon approvals of
any competent authorities, H Shares generally cannot be subscribed for by or traded between legal
or natural PRC persons.
All H Shares will rank pari passu with each other in all respects and, in particular, will rank
equally for all dividends or distributions declared, paid or made after the date of this document. All
dividends in respect of the H Shares are to be paid by us in Hong Kong dollars.
SHARE CAPITAL
– 184 –


--- page 194 ---
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
The Company has filed for a “full circulation” of all the existing Unlisted Shares into H Shares
on a one-for-one basis, and submitted the filing reports, authorization documents of the
shareholders of Unlisted Shares for which an H-share “full circulation” are applied, explanation
about the compliance of share acquisition and other documents in accordance with the requirements
of the CSRC.
The relevant filings of the conversion of the existing 46,409,494 Unlisted Shares held by the
existing Shareholders into H Shares on a one-for-one basis have been completed on February 4,
2026.
Upon completion of the Global Offering, if any of our Shares are not listed or traded on any
stock exchange, the holders of our Unlisted Shares may convert their Shares into H Shares provided
such conversion shall have gone through any requisite internal approval process and complied with
the regulations prescribed by the securities regulatory authorities of the State Council and the
regulations, requirements and procedures prescribed by the overseas stock exchange(s) and have
completed the required filing with the securities regulatory authorities of the State Council,
including the CSRC. The listing of such converted Shares on the Hong Kong Stock Exchange will
also require the approval of the Hong Kong Stock Exchange.
Based on the procedures for the conversion of our Unlisted Shares into H Shares as disclosed
in this section, we can apply for the listing of all or any portion of our Unlisted Shares on the Hong
Kong Stock Exchange as H Shares in advance of any proposed conversion to ensure that the
conversion process can be completed promptly upon notice to the Hong Kong Stock Exchange and
delivery of Shares for entry on the H Share register. As any listing of additional Shares after our
initial listing on the Hong Kong Stock Exchange is ordinarily considered by the Hong Kong Stock
Exchange to be a purely administrative matter, it will not require such prior application for listing
at the time of our initial listing in Hong Kong.
No class Shareholder voting is required for the listing and trading of the converted Shares on
the Hong Kong Stock Exchange. Any application for listing of the converted Shares on the Hong
Kong Stock Exchange after our initial listing is subject to prior notification by way of
announcement to inform Shareholders and the public of such proposed conversion.
After all the requisite approvals have been obtained, the following procedures will need to be
completed: the relevant Domestic Unlisted Shares will be withdrawn from the Share register and we
will re-register such Shares on our H Share register maintained in Hong Kong and instruct the H
Share Registrar to issue H Share certificates. Registration on our H Share register will be on the
condition that (a) our H Share Registrar lodges with the Hong Kong Stock Exchange a letter
confirming the proper entry of the relevant H Shares on the H Share register of members and the
due dispatch of H Share certificates and (b) the admission of the H Shares to trade on the Hong
Kong Stock Exchange will comply with the Listing Rules and the General Rules of HKSCC and the
HKSCC Operational Procedures in force from time to time. Until the converted Shares are
re-registered on our H Share register, such Shares would not be listed as H Shares.
RESTRICTION ON TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL
OFFERING
In accordance with Article 160 of the PRC Company Law, the shares issued prior to any public
offering of shares by a company cannot be transferred within one year from the date on which such
publicly offered shares are listed and traded on the relevant stock exchange. As such, the Shares
issued by the Company prior to the Global Offering will be subject to such statutory restriction on
transfer within a period of one year from the Listing Date. See “History, Development and
Corporate Structure — Pre-IPO Investments”.
SHARE CAPITAL
– 185 –


--- page 195 ---
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Pursuant to the PRC Company Law and the terms of the Articles of Association, our Company
may from time to time by special resolution of shareholders, among others, increase its capital or
decrease its capital or repurchase of shares. See “Appendix V — Summary of the Articles of
Association” in this prospectus.
SHAREHOLDERS’ APPROV AL FOR THE GLOBAL OFFERING
Approval from holders of the Shares is required for the Company to issue H Shares and seek
the listing of H Shares on the Hong Kong Stock Exchange. The Company has obtained such
approval at the Shareholders’ general meeting held on August 18, 2025.
SHARE CAPITAL
– 186 –


--- page 196 ---
You should read the following discussion and analysis with our audited consolidated
financial information, including the notes thereto, included in the Accountants’ Report in
Appendix I to this Prospectus. Our consolidated financial information has been prepared in
accordance with IFRSs.
The following discussion and analysis contain forward-looking statements that reflect
our current views with respect to future events and financial performance. These statements
are based on our assumptions and analysis in light of our experience and perception of
historical trends, current conditions and expected future developments, as well as other
factors we believe are appropriate under the circumstances. However , whether actual
outcomes and developments will meet our expectations and predictions depends on a number
of risks and uncertainties. In evaluating our business, you should carefully consider the
information provided in this Prospectus, including but not limited to the sections headed
“Risk Factors” and “Business.”
For the purpose of this section, unless the context otherwise requires, references to
2023, 2024 and 2025 refer to our financial years ended December 31 of such years, and Track
Record Period refers to 2023, 2024 and 2025. Unless the context otherwise requires, financial
information described in this section is described on a consolidated basis.
OVERVIEW
We are a China-based medical device company specializing in clinical sports medicine
solutions. We are the fourth largest sports medicine implants and instruments provider, representing
a market share of approximately 6.5% in China’s sports medicine implants and instruments market,
and the largest domestic sports medicine implants and instruments provider in China, in terms of
sales revenue in 2024, according to CIC. We offer holistic solutions for the treatment of injuries to
soft tissues of rotator cuffs, ligaments and meniscus, as well as for the rehabilitation and prevention
of sports-related injuries, leveraging our self-developed medical implants, active equipment,
associated medical consumables and surgical instruments.
Our sports medicine product matrix mainly comprises 63 products spanning medical implants,
active equipment and associated medical consumables, as well as surgical instruments and
regenerative repair products, as of the Latest Practicable Date. Building upon our strong
technological foundation in sports medicine, we also aim to expand into the intelligent
rehabilitation. Notably, we are developing sports medicine prescription and rehabilitation system,
expanding into intelligent rehabilitation solutions market.
Our revenue increased from RMB238.5 million in 2023 to RMB327.1 million in 2024, and
further to RMB402.8 million in 2025. Our profit for the year increased from RMB57.1 million in
2023 to RMB95.4 million in 2024, and further to RMB137.0 million in 2025.
BASIS OF PREPARATION
Our Historical Financial Information has been prepared in accordance with all applicable
International Financial Reporting Standards (“ IFRS ”), which comprise all standards and
interpretations approved by the International Accounting Standards Board (“ IASB ”). See Note 2 of
the Accountants’ Report in Appendix I to this Prospectus for material accounting policy
information.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the
purpose of preparing our Historical Financial Information, we have adopted all applicable new and
revised IFRS Accounting Standards for the Track Record Period, except for any new or revised
FINANCIAL INFORMATION
– 187 –


--- page 197 ---
standards or interpretations that are not yet effective for the Track Record Period. The revised and
new accounting standards and interpretations issued but not yet effective for the Track Record
Period, are set out in Note 2.2 of the Accountants’ Report in Appendix I to this Prospectus. Our
Historical Financial Information also complies with the applicable disclosure provisions of the
Listing Rules.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial position have been, and are expected to be,
continuously and materially affected by a number of factors, including the following:
Growing Sports Medicine Device Market in China and Globally
Our financial performance and future growth depend on the overall growth of the sports
medicine device market in China and globally. The growth of the sports medicine device market is
primarily driven by various factors beyond our control, including increasing patient awareness and
availability of minimally invasive surgeries, a growing population participating in exercise, and
favorable government policies supporting the development of domestically produced medical
devices. Compared to sports medicine device markets in developed countries such as the United
States, China’s market remains significantly underpenetrated, demonstrating substantial growth
potential, according to CIC. We ranked the fourth among all companies in China’s sports medicine
implants and instruments market, with a market share of 6.5% in China’s sports medicine implants
and instruments market in terms of revenue in 2024, according to the same source. This market
leadership enables us to capitalize on emerging opportunities, allowing us to efficiently expand into
new markets, enhance product adoption and drive higher sales volumes as market demand grows in
China.
Globally, the sports medicine device market is also experiencing robust growth, fueled by
rising participation in sports and fitness activities, advancements in minimally invasive surgical
techniques, an aging population prone to musculoskeletal issues, and increasing healthcare
investments. Leveraging our diverse product portfolio, deep industry experience, established
presence in China, and expanding international operations, we believe we are well-positioned to
capitalize on the expansion of the global sports medicine device market, leading to increased sales
volumes and revenue growth.
Comprehensive Product Portfolio Covering the Key Steps of the Sports Medicine Cycle
We aim to provide a broad range of products that cover the entire lifecycle of sports medicine,
from treatment to prevention to rehabilitation, enabling us to command premium pricing and
maintain favorable gross profit margins. Our existing product portfolio primarily includes medical
implants, surgical equipment and associated medical consumables, which deliver efficient patient
care during various surgical procedures for sports-related injuries. During the Track Record Period,
we primarily derived revenue from medical implants and surgical equipment and medical
consumables, and the steady growth in revenue of both segments drove our business expansion. We
generated revenue of RMB186.5 million, RMB250.0 million, and RMB310.4 million from medical
implants in 2023, 2024 and 2025, respectively. In addition, we generated revenue of RMB51.9
million, RMB77.0 million and RMB92.0 million from surgical equipment and associated medical
consumables in 2023, 2024 and 2025, respectively. By continuously launching new sports medicine
products, we aim to bring additional revenue streams and capture greater market share.
Furthermore, governmental policies affect the pricing and profit margins of our products.
Governmental policies, such as the volume-based procurement program enhancing the affordability
of high-value medical consumables and national healthcare reimbursement programs setting
payment caps may lower the prices and encourage the adoption of our products, resulting in the
surge in the sales volume and increased revenue.
FINANCIAL INFORMATION
– 188 –


--- page 198 ---
Continuous Research and Development Efforts to Further Diversify Offerings
The success of such R&D activities significantly affects our ability to expand sales, business
scale, and in turn results of operation and financial condition. We have a diversified pipeline with
products under various development stages. Leveraging our four core technology platforms —
biomaterial, imaging and dynamic, tissue engineering, and intelligent medicine — we develop
advanced technologies like biocompatible materials, high-resolution imaging systems, biological
scaffolds, and AI-driven analytics, which further enhance product durability, efficiency and
precision, allowing us to differentiate our offerings, sustain premium pricing and maintain favorable
profit margins.
On the other hand, while we expect to continue to incur significant research and development
expenses in the foreseeable future, we need to control the amount of such expenses at a reasonable
level. Our research and development expenses amounted to RMB35.0 million, RMB37.3 million
and RMB47.5 million in 2023, 2024 and 2025, respectively. These efforts have enabled us to
develop products that meet evolving market demands and strengthen our competitive position.
However, if we fail to balance R&D spending relative to intended outcomes, our financial resources
may be strained without commensurate returns, materially adversely affecting our financial
condition.
Extensive Distributor Network and Robust Relationships with Hospitals to Enhance Market
Penetration
Our market expansion relies on effective distributor networks and marketing efforts. During
the Track Record Period, we primarily rely on distributors to sell our products to hospitals,
leveraging their established networks and local expertise to ensure broad market access. The
coverage and effectiveness of our distributorship network are critical to our market expansion and
penetration. Through our nationwide distributor network, we have successfully sold our products to
over 3,000 hospitals across Chinese mainland, including over 1,000 Class III hospitals. We also
depend on distributors across over 50 countries and regions to promote our products in overseas
markets, capitalizing on their familiarity with local regulations, customer preferences, and market
dynamics. We intend to continue relying on our distributors’ expertise and established relationships
with hospitals to deepen penetration in existing markets and expand into new geographical regions.
This strategy is expected to drive sales volumes and revenue growth, thereby enhancing our overall
financial performance.
Effective Cost Management and Improving Operational Efficiency
Our profitability relies on our effective cost management and improving operational
efficiency, as we strive to optimize production processes, streamline supply chains, and leverage
economies of scale to control expenses amid business growth. During the Track Record Period, our
cost of sales amounted to RMB61.2 million, RMB99.5 million and RMB104.1 million in 2023,
2024 and 2025, respectively. In particular, raw material costs amounted to RMB45.1 million,
RMB74.0 million and RMB71.9 million during the same period. Fluctuations in raw material costs
could affect our overall production costs, depending on our ability to adjust pricing or manage costs.
Supply chain disruptions from trade policies, tariffs or geopolitical tensions may further impact
imported raw material availability and costs, potentially delaying production or necessitating
pricing adjustments. We secured favorable procurement terms with our suppliers leveraging our
business scale and market recognition.
Similarly, controlling operating expenses is vital to our results of operations, as business
expansion in China and globally will likely increase these costs through higher marketing,
administrative, and distribution efforts. During the Track Record Period, our selling and distribution
expenses amounted to RMB66.1 million, RMB69.6 million and RMB80.6 million in 2023, 2024 and
2025, respectively, and our administrative expenses amounted to RMB26.2 million, RMB22.8
million and RMB36.7 million during the same periods. As we continue to scale our business in
FINANCIAL INFORMATION
– 189 –


--- page 199 ---
China and globally, we expect our selling and distribution expenses and administrative expenses to
increase in future periods. Enhancing operational efficiency through digital tools, process
automation and staff training is key to mitigating increased operating expenses, thereby ensuring
our sustainable growth.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments related to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our financial
position and operational results. Our management continually evaluates such estimates,
assumptions and judgments based on past experience and other factors, including industry practices
and expectations of future events which are deemed to be reasonable under the circumstances. There
has not been any material deviation from our management’s estimates or assumptions and actual
results, and we have not made any material changes to these estimates or assumptions during the
Track Record Period. We do not expect any material changes to these estimates and assumptions in
the foreseeable future.
For a discussion of the critical accounting policies, estimates, assumptions and judgments, see
Notes 2.3 and 3 of the Accountants’ Report in Appendix I to this Prospectus.
DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
The following table sets forth a summary of our results of operations for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 327,119 402,751
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(61,234) (99,524) (104,132)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 227,595 298,619
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,834 10,097 22,728
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,108) (69,628) (80,570)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,165) (22,768) (36,706)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,024) (37,252) (47,503)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) (13) (415)
Reversal of impairment/(impairment) of
financial assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (111) (1,642)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(486) (352) (343)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,322 107,568 154,168
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,210) (12,179) (17,198)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Non-IFRS Measure
To supplement our historical financial information, which is presented in accordance with
IFRS, we also use adjusted profit (non-IFRS measure) as additional financial measured, which are
not required by, or presented in accordance with IFRS. We believe this non-IFRS measure facilitates
comparisons of operating performance from year to year and company to company by adjusting for
potential impacts of items. We believe that this measure provides useful information to investors
FINANCIAL INFORMATION
– 190 –


--- page 200 ---
and others in understanding and evaluating our consolidated results of operations. Our presentation
of adjusted profit (non-IFRS measure) may not be comparable to similarly titled measures presented
by other companies. The use of these non-IFRS measures has limitations as analytical tools, and you
should not consider them in isolation form, or as substitutes for analysis of, or our results of
operations as reported under IFRS.
The following table reconciles our adjusted profit (non-IFRS measure) for the year presented
in accordance with IFRS, which is profit for the year.
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Add:
Share award expenses
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118905 1,083 1,207
Listing expenses (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 15,449
Adjusted profit for the year (non-IFRS measure) /H1118 58,017 96,472 153,626
Notes:
(1) Share award expenses are non-cash in nature.
(2) Listing expenses represent expenses related to the Global Offering.
Revenue
In 2023, 2024 and 2025, our revenue amounted to RMB238.5 million, RMB327.1 million, and
RMB402.8 million, respectively.
Revenue by Product Category
During the Track Record Period, we generated substantially all of our revenue from the sales
of (i) medical implants and (ii) surgical equipment and associated medical consumables.
The following table sets forth a breakdown of our revenue by product segment in absolute
amount and as a percentage of our total revenue for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,516 78.2 249,987 76.4 310,375 77.1
Surgical equipment and
associated medical
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,919 21.8 76,986 23.5 92,020 22.8
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 0.0 146 0.1 356 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 100.0 327,119 100.0 402,751 100.0
Note:
(1) Others primarily comprised revenue from the sales of surgical utility carts and regenerative repair products for joint
soft tissues.
FINANCIAL INFORMATION
– 191 –


--- page 201 ---
The following table sets forth a breakdown of our sales volume and average sales price by
product category for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118Sales V olume
(Units)
262,000 560,110 710,425
Average Selling
Price (RMB)
711.9 446.3 436.9 (1)
Surgical equipment and
associated medical
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales V olume
(Units)
87,098 152,266 177,133
Average Selling
Price (RMB)
596.1 505.6
(2) 519.5 (3)
Notes:
(1) The slight decrease in average selling prices of medical implants from RMB446.3 per unit to RMB436.9 per unit
primarily reflected normal market fluctuations, including adjustments in sales mix in response to normal market
fluctuations and periodic product promotions.
(2) The average selling price of surgical equipment and associated medical consumables decreased from RMB596.1 per
unit in 2023 to RMB505.6 per unit in 2024, primarily due to the increase in the sales of medical consumables used
for surgical equipment, which command relatively lower selling prices.
(3) The average selling price of surgical equipment and associated medical consumables increased slightly from
RMB505.6 per unit in 2024 to RMB519.5 per unit in 2025, primarily due to the increased sales of surgical equipment
that commanded relatively higher average selling prices than associated medical consumables. The sales volume of
our surgical equipment increased as we successfully expanded our sales in overseas markets, where new customers
typically adopt our equipment at the initial stage of their engagement with us.
Revenue by Geographical Regions
During the Track Record Period, we had operations in various countries and regions. The
following table sets forth a breakdown of our revenue by geographical regions based on our
distributors’ principal places of business, in absolute amount and as a percentage of our total
revenue for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118231,876 97.2 306,267 93.6 332,485 82.6
Other countries and regions (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11186,666 2.8 20,852 6.4 70,266 17.4
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 100.0 327,119 100.0 402,751 100.0
Note:
(1) Other countries and regions mainly include France, Poland and Spain.
FINANCIAL INFORMATION
– 192 –


--- page 202 ---
The following table sets forth a breakdown of our sales volume and average selling price by
geographical region for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118Sales V olume (Units) 339,544 675,394 763,030
Average Selling Price
(RMB)
682.9 453.5 435.7
Other countries and
regions (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales V olume (Units) 9,576 37,008 124,910
Average Selling Price
(RMB)
696.1 563.4 (2) 562.5
Notes:
(1) Other countries and regions mainly include France, Poland and Spain.
(2) The average selling price of our products in other countries and regions decreased from RMB696.1 per unit in 2023
to RMB563.4 per unit in 2024, primarily due to our strategic initiatives to lower prices in overseas markets to expand
our presence. We adjusted our sales strategies by enhancing promotional activities, which effectively broadened our
customer base and increased sales volumes. Additionally, shifts in our product mix contributed to this trend, with a
higher proportion of sales from our medical implants, which command lower average selling prices than surgical
equipment and associated medical consumables.
During the Track Record Period, our revenue from other countries and regions increased from
RMB6.7 million in 2023 to RMB20.9 million in 2024, and further to RMB70.3 million in 2025. The
increases were primarily attributable to our continued expansion into overseas markets, including
the scaling of our sales channels and customer base and improved brand recognition.
Cost of sales
Our cost of sales amounted to RMB61.2 million, RMB99.5 million and RMB104.1 million in
2023, 2024 and 2025, respectively. During the Track Record Period, our cost of sales primarily
consisted of (i) raw material costs, (ii) labor costs, (iii) subcontracting processing fees, and (iv)
overhead costs.
The following table sets forth a breakdown of our cost of sales by nature in absolute amount
and as a percentage of our total cost of sales for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Raw material costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,054 73.6 73,991 74.3 71,875 69.0
Labor costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,139 14.9 13,022 13.1 16,244 15.6
Subcontracting processing fees /H1118/H1118/H1118/H1118/H1118/H1118/H11182,524 4.1 3,942 4.0 5,771 5.5
Overhead costs (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,517 7.4 8,569 8.6 10,242 9.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,234 100.0 99,524 100.0 104,132 100.0
Note:
(1) Overhead costs mainly include depreciation and amortization, logistics fees, utility fees, testing fees and service fees.
FINANCIAL INFORMATION
– 193 –


--- page 203 ---
The following table sets forth a breakdown of our cost of sales by product segment in absolute
amount and as a percentage of our total cost of sales for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,160 64.0 69,029 69.4 71,105 68.3
Surgical equipment and associated
medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,992 35.9 30,404 30.5 32,958 31.6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882 0.1 91 0.1 69 0.1
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,234 100.0 99,524 100.0 104,132 100.0
Gross Profit and Gross Profit Margin
We had gross profit of RMB177.3 million, RMB227.6 million and RMB298.6 million in 2023,
2024 and 2025, respectively. Our gross profit margin was 74.3%, 69.6% and 74.1% in 2023, 2024
and 2025, respectively.
The following table sets forth a breakdown of our gross profit and gross profit margin by
product segment for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,356 79.0 180,958 72.4 239,270 77.1
Surgical equipment and associated
medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,927 57.6 46,582 60.5 59,062 64.2
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 23.4 55 37.7 287 80.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 74.3 227,595 69.6 298,619 74.1
The following table sets forth a breakdown of gross profit and gross profit margin by
geographical regions for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
Gross
profit
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118172,991 74.6 214,357 70.0 252,355 75.9
Other countries and regions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,317 64.8 13,238 63.5 46,264 65.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 74.3 227,595 69.6 298,619 74.1
FINANCIAL INFORMATION
– 194 –


--- page 204 ---
In 2023, 2024 and 2025, gross profit margin from other countries and regions were lower than
gross profit margin from Chinese mainland, primarily because we sold fewer medical implants
overseas, which typically had higher gross profit margins than surgical equipment and associated
medical consumables.
Other Income and Gains
We recorded other income and gains of RMB14.8 million, RMB10.1 million and RMB22.7
million in 2023, 2024 and 2025, respectively. During the Track Record Period, our other income
primarily consisted of (i) bank interest income and (ii) government grants. The government grants
primarily consist of subsidies and funding to support the initiation and development of R&D
projects, as well as awards recognizing our R&D achievements and other types of government
subsidies. These grants are mostly awarded by governmental authorities in Beijing in relation to our
R&D initiatives, which are not conditional and are generally non-recurring in nature. As we
continue to invest in our R&D initiatives, we anticipate receiving similar grants in the future.
During the Track Record Period, our other gains primarily consisted of (i) gain on disposal of
financial assets at fair value through profit or loss, and (ii) foreign exchange gains.
The following table sets forth a breakdown of our other income and gains for the periods
indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Other income
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,734 5,568 5,381
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,791 3,612 14,617
Additional tax deduction for input V A T /H1118/H1118/H1118/H1118/H1118 – 790 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 58 60
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,555 10,028 20,058
Gains
Investment income on financial assets at fair
value through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870 – 1,600
Fair value gains on financial assets at fair
value through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – 1,064
Foreign exchange gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 63 –
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 866
Total gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118279 69 2,670
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/H111814,834 10,097 22,728
Note:
(1) Others primarily comprised additional deduction for input V A T, refund for processing fees for individual
income tax withholding.
Selling and Distribution Expenses
We had selling and distribution expenses of RMB66.1 million, RMB69.6 million and
RMB80.6 million in 2023, 2024 and 2025, respectively. During the Track Record Period, our selling
and distribution expenses primarily consisted of (i) employee benefits expenses; (ii) marketing
expenses; and (iii) technical service expenses, which represent amounts we pay to qualified
third-party technical service providers in regions that implement the “Two-Invoice System,” under
FINANCIAL INFORMATION
– 195 –


--- page 205 ---
which suppliers of high-value medical consumables are expected to arrange certain professional
services, including integrated logistics and technical services. According to CIC, this arrangement
with technical service providers is in line with the industry norm.
The following table sets forth a breakdown of our selling and distribution expenses by nature
both in absolute amounts and as percentages of total selling and distribution expenses for the
periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee benefits expenses /H1118/H1118/H1118/H1118/H1118/H111829,495 44.6 33,557 48.2 37,715 46.8
Marketing expenses (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,905 28.6 15,514 22.3 17,583 21.8
Technical service expenses /H1118/H1118/H1118/H1118/H1118/H11186,956 10.5 9,751 14.0 13,850 17.2
Traveling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,189 7.8 5,718 8.2 6,563 8.1
Share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151 0.3 180 0.2 207 0.3
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,412 8.2 4,908 7.1 4,652 5.8
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,108 100.0 69,628 100.0 80,570 100.0
Notes:
(1) Marketing expenses mainly include conference fees, product sample costs and labor fees in relation to our
promotional events.
(2) Others mainly include business development expenses, depreciation and amortization, office expenses, postage
expenses.
Administrative Expenses
Our administrative expenses amounted to RMB26.2 million, RMB22.8 million and RMB36.7
million in 2023, 2024 and 2025, respectively. During the Track Record Period, our administrative
expenses primarily consisted of (i) employee benefits expenses, (ii) depreciation and amortization,
(iii) professional service fee, in relation to our prior A-Share listing attempt and other third-party
services supporting our daily operations, (iv) listing expenses, (v) business and traveling expenses,
and (vi) share award expense.
The following table sets forth a breakdown of our administrative expenses by nature both in
absolute amounts and as percentages of total administrative expenses for the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee benefits expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,532 36.4 11,094 48.7 12,200 33.2
Depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H11183,324 12.7 2,715 11.9 1,114 3.0
Professional service fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,190 31.3 4,159 18.3 3,230 8.8
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 15,449 42.1
Business and travel expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,799 10.7 2,502 11.0 1,961 5.3
Share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118679 2.6 812 3.6 868 2.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,641 6.3 1,486 6.5 1,884 5.2
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,165 100.0 22,768 100.0 36,706 100.0
FINANCIAL INFORMATION
– 196 –


--- page 206 ---
Note:
(1) Others mainly included software service fee and property management fee.
Research and Development Expenses
We had research and development expenses of RMB35.0 million, RMB37.3 million, and
RMB47.5 million in 2023, 2024 and 2025, respectively. During the Track Record Period, our
research and development expenses primarily consisted of (i) employee benefits expenses; (ii)
professional service fees in relation to validation and registration tests of our products; (iii) material
costs; and (iv) depreciation and amortization.
The following table sets forth a breakdown of our research and development expenses by
nature both in absolute amounts and as percentages of total research and development expenses for
the periods indicated:
Y ear ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee benefits expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111817,911 51.1 20,268 54.4 25,243 53.1
Professional service fees (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,295 23.7 8,085 21.7 13,197 27.9
Material costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,818 19.5 5,309 14.3 4,995 10.5
Depreciation and amortization /H1118/H1118/H1118/H1118/H11181,280 3.7 2,489 6.7 2,725 5.7
Share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875 0.2 90 0.2 132 0.3
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118645 1.8 1,011 2.7 1,211 2.5
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,024 100.0 37,252 100.0 47,503 100.0
Notes:
(1) Others mainly included energy costs, office, and traveling expenses.
(2) Professional service fees primarily include registration fees, testing fees and patent application fees.
Other Expenses
Our other expenses mainly consisted of non-operating expenses and losses on asset scraping
and disposal. We had other expenses of RMB49.0 thousand, RMB13.0 thousand and RMB415.0
thousand in 2023, 2024 and 2025, respectively. During the Track Record Period, the fluctuations in
other expenses were mainly caused by the variations in asset usage.
Reversal of Impairment/(Impairment) of Financial Assets, Net
Our impairment or reversal of impairment of financial assets, net mainly represented changes
in our allowance over trade receivables, other receivables and deposits based on expected credit
loss. During the Track Record Period, we recorded reversal of impairment of financial assets, net
of RMB12.0 thousand in 2023 and impairment of financial assets, net of RMB0.1 million and
RMB1.6 million in 2024 and 2025, respectively. During the Track Record Period, the changes were
primarily caused by the changes in the year-end balances of our financial assets and adjustments in
the expected credit loss rates applicable in each period.
Finance Costs
Our finance costs consisted of interest on bank borrowings and other loans and interest on
lease liabilities. We had finance costs of RMB0.5 million, RMB0.4 million and RMB0.3 million in
2023, 2024 and 2025, respectively.
FINANCIAL INFORMATION
– 197 –


--- page 207 ---
Income Tax Expense
Our income tax expenses mainly represented income tax paid or payable at the applicable tax
rates in accordance with the relevant laws and regulations in each tax jurisdiction in which we
operate or are domiciled. See Note 10 of the Accountants’ Report in Appendix I to this prospectus.
During the Track Record Period, we had income tax expense of RMB7.2 million, RMB12.2 million
and RMB17.2 million in 2023, 2024 and 2025, respectively.
Pursuant to the Corporate Income Tax Law of the PRC and the respective regulations (the
“CIT Law ”), our subsidiaries operating in Chinese mainland are subject to a rate of 25% on the
taxable income except for certain subsidiaries which enjoy a preferential income tax rate. In
addition, on July 31, 2020, we were accredited as a “High and New Technology Enterprise”
(“HNTE ”), which was renewed in October 2023. As a result, we were entitled to a preferential EIT
rate of 15% for the Track Record Period. Furthermore, one of our subsidiaries in Chinese mainland
was qualified as a small and micro-sized enterprise. According to the Announcement of the Ministry
of Finance and the State Administration of Taxation on Preferential Policies for the Income Tax of
Small and Micro Enterprises and Individual Industrial and Commercial Households, the annual
taxable income of small and micro-sized enterprises not exceeding RMB1 million is reduced by
25% of the taxable income and subject to enterprise income tax at a rate of 20%. According to the
“Announcement of the Ministry of Finance and the State Administration of Taxation on Further
Implementation of Preferential Policies on Income Tax for Small and Micro Enterprises,” for small
and micro enterprises with annual taxable income exceeding RMB1 million but not exceeding
RMB3 million, the taxable income shall be reduced to 25% of the actual amount and subject to
enterprise income tax at a rate of 20%.
As of the Latest Practicable Date, we did not have any dispute with any tax authority. During
the Track Record Period and up to the Latest Practicable Date, we had not been subject to any tax
investigation, enquiries, penalties or surcharges.
YEAR-TO-YEAR COMPARISON OF RESULTS OF OPERATIONS
Y ear Ended December 31, 2025 Compared with Y ear Ended December 31, 2024
Revenue
Our revenue increased by 23.1% from RMB327.1 million in 2024 to RMB402.8 million in
2025, primarily due to the increased sales of our medical implants and surgical equipment and
associated medical consumables.
Medical Implants
Our revenue from medical implants increased by 24.2% from RMB250.0 million in 2024 to
RMB310.4 million in 2025, primarily attributable to the increased sales of our suture anchors and
meniscus repair systems. The sales volume of our suture anchor rose substantially from 277.8
thousand units in 2024 to 365.2 thousand units in 2025. Meanwhile, the sales volume of our
meniscus repair systems increased during the same period. The sales growth of medical implants
was mainly driven by the increasing market acceptance and enhanced market recognition of our
products. This sales growth was partially offset by a decrease in their selling price during the same
period, mainly because these products were included in the volume-based procurement program,
which enhanced the affordability of our medical implants.
Surgical Equipment and Associated Medical Consumables
Our revenue from surgical equipment and associated medical consumables increased by
19.5% from RMB77.0 million in 2024 to RMB92.0 million in 2025, primarily attributable to the
increased sales of our medical consumables associated with active equipment, in particular RF
FINANCIAL INFORMATION
– 198 –


--- page 208 ---
ablation electrodes. Such growth was driven by the increasing adoption of our active equipment in
surgical procedures during the Track Record Period, which in turn resulted in more frequent
replacement and purchase of the related consumables.
Cost of Sales
Our cost of sales increased from RMB99.5 million in 2024 to RMB104.1 million in 2025. Our
labor costs increased from RMB13.0 million to RMB16.2 million during the same period, primarily
due to the continued expansion of our production team and increased compensation for our
employees to award their performance. This increase was partially offset by the decrease in raw
material costs from RMB74.0 million to RMB71.9 million during the same period, primarily due
to our effective cost management.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by 31.2% from RMB227.6 million in
2024 to RMB298.6 million in 2025. Gross profit margin increased from 69.6% in 2024 to 74.1%
in 2025.
Medical Implants
Our gross profit from medical implants increased by 32.2% from RMB181.0 million in 2024
to RMB239.3 million in 2025. Gross profit margin for medical implants increased from 72.4% in
2024 to 77.1% in 2025, primarily due to our effective cost management in the face of downward
pricing pressures from the centralized volume-based procurement program and economies of scales
in production. Specifically, we negotiated with core suppliers for favorable procurement price,
leveraging our bargaining power. In addition, we collaborated with suppliers on raw material design
and production workflows, optimizing their production processes and production costs, thereby
fostering robust relationships with them while securing favorable pricing terms. Furthermore, we
strategically diversified suppliers, sourcing certain raw materials from various suppliers and
enhancing our resilience against supply chain disruptions. In the meantime, our increased
production volumes unlocked further efficiencies, lowering per-unit labor and manufacturing
expenses, while ongoing improvements in production processes amplified these gains.
Surgical Equipment and Associated Medical Consumables
Our gross profit from surgical equipment and associated medical consumables increased by
26.8% from RMB46.6 million in 2024 to RMB59.1 million in 2025. Gross profit margin for surgical
equipment and associated medical consumables increased from 60.5% in 2024 to 64.2% in 2025,
primarily due to our effective cost management strategies and economies of scale. We negotiated
more favorable procurement prices with suppliers by leveraging our bargaining power, while
benefiting from the economies of scale as we expanded the production.
Other Income and Gains
Our other income and gains increased from RMB10.1 million in 2024 to RMB22.7 million in
2025, primarily due to an increase in government grants, which were awarded for our R&D
achievements and supported our business growth and overseas expansion efforts.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 15.7% from RMB69.6 million in 2024 to
RMB80.6 million in 2025, primarily due to (i) an increase in employee benefit expenses of RMB4.2
million in line with our increased market expansion efforts that required additional sales and
FINANCIAL INFORMATION
– 199 –


--- page 209 ---
marketing personnel; and (ii) an increase in technical service expenses of RMB4.1 million,
primarily due to the sales growth in regions implementing the Two-Invoice System, which led to
an increased demand for third-party technical service providers.
Administrative Expenses
Our administrative expenses increased from RMB22.8 million in 2024 to RMB36.7 million in
2025, primarily due to an increase in listing expenses in relation to the Listing.
Research and Development Expenses
Our research and development expenses increased by 27.5% from RMB37.3 million in 2024
to RMB47.5 million in 2025, primarily due to (i) an increase in employee benefits expenses of
RMB5.0 million, as we recruited more R&D professionals with master’s degrees or above, as well
as enhanced compensation to award R&D personnel, and (ii) an increase in professional service fees
of RMB5.1 million in relation to increased registration and testing fees for our new products.
Income Tax Expense
Our income tax expense increased from RMB12.2 million in 2024 to RMB17.2 million in
2025, primarily due to an increase in operating profit during this period.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased from RMB95.4 million in 2024
to RMB137.0 million in 2025.
Y ear Ended December 31, 2024 Compared with Y ear Ended December 31, 2023
Revenue
Our revenue increased by 37.1% from RMB238.5 million in 2023 to RMB327.1 million in
2024, primarily due to increased sales of medical implants and surgical equipment and associated
medical consumables.
Medical Implants
Our revenue from medical implants increased by 34.0% from RMB186.5 million in 2023 to
RMB250.0 million in 2024, primarily attributable to the increased sales of suture anchors, suture
buttons and high-strength suture, and meniscus repair systems. The sales volume of suture anchors,
particularly our bioabsorbable suture anchors, substantially increased from 125.6 thousand in 2023
to 277.8 thousand in 2024. Meanwhile, the sales volume of suture button and high-strength sutures
significantly increased from 94.1 thousand units in 2023 to 187.1 thousand units in 2024. The sales
volume of meniscus repair systems increased from 24.1 thousand units in 2023 to 62.1 thousand
units in 2024. The surge in the sales volume of medical implants were partially offset by decreases
in the selling prices of these products. The growing sales volumes of these medical implants was
driven by growing market acceptance of sports medicine products, demonstrated by an increase in
the number of our hospital customers. On the other hand, the decline in the selling prices was
mainly caused by the implementation of the volume-based procurement program that exerted the
downward pricing pressure on our medical implants, which in turn enhanced their affordability and
encouraged adoption.
Surgical Equipment and Associated Medical Consumables
Our revenue from surgical equipment and associated medical consumables increased by
48.3% from RMB51.9 million in 2023 to RMB77.0 million in 2024, primarily due to the increased
sales of medical consumables used for active equipment, such as surgical shaver system and plasma
FINANCIAL INFORMATION
– 200 –


--- page 210 ---
ablation equipment. The sales volume of our associated medical consumables increased
significantly from 76.7 thousand units in 2023 to 135.3 thousand units in 2024, and the selling price
of these products increased during the same period. This sales growth was mainly driven by our
first-mover advantage in marketing these products in China and enhanced market recognition
resulting from our continuous product development efforts.
Cost of Sales
Our cost of goods sold increased by 62.5% from RMB61.2 million in 2023 to RMB99.5
million in 2024, primarily due to an increase in raw material costs of RMB28.9 million, in line with
our expanded production to meet growing customer demand, and an increase in labor costs of
RMB3.9 million associated with our expanded production team.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by 28.4% from RMB177.3 million in
2023 to RMB227.6 million in 2024. Our gross profit margin decreased from 74.3% in 2023 to
69.6% in 2024.
Medical Implants
Our gross profit from medical implants increased by 22.8% from RMB147.4 million in 2023
to RMB181.0 million in 2024, driven by the increased revenue from this product segment. Gross
profit margin for medical implants decreased from 79.0% in 2023 to 72.4% in 2024, primarily due
to the lower selling prices of our medical implants, which were included in the volume-based
procurement programs since 2024.
Surgical Equipment and Associated Medical Consumables.
Our gross profit from surgical equipment and associated medical consumables increased by
55.7% from RMB29.9 million in 2023 to RMB46.6 million in 2024, primarily due to the increased
revenue from this product segment. Gross profit margin for surgical equipment and associated
medical consumables increased from 57.6% in 2023 to 60.5% in 2024, primarily due to a decrease
in raw material costs, as we benefitted from favorable procurement prices by leveraging our robust
relationships with suppliers and strong bargaining power, as well as the economies of scale due to
our expanded production.
Other Income and Gains
Our other income and gains decreased from RMB14.8 million in 2023 to RMB10.1 million in
2024, primarily due to a decrease in government grants that were one-off in nature.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 5.3% from RMB66.1 million in 2023 to
RMB69.6 million in 2024, primarily attributable to an (i) increase in employee benefits expense of
RMB4.1 million, due to the expansion of our sales and marketing team, and (ii) an increase in
technical service expenses of RMB2.8 million, as we engaged more third-party service providers for
technical services to provide better technical support.
Administrative Expenses
Our administrative expenses decreased by 13.0% from RMB26.2 million in 2023 to RMB22.8
million in 2024, primarily due to a decrease in professional service fees of RMB4.0 million
attributable to the decreased expenses for professional parties in relation to the prior listing.
FINANCIAL INFORMATION
– 201 –


--- page 211 ---
Research and Development Expenses
Our research and development expenses increased by 6.4% from RMB35.0 million in 2023 to
RMB37.3 million in 2024, primarily due to (i) an increase in employee benefits expenses of
RMB2.4 million, resulting from our expanded R&D team, and (ii) an increase in depreciation and
amortization of RMB1.2 million, attributable to the expansion in our R&D facilities.
Income Tax Expense
Our income tax expense increased from RMB7.2 million in 2023 to RMB12.2 million in 2024,
primarily due to an increase in operating profit during the same period.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by 67.0% from RMB57.1 million
in 2023 to RMB95.4 million in 2024.
DISCUSSION OF SELECTED ITEMS FROM THE CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth selected information from our consolidated statements of
financial position as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,040 82,880 85,900
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,652 8,114 4,500
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,782 1,484 1,186
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118837 1,163 1,939
Certificate of deposit with a maturity
exceeding one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 10,149
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,823 1,333 786
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,134 94,974 104,460
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,287 57,154 64,476
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,651 19,134 40,981
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,836 12,011 14,384
Financial assets 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– – 422,934
Time deposits with original maturities of
over three months and due within one
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– 344,093 –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,144 522,360 659,621
FINANCIAL INFORMATION
– 202 –


--- page 212 ---
As of December 31,
2023 2024 2025
(RMB in thousands)
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,900 23,550 27,765
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,173 77,780 66,586
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,198 10,487 4,222
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 12,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,276 3,716 1,901
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 1,617 5,976
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,672 10,083 12,370
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,525 127,233 130,820
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,619 395,127 528,801
Non-current liabilities
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118– 17,000 18,723
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,054 1,861 –
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118931 – 5,121
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,985 18,861 23,844
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,768 471,240 609,417
Inventories
Our inventories primarily consisted of (i) raw materials, (ii) work-in-progress, (iii) semi-
finished goods, (iv) finished goods, (v) materials consigned for processing, as we outsourced certain
production procedures to third-party manufacturers, and (vi) goods in transit, which represents
goods that had been shipped to customers but were pending customer acceptance. The following
table sets forth a breakdown of our inventories as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,842 18,717 24,320
Work-in-progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,693 7,201 6,466
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,198 8,947 11,887
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,188 21,424 18,980
Materials consigned for processing /H1118/H1118/H1118/H1118/H1118738 1,717 3,529
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118866 1,899 3,991
Less: Provision for inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,238) (2,751) (4,697)
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/H111839,287 57,154 64,476
Our inventories increased by 45.5% from RMB39.3 million as of December 31, 2023 to
RMB57.2 million as of December 31, 2024 and further increased by 12.8% to RMB64.5 million as
of December 31, 2025. Our inventories increased steadily during the Track Record Period, primarily
due to an increase in the procurement of raw materials in anticipation of the expanded production
to meet the growing market demand, as well as increases in work-in-progress, semi-finished goods
and finished products resulting from our production expansion.
FINANCIAL INFORMATION
– 203 –


--- page 213 ---
We believe there is no impairment issue for our inventories as of December 31, 2025. We have
made sufficient provisions based on our estimates of the realizable value of such inventories. We
made full provision for inventories that are no longer expected to be used or sold. During the Track
Record Period, we periodically inspected the inventory level to avoid stockpiling while scheduling
our production to optimize the raw material usage.
The following table sets forth an aging analysis of our inventories as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,001 52,925 56,161
Over one year but within two years /H1118/H1118/H1118/H1118/H11181,149 4,434 6,405
Over two years but within three years /H1118/H1118/H1118 1,874 752 1,412
Over three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118501 1,794 498
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/H111840,525 59,905 64,476
The following table sets forth the turnover days of our inventories for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(days)
Inventory turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204 184 226
Note:
(1) Inventory turnover days for a year equal the average of the gross value of the opening and closing inventory
balance divided by cost of sales for the relevant year and multiplied by the number of days in the relevant year,
which is 365 days for each year.
Our inventory turnover days decreased from 204 days in 2023 to 184 days in 2024 primarily
attributable to the increased market demand for our products, which accelerated the sales efficiency
and therefore shortened the inventory turnover. Our inventory turnover days increased from 184
days in 2024 to 226 days in 2025, primarily due to the increased inventories to meet our production
needs in response to the surging market demand.
Our Directors have assessed and made sufficient provision for our inventories and do not
believe there is any material impairment or recoverability issue for our inventories during the Track
Record Period and up to the Latest Practicable Date.
As of February 28, 2026, RMB18.3 million or 26.4% of our inventories as of December 31,
2025 had been utilized or sold.
FINANCIAL INFORMATION
– 204 –


--- page 214 ---
Trade and Bills Receivables
Our trade and bills receivables represented the outstanding receivables from our customers
during our ordinary course of business. The following table sets forth a breakdown of our trade and
bills receivables as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,757 5,177 42,845
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,177 –
Less: Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(106) (220) (1,864)
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/H11182,651 19,134 40,981
Our trade and bills receivables increased by 621.8% from RMB2.7 million as of December 31,
2023 to RMB19.1 million as of December 31, 2024, primarily due to an increase in bills receivables
as one customer paid by bills in November, 2024. Our trade receivables increased from RMB2.8
million to RMB5.2 million during the same period, primarily due to our increased sales in overseas
markets in which we provided credit terms to overseas distributors. Our trade and bills receivables
increased by 114.2% from RMB19.1 million as of December 31, 2024 to RMB41.0 million as of
December 31, 2025, primarily due to the increased trade receivables from RMB5.2 million to
RMB42.8 million during the same period, driven by our continued business growth, particularly the
increase in overseas sales due to our expansion in overseas markets, as we typically grant longer
credit period to overseas customers.
During the Track Record Period, all of our trade and bills receivables were aged within one
year.
The following table sets forth the turnover days of our trade and bills receivables for the
periods indicated:
Y ear ended December 31,
2023 2024 2025
(days)
Trade and bills receivables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851 22 8
Note:
(1) Trade and bills receivables turnover days for a year equal the average of opening and closing balance of trade
and bills receivables for the relevant year divided by revenue for the relevant year and multiplied by the
number of days in the relevant year, which is 365 days for each year.
Our trade and bills receivables turnover days increased from five days in 2023 to 12 days in
2024, mainly due to an increase in bills receivables during this period as a customer settled in bills.
Our trade and bills receivables turnover days increased from 12 days in 2024 to 28 days in 2025,
mainly due to our increased sales in overseas markets. We granted credit terms to certain
distributors overseas or as required by applicable domestic regulations in relation to the sales of
medical devices. These relatively short turnover periods reflect our tight credit terms with these
distributors. We typically provide a credit term from 30 to 90 days for these distributors.
FINANCIAL INFORMATION
– 205 –


--- page 215 ---
We have assessed the recoverability of our outstanding trade receivables balances, and our
Directors are of the view that there are no recoverability issues and that sufficient provisions have
been made for the following reasons: (i) our customers primarily comprise industry-leading
enterprises and state-owned enterprises, which generally possess strong financial strength and
demonstrate good credit histories with low default rates; (ii) we maintain stable and long-term
relationships with these customers, fostering mutual trust and consistent payment behaviors over
time; (iii) we have implemented internal control measures to manage risks associated with trade
receivables, including regular credit assessments, aging analyses and proactive follow-up
procedures; and (iv) the trade receivables arise primarily due to customers’ standard settlement and
funding cycles, which are predictable and aligned with their operational norms, further mitigating
any potential recoverability concerns.
Our Directors have assessed and made sufficient provision for our trade and bills receivables
and do not believe there is any material impairment or recoverability issue for our trade and bills
receivables during the Track Record Period and up to the Latest Practicable Date.
As of February 28, 2026, RMB20.2 million, or 47.1% of our trade and bills receivables as of
December 31, 2025, had been settled.
Property, Plant and Equipment
Our property, plant and equipment primarily consisted of (i) leasehold improvements, (ii)
machinery, (iii) tools, (iv) office equipment, and (v) construction in progress.
The following table sets forth a breakdown of our property, plant and equipment as of the
dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,568 6,318 2,486
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,702 10,814 13,260
Tools /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,949 10,793 10,939
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,262 866 688
Construction in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118559 54,089 58,527
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/H111830,040 82,880 85,900
Our property, plant and equipment increased by 175.9% from RMB30.0 million as of
December 31, 2023 to RMB82.9 million as of December 31, 2024 primarily due to an increase in
construction in progress for a new production plant in response to the growing market demand. Our
property, plant and equipment increased from RMB82.9 million as of December 31, 2024 to
RMB85.9 million as of December 31, 2025, primarily due to an increase in machinery to support
our production expansion an increase in construction in progress in relation to the new production
plant and additional production equipment.
Right-of-Use Assets
During the Track Record Period, our right-of-use assets primarily consisted of leased
buildings and our own land. Our right-of-use assets decreased by 23.8% from RMB10.7 million as
of December 31, 2023 to RMB8.1 million as of December 31, 2024, and further decreased by 44.5%
to RMB4.5 million as of December 31, 2025, primarily due to depreciation.
FINANCIAL INFORMATION
– 206 –


--- page 216 ---
Prepayments, Other Receivables and Other Assets
The following table sets forth a breakdown of our prepayments, other receivables and other
assets as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Current:
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,569 3,325 2,462
Right-of-return assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118883 3,012 3,060
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118914 3,798 5,316
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 01 0
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 1,355 2,721
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118339 515 819
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10) (4) (4)
Non-current:
Prepayments for property, plant and equipment /H1118 2,541 943 385
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291 402 411
Impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9) (12) (10)
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/H11189,659 13,344 15,170
Our prepayments, other receivables and other assets increased by 38.2% from RMB9.7 million
as of December 31, 2023 to RMB13.3 million as of December 31, 2024, primarily due to (i) an
increase in right-of-return assets, and (ii) an increase in deductible value-added tax, driven by our
continuous business expansion. The right-of-return assets were recognized for our right to recover
goods from customers when they want to exchange or return purchased goods, and is recorded as
a percentage of sales revenue during the period to reflect the expected return level. The
right-of-return assets increased from 2023 to 2024, mainly because we adjusted the expected return
level due to the shifting market demand and our varying product mix. In the meantime, our
deductible value-added tax increased during the same period due to our V A T-bearing purchases of
property, plant and equipment for our new production plant. Our prepayments, other receivables and
other assets increased by 13.7% from RMB13.3 million as of December 31, 2024 to RMB15.2
million as of December 31, 2025, primarily due to an increase in deductible value-added tax and
an increase in listing expenses.
As of February 28, 2026, RMB3.3 million, or 21.5% of our prepayments, other receivables
and other assets as of December 31, 2025, had been settled.
Financial Assets at Fair Value Through Profit or Loss
Our financial assets at fair value through profit or loss increased from nil as of December 31,
2023 and 2024 to RMB422.9 million as of December 31, 2025, primarily due to the investment of
idle funds in bank-issued low- to medium-risk wealth management products such as cash
management products and short-term wealth management products.
We believe we can make better use of our cash by making appropriate investments in wealth
management products of low-to-medium risk, which generate income without interfering with our
business operation or capital expenditures. Our investment decisions with respect to financial
products are made on a case-by-case basis and after due and careful consideration of a number of
factors, including, but not limited to, the market conditions, the economic developments, the
anticipated investment conditions, the investment cost, the duration of the investment, the expected
benefit and potential loss of the investment, our cash flow position and future working capital needs
FINANCIAL INFORMATION
– 207 –


--- page 217 ---
based on operational requirements. We have adopted a comprehensive set of internal policies and
guidelines to manage our investments. Our Board exercises oversight over our investment activities
through regular review and approval of significant investment decisions. Pursuant to our investment
management policies, investments exceeding specified thresholds are subject to prior Board
approval, while investments below such thresholds may be approved by the relevant management
departments within their authorized limits. Our investment department is responsible for organizing
project evaluations, conducting feasibility analyses, overseeing project implementation and
maintaining investment records. Our finance department is responsible for performing economic
and financial analyses, arranging payment of investment funds, conducting financial supervision
and carrying out post-investment evaluations. Our internal audit department conducts periodic
audits and inspections to ensure compliance with internal policies and the accuracy of accounting
treatment. Our management, including our investment, finance and internal auditing departments,
has extensive experience in managing the financial aspects of an enterprise’s operations. Upon
Listing, we intend to continue making investments strictly in accordance with our internal control
policies. To the extent that any such investment constitutes a notifiable transaction under Chapter
14 of the Listing Rules, we will comply with the applicable requirements thereunder, including the
relevant announcement, reporting and/or shareholders’ approval requirements, as appropriate.
Trade Payables
Our trade payables were primarily related to the amounts payable to suppliers.
Our trade payables increased by 82.6% from RMB12.9 million as of December 31, 2023 to
RMB23.6 million as of December 31, 2024, primarily due to the increased procurement of raw
materials to meet our continuously expanding production scale. Our trade payables increased from
RMB23.6 million as of December 31, 2024 to RMB27.8 million as of December 31, 2025.
The following table sets forth an aging analysis of the trade payables based on the invoice
dates as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,639 23,187 27,067
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261 363 698
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/H111812,900 23,550 27,765
The following table sets forth the turnover days of our trade payables for the periods
indicated:
As of December 31,
2023 2024 2025
(days)
Trade payables turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856 67 90
Note:
(1) Trade payables turnover days for a year equal the average of the opening and closing balance of trade payables
for the relevant year divided by the cost of sales for the relevant year and multiplied by the number of days
in the relevant year, which is 365 days for each year.
FINANCIAL INFORMATION
– 208 –


--- page 218 ---
Our trade payables turnover days increased from 56 days in 2023 to 67 days in 2024, primarily
due to increased procurement of raw materials to support our production expansion. Our trade
payables turnover days increased from 67 days in 2024 to 90 days in the year ended December 31,
2025, mainly because we substantially increased raw material procurement in response to the
surging market demand. During the Track Record Period, our suppliers typically granted us a credit
term from 30 days to 90 days.
As of February 28, 2026, RMB19.9 million, or 71.5% of our trade and bills payables as of
December 31, 2025 had been settled.
Other Payables and Accruals
The following table sets forth a breakdown of our other payables and accruals as of the dates
indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,068 20,206 25,352
Payroll and welfare payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,776 19,380 23,318
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,379 4,699 9,284
Payable for purchase of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118754 30,070 7,086
Long-term liabilities due within one year /H1118 – 976 1,000
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,167 –
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196 1,282 546
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/H111840,173 77,780 66,586
Our other payables and accruals further increased by 93.6% from RMB40.2 million as of
December 31, 2023 to RMB77.8 million as of December 31, 2024, primarily due to an increase in
payable for purchase of property, plant and equipment resulting from the construction of a new
production plant, and an increase in payroll and welfare payables for our expanded workforce. Our
other payables and accruals then decreased by 14.4% from RMB77.8 million as of December 31,
2024 to RMB66.6 million as of December 31, 2025, mainly because we settled certain payment for
property, plant and equipment in relation to our new production plant.
As of February 28, 2026, RMB35.3 million, or 49.2% of our other payables and accruals as
of December 31, 2025 had been settled.
Refund Liabilities
Our refund liabilities represent amounts of expected refunds or exchanges on sales that allow
returns and exchanges. Our refund liabilities increased from RMB3.7 million as of December 31,
2023 to RMB10.1 million as of December 31, 2024, primarily due to revised expectations reflecting
increasing sales revenue, shifting market demand and changes in our product mix. Our refund
liabilities increased from RMB10.1 million as of December 31, 2024 to RMB12.4 million as of
December 31, 2025.
SHARE CAPITAL AND TOTAL EQUITY
Our share capital amounted to RMB46.4 million, RMB46.4 million and RMB46.4 million as
of December 31, 2023, 2024 and 2025, respectively. In addition, our total equity amounted to
RMB374.8 million, RMB471.2 million and RMB609.4 million as of December 31, 2023, 2024 and
FINANCIAL INFORMATION
– 209 –


--- page 219 ---
2025, respectively. Our total equity increased to RMB471.2 million as of December 31, 2024 from
RMB374.8 million as of December 31, 2023, primarily reflecting our profit for the year ended
December 31, 2024 of RMB95.4 million and our share award reserve of RMB1.1 million in 2024.
As of December 31, 2025, our total equity increased to RMB609.4 million, primarily reflecting our
profit for year ended December 31, 2025 of RMB137.0 million and our share award reserve in 2025
of RMB1.2 million.
LIQUIDITY AND CAPITAL RESOURCES
Net Current Assets and Liabilities
The following table sets forth selected information from our consolidated statements of
financial position as of the dates indicated:
As of December 31,
As of
February 28,
2023 2024 2025 2026
(RMB in thousands)
(Unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,287 57,154 64,476 71,259
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,651 19,134 40,981 39,270
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,836 12,011 14,384 21,805
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 422,934 393,433
Time deposits with original maturities
of over three months and due within
one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 344,093 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846 85,033
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,144 522,360 659,621 610,800
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,900 23,550 27,765 19,742
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,173 77,780 66,586 41,601
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,198 10,487 4,222 4,772
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118 – – 12,000 2,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,276 3,716 1,901 930
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 1,617 5,976 119
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,672 10,083 12,370 12,370
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,525 127,233 130,820 81,534
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,619 395,127 528,801 529,266
Our net current assets increased from RMB528.8 million as of December 31, 2025 to
RMB529.3 million as of February 28, 2026, primarily due to (i) a decrease in other payables and
accruals of RMB25.0 million due to the payment of employees’ annual bonus; (ii) a decrease in
interest-bearing bank borrowings of RMB10.0 million; and (iii) an increase in prepayments, other
receivables and other assets of RMB7.4 million, partially offset by a decrease in cash and cash
equivalents of RMB31.8 million.
Our net current assets increased from RMB395.1 million as of December 31, 2024 to
RMB528.8 million as of December 31, 2025, primarily due to (i) an increase in financial assets at
fair value through profit or loss of RMB422.9 million; (ii) an increase in cash and cash equivalents
FINANCIAL INFORMATION
– 210 –


--- page 220 ---
of RMB26.9 million, primarily due to our continued business growth; and (iii) an increase in trade
and bills receivables of RMB21.8 million, driven by the increased sales, partially offset by a
decrease in time deposits with original maturities of over three months and due within one year of
RMB344.1 million.
Our net current assets increased from RMB334.6 million as of December 31, 2023 to
RMB395.1 million as of December 31, 2024, primarily due to (i) an increase in time deposits of
RMB344.1 million, (ii) an increase in inventories of RMB17.9 million, in anticipation of the
growing market demand for our products, (iii) an increase in trade and bills receivables of RMB16.5
million, in line with the growth in sales, (iv) an increase in prepayments, other receivables and other
assets of RMB5.2 million, in line with our business expansion, partially offset by (i) a decrease in
cash and cash equivalent of RMB266.4 million, (ii) an increase in other payables and accruals of
RMB37.6 million for our purchase of property, plant and equipment and increased payroll and
welfare payables for expanded workforce, and (iii) an increase in trade payables of RMB10.7
million for increased raw material procurement for expanded production.
Working Capital
We have historically funded our cash requirements principally from cash generated from
operations and equity financing. We monitor and maintain a level of cash and cash equivalents
deemed adequate to finance our operations and mitigate the effects of fluctuations in cash flows. As
of December 31, 2023, 2024 and 2025, we had cash and cash equivalent of RMB356.4 million,
RMB90.0 million and RMB116.8 million, respectively. As of December 31, 2023, 2024 and 2025,
we had time deposits of nil, RMB344.1 million and nil, respectively. In addition, as of December
31, 2025, we had financial assets at fair value through profit or loss of RMB422.9 million. Going
forward, we believe that our liquidity requirements will be satisfied by using a combination of
operating cash flow and the estimated net proceeds received from the Global Offering.
Taking into account the financial resources available to us, including our cash and cash
equivalents on hand and our time deposits, and the estimated net proceeds from the Global Offering,
our Directors are of the view that we have sufficient working capital to meet our present
requirements and for the next 12 months from the date of this Prospectus.
Cash Flow
The following table sets forth our cash flow for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Net cash flows from operating activities /H1118/H1118/H1118/H1118/H111879,856 94,515 157,116
Net cash flows used in investing activities /H1118/H1118/H1118 (21,168) (371,252) (120,561)
Net cash flows from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,594 10,133 (9,354)
Net increase/(decrease) in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,282 (266,604) 27,201
Cash and cash equivalents at beginning of
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/H1118272,840 356,370 89,968
Effect of foreign exchange rate changes, net /H1118/H1118 248 202 (323)
Cash and cash equivalents at end of year /H1118/H1118 356,370 89,968 116,846
FINANCIAL INFORMATION
–2 1 1–


--- page 221 ---
Net Cash Flows from Operating Activities
Our net cash flows from operating activities primarily represented our profit before tax for the
period adjusted by: (i) non-cash and non-operating items and (ii) changes in working capital.
In 2025, our net cash flows generated from operating activities were RMB157.1 million,
which represents our profit before taxation of RMB154.2 million, as adjusted by non-cash and
non-operating items, primarily comprising interest income of RMB5.4 million, and changes in
working capital, primarily comprising (i) increase in prepayments, other receivables and other
assets of RMB2.4 million; (ii) increase in inventories of RMB13.3 million; and (iii) increase in
trade and bills receivables of RMB23.5 million, partially offset by an increase in other payables and
accruals, contract liabilities and refund liabilities of RMB32.5 million, depreciation of property,
plant and equipment of RMB10.9 million, and right-of-use assets of RMB3.6 million.
In 2024, our net cash flows from operating activities were RMB94.5 million, which represents
our profit before taxation of RMB107.6 million, as adjusted by non-cash and non-operating items,
primarily comprising interest income of RMB5.6 million, and changes in working capital, primarily
comprising (i) increase in inventories of RMB24.6 million, and (ii) increase in trade and bills
receivables of RMB16.6 million, partially offset by (i) increase in other payables and accruals,
contract liabilities and refund liabilities of RMB15.0 million, (ii) increase in trade payables of
RMB10.5 million, and (iii) depreciation of property, plant and equipment of RMB10.0 million.
In 2023, our net cash flows from operating activities were RMB79.9 million, which represents
our profit before taxation of RMB64.3 million, as adjusted by non-cash and non-operating items,
primarily comprising (i) depreciation of property, plant and equipment of RMB9.4 million, and (ii)
depreciation of right-of-use assets of RMB3.1 million, and changes in working capital, primarily
comprising (i) increase in other payables and accruals of RMB12.4 million and (ii) increase in trade
payables of RMB6.8 million, partially offset by increase in inventories of RMB18.4 million.
Net Cash Flows Used in Investing Activities
In 2025, our net cash flows used in investing activities were RMB120.6 million, which was
primarily attributable to purchases of financial assets at FVTPL of RMB781.9 million and
purchases of time deposits with original maturities of over three months and due within one year
of RMB263.0 million, partially offset by (i) proceeds from time deposits with original maturities
of over three months and due within one year of RMB607.1 million and proceeds from disposal of
financial assets at FVTPL of RMB360.0 million.
In 2024, our net cash flows used in investing activities were RMB371.3 million, which was
primarily attributable to (i) purchases of time deposits with original maturities of over three months
and due within one year of RMB593.2 million and (ii) purchases of items of property, plant and
equipment of RMB27.2 million, partially offset by proceeds from maturity of time deposits with
original maturities of over three months and due within one year of RMB249.1 million.
In 2023, our net cash flows used in investing activities were RMB21.2 million, which was
primarily attributable to (i) purchases of items of property, plant and equipment of RMB17.5
million, and (ii) purchases of intangible assets and right-of-use assets of RMB3.8 million.
Net Cash Flows from/(Used in) Financing Activities
In 2025, our net cash flows used in financing activities were RMB9.4 million, which was
primarily attributable to payments of listing expenses of RMB19.2 million, partially offset by new
bank borrowing of RMB13.7 million.
FINANCIAL INFORMATION
– 212 –


--- page 222 ---
In 2024, our net cash flows generated from financing activities were RMB10.1 million, which
was primarily attributable to new bank borrowings of RMB17.0 million, partially offset by (i) lease
payments of RMB4.1 million and (ii) payments of listing expenses in relation to the prior listing
attempt of RMB2.7 million.
In 2023, our net cash flows generated from financing activities were RMB24.6 million, which
was primarily attributable to proceeds from issue of shares of RMB36.7 million, partially offset by
(i) payments of listing expenses in relation to the prior listing attempt of RMB8.5 million and (ii)
lease payments of RMB3.5 million.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates or for the periods
indicated:
Y ear ended/As of December 31,
2023 2024 2025
Gross profit margin (%) (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874.3 69.6 74.1
Net profit margin (%) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.9 29.2 34.0
Current ratio (times) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.7 4.1 5.0
Quick ratio (times) (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.2 3.7 4.5
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin equals net profit for the year divided by revenue for the year and multiplied by 100%.
(3) Current ratio is calculated based on total current assets divided by total current liabilities.
(4) Quick ratio is calculated based on total current assets less inventories divided by total current liabilities.
INDEBTEDNESS
During the Track Record Period, our indebtedness mainly included interest-bearing bank
borrowings and lease liabilities. As of December 31, 2023, 2024 and 2025, we had a total
indebtedness of RMB8.3 million, RMB22.6 million and RMB32.6 million, respectively.
The following table sets forth our indebtedness as of the dates indicated:
As of December 31,
As of
February 28,
2023 2024 2025 2026
(RMB in thousands)
(Unaudited)
Current
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 12,000 2,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,276 3,716 1,901 930
Non-Current
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,000 18,723 18,723
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,054 1,861 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,330 22,577 32,624 21,653
FINANCIAL INFORMATION
– 213 –


--- page 223 ---
Interest-bearing Bank Borrowings
As of December 31, 2025, our interest-bearing bank borrowings comprised of secured loans
with an effective annual rate of LPR minus 90 basis points. We had interest-bearing bank
borrowings of nil, RMB17.0 million, RMB30.7 million and RMB20.7 million as of December 31,
2023, 2024, 2025 and February 28, 2026 respectively. For more details, see Note 25 to the
Accountant’s Report in Appendix I to this document. As of December 31, 2025, our committed
unutilised bank facilities was approximately RMB79.3 million.
Our Directors have confirmed that our bank borrowings contain standard terms, conditions
and covenants that are customary for commercial bank borrowings in China. Our Directors also
have confirmed that we did not experience any difficulty in obtaining bank loans or other
borrowings, default in payment of bank loans or other borrowings or breach of covenants during the
Track Record Period and up to the Latest Practicable Date.
Lease Liabilities
As of December 31, 2023, 2024, 2025 and February 28, 2026, our total lease liabilities
amounted to RMB8.3 million, RMB5.6 million, RMB1.9 million and RMB0.9 million, respectively.
Our lease liabilities are related to lease contracts for various buildings used in our operations,
which typically have lease terms between 2 and 6 years. Our lease liabilities decreased by 33.0%
from RMB8.3 million as of December 31, 2023 to RMB5.6 million as of December 31, 2024.
Furthermore, our lease liabilities decreased by 65.9% from RMB5.6 million as of December 31,
2024 to RMB1.9 million as of December 31, 2025, as we settled certain rent payments. The
incremental borrowing rates applied to lease liabilities range from 4.20% to 4.65% per annum,
3.85% to 4.65% per annum and 3.85% to 4.65% per annum as of December 31, 2023, 2024 and
2025.
Save as disclosed above, as of February 28, 2026, we had no bank borrowings or other
borrowings, or any other loan capital issued and outstanding or agreed to be issued, bank overdrafts,
borrowings or similar indebtedness, liabilities under acceptance (other than normal trade bills) or
acceptance credits, debentures, mortgages, charges, hire purchases, guarantees or other material
contingent liabilities.
CONTINGENT LIABILITIES
As of December 31, 2023, 2024 and 2025, we did not have any material contingent liabilities.
CAPITAL COMMITMENTS
Our capital commitments during the Track Record Period were primarily related to the
acquisition of property, plant and equipment. Our capital commitments as of December 31, 2023,
2024 and 2025 were RMB1.4 million, RMB37.1 million and RMB17.1 million, respectively. The
following table sets forth the details of our capital commitments as of the dates indicated:
As of December 31,
2023 2024 2025
(RMB in thousands)
Contracted, but not provided for:
Construction of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,359 37,061 17,095
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/H11181,359 37,061 17,095
FINANCIAL INFORMATION
– 214 –


--- page 224 ---
CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period were primarily related to purchases
of items of property, plant and equipment and intangible assets. Our capital expenditures in 2023,
2024 and 2025 were RMB21.3 million, RMB27.2 million and RMB34.2 million, respectively. The
following table sets forth the details of our capital expenditures for the periods indicated:
Y ear ended December 31,
2023 2024 2025
(RMB in thousands)
Purchases of items of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,471 27,159 34,235
Purchases of items of intangible assets
and right-of-use assets (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,782 – –
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/H111821,253 27,159 34,235
Note:
(1) Intangible assets and right-to-use assets purchased in 2023 primarily include the installment payment for the
patent rights purchased in 2020 and land use rights. Specifically, intangible assets are procured patents, which
are not material to our products or manufacturing process.
We funded our capital expenditure requirements during the Track Record Period mainly from
cash generated from operations and equity financing. We intend to fund our future capital
expenditures and long-term investments with a combination of operating cashflow and net proceeds
received from the Global Offering. See “Future Plans and Use of Proceeds.” We may reallocate the
fund to be utilized on capital expenditure based on our ongoing business needs.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet arrangements.
MATERIAL RELATED PARTY TRANSACTIONS
For details about our related party transactions during the Track Record Period, see note 33
of the Accountants’ Report in Appendix I to this Prospectus.
Our Directors believe that our transactions with related parties during the Track Record Period
were conducted on an arm’s length basis, and they did not distort our results of operations or make
our historical results not reflective of our future performance.
FINANCIAL RISK
Our principal financial instruments mainly include cash and cash equivalents and interest-
bearing bank borrowings. The main purpose of these financial instruments is to raise finance for our
operations. We have various other financial assets and liabilities such as trade receivables and trade
payables, which arise directly from its operations.
The main risks arising from the our financial instruments are credit risk and liquidity risk. Our
board of directors review and agree policies for managing each of these risks. See note 36 of the
Accountants’ Report in Appendix I to this Prospectus.
FINANCIAL INFORMATION
– 215 –


--- page 225 ---
DIVIDENDS AND DIVIDEND POLICY
No dividends were paid or declared by our Company during the Track Record Period. We do
not have any fixed dividend policy or pre-determined dividend payout ratio. As advised by our PRC
legal Advisor, according to the PRC Company Law, dividends may be paid only out of distributable
profit and we may distribute after-tax profits after making up losses and appropriation of statutory
reserves. Any future determination to pay dividends, as well as the amount will be made at the
discretion of our Board of Directors which will be subject to the corporate shareholder approval
processes and may be based on a number of factors, including but not limited to our future
operations and earnings, capital requirements and surplus, cash flows and general financial
condition, contractual restrictions, taxation and other factors from time to time that the Board of
Directors may deem relevant, and will also be subject to our Articles of Association and
constitutional documents, as well as applicable laws and regulations. Any future declarations and
payments of dividends may or may not reflect the historical declarations and payments of dividends.
DISTRIBUTABLE RESERVES
As of December 31, 2025, we had retained earnings of RMB267.4 million.
LISTING EXPENSES
Listing expenses consist of professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We expect to incur listing expenses of
approximately HK$71.2 million, which accounts for approximately 8.6% of the gross proceeds from
the Global Offering. We estimate the listing expenses to consist of (i) approximately HK$33.3
million in underwriting fees and (ii) HK$37.9 million in non-underwriting fees, comprising fees and
expenses for legal advisors and reporting accountants of approximately HK$24.5 million, and other
fees and expenses of approximately HK$13.4 million. Among of the total listing expenses,
approximately HK$38.7 million will be directly attributable to the issue of our Shares, which will
be deducted from equity upon the completion of the Global Offering, and the remaining HK$32.5
million will be expensed in our consolidated statements of comprehensive income.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
See “Appendix II — Unaudited Pro Forma Financial Information.”
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate and
after due and careful consideration, the Directors confirm that, up to the date of this Prospectus,
there had been no material adverse change in our financial or trading position or prospects since
December 31, 2025, being the end date of the periods reported in Appendix I to this Prospectus, and
there is no event since December 31, 2025 that would materially affect the information as set out
in the Accountants’ Report in Appendix I to this Prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there was no circumstance that
would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
– 216 –


--- page 226 ---
THE CORNERSTONE PLACING
We, the Joint Sponsors and the Overall Coordinators have entered into cornerstone investment
agreements (each a “ Cornerstone Investment Agreement ” and collectively, the “ Cornerstone
Investment Agreements ”) with the cornerstone investors set out below (each a “ Cornerstone
Investor ” and collectively, the “ Cornerstone Investors ”), pursuant to which the Cornerstone
Investors have agreed to, subject to certain conditions, subscribe, or cause their designated entities
to subscribe, at the Offer Price for such number of Offer Shares (rounded down to the nearest whole
board lot of 50 H Shares) that may be purchased for an aggregate amount of approximately US$37
million (or approximately HK$289.9 million, calculated based on an exchange rate of US$1.00 to
HK$7.8344) (the “ Cornerstone Placing ”).
Based on the Offer Price of HK$98.50 per Offer Share, the total number of Offer Shares to
be subscribed for by the Cornerstone Investors would be 2,922,900, representing 34.71% of the
Offer Shares and 5.33% of the total issued share capital after completion of the Global Offering.
We believe that the Cornerstone Placing demonstrates our Cornerstone Investors’ confidence
in our Company and its business prospect, and that leveraging on the Cornerstone Investors’
investment or industry experience, the Cornerstone Placing will help to raise the profile of our
Company. Our Company became acquainted with each of the Cornerstone Investors in its ordinary
course of operation through the Group’s business network or through introduction by the Overall
Coordinators.
The Cornerstone Placing will form part of the International Offering, and save as otherwise
obtained consent by the Stock Exchange, the Cornerstone Investors and their respective close
associates will not subscribe for any Offer Shares under the Global Offering (other than pursuant
to the Cornerstone Investment Agreements). The Offer Shares to be subscribed by the Cornerstone
Investors will rank pari passu in all respects with the fully paid H Shares in issue following the
Global Offering of the Company and will be counted towards the public float of our Company under
Rule 8.08 (as amended and replaced by Rule 19A.13A) of the Listing Rules.
The three largest public Shareholders will not hold more than 50% of the H Shares held in
public hands at the time of the Listing in compliance with Rule 8.08(3) of the Listing Rules. Other
than a guaranteed allocation of the relevant Offer Shares at the final Offer Price, the Cornerstone
Investors do not have any preferential rights under each of their respective Cornerstone Investment
Agreements, as compared with other public Shareholders. There are no side arrangements or
agreements between our Company and the Cornerstone Investors or any benefit, direct or indirect,
conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other than a
guaranteed allocation of the relevant Offer Shares at the final Offer Price, following the principles
as set out in Chapter 4.15 of the Guide for New Listing Applicants.
To the best knowledge of the Company, among the Cornerstone Investors, OAP IV (HK)
Limited is our existing Shareholder. We have applied for, and the Stock Exchange has granted, a
waiver under Rule 10.04 of the Listing Rules and a consent under paragraph 1C(2) of Appendix F1
to the Listing Rules in relation to the subscription of the Offer Shares as Cornerstone Investors by
OAP IV (HK) Limited pursuant to the anti-dilution right. Please refer to the section headed “Waiver
from Strict Compliance with the Listing Rules — Waiver under Rule 10.04 and Consent under
Paragraph 1C(2) of Appendix F1 to the Listing Rules in Respect of Subscriptions of Offer Shares
by Existing Shareholders as Cornerstone Investors” for further details.
CORNERSTONE INVESTORS
– 217 –


--- page 227 ---
To the best knowledge of our Company, (i) save for OAP IV (HK) Limited, none of the
Cornerstone Investors is accustomed to taking instructions from or financed by our Company or any
of our Directors, chief executive, our Controlling Shareholders, substantial Shareholders, existing
Shareholders or any of their respective subsidiaries, or their respective close associates in relation
to the acquisition, disposal, voting or other disposition of the H Shares registered in their name or
otherwise held by them; (ii) save for OAP IV (HK) Limited, each of the Cornerstone Investors and
their respective ultimate beneficial owners are independent of our Group, our connected persons
and their respective associates, and is not an existing Shareholder or a close associate of our Group;
(iii) save for OAP IV (HK) Limited who had a Board representation by virtue of its capacity as a
Pre-IPO Investor, immediately following the completion of the Global Offering, the Cornerstone
Investors or their close associates will not, by virtue of their cornerstone investments, have any
Board representation in our Company; (iv) none of the Cornerstone Investors and their close
associates will become a substantial Shareholder of our Company; (v) each of the Cornerstone
Investors make independent investment decisions, and their subscription under the Cornerstone
Placing would be financed by its own internal financial resources, financial resources of its
shareholders or the assets managed for its investors (in the case of Cornerstone Investors which are
funds or investment managers) and it has sufficient funds to settle its respective investment under
the Cornerstone Placing. Each of the Cornerstone Investors has further 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. None of the
Cornerstone Investors are listed on any stock exchange.
The Cornerstone Investors have agreed to fully pay for the relevant Offer Shares that they
have subscribed before dealings in the Company’s H Shares commence on the Stock Exchange.
Since there is no over-allotment option in the International Offering, there will be no delayed
delivery of Offer Shares to be subscribed by the Cornerstone Investors. The number of Offer Shares
to be acquired by each Cornerstone Investor maybe reduced on a pro rata basis in accordance with
the terms of the Cornerstone Investment Agreement to satisfy the short fall, after taking into account
the requirements under Appendix F1 to the Listing Rules. Details of the actual number of Offer
Shares to be allocated to the Cornerstone Investors will be disclosed in the allotment results
announcement of our Company to be published on or around Monday, May 4, 2026. Please refer to
the section headed “Structure of the global offering — The Hong Kong Public Offering —
Reallocation” for further information.
CORNERSTONE INVESTORS
– 218 –


--- page 228 ---
THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Cornerstone Investor
Total
Investment
Amount
Number of
Offer Shares
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(USD in
millions) % %
JSC International Investment
Fund SPC (“ JSC
International ”) for and on
behalf of JSC International
Investment Fund SPC –
Shenghai SP (“ Shenghai
SP”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.00
(1) 1,968,550 23.37 3.59
OAP IV (HK) Limited ( ෳ௹ԭ
̬ಂ(ಥ)ʮ̡)
(“OAP IV ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 (2) 397,650 4.72 0.73
Greater Bay Area Development
Fund Management Limited
(ʮ
̡)( “ GBAD Fund
Management ”) for and on
behalf of the Managed
Account of Mega Prime
Development Limited
(“Mega Prime ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00
(2) 318,100 3.78 0.58
GBAD Fund Management for
and on behalf of the
Managed Account of Poly
Platinum Enterprises Limited
(“Poly Platinum ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00
(2) 238,600 2.83 0.44
Notes:
(1) The subscription amount of JSC International for and on behalf of Shenghai SP was inclusive of brokerage fee, the
SFC transaction levy, the AFRC transaction levy and the Stock Exchange trading fee.
(2) The subscription amount of each of OAP IV , GBAD Fund Management for and on behalf of Mega Prime and Poly
Platinum was exclusive of brokerage fee, the SFC transaction levy, the AFRC transaction levy and the Stock
Exchange trading fee.
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
JSC International (for and on behalf of Shenghai SP)
Shenghai SP is a segregated portfolio issued by JSC International Investment Fund SPC,
which is controlled by JSC Yizhi Phase II (Beijing) Equity Investment Fund Partnership (Limited
Partnership) (͵౽ɚಂ(̏ԯ)ΥྫΆุ(Υྫ)) (“ JSC Yizhi Phase II ”).
CORNERSTONE INVESTORS
– 219 –


--- page 229 ---
JSC Yizhi Phase II is held as to (i) 0.10% by its general partner, Jingquan Shancheng
Management Consulting (Beijing) Company Limited (ഛ༐၍ଣፔ༔(̏ԯ)ʮ̡), which is
ultimately wholly controlled by Beijing Financial Holdings Group Co., Ltd. (ණྠϞ
ʮ̡)( “Beijing Financial ”); and (ii) 99.90% by its sole limited partner, Beijing Yitang Shenghai
Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ
(Υྫ)) (“ Yitang Shenghai ”). Beijing Financial is wholly owned and supervised by the
State-owned Assets Supervision and Administration Commission of the Beijing Municipal People’
Government (ึ).
Yitang Shenghai is a limited partnership incorporated in PRC. It is owned as to (i) 0.05% by
its general partner, Beijing E-Town International Industrial Investment Management Co., Ltd. ( ̏
ʮ̡)( “ E-Town Industrial ”) and (ii) 99.95% by Beijing E-Town
International Investment and Development Co., Ltd. (ʮ̡)( “ E-Town
International Investment ” together with its affiliates, collectively, “ E-Town Investment ”).
E-Town Industrial is controlled as to 99% by E-Town International Investment, which is wholly
owned by the Finance and State- Owned Assets Bureau of the Beijing Economic Technological
Development Area (਷༟҅).
OAP IV
OAP IV is a private investment fund specializing in healthcare investments primarily in Asia
and is an existing shareholder of the Company. Please refer to the section headed “History,
Development and Corporate Structure — Information about our Pre-IPO Investors” for further
information of OAP IV .
OAP IV is wholly owned by OrbiMed Asia Partners IV , L.P . (“ Asia IV ”), a Cayman Islands
exempted limited partnership. OrbiMed Asia GP IV , L.P . (“ Asia GP ”) is the general partner of Asia
IV and OrbiMed Advisors IV Limited is the general partner of Asia GP . OrbiMed Advisors LLC is
the advisory company to Asia IV .
Greater Bay Area Homeland Investments Limited
Mega Prime Development Limited (“ Mega Prime ”) is a company incorporated in the British
Virgin Islands with limited liability and is a wholly-owned subsidiary of GBA Homeland Limited,
which in turn is wholly owned by Greater Bay Area Homeland Investments Limited ( ɽᝄਜ΍Ν
ʮ̡)( “ GBAHIL ”).
Poly Platinum Enterprises Limited (“ Poly Platinum ”) is a company incorporated in the
British Virgin Islands with limited liability and is wholly-controlled by Greater Bay Area Homeland
Development Fund LP (“ GBA Fund ”). GBA Fund is a private fund established in the Cayman
Islands and has nine limited partners, each of which holds less than 16% equity interest therein. The
general partner of the GBA Fund is Greater Bay Area Homeland Development Fund (GP) Limited
(ږGP)ʮ̡), which is ultimately wholly controlled by GBAHIL.
GBAHIL is a company incorporated in Hong Kong with limited liability and is jointly owned
by ten shareholders, each of which holds less than 13% equity interest therein. GBAHIL’s business
encompasses investment, investment holding and the establishment or management of private
equity funds through its subsidiaries to grasp the historical opportunities of the development of
Guangdong-Hong Kong-Macao Greater Bay Area, and the construction of an international
innovation and technology hub, focusing on technological innovation, industrial upgrading, quality
of life, smart city and all other related industries.
Mega Prime subscribes for the Offer Shares through the account managed by Greater Bay Area
Development Fund Management Limited (ʮ̡)( “ GBAD Fund
Management ”). Poly Platinum and GBA Fund are under the discretionary management of GBAD
Fund Management, a company wholly owned by GBAHIL and licensed under the SFO to conduct
Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management)
regulated activities in Hong Kong. GBAD Fund Management’s internal investment committee is
responsible for making its investment decisions.
CORNERSTONE INVESTORS
– 220 –


--- page 230 ---
CLOSING CONDITIONS
The obligation of each of the Cornerstone Investors to acquire the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Hong Kong Underwriting Agreement and the International Underwriting Agreement
being entered into and having become effective and unconditional (in accordance with
their respective original terms or as subsequently waived or varied by agreement of the
parties thereto) by no later than the time and date as specified in the Hong Kong
Underwriting Agreement and the International Underwriting Agreement;
(ii) neither the Hong Kong Underwriting Agreement nor the International Underwriting
Agreement having been terminated;
(iii) the Listing Committee having granted the approval for the listing of, and permission to
deal in, the H Shares (including the H Shares under the Cornerstone Placing) as well as
other applicable waivers and approvals and such approval, permission or waiver having
not been revoked prior to the commencement of dealings in the H Shares on the Stock
Exchange;
(iv) the Offer Price having been agreed according to the Hong Kong Underwriting
Agreement and the International Underwriting Agreement to be signed among the parties
to such agreements in connection with the Global Offering;
(v) the CSRC having accepted the CSRC Filings (as defined in the respective Cornerstone
Investment Agreement) and published the filing results in respect of the CSRC Filings
on its website, and such notice of acceptance and/or filing results published not having
otherwise been rejected, withdrawn, revoked or invalidated prior to the commencement
of dealings in the H Shares on the Stock Exchange;
(vi) no laws shall have been enacted or promulgated which prohibits the consummation of
the transactions contemplated in Hong Kong Public Offering, the International Offering
or the 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
(vii) the respective representations, warranties, acknowledgements, undertakings and
confirmations of the Cornerstone Investors under the Cornerstone Investment
Agreements are and will be (as of the closing of the Cornerstone Investment
Agreements) 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
Cornerstone Investors.
RESTRICTIONS ON DISPOSALS BY 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 any of the Offer Shares they have purchased pursuant to the relevant
Cornerstone Investment Agreements, 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
– 221 –


--- page 231 ---
FUTURE PLANS
See “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
Assuming an Offer Price of HK$98.50 per Offer Share, we estimate that we will receive net
proceeds of approximately HK$758.4 million from the Global Offering after deducting the
underwriting commissions and other estimated expenses in connection with the Global Offering.
We intend to use the net proceeds we expect to receive from the Global Offering for the
purposes and in the amounts set out below:
 Approximately 30.0%, or HK$227.5 million, will be allocated to expand our production
capacity and enhance production efficiency, enabling us to meet the rapidly growing
market demand. Specifically, our expansion plan encompasses (i) the acquisition of new
production facilities and construction of new production lines for medical implants
including suture anchor and meniscus repair systems and medical consumables for active
equipment such as plasma electrode for plasma RF ablation equipment; (ii) the
acquisition of advanced equipment, such as CNC longitudinal cutting machine tool, wire
cutting machine, braiding machine, injection molding machine and grinding machine;
and (iii) the automation of existing production facilities and the implementation of
digital information systems to enhance the accuracy of production planning, strengthen
quality control, facilitate transportation efficiency and optimize overall supply chain
management.
Specifically, we plan to acquire new production facilities and construct new production
lines in addition to our existing ones. Such expansion will be funded by a mixture of our
operating cashflow, bank borrowings and net proceeds from the Global Offering. The
following table provides a detailed breakdown of the expansion plan:
Expected
Production
Timeline Location
Lease or
Acquisition
Budgeted
Capacity
Latest
Status
Total Capital
Expenditure
(1)
(HK$ in million)
To commence
in 2027 /H1118/H1118/H1118/H1118
Beijing Acquisition 2.0 million
units per
year
At the
planning
stage
306.8
To commence
in 2026 /H1118/H1118/H1118/H1118
Suzhou,
Jiangsu
Acquisition N/A
(2) Under
construction
43.8
Notes:
(1) Total capital expenditure for our production facilities refer to the total amount of investments required.
(2) Jiangsu Production Plant is planned for manufacturing of raw materials and components for our medical
implants and surgical equipment, and it would not directly contribute to budgeted capacity of finished
products.
FUTURE PLANS AND USE OF PROCEEDS
– 222 –


--- page 232 ---
Regarding the capacity expansion initiatives, the following table sets forth a further
breakdown of the net proceeds from the Global Offering, including the purposes and
amounts allocated:
Use of Proceeds Estimated Amount
(HK$ in million)
Acquisition of new production facilities and construction of new
production lines /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144.8
Acquisition of advanced equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858.6
Automation of production facilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824.1
We plan to install new advanced equipment and automatic production lines in our new
production facilities. These initiatives are expected to enhance the production capacity and
production efficiency of our new production facilities.
 Approximately 35.0%, or HK$265.5 million, will be used for our R&D efforts in line
with our patient-oriented product strategy. We intend to leverage our four technology
platforms to continuously upgrade our existing offerings while delivering sports
medicine products that incorporate advanced technologies, thereby addressing unmet
clinical needs and diversifying our product portfolio. Our R&D initiatives include both
enhancements to our existing product portfolio and strategic expansions into emerging
fields, underscoring our commitment to innovation in sports medicine. For medical
implants, we are developing advanced all-suture and self-guided separable solutions,
such as self-guided separable suture anchors and fiber-based all-suture buttons, to
improve procedural efficiency and patient outcomes. In surgical equipment, our efforts
focus on incorporating cordless designs and high-resolution cameras, which
significantly enhance the accuracy and convenience of arthroscopic procedures. Looking
ahead, we aim to develop the arthroscopic surgical robot to streamline operational
efficiency. Additionally, we plan to innovate soft tissue repair scaffolds designed to
promote natural tissue ingrowth and accelerated healing, further solidifying our position
at the forefront of minimally invasive and regenerative technologies. Specifically, our
plan includes the following:
o R&D Team Expansion . Approximately 19.3%, or HK$146.4 million, will be used
to expand our R&D team to facilitate our technological advancements and product
development. In particular, we expect to (i) grow our R&D team by recruiting
leading experts from the sports medicine device industry or the general medical
device industry, as well as graduates from top universities specializing in
biomedical engineering, material science, tissue engineering and AI, with an
annual recruitment plan of approximately 16, 16 and 18 R&D personnel for 2026,
2027, and 2028, respectively; (ii) provide competitive remuneration to our existing
R&D personnel to ensure team stability; and (iii) deliver comprehensive training
programs to our R&D staff to enhance their interdisciplinary skills in areas such
as material science, tissue engineering, AI technologies, and clinical application,
fostering a collaborative environment for breakthrough developments and
remaining at the forefront of technological advancements.
o Research Materials and Equipment Procurement. Approximately 8.2%, or
HK$62.2 million, will be used to increase the procurement of certain materials
necessary for our technological advancements and product development, such as
advanced biomaterials and components for our surgical equipment and sports
medicine systems, to fuel the development and testing of new products.
Additionally, we plan to procure and install advanced research equipment, testing
instruments and supporting infrastructure, thereby enabling efficient prototyping,
validation and iteration of our products.
FUTURE PLANS AND USE OF PROCEEDS
– 223 –


--- page 233 ---
o Increasing Design V alidation, Registration Tests and Clinical Trials.
Approximately 7.5%, or HK$56.9 million, will be used to invest in clinical
validation, in line with our extensive pipeline and planned product portfolio
expansion. In particular, we plan to invest in product validation, registration tests
and clinical trials required for obtaining regulatory approvals from the NMPA and
regulatory authorities in other jurisdictions. In addition, to facilitate these clinical
validation efforts, we plan to engage third-party service providers, including CROs
and SMOs, and collaborate with qualified hospitals to conduct efficient and
compliant clinical trials, thereby accelerating the product development process.
 Approximately 25.0%, or HK$189.6 million, will be used for commercialization, sales
and marketing efforts to reinforce our leadership in China and establish our presence and
brand image worldwide. This includes constructing global sales networks, establishing
localized operations to adapt to and understand regional demand, participating in
international academic conferences to enhance brand recognition, and other marketing
efforts. Our plan includes the following:
o Global Sales and Marketing Network. Approximately 17.0%, or HK$128.9
million, will be used to expand our sales and marketing team in China and overseas
markets by engaging professionals with specialized backgrounds and deep industry
expertise, as medical device sales demands in-depth knowledge of clinical
applications and regulatory landscapes. Specifically, we expect to recruit local
sales personnel in target markets who are familiar with local laws, regulations and
market dynamics to build strong relationships with customers and facilitate
seamless market entry, as well as well-versed in the features and applications of
our products and medical knowledge and technologies that underlie our products.
In addition, we intend to broaden our distributor network to deepen penetration in
existing markets and expand into new ones, leveraging their established channels
for efficient product distribution. To retain top talent and remain competitive
against industry peers, we will provide ongoing training programs to enhance skills
in global sales strategies and increase remuneration packages to ensure team
stability. We are committed to strengthening our market presence in China through
a multifaceted strategy that leverages our core strengths to drive deeper penetration
and sustained growth. Our professional sales teams will play a pivotal role in this
expansion, enabling us to further penetrate the domestic market by cultivating
robust and trusted relationships with hospitals and physicians, thereby fostering
long-term partnerships and increasing product adoption in key healthcare
institutions. Complementing these efforts, our targeted branding initiatives will
raise public awareness of sports medicine, educating stakeholders on its benefits
while simultaneously enhancing the visibility and uptake of our innovative
products. Furthermore, our extensive distributor network, working in tandem with
our in-house sales team, will amplify our market recognition, ensuring broader
geographic coverage and efficient distribution channels that capitalize on local
insights and accelerate our competitive positioning. Additionally, we are
strategically advancing our global expansion with a primary focus on key
European markets, including France, Poland, Spain, and other countries where we
have already secured product certifications and gained familiarity with local
market dynamics, positioning us well to capitalize on growth opportunities in these
geographical markets. To further solidify our presence, we plan to enhance brand
establishment through targeted marketing and distribution initiatives, while
pursuing additional medical device certifications to broaden our product offerings
and compliance footprint.
FUTURE PLANS AND USE OF PROCEEDS
– 224 –


--- page 234 ---
The following table sets forth the number of sales personnel to be recruited in
target overseas markets:
Expected
Time (Y ear) Target Markets
New Sales
Personnel to be
Recruited Key Milestones
2026 /H1118/H1118/H1118/H1118/H1118Australia,
Southeast Asia
and Europe
4 We plan to achieve product launches in
key markets such as Australia and
India, while actively exploring new
market opportunities in Eastern and
Northern Europe.
2027 /H1118/H1118/H1118/H1118/H1118Europe and
Latin America
6 We plan to achieve product launches in
key markets such as Mexico and Brazil,
and continue our expansion into
untapped regions across Europe.
2028 /H1118/H1118/H1118/H1118/H1118Europe 8 We plan to continue our expansion into
untapped European markets.
o Enhanced Marketing Efforts. Approximately 8.0%, or HK$60.7 million, will be
used to enhance our global marketing efforts, focusing on building brand visibility
and staying attuned to market trends. Specifically, we plan to sponsor and attend
various international academic conferences and industry exhibitions to not only
elevate our market recognition among doctors, hospitals and other key
stakeholders but also to engage effectively with these industry participants,
gathering insights on emerging trends in sports medicine and identifying
opportunities for collaboration and innovation.
 Approximately 10.0%, or HK$75.8 million, will be used for working capital and general
corporate purposes.
To the extent that the net proceeds of the Global Offering are not immediately used for the
above purposes or if we are unable to effect any part of our future development plans as intended,
we will only deposit such funds into short-term interest-bearing accounts at licensed commercial
banks and/or other authorized financial institutions (as defined under the Securities and Futures
Ordinance or the applicable laws and regulations in other jurisdictions). In such event, we will
comply with the appropriate disclosure requirements under the Listing Rules.
If any part of our development plan does not proceed as planned for reasons such as changes
in government policies that would render the development of any of our projects not viable, or the
occurrence of force majeure events, we will carefully evaluate the situation and may reallocate the
net proceeds from the Global Offering.
FUTURE PLANS AND USE OF PROCEEDS
– 225 –


--- page 235 ---
HONG KONG UNDERWRITERS
CLSA Limited
CCB International Capital Limited
China Galaxy International Securities (Hong Kong) Co., Limited
CMBC Securities Company Limited
Futu Securities International (Hong Kong) Limited
Open Securities Limited
Orient Securities (Hong Kong) Limited
Zheshang International Financial Holdings Co., Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
The Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially
842,200 Hong Kong Offer Shares (subject to reallocation) for subscription by the public in Hong
Kong on and subject to the terms and conditions of this prospectus at the Offer Price.
Subject to the Listing Committee granting approval for the listing of, and permission to deal
in, the H Shares to be issued pursuant to the Global Offering and certain other conditions set out
in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed to severally
(and not jointly or jointly and severally) to subscribe or procure subscribers for their respective
applicable proportions of the Hong Kong Offer Shares now being offered which are not taken up
under the Hong Kong Public Offering on and subject to the terms and conditions of this prospectus
and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional upon and subject to, among other
things, the International Underwriting Agreement having been signed and becoming unconditional
and not having been terminated in accordance with its terms.
Grounds for Termination
The Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) shall, in their sole and absolute discretion, be entitled by notice (in writing) 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 shall develop, occur, exist or come into effect:
(i) any event or series of events or circumstance in the nature of force majeure
(including, without limitation, any acts of government, declaration of a national or
international or regional emergency or war, calamity, crisis, epidemic, pandemic,
outbreak of diseases or its escalations, mutation or aggravation (including, without
limitation, COVID-19, SARS, swine or avian flu, H5N1, H1N1, H1N7, H7N9,
Ebola virus, Middle East respiratory syndrome (MERS) and such related/mutated
forms), accidents or prolonged interruption or delay in transportation, economic
sanctions, strikes, labour disputes, lock-outs, other industrial actions, fire,
explosion, flooding, earthquake, tsunami, volcanic eruption, riots, rebellion, civil
commotion, public disorder, acts of war, outbreak or escalation of hostilities
(whether or not war is declared), acts of God or acts of terrorism (whether or not
responsibility has been claimed)), economic sanctions, paralysis in government
operations, interruptions or delay in transportation in or affecting Hong Kong, the
PRC, the United States, Japan, Singapore, the United Kingdom, the European
Union (or any member thereof), or any other jurisdictions relevant to any member
of our Group (collectively, the “ Relevant Jurisdictions ”); or
UNDERWRITING
– 226 –


--- page 236 ---
(ii) any change, or any development involving a prospective change, or any event or
circumstance likely to result in any change or development involving a prospective
change in any local, national, regional or international financial, economic,
political, military, industrial, legal, fiscal, regulatory, currency, credit or market
conditions, equity securities or exchange control or any monetary or trading
settlement system (including, without limitation, conditions in the stock and bond
markets, money and foreign exchange markets, the interbank markets and credit
markets) in or affecting any Relevant Jurisdictions; or
(iii) any moratorium, suspension or restriction (including, without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) in or on trading in securities generally on the Stock Exchange, the Shanghai
Stock Exchange, the Shenzhen Stock Exchange, the New Y ork Stock Exchange, the
NASDAQ Global Market or the London Stock Exchange; or
(iv) any general moratorium on commercial banking activities in 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 other competent authority), London, 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 any Relevant
Jurisdiction; or
(v) any new Law (as defined in the Hong Kong Underwriting Agreement), or any
change or any development involving a prospective change or any event or
circumstance likely to result in a change or a development involving a prospective
change in (or in the interpretation or application by any court or other competent
authority of) existing laws, in each case, in or affecting any of the Relevant
Jurisdictions; or
(vi) the imposition of sanctions, in whatever form, or the withdrawal of trading
privileges, directly or indirectly, under any sanction Laws (as defined in the Hong
Kong Underwriting Agreement), or regulations in, Hong Kong, the PRC or any of
the Relevant Jurisdiction; or
(vii) a change or development involving a prospective change in or affecting taxes or
exchange control, currency exchange rates or foreign investment regulations
(including, without limitation, a material devaluation of the Hong Kong dollar or
the 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 implementation of any exchange control, in any of the Relevant Jurisdictions;
or
(viii) any litigation or claim of any third party being threatened or instigated against any
member of our Group; or
(ix) a Director, a Supervisor or a member of our Group’s senior management as named
in this prospectus being charged with an indictable offense, or prohibited by
operation of law or otherwise disqualified from taking part in the management or
taking directorship or supervisorship of a company; or
(x) a contravention by any member of our Group of the Listing Rules or applicable
Laws (as defined in the Hong Kong Underwriting Agreement); or
UNDERWRITING
– 227 –


--- page 237 ---
(xi) non-compliance of this prospectus (or any other documents used in connection
with the contemplated offer and sale of the H Shares), the CSRC Filings (as
defined in the Hong Kong Underwriting Agreement) or any aspect of the Global
Offering with the Listing Rules, the CSRC Rules (as defined in the Hong Kong
Underwriting Agreement) or any other applicable Laws (as defined in the Hong
Kong Underwriting Agreement); or
(xii) other than with the written consent of the Overall Coordinators, the issue or
requirement to issue by our Company of any supplement or amendment to this
prospectus (or to any other documents used in connection with the contemplated
offer and sale of the H Shares) pursuant to the Companies Ordinance or the
Companies (Winding Up and Miscellaneous Provisions) Ordinance or the Listing
Rules, the CSRC Rules (as defined in the Hong Kong Underwriting Agreement) or
any requirement or request of the Stock Exchange, the CSRC and/or the SFC; or
(xiii) any change or prospective change or development, or a materialization of, any of
the risks set out in the section headed “ Risk Factors ” of this prospectus; or
(xiv) a valid demand by any 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),
which, individually or in the aggregate, in the sole and absolute opinion of the Overall
Coordinators and the Joint Sponsors: (A) has or will or may have a material adverse
effect on the assets, liabilities, business, general affairs, management, prospects,
shareholders’ equity, profits, losses, results of operations, position or condition,
financial or otherwise, or performance of our Group as a whole; or (B) has or will or may
have a material adverse effect on the success of the Global Offering or the level of
applications under the Hong Kong Public Offering or the level of interest under the
International Offering; or (C) make or will or may make it inadvisable or inexpedient or
impracticable for the Global Offering, to proceed or to market the Global Offering or the
delivery or distribution of the Offer Shares on the terms and in the manner contemplated
by the Offering Related Documents (as defined below); or (D) has or will or may have
the effect of making any part of the Hong Kong Underwriting Agreement (including
underwriting) incapable of performance in accordance with its terms or preventing or
delaying the processing of applications and/or payments pursuant to the Global Offering
or pursuant to the underwriting thereof.
(b) there has come to the notice of the Overall Coordinators or the Joint Sponsors:
(i) that any statement contained in any of the Offering Documents (as defined in the
Hong Kong Underwriting Agreement), the formal notice, the Operative Documents
(as defined in the Hong Kong Underwriting Agreement), the Preliminary Offering
Circular (as defined in the Hong Kong Underwriting Agreement), the PHIP (as
defined in the Hong Kong Underwriting Agreement) and/or in any notices,
announcements, advertisements, communications or other documents issued or
used by or on behalf of our Company in connection with the Hong Kong Public
Offering (collectively, the “ Offer Related Documents ”) (including any
supplement or amendment thereto) was, when it was issued, or has become, untrue,
incorrect, inaccurate, incomplete or misleading or deceptive in any material
respect, or that any forecast, estimate, expression of opinion, intention or
expectation contained in any of the Offer Related Documents (including any
supplement or amendment thereto) is not fair and honest and based on reasonable
assumptions; or
UNDERWRITING
– 228 –


--- page 238 ---
(ii) that any matter has arisen or has been discovered which would, had it arisen or
been discovered immediately before the date of this prospectus, constitute a
material misstatement in or omission from any of the Offer Related Documents
(including any supplement or amendment thereto); or
(iii) any material breach of any of the obligations imposed upon any party to the Hong
Kong Underwriting Agreement or the International Underwriting Agreement (other
than upon any of the Hong Kong Underwriters or the International Underwriters);
or
(iv) any event, act or omission which gives or is likely to give rise to any liability of
any of the Indemnifying Parties (as defined in the Hong Kong Underwriting
Agreement) pursuant to the provisions under the Hong Kong Underwriting
Agreement; or
(v) any adverse change, or any development involving a prospective adverse change,
in the assets, liabilities, business, general affairs, management, prospects,
shareholders’ equity, profits, losses, earnings, results of operations, position or
condition, financial or otherwise, or performance of our Group as a whole; or
(vi) any breach of, or any event or circumstance rendering untrue or incorrect,
incomplete or misleading in any respect, any of the Warranties (as defined in the
Hong Kong Underwriting Agreement); or
(vii) the chairman of the Board, the general manager or the chief financial officer of our
Company or any of the executive Directors vacating his office; or
(viii) an Authority (as defined in the Hong Kong Underwriting Agreement) or a political
body or organization in any Relevant Jurisdiction commencing any investigation or
other action, or announcing an intention to investigate or take other action, against
any Director or a member of our Company’s senior management as disclosed in
this prospectus; or
(ix) that approval by the Listing Committee of the Stock Exchange of the listing of, and
permission to deal in, the H Shares to be issued or sold under the Global Offering
is refused or not granted, other than subject to customary conditions, on or before
the Listing Date, or if granted, the approval is subsequently withdrawn, qualified
(other than by customary conditions) or withheld; or
(x) that our Company withdraws any of the Offering Documents (as defined in the
Hong Kong Underwriting Agreement) or the Global Offering; or
(xi) that any expert (other than the Joint Sponsors) specified in this prospectus, whose
consent is required for the issue of the prospectus with the inclusion of its reports,
letters or opinions and references to its name included in the form and context in
which it respectively appears, has withdrawn its consent to being named in this
prospectus or to the issue of any of the Offer Related Documents; or
(xii) that there is a prohibition on our Company for whatever reason from offering,
allotting, issuing or selling any of the Offer Shares pursuant to the terms of the
Global Offering; or
(xiii) any Director, Supervisor or member of senior management of our Company as
disclosed in this prospectus being charged with an indictable offence or is
prohibited by operation of law or otherwise disqualified from taking part in the
management of a company or that there is the commencement by any
UNDERWRITING
– 229 –


--- page 239 ---
governmental, political or regulatory body of any investigation or other action
against any Director, Supervisor or member of senior management of our Company
in his/her capacity as such, or an announcement by any governmental, political or
regulatory body that it intends to commence any such investigation or take any
such action; or
(xiv) that there is any order or petition for the winding-up 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 material
assets or undertaking of any member of our Group or anything analogous thereto
occurring in respect of any member of our Group; or
(xv) that a material portion of the orders placed or confirmed in the bookbuilding
process, or of the investment commitments made by any cornerstone investors
under agreements signed with such cornerstone investors, have been withdrawn,
terminated or cancelled.
Undertakings to the Stock Exchange Pursuant to the Listing Rules
Undertakings by our Company
In accordance with Rule 10.08 of the Listing Rules, our Company has undertaken to the Stock
Exchange that no further shares or securities convertible into equity securities of our Company
(whether or not of a class already listed) may be issued or sold or transferred out of treasury or form
the subject of any agreement to such an issue, or sale or transfer out of treasury within six months
from the date on which securities of our Company first commence dealing on the Stock Exchange
(whether or not such issue of shares or securities, or sale or transfer of treasury shares will be
completed within six months from the commencement of dealing), except for the issue of shares or
securities pursuant to the Global Offering or for circumstances permitted under Rule 10.08 of the
Listing Rules.
Undertakings by our Controlling Shareholders
In accordance with Rule 10.07(1) of the Listing Rules, each of our Controlling Shareholders
have undertaken to our Company and the Stock Exchange that, except pursuant to the Global
Offering, he or it shall not:
(a) in the period commencing on the date by reference to which disclosure of his or its
shareholding in our Company is made in this prospectus and ending on the date which
is six months from the Listing Date, dispose of, nor enter into any agreement to dispose
of or otherwise create any options, rights, interests or encumbrances in respect of, any
of the Shares in respect of which he or it is shown by this prospectus to be the beneficial
owner; or
(b) in the period of six months commencing on 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 of
the Shares referred to in paragraph (a) above, if, immediately following such disposal or
upon the exercise or enforcement of such options, rights, interests or encumbrances, he
or it would cease to be a Controlling Shareholder,
UNDERWRITING
– 230 –


--- page 240 ---
provided that the above shall not prevent us from using securities of our Company beneficially
owned by us 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.
In addition, in accordance with Note 3 to Rule 10.07 of the Listing Rules, each of our
Controlling Shareholders has undertaken to our Company and the Stock Exchange that, within the
period commencing on the date by reference to which disclosure of his shareholding in our
Company is made in this prospectus and ending on the date which is 12 months from the Listing
Date, he or it will:
(a) when he pledges or charges any Shares beneficially owned by him or it 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, he will immediately inform our Company
of such pledge or charge together with the number of Shares so pledged or charged; and
(b) when he or it receives indications, either verbal or written, from the pledgee or chargee
that any of the pledged or charged Shares will be disposed of, he or it will immediately
inform our Company of such indications.
Our Company will inform the Stock Exchange as soon as it has been informed of the matters
referred to in paragraphs (a) and (b) above (if any) by our Controlling Shareholders and, subject to
the then requirements of the Listing Rules, disclose such matters by way of an announcement which
is published in accordance with Rule 2.07C of the Listing Rules as soon as possible.
Undertakings Pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Our Company has undertaken to the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries,
the Hong Kong Underwriters and each of them not to (save for the issue, offer or sale of the Offer
Shares by our Company pursuant to the Global Offering, 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 Listing Rules, at any time during the period
commencing on the date of the Hong Kong Underwriting Agreement and ending on, and including,
the last date of the six months after the Listing Date (the “ First Six-Month Period ”):
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to
allot, issue or sell, mortgage, charge, pledge, assign, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose
of or create an Encumbrance over, or agree to transfer or dispose of or create an
Encumbrance (as defined in the Hong Kong Underwriting Agreement) over, either
directly or indirectly, conditionally or unconditionally, any legal or beneficial interest in
the share capital or any other securities of our Company, as applicable, or any interest
in any of the foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants or
other rights to purchase any 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 economic consequences of ownership (legal or beneficial) of any Shares or
other securities of our Company, as applicable, or any interest in any of the foregoing
UNDERWRITING
– 231 –


--- page 241 ---
(including, without limitation, any securities convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights to
purchase, any Shares or other securities of our Company, as applicable); or
(c) enter into any transaction with the same economic effect as any transaction described in
paragraphs (a) or (b) above; or
(d) offer to or contract to or agree to announce, or publicly disclose any intention to effect
any transaction described in paragraphs (a), (b) or (c) above,
in each case, whether any such transaction described in paragraphs (a), (b) or (c) above is to be
settled by delivery of share capital or such other securities of our Company, in cash or otherwise,
in cash or otherwise (whether or not the issue of such share capital or other securities of our
Company will be completed within the First Six-Month Period), provided that the foregoing
restrictions shall not apply to the issue of the H Shares by our Company pursuant to the Global
Offering.
In the event that, at any time during the period of six months immediately following the
expiration of the First Six-Month Period (the “ Second Six-Month Period ”), our Company enters
into any of the transactions specified above or offers or agrees or contracts to, or announces, or
publicly discloses, any intention to, enter into any such transactions, our Company will take all
reasonable steps to ensure that it will not create a disorderly or false market in the Shares or other
securities of our Company. Each of our Controlling Shareholders hereby undertakes to each of the
Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters to
procure our Company to comply with the undertakings.
Undertakings by our Controlling Shareholders
Each of our Controlling Shareholders has hereby jointly and severally undertaken to our
Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong
Underwriters that, except as pursuant to the Global Offering or otherwise in compliance with the
Listing Rules, without the prior written consent of the Joint Sponsors and the Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters):
(a) during the First Six-Month Period, none of them will, and each of them will procure that
the relevant registered holder(s), any nominee or trustee holding on trust for him/it will
not:
(i) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate,
lend, grant or sell any option, warrant, contract or right to purchase, grant or
purchase any option, warrant, contract or right to sell, or otherwise transfer or
dispose of or create an Encumbrance over, or agree to transfer or dispose of or
create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or other securities of our Company or any interest
therein (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any
warrants or other rights to purchase, any Shares or any such other securities, as
applicable) beneficially owned by him/it as at the Listing Date (the “ Locked-up
Securities ”), or deposit any Locked-up Securities with a depositary in connection
with the issue of depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of, any Locked-up
Securities; or
UNDERWRITING
– 232 –


--- page 242 ---
(iii) enter into any transaction with the same economic effect as any transaction
described in paragraphs (i) or (ii) above; or
(iv) offer to or contract to or agree to or announce that our Controlling Shareholders
will or may enter into any transaction described in paragraphs (i), (ii) or (iii)
above,
in each case, whether any such transaction described in paragraphs (a)(i), (a)(ii) or
(a)(iii) above is to be settled by delivery of such Shares or other securities of our
Company, in cash or otherwise (whether or not the settlement or delivery of such Shares
or other securities will be completed within the First Six-Month Period);
(b) during the Second Six-Month Period, our Controlling Shareholders will not enter into
any transaction described in paragraphs (a)(i), (a)(ii) or (a)(iii) above or offer, agree or
contract to or announce any intention to enter into any such transaction if, immediately
following such transaction, any of them will cease to be a Controlling Shareholders (as
defined in the Listing Rules) of our Company;
(c) during the First Six-Month Period and Second Six-Month Period, our Controlling
Shareholders will:
(i) if and when any of them or the relevant registered holder(s) pledges or charges any
Locked-up Securities, immediately inform our Company, the Joint Sponsors and
the Overall Coordinators in writing of such pledge or charge together with the
number of Locked-up Securities so pledged or charged;
(ii) if and when he/it or the relevant registered holder(s) receives indications, either
verbal or written, from any pledgee or chargee that any of the pledged or charged
Locked-up Securities will be disposed of, immediately inform our Company, the
Joint Sponsors and the Overall Coordinators in writing of such indications; and
(d) until the expiry of the Second Six-Month Period, in the event that he enters into any of
the transactions specified in paragraphs (a)(i), (a)(ii) or (a)(iii) above or offers to or
agrees to or announces any intention to effect any such transaction, he/it will take all
reasonable steps to ensure that he/it will not create a disorderly or false market in the
securities of our Company.
Our Company hereby undertakes to the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwriters that upon receiving such information in writing
from our Controlling Shareholders, it will, as soon as practicable and if required pursuant to the
Listing Rules, notify the Stock Exchange and make a public disclosure in relation to such
information by way of an announcement.
For the avoidance of doubt, the restrictions above do not apply to (i) any additional Shares or
other securities of our Company or any interest therein acquired by any of our Controlling
Shareholders after the Listing; or (ii) any pledge or charge of any Shares or other equity securities
of our Company, as applicable, or any interest in any of the foregoing (including, without limitation,
any securities convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to purchase, any Shares or other equity securities of our
Company) after the Global Offering 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.
UNDERWRITING
– 233 –


--- page 243 ---
Indemnity
Each of our Company and our Controlling Shareholders has agreed to indemnify, among
others, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong
Underwriters for certain losses which they may suffer, including, amongst others, losses arising
from their performance of their obligations under the Hong Kong Underwriting Agreement and any
breach by them, respectively of the Hong Kong Underwriting Agreement or certain provisions
thereof.
Joint Sponsors’ Fee
The sponsor fee payable to the Joint Sponsors in connection with the Listing by our Company
is US$0.7 million in aggregate.
The International Offering
In connection with the International Offering, it is expected that our Company will enter into
the International Underwriting Agreement with, among others, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and the International
Underwriters. Under the International Underwriting Agreement, the International Underwriters will,
subject to certain conditions set out therein, severally and not jointly, agree to procure subscribers
or purchasers for the International Offer Shares, failing which they agree to subscribe for or
purchase their respective proportions of the International Offer Shares which are not taken up under
the International Offering.
It is expected that the International Underwriting Agreement may be terminated on similar
grounds as the Hong Kong Underwriting Agreement. Potential investors should note that if the
International Underwriting Agreement is not entered into, or is terminated, the Global Offering will
not proceed.
Total Commission and Expenses
The Capital Market Intermediaries and the Underwriters will receive an underwriting
commission (the “ Fixed Fees ”) equals to 3% of the aggregate sale proceeds from the Global
Offering (collectively the “ Gross Proceeds ”). Our Company may, at our sole and absolute
discretion, pay to one or more Capital Market Intermediaries or Underwriters an incentive fee up
to 1% of the Gross Proceeds (the “ Discretionary Fees ”). As of the date of this prospectus, the
allocation of a portion of the Fixed Fees remains subject to the Company’s discretion. Accordingly,
such unallocated portion will be regarded as discretionary fees for the purpose of the Listing Rules.
The ratio of the fixed fees and discretionary fees (as classified under and for the purpose of Rule
3A.34 of the Listing Rules) payable by the Company to all syndicated members is expected to be
approximately 49.5%:50.5% (assuming the Discretionary Fees will be paid in full). 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.
Based on an Offer Price of HK$98.50, the aggregate commissions and fees, together with
listing fees, SFC transaction levy, AFRC transaction levy, Stock Exchange trading fee, legal and
other professional fees and other expenses, payable by our Company relating to the Global Offering
are estimated to be approximately HK$71.2 million in total.
UNDERWRITING
– 234 –


--- page 244 ---
Activities by Syndicate Members
We describe below a variety of activities that underwriters of the Hong Kong Public Offering
and the International Offering (together, referred to as “ Syndicate Members ”) and their affiliates
may each individually undertake and (as further described below) which do not form part of the
underwriting process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of commercial
and investment banking, brokerage, funds management, trading, hedging, investing and other
activities for their own account and for the account of others. In the ordinary course of their various
business activities, the Syndicate Members and their respective affiliates may purchase, sell or hold
a broad array of investments and actively trade securities, derivatives, loans, commodities,
currencies, credit default swaps, and other financial instruments for their own account and for the
accounts of their customers. Such investment and trading activities may involve or relate to assets,
securities and/or instruments of 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, proprietary trading in the H Shares and entering into over
the counter or listed derivative transactions or listed and unlisted securities transactions (including
issuing securities such as derivative warrants listed on a stock exchange) which have the H Shares
as their or part of their underlying assets. Those activities may require hedging activity by those
entities involving, directly or indirectly, buying and selling the H Shares. All such activities could
occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and their
affiliates holding long and/or short positions in the H Shares, in baskets of securities or indices
including the H Shares, in units of funds that may purchase the H Shares, or in derivatives related
to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities having
the H Shares as their or part of their underlying assets, whether on the Stock Exchange or on any
other stock exchange, the rules of the relevant exchange may require the issuer of those securities
(or one of its affiliates or agents) to act as a market maker or liquidity provider in the security, and
this will also result in hedging activity in the H Shares in most cases.
These activities may affect the market price or value of the H Shares, the liquidity or trading
volume in the H Shares and the volatility of their share price, and the extent to which this occurs
from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members will
be subject to certain restrictions, including the following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer Shares,
effect any transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares), whether in the open market or otherwise, with
a view to stabilizing or maintaining the market price of any of the Offer Shares at levels
other than those which might otherwise prevail in the open market; and
(b) all of them must comply with all applicable laws, including the market misconduct
provisions of the SFO, the provisions prohibiting insider dealing, false trading, price
rigging and stock market manipulation.
UNDERWRITING
– 235 –


--- page 245 ---
Hong Kong Underwriters’ Interests in our Company
Save as otherwise disclosed in this prospectus and save for its obligations under the Hong
Kong Underwriting Agreement, none of the Hong Kong Underwriters has any shareholding interests
in our Company or the right or option (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in our Company.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Underwriting Agreements.
Other Services to our Company
The Overall Coordinators and certain of the Underwriters or their respective affiliates have,
from time to time, provided and expect to provide in the future investment banking and other
services to our Company and our respective affiliates, for which such Overall Coordinators,
Underwriters or their respective affiliates have received or will receive customary fees and
commissions.
Other Services Provided by the Underwriters
The Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers and the Underwriters may in their ordinary course of business provide financing to
investors subscribing for the Offer Shares offered by this prospectus. Such Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers and Underwriters may enter
into hedges and/or dispose of such Offer Shares in relation to the financing which may have a
negative impact on the trading price of our H Shares.
Independence of the Joint Sponsors
Each of the Joint Sponsors satisfied the independence criteria set out in Rule 3A.07 of the
Listing Rules.
UNDERWRITING
– 236 –


--- page 246 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. CLSA Limited, CCB International Capital Limited, China Galaxy International
Securities (Hong Kong) Co., Limited and CMBC Securities Company Limited are the Overall
Coordinators of the Global Offering.
The Listing is sponsored by the Joint Sponsors. 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 or sold pursuant to the Global Offering.
8,421,850 Offer Shares will initially be made available under the Global Offering comprising:
 the Hong Kong Public Offering of 842,200 H Shares (subject to reallocation) in Hong
Kong as described in “— The Hong Kong Public Offering” in this section below; and
 the International Offering of 7,579,650 H Shares (subject to reallocation) outside the
United States (including to professional and institutional investors within Hong Kong)
in offshore transactions in reliance on Regulation S, as described in “— The
International Offering” in this section below.
Investors may either (i) apply for Hong Kong Offer Shares under the Hong Kong Public
Offering; or (ii) apply for or indicate an interest for International Offer Shares under the
International Offering, but may not do both.
The Offer Shares will represent approximately 15.36% of the enlarged issued share capital of
our Company immediately following the completion of the Global Offering.
References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 842,200 Offer Shares (subject to reallocation) for
subscription by the public in Hong Kong at the Offer Price, representing approximately 10.00% of
the total number of Offer Shares initially available under the Global Offering. The number of Offer
Shares initially offered under the Hong Kong Public Offering, subject to any reallocation of Offer
Shares between the International Offering and the Hong Kong Public Offering, will represent
approximately 1.54% of the enlarged issued share capital of our Company immediately following
the completion of the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as
to institutional and professional investors. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and other
securities and corporate entities that regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in the
paragraph headed “— Conditions of the Global Offering” below.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be based
solely on the level of valid applications received under the Hong Kong Public Offering. The basis
of allocation may vary, depending on the number of Hong Kong Offer Shares validly applied for
STRUCTURE OF THE GLOBAL OFFERING
– 237 –


--- page 247 ---
by applicants. Such allocation could, where appropriate, consist of balloting, which could mean that
some applicants may receive a higher allocation than others who have applied for the same number
of Hong Kong Offer Shares, and those applicants who are not successful in the ballot may not
receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under the
Hong Kong Public Offering (after taking into account any reallocation referred to below) will be
divided equally (to the nearest board lot) into two pools: pool A and pool B (with any odd lots being
allocated to pool A). The Hong Kong Offer Shares in pool A will be allocated on an equitable basis
to applicants who have applied for Hong Kong Offer Shares with an aggregate subscription price
of HK$5.0 million (excluding the brokerage, the SFC transaction levy, the AFRC transaction levy
and the Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in pool B will
be allocated on an equitable basis to applicants who have applied for Hong Kong Offer Shares with
an aggregate subscription price of more than HK$5.0 million (excluding the brokerage, the SFC
transaction levy, the AFRC transaction levy and the Stock Exchange trading fee payable) and up to
the total value in pool B.
Investors should be aware that applications in pool A and applications in pool B may receive
different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the pools are
unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the other pool to
satisfy demand in that other pool and be allocated accordingly. For the purpose of the immediately
preceding paragraph only, the “price” for Hong Kong Offer Shares means the price payable on
application therefor. Applicants can only receive an allocation of Hong Kong Offer Shares from
either pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 421,100 Hong Kong Offer Shares
(being 50% of the 842,200 Offer Shares initially available under the Hong Kong Public Offering)
is liable to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the discretion
of the Overall Coordinators. Subject to the allocation cap described in the subsequent paragraph, the
Overall Coordinators may in their discretion reallocate Offer Shares from the International Offering
to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong Public
Offering. In addition, if the Hong Kong Public Offering is not fully subscribed, the Overall
Coordinators will have the discretion (but shall not be under any obligation) to reallocate to the
International Offering all or any unsubscribed Hong Kong Offer Shares in such amounts as they
deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering will
be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall Coordinators
deem appropriate. In the event of reallocation of Offer Shares between the International Offering
and the Hong Kong Public Offering in the circumstances where (a) the International Offer Shares
are fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times; or (b) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times, then up to 421,050 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 1,263,250 Offer
Shares, representing approximately 15% of the number of Offer Shares initially available under the
Global Offering in accordance with Chapter 4.14 of the Guide for New Listing Applicants.
STRUCTURE OF THE GLOBAL OFFERING
– 238 –


--- page 248 ---
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.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering will
be allocated between Pool A and Pool B in equal proportion and the number of Offer Shares
allocated to the International Offering will be correspondingly reduced in such manner as the
Overall Coordinators in their discretion consider appropriate.
In the event that both the Hong Kong Public Offering and International Offering are
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.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and the
International Offering will be disclosed in the allotment results announcement, which is expected
to be published on Monday, May 4, 2026.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an undertaking
and confirmation in the application submitted by him/her/it that he/she/it and any person(s) for
whose benefit he/she/it is making the application has not applied for or taken up, or indicated an
interest for, and will not apply for or take up, or indicate an interest for, any International Offer
Shares under the International Offering. Such applicant’s application under the International
Offering is liable to be rejected if such undertaking and/or confirmation is/are breached and/or
untrue (as the case may be).
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channel), the Offer Price in addition to the brokerage, the SFC transaction
levy, the AFRC transaction levy and the Stock Exchange trading fee payable on each Offer Share,
amounting to a total of HK$4,974.67 for one board lot of 50 Offer Shares. Please refer to the section
headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share
Certificates and Refund of Application Monies” in this prospectus for details.
THE INTERNATIONAL OFFERING
Number of Offer Shares Offered
The International Offering will consist of 7,579,650 Shares (subject to reallocation),
representing approximately 90.00% of the total number of Offer Shares initially available under the
Global Offering. The number of Offer Shares initially offered under the International Offering,
subject to any reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, will represent approximately 13.8% of the enlarged issued share capital of our
Company immediately following the completion of the Global Offering.
Allocation
The International Offering will include selective marketing of Offer Shares to institutional and
professional investors and other investors anticipated to have a sizeable demand for such Offer
Shares in Hong Kong and other jurisdictions outside the United States in reliance on Regulation S.
Professional investors generally include brokers, dealers, companies (including fund managers)
STRUCTURE OF THE GLOBAL OFFERING
– 239 –


--- page 249 ---
whose ordinary business involves dealing in shares and other securities and corporate entities that
regularly invest in shares and other securities. Allocation of Offer Shares pursuant to the
International Offering will be effected in accordance with the “book-building” process described in
“— Pricing and Allocation” in this section below and based on a number of factors, including the
level and timing of demand, the total size of the relevant investor’s invested assets or equity assets
in the relevant sector and whether or not it is expected that the relevant investor is likely to buy
further Offer Shares and/or hold or sell its Offer Shares after the Listing. Such allocation is intended
to result in a distribution of the Offer Shares on a basis which would lead to the establishment of
a solid professional and institutional shareholder base to the benefit of our Group and the
Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require any
investor who has been offered Offer Shares under the International Offering and who has made an
application under the Hong Kong Public Offering to provide sufficient information to the Overall
Coordinators so as to allow them to identify the relevant applications under the Hong Kong Public
Offering and to ensure that they are excluded from any allocation of Offer Shares under the
International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the clawback arrangement described in “— The Hong Kong Public Offering
— Reallocation” in this section above.
PRICING AND ALLOCATION
Pricing of the Offer Shares
The Offer Price will be HK$98.50 per Offer Share, unless otherwise announced, as further
explained below. Applicants under the Hong Kong Public Offering may be required to pay, on
application (subject to application channel), the Offer Price plus brokerage of 1.0%, SFC
transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee
of 0.00565%, amounting to a total of HK$4,974.67 for one board lot of 50 Offer Shares.
The International Underwriters will be soliciting from prospective investors’ indications of
interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the International
Offering they would be prepared to acquire either at different prices or at a particular price. This
process, known as “book-building,” is expected to continue up to, and to cease on or about, the last
day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where they
deem appropriate, based on the level of interest expressed by prospective investors during the
book-building process in respect of the International Offering, and with the consent of our
Company, reduce the number of Offer Shares offered below and/or the Offer Price as stated in this
prospectus at any time on or prior to the morning of the last day for lodging applications under the
Hong Kong Public Offering. In such a case, we will, as soon as practicable following the decision
to make such reduction, and in any event not later than the morning of the last day for lodging
applications under the Hong Kong Public Offering, cause to be published on the websites of our
Company and the Stock Exchange at starsportmed.com and www.hkexnews.hk , respectively,
notices of the reduction. Our Company will also, as soon as practicable following the decision to
make such change, issue a supplemental prospectus updating investors of the change in the number
of Offer Shares being offered under the Global Offering and/or the Offer Price. The Global Offering
must first be canceled and subsequently relaunched on FINI pursuant to the supplemental
prospectus. Upon the issue of such a notice and supplemental prospectus, the revised number of
STRUCTURE OF THE GLOBAL OFFERING
– 240 –


--- page 250 ---
Offer Shares and/or the Offer Price will be final and conclusive and the Offer Price, if agreed upon
by the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company,
will be fixed within such revised Offer Price.
Before submitting applications for the Hong Kong Offer Shares, applicants should have regard
to the possibility that any announcement of a reduction in the number of Offer Shares and/or Offer
Price may not be made until the last day for lodging applications under the Hong Kong Public
Offering. Such notice will also include confirmation or revision, as appropriate, of the working
capital statement and the Global Offering statistics as currently set out in this prospectus, and any
other financial information which may change as a result of any such reduction. In the absence of
any such notice so published, the number of Offer Shares will not be reduced and/or the Offer Price,
if agreed upon by the Overall Coordinators (for themselves and on behalf of the Underwriters) and
our Company, will under no circumstances be set outside the Offer Price as stated in this prospectus.
If there is any change to the offer size due to change in the number of Offer Shares offered
in the Global Offering (other than pursuant to the reallocation mechanism as disclosed in this
prospectus), or change to the Offer Price which leads to the resulting price falling outside the
indicative Offer Price as stated in this prospectus, or if the Company becomes aware that there has
been a significant change affecting any matter contained in this prospectus or a significant new
matter has arisen, the inclusion of information in respect of which would have been required to be
in this prospectus if it had arisen before this prospectus was issued, after the issue of this prospectus
and before the commencement of dealings in our H Shares as prescribed under Rule 11.13 of the
Listing Rules, our Company is required to cancel the Global Offering and issue a supplemental
prospectus or a new prospectus and subsequently relaunched on FINI pursuant to the supplemental
prospectus.
Announcement of Final Pricing of the Offer Shares
The final pricing of the Offer Shares, the level of indications of interest in the International
Offering, the level of applications in the Hong Kong Public Offering, the basis of allocations of the
Hong Kong Offer Shares and the results of allocations in the Hong Kong Public Offering are
expected to be made available through a variety of channels in the manner described in the section
headed “How to Apply for Hong Kong Offer Shares — B. Publication of Results” in this prospectus.
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under
the terms and conditions of the Hong Kong Underwriting Agreement and is subject to, among other
things, the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company agreeing on the Offer Price.
Our Company expects to enter into the International Underwriting Agreement relating to the
International Offering on or around Wednesday, April 29, 2026.
These underwriting arrangements, including the Underwriting Agreements, are summarized in
the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
 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, on the Main Board
of the Stock Exchange and such approval not subsequently having been withdrawn or
revoked prior to the Listing Date;
 the pricing of the Offer Shares having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company;
STRUCTURE OF THE GLOBAL OFFERING
– 241 –


--- page 251 ---
 the execution and delivery of the International Underwriting Agreement on or around
Wednesday, April 29, 2026; and
 the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the International
Underwriting Agreement becoming and remaining unconditional and not having been
terminated in accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the respective Underwriting Agreements
(unless and to the extent such conditions are validly waived on or before such dates and times) and,
in any event, not later than the date which is 30 days after the date of this prospectus.
The consummation of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering becoming unconditional and not having
been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified, the
Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of the lapse
of the Hong Kong Public Offering will be published by our Company on the websites of our
Company and the Stock Exchange at starsportmed.com and www.hkexnews.hk , respectively, on
the next day following such lapse. In such a situation, all application monies will be returned,
without interest, on the terms set out in the section headed “How to Apply for Hong Kong Offer
Shares — D. Despatch/Collection of H Share Certificates and Refund of Application Monies” in
this prospectus. In the meantime, all application monies will be held in separate bank account(s)
with the receiving banks or other bank(s) in Hong Kong licensed under the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong).
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00 a.m.
on Tuesday, May 5, 2026, provided that the Global Offering has become unconditional in all
respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Tuesday, May 5, 2026, it is expected that dealings in the H Shares on the Stock
Exchange will commence at 9:00 a.m. on Tuesday, May 5, 2026.
The H Shares will be traded in board lots of 50 H Shares each and the stock code of the H
Shares will be 1609.
STRUCTURE OF THE GLOBAL OFFERING
– 242 –


--- page 252 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering and below are the procedures for application.
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 starsportmed.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;
 have a Hong Kong address ( for the White Form eIPO service only ); and
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the person(s)
for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or a Supervisor, or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Friday, April 24, 2026
and end at 12:00 noon on Wednesday, April 29, 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
www.eipo.com.hk Applicants who would
like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m.
on Friday,
April 24, 2026
to 11:30 a.m.
on Wednesday,
April 29, 2026,
Hong Kong time.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Wednesday,
April 29, 2026,
Hong Kong time.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 243 –


--- page 253 ---
Application Channel Platform Target Investors Application Time
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
Applicants 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.
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 244 –


--- page 254 ---
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor HKSCC
Nominees shall be liable to you or any other person in respect of any actions taken by HKSCC or
HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any breach of the
terms and conditions of this prospectus.
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. Hong Kong identity (“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 four in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document’s issuing country or jurisdiction, the identity document type; and (ii), the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each joint
beneficial owner. If you do not include this information, the application will be treated as being made for your
benefit.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 245 –


--- page 255 ---
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).
(1) Subject to change, if the Articles of Association and applicable company law prescribe a lower cap.
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 or they think fit, including evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 50 H Shares
Permitted number of
Hong Kong Offer
Shares for application
and amount payable
on application/
successful allotment /H1118/H1118
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the amount
payable associated with each specified board lot size in the
table below.
The Offer Price is HK$98.50 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.
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 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 .
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 246 –


--- page 256 ---
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 Offer Shares you have selected. Y ou
must pay the respective maximum amount payable on
application in full upon application for Hong Kong Offer
Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
50 4,974.67 700 69,645.36 5,000 497,466.87 70,000 6,964,536.08
100 9,949.34 800 79,594.70 10,000 994,933.73 80,000 7,959,469.80
150 14,924.00 900 89,544.03 15,000 1,492,400.59 90,000 8,954,403.53
200 19,898.67 1,000 99,493.38 20,000 1,989,867.46 100,000 9,949,337.26
250 24,873.34 1,500 149,240.06 25,000 2,487,334.31 150,000 14,924,005.88
300 29,848.01 2,000 198,986.75 30,000 2,984,801.18 200,000 19,898,674.50
350 34,822.68 2,500 248,733.43 35,000 3,482,268.03 250,000 24,873,343.13
400 39,797.35 3,000 298,480.12 40,000 3,979,734.90 300,000 29,848,011.76
450 44,772.02 3,500 348,226.81 45,000 4,477,201.77 350,000 34,822,680.38
500 49,746.68 4,000 397,973.49 50,000 4,974,668.63 421,100
(1) 41,896,659.17
600 59,696.03 4,500 447,720.17 60,000 5,969,602.36
Notes:
(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).
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 for any Offer Shares.
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 authorize us and/or the
Overall Coordinators (or its agents or nominees), as our agents, to execute any
documents for you and to do on your behalf all things necessary to register any Hong
Kong Offer Shares allocated to you in your name or in the name of HKSCC Nominees
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 247 –


--- page 257 ---
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 the Global Offering set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have
made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied only
on the information and representations contained therein in making your application (or
as the case may be, causing your application to be made) and will not rely on any other
information or representations;
(vi) agree that the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Underwriters, their or our 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 “— G.
Personal Data — 4. Transfer of Personal Data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your application
(or as the case may be, HKSCC Nominees’ application) has been accepted) that you will
not rescind it 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 you will not be allocated Hong Kong Offer Shares” in this
section;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 248 –


--- page 258 ---
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it and
the resulting contract will be governed by and construed in accordance with the laws of
Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong that apply to your application and that neither we nor the Relevant
Persons will breach any law inside and/or outside Hong Kong as a result of the
acceptance of your offer to purchase, or any action arising from your rights and
obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by our Company, any of the Directors, Supervisors, chief
executives of our Company, substantial Shareholder(s) or existing Shareholder(s) 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 our Company, any of
the Directors, Supervisors, chief executives of our Company, substantial Shareholder(s)
or existing Shareholder(s) or any of its subsidiaries or any of their respective close
associates in relation to the acquisition, disposal, voting or other disposition of the H
Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong Kong
Offer Shares to you and that you may be prosecuted for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated to
you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application has
been or will be made for your benefit by giving electronic application instructions to
HKSCC directly or indirectly or through the application channel of the White Form
eIPO service or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person) warrant
that (1) no other application has been or will be made by you as agent for or for the
benefit of that person or by that person or by any other person as agent for that person
by giving electronic application instructions to HKSCC and the 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
– 249 –


--- page 259 ---
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/H1118The designated results of allocations
website at www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC
EIPO channel, and (ii) the number of
Hong Kong Offer Shares conditionally
allotted to them, among other things,
will be displayed on the “Allotment
Results” page of the White
Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website at
starsportmed.com which will provide
links to the abovementioned websites
of the H Share Registrar.
Telephone +852 2862 8555 – the
allocation results telephone enquiry
line provided by the H Share Registrar
24 hours, from 11:00 p.m. on Monday,
May 4, 2026 to 12:00 midnight on
Sunday, May 10, 2026 (Hong Kong
time)
No later than 11:00 p.m. on Monday,
May 4, 2026 (Hong Kong time).
between 9:00 a.m. to 6:00 p.m.
on Tuesday, May 5, 2026 to
Wednesday, May 6, 2026, Thursday,
May 7, 2026 to Friday, May 8, 2026
For those applying through HKSCC EIPO channel, you may also check with your broker or
custodian from 6:00 p.m. on Thursday, April 30, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, April 30, 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 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
starsportmed.com by no later than 11:00 p.m. on Monday, May 4, 2026 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 250 –


--- page 260 ---
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees
have full discretion to reject or accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to the
paragraph headed “— A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants
will be required to hold sufficient application funds on deposit with their designated bank before
balloting. After balloting of Hong Kong 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
– 251 –


--- page 261 ---
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 Tuesday, May 5,
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 H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For physical share certificates
of 100,000 or more Offer
Shares issued under your
own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person from Hong
Kong Share Registrar,
Computershare Hong Kong
Investor Services Limited at
Shops 1712-1716, 17th
Floor, Hopewell Centre, 183
Queen’s Road East, Wan
Chai, Hong Kong
Time: 9:00 a.m. to 1:00 p.m.
on Tuesday, May 5, 2026
(Hong Kong time).
If you are an individual, you
must not authorize any other
person to collect for you. If
you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s chop.
Both individuals and authorised
representatives must produce,
at the time of collection,
evidence of identity
acceptable to the H Share
Registrar.
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
– 252 –


--- page 262 ---
White Form eIPO service HKSCC EIPO channel
For physical share certificates
of less than 100,000 Offer
Shares issued under your
own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our H Share certificate(s) will
be sent to the address
specified in your application
instructions by ordinary post
at your own risk.
Date: Monday, May 4, 2026.
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tuesday, May 5, 2026. Subject to the arrangement
between you and your
broker or custodian .
Responsible party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/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/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
Application monies paid
between you and it.
Application monies paid
between you and it through
multiple bank accounts /H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk.
Note:
1. Except in the event of any of the Severe Weather Signals (as defined below) in the morning on Monday, May 4,
2026 rendering it impossible for the relevant H Share certificates to be despatched to HKSCC in a timely
manner, our Company shall procure the H Share Registrar to arrange for delivery of the supporting documents
and H Share certificates in accordance with the contingency arrangements as agreed between them. Y ou may
refer to the paragraph headed “— E. Severe Weather Arrangements” in this section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, April 29, 2026 if, there is/are:
 a No. 8 typhoon warning signal or above;
 a black rainstorm warning signal; 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 Wednesday, April 29, 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 253 –


--- page 263 ---
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
starsportmed.com of the revised timetable.
If a Severe Weather Signal is hoisted on Monday, May 4, 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 Tuesday, May 5, 2026.
If a Severe Weather Signal is hoisted on Monday, May 4, 2026, for physical share certificates
of less than 100,000 Offer Shares issued under your own name, the despatch of physical H Share
certificate(s) will be made by ordinary post when the post office re-opens after the Severe Weather
Signal is lowered or cancelled (e.g. in the afternoon of Monday, May 4, 2026 or on Tuesday, May 5,
2026).
If a Severe Weather Signal is hoisted on Tuesday, May 5, 2026, for physical share certificates
of 100,000 or more Offer Shares issued under your own name, physical H Share certificate(s) will
be available for collection in person at the H Share Registrar’s office after the Severe Weather
Signal is lowered or cancelled (e.g. in the afternoon of Tuesday, May 5, 2026 or on Wednesday, May
6, 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the H Shares or any other date HKSCC
chooses. Settlement of transactions between Exchange Participants is required to take place in
CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
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 our Company, the H Share Registrar, the receiving banks and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than HKSCC
Nominees. This personal data may include client identifier(s) and your identification information.
By giving application instructions to HKSCC, you acknowledge that you have read, understood and
agree to all of the terms of the Personal Information Collection Statement below.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 254 –


--- page 264 ---
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 our 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 our Company or its agents and the H Share Registrar is accurate and
up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares into
or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of our
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 our 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 H Shares
including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of our Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from our Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable our
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which applicants
and holders of the H Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 255 –


--- page 265 ---
4. Transfer of personal data
Personal data held by our Company and the H Share Registrar relating to the applicants for
and holders of Hong Kong Offer Shares will be kept confidential but our 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:
 our Company’s appointed agents such as financial advisors, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar 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 our 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
Our Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which the
personal data were collected. Personal data which is no longer required will be destroyed or dealt
with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether our
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. Our 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 our 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
– 256 –


--- page 266 ---
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF STAR SPORTS MEDICINE CO., LTD., CITIC SECURITIES (HONG
KONG) LIMITED AND CCB INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of Star Sports Medicine Co., Ltd.
(the “Company”) and its subsidiaries (together, the “Group”) set out on pages I-3 to I-53, which
comprises the consolidated statements of profit or loss and other comprehensive income, statements
of changes in equity and statements of cash flows of the Group for each of the years ended 31
December 2023, 2024 and 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 2023, 2024 and 2025 and material accounting policy information and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial Information
set out on pages I-3 to I-53 forms an integral part of this report, which has been prepared for
inclusion in the prospectus of the Company dated 24 April 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
Information in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”). This standard requires that we comply with ethical standards and plan
and perform our work to obtain reasonable assurance about whether the Historical Financial
Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the reporting
accountants’ judgement, including the assessment of risks of material misstatement of the Historical
Financial Information, 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 267 ---
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 2023, 2024 and 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.
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-3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which states that no dividends have
been paid by the Company in respect of the Relevant Periods.
Ernst & Young
Certified Public Accountants
Hong Kong
24 April 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 268 ---
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 (“HKSAs”) 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-3 –


--- page 269 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 238,542 327,119 402,751
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(61,234) (99,524) (104,132)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,308 227,595 298,619
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 14,834 10,097 22,728
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118(66,108) (69,628) (80,570)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,165) (22,768) (36,706)
Research and development expenses /H1118/H1118/H1118/H1118 (35,024) (37,252) (47,503)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) (13) (415)
Reversal of impairment/(impairment) of
financial assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (111) (1,642)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (486) (352) (343)
PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 64,322 107,568 154,168
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 (7,210) (12,179) (17,198)
PROFIT FOR THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Total comprehensive income
attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
EARNINGS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE
PARENT
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.23 2.06 2.95
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 270 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 30,040 82,880 85,900
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 10,652 8,114 4,500
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 1,782 1,484 1,186
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 837 1,163 1,939
Certificate of deposit with a maturity
exceeding one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 – – 10,149
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 2,823 1,333 786
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,134 94,974 104,460
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 39,287 57,154 64,476
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 2,651 19,134 40,981
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 6,836 12,011 14,384
Financial assets at fair value through
profit or loss (the “FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 – – 422,934
Time deposits with original maturities of
over three months and due within one
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/H111821 – 344,093 –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 356,370 89,968 116,846
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,144 522,360 659,621
TOTAL ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118451,278 617,334 764,081
CURRENT LIABILITIES
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 12,900 23,550 27,765
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 40,173 77,780 66,586
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 9,198 10,487 4,222
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111825 – – 12,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 3,276 3,716 1,901
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 1,617 5,976
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 3,672 10,083 12,370
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,525 127,233 130,820
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,619 395,127 528,801
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
380,753 490,101 633,261
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 17,000 18,723
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 5,054 1,861 –
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 931 – 5,121
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,985 18,861 23,844
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,768 471,240 609,417
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/H1118/H1118/H1118/H1118/H1118/H1118/H111828 46,409 46,409 46,409
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 328,359 424,831 563,008
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,768 471,240 609,417
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 271 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Paid-in
capital/share
capital
Capital
reserve*
Share
award
reserve*
Statutory
surplus
reserve*
(Accumulated
losses)/
retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30)
At 1 January 2023 /H1118/H1118 45,923 377,853 – – (141,463) 282,313
Profit for the year /H1118/H1118/H1118 –––– 57,112 57,112
Total comprehensive
income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 57,112 57,112
Issue of share capital /H1118 486 33,952 – – – 34,438
Recognition of
equity-settled share
award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 905 – – 905
Appropriation to
statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,849 (5,849) –
Conversion into a
joint stock
company (note (i)) /H1118 – (142,557) – – 142,557 –
At 31 December
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 269,248 905 5,849 52,357 374,768
Note:
(i) On 28 February 2023, the Company was converted to a joint stock limited liability company, and a total of 46,409
thousand ordinary shares with a par value of RMB1.00 each were issued and allotted to the respective shareholders
based on the paid-in capital registered in their respective names as of that date. Besides, capital reserve of
RMB142,557 thousand was used to offset the accumulated losses.
Attributable to owners of the parent
Share capital
Capital
reserve*
Share
award
reserve*
Statutory
surplus
reserve*
Retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30)
At 1 January 2024 /H1118/H1118 46,409 269,248 905 5,849 52,357 374,768
Profit for the year /H1118/H1118/H1118 –––– 95,389 95,389
Total comprehensive
income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 95,389 95,389
Recognition of
equity-settled share
award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,083 – – 1,083
Appropriation to
statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 9,670 (9,670) –
At 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 269,248 1,988 15,519 138,076 471,240
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 272 ---
Attributable to owners of the parent
Share capital
Capital
reserve*
Share
award
reserve*
Statutory
surplus
reserve*
Retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30)
At 1 January 2025 /H1118/H1118 46,409 269,248 1,988 15,519 138,076 471,240
Profit for the year /H1118/H1118/H1118 –––– 136,970 136,970
Total comprehensive
income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 136,970 136,970
Recognition of
equity-settled share
award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,207 – – 1,207
Appropriation to
statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 7,685 (7,685) –
At 31 December
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 269,248 3,195 23,204 267,361 609,417
* These reserve accounts comprised the consolidated reserves of RMB328,359 thousand, RMB424,831 thousand and
RMB563,008 thousand in the consolidated statements of financial position as at 31 December 2023, 2024 and 2025,
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 273 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,322 107,568 154,168
Adjustments for:
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 486 352 343
Foreign exchange differences, net /H1118/H1118/H1118/H1118/H1118/H11186 (107) (63) 411
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,6 (4,734) (5,568) (5,381)
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,13 9,430 10,030 10,934
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H11186,14(a) 3,142 3,615 3,614
Amortisation of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H11186,15 298 298 298
Equity-settled share award expense /H1118/H1118/H1118/H1118/H11186,30 905 1,083 1,207
(Reversal of impairment)/impairment of
trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,18 (17) 114 1,644
Impairment/(reversal of impairment) of
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,19 5 (3) (2)
Impairment losses on inventories /H1118/H1118/H1118/H1118/H1118/H1118/H11186 1,053 1,923 3,304
Fair value gains on financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,6 (14) – (1,064)
Investment income on financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,6 (70) – (1,600)
Loss on disposal of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 31 13 –
74,730 119,362 167,876
Increase in inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,446) (24,574) (13,292)
Decrease/(increase) in trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607 (16,597) (23,490)
Decrease/(increase) in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118490 (2,540) (2,382)
Increase in trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,834 10,511 4,127
Increase in other payables and accruals,
contract liabilities and refund liabilities /H1118 12,394 14,979 32,511
Cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,609 101,141 165,350
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,6 4,734 5,568 5,381
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,487) (12,194) (13,615)
Net cash flows from operating activities /H1118/H1118/H1118 79,856 94,515 157,116
CASH FLOWS FROM INVESTING
ACTIVITIES
Investment income on financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884 – 1,600
Purchases of items of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,471) (27,159) (34,235)
Purchases of intangible assets and right-of-
use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,782) – –
Proceeds from disposal of items of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181––
Purchases of financial assets at FVTPL /H1118/H1118/H1118/H1118 (85,000) – (781,870)
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 274 ---
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Proceeds from disposal of financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,000 – 360,000
Proceeds from time deposits with original
maturities of over three months and due
within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 249,079 607,095
Purchases of time deposits with original
maturities of over three months and due
within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (593,172) (263,002)
Purchase of certificate of deposit with a
maturity exceeding one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (10,149)
Net cash flows used in investing activities /H1118/H1118 (21,168) (371,252) (120,561)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,666 – –
New bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,000 13,723
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,540) (4,127) (3,841)
Payments of listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,532) (2,740) (19,236)
Net cash flows from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,594 10,133 (9,354)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,282 (266,604) 27,201
CASH AND CASH EQUIV ALENTS A T
BEGINNING OF YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,840 356,370 89,968
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248 202 (323)
CASH AND CASH EQUIV ALENTS AT
END OF YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 275 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 27,444 25,745 24,388
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 7,831 5,182 1,901
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 1,782 1,484 1,186
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 9,059 12,000 12,000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 631 517 489
Certificate of deposit with a maturity
exceeding one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 – – 10,149
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 321 483 592
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,068 45,411 50,705
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 38,556 55,129 62,063
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 2,651 19,134 40,981
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 12,083 43,115 56,325
Financial assets 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/H1118/H111820 – – 422,934
Time deposits with original maturities of
over three months and due within one
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/H111821 – 344,093 –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 356,005 72,809 116,798
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118409,295 534,280 699,101
TOTAL ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118456,363 579,691 749,806
CURRENT LIABILITIES
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 16,819 30,517 43,204
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 39,756 47,295 59,134
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 9,198 10,487 4,222
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 3,249 3,665 1,901
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 1,618 5,787
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 3,672 10,083 12,370
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – – 10,000
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,000 103,665 136,618
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
335,295 430,615 562,483
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118382,363 476,026 613,188
NON-CURRENT LIABILITIES
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 5,054 1,861 –
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 9 3 1––
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,985 1,861 –
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118376,378 474,165 613,188
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 46,409 46,409 46,409
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 329,969 427,756 566,779
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118376,378 474,165 613,188
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 276 ---
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Star Sports Medicine Co., Ltd. (the “Company”) was a limited liability company established in Beijing of the People’s
Republic of China (the “PRC”) on 31 July 2017. The registered office of the Company is located at Room A018 and B018,
Building 1, No. 25, Jinghai 2nd Street, Beijing Economic and Technological Development Area, Beijing.
On 28 February 2023, the Company was converted to a joint stock limited liability company, and a total of 46,409
thousand ordinary shares with a par value of RMB1.00 each were issued and allotted to the respective shareholders of the
Company according to the paid-in capital registered under the names of these shareholders on that day.
During the Relevant Periods, the Group was principally engaged in the research and development and sales of
innovative medical devices and equipment in the field of sports medicine. The product line covers medical implants, surgical
equipment and associated medical consumables.
As at the date of this report, the Company had direct interests in the following subsidiaries and the particulars of
which are set out below:
Name Note
Place and date of
registration and
place of business
Nominal value of
registered share
capital
Percentage
of equity
attributable
to the
Company
Direct Principal activities
ʮ̡
Suzhou Xingyue Smart
Healthcare Technology Co., Ltd.
(“Suzhou Tianxing”)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
a PRC/Mainland
China
25 April
2023
RMB10,000,000 100% Production and
sale of sports
medicine
products
ʮ̡
Hunan Tianxing Bomeidi
Medical Devices Co., Ltd.
(“Hunan Tianxing”)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
a PRC/Mainland
China
7 June 2022
RMB2,000,000 100% Production and
sale of sports
medicine
products
ʮ̡
Star (HK) Medicine Co., Ltd.
(“Star (HK)”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
a Hong Kong
7 February
2024
HKD10,000 100% No substantial
business
operations
* The English names of the companies registered in the PRC represent the best efforts made by management of
the Company to translate the Chinese names of these companies as they do not have official English names.
Note:
a. No audited statutory financial statements have been prepared for these subsidiaries for the years ended
31 December 2023, 2024 and 2025.
The carrying amounts of the Company’s investments in subsidiaries are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Investments, at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,059 12,000 12,000
2. ACCOUNTING POLICIES
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. 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 financial
assets at fair value. These financial statements are presented in Renminbi (“RMB”) and all values are rounded to the nearest
thousand except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 277 ---
Basis of consolidation
The Historical Financial Information includes the financial statements of the Company and its subsidiaries
(collectively referred to as the “Group”) for the Relevant Periods. A subsidiary is an entity (including a structured
entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities
of the investee).
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.
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/H1118/H1118Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118Amendments to the Classification and Measurement of Financial
Instruments 1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture 3
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements to IFRS Accounting
Standards — V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Amendments to: IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
The application of IFRS 18 will have no impact on the consolidated statement of financial position of the Group, but
will have impact on the presentation of the consolidated statement of profit or loss and other comprehensive income. Except
for IFRS 18, the directors of the Company anticipate that the application of these new and amended IFRS Accounting
Standards will have no material impact on the Group’s financial performance and financial position in the foreseeable future.
2.3 MATERIAL ACCOUNTING POLICIES
Fair value measurement
The Group measures certain financial instruments at the end of each reporting Periods. 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
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 278 ---
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 Historical Financial Information
are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is observable, either directly or indirectly;
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.
For assets and liabilities that are recognised in the Historical Financial Information 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 asset is required (other
than inventories, deferred tax assets and financial assets), the asset’s recoverable amount is estimated. An asset’s
recoverable amount is the higher of the asset’s or 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 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 the statement
of profit or loss in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 279 ---
(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);
(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:
Categories Annual rates
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50% to 19.00%
Tools /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.00% to 33.33%
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.00% to 31.67%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over the shorter of the lease terms and 20%
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.
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 either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the
useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at each financial year end.
Patents
Purchased patents are stated at cost less any impairment losses and are amortised on the straight-line basis over
their estimated useful lives of 10 to 20 years.
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 280 ---
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.
Deferred 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 not exceeding five to seven years,
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:
Land use rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 years
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 to 6 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
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 buildings, (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 is considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income, and fair value through profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 281 ---
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.
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.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest income, foreign exchange
revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the
same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in
other comprehensive income. Upon derecognition, the cumulative fair value change recognised in other
comprehensive income is recycled to the statement of 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.
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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 282 ---
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.
Debt investments at fair value through other comprehensive income and financial assets at amortised cost are
subject to impairment under the general approach and they are classified within the following stages for measurement
of ECLs except for trade receivables 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.
Simplified approach
For trade 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.
Classification as equity and financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of financial liability and equity instrument.
A financial liability is any liability that is (a) a contractual obligation (i) to deliver cash or another financial
asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions
that are potentially unfavourable to the entity; or (b) a contract that will or may be settled in the entity’s own equity
instruments and is: (i) a non derivative for which the entity is or may be obliged to deliver a variable number of the
entity’s own equity instruments; or (ii) a derivative that will or may be settled other than by the exchange of a fixed
amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 283 ---
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 payables, financial liabilities included in other payables and
accruals, and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing borrowings are subsequently measured
at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in
which case they are stated at cost. Gains and losses are recognised in 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.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in financial position if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis,
or to realise the assets and settle the liabilities simultaneously.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
cost basis. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to
completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and
short-term highly liquid deposits with a maturity of generally within three months that are readily 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.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event
and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable
estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the
end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase
in the discounted present value amount arising from the passage of time is included in finance costs in the statement
of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 284 ---
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
each reporting period, taking into consideration interpretations and practices prevailing in the countries in which the
Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of each reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries, when the timing
of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carryforward of unused tax credits and
unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax
assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of each reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right
to set off current tax assets and current tax 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.
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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 285 ---
When the contract contains a financing component which provides the customer with a significant benefit of
financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present
value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing
transaction between the Group and the customer at contract inception. When the contract contains a financing
component which provides the Group with a significant financial benefit for more than one year, revenue recognised
under the contract includes the interest expense accreted on the contract liability under the effective interest method.
For a contract where the period between the payment by the customer and the transfer of the promised goods or
services is one year or less, the transaction price is not adjusted for the effects of a significant financing component,
using the practical expedient in IFRS 15.
(a) Sale of sports medicine products
Revenue from the sale of sports medicine products is recognised at the point in time when control of
the asset is transferred to the customer, generally on delivery of the medicine products.
Some contracts for the sale of medicine products provide customers with rights of return and volume
rebates, giving rise to variable consideration.
(i)
Rights of return
For contracts which provide a customer with a right to return the goods within a specified period, the
expected value method is used to estimate the goods that will not be returned because this method best predicts
the amount of variable consideration to which the Group will be entitled. The requirements in IFRS 15 on
constraining estimates of variable consideration are applied in order to determine the amount of variable
consideration that can be included in the transaction price. For goods that are expected to be returned, instead
of revenue, a refund liability is recognised. A right-of-return asset (and the corresponding adjustment to cost
of sales) is also recognised for the right to recover products from a customer.
(ii)
V olume rebates
Retrospective volume rebates may be provided to certain customers once the quantity of products
purchased during the period exceeds a threshold specified in the contract. Rebates are offset against amounts
payable by the customer. To estimate the variable consideration for the expected future rebates, the most likely
amount method is used for contracts with a single-volume threshold and the expected value method for
contracts with more than one volume threshold. The selected method that best predicts the amount of variable
consideration is primarily driven by the number of volume thresholds contained in the contract. The
requirements on constraining estimates of variable consideration are applied and a refund liability for the
expected future rebates is recognised.
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.
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. Contract liabilities are recognised as revenue when the Group
performs under the contract (i.e., transfers control of the related goods to the customer).
Right-of-return assets
A right-of-return asset is recognised for the right to recover the goods expected to be returned by customers.
The asset is measured at the former carrying amount of the goods to be returned, less any expected costs to recover
the goods and any potential decreases in the value of the returned goods. The Group updates the measurement of the
asset for any revisions to the expected level of returns and any additional decreases in the value of the returned goods.
Refund liabilities
A refund liability is recognised for the obligation to refund some or all of the consideration received
(or receivable) from a customer and is measured at the amount the Group ultimately expects it will have to return to
the customer. The Group updates its estimates of refund liabilities (and the corresponding change in the transaction
price) at the end of each reporting period.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each
entity in the Group uses RMB as its 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 Relevant Periods. Differences arising on settlement or translation of monetary items
are recognised in the statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 286 ---
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).
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.
Share-based payments
The Company operates a restricted share scheme. Employees (including directors) of the Group receive
remuneration in the form of share-based payments, whereby employees render services in exchange for equity
instruments (“equity-settled transactions”). The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date at which they are granted. The fair value is determined by reference to the
transaction prices of recent third-party investors or Market Approach-Comparable Companies Multiple Method,
further details of which are given in note 30 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 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.
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 scheme
The employees of the Group’s subsidiaries which operate in Chinese mainland are required to participate in
a central pension scheme operated by the local municipal government. The Company and 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 a housing fund, basic medical insurance, unemployment
insurance, injury insurance and maternity insurance. The Group makes monthly contributions to the housing fund and
other social insurances. The contributions are charged to the statement of profit or loss on an accrual basis. The Group
has no further obligations beyond the contributions made.
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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 287 ---
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgements
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:
Revenue from contracts with customers
The Group applied the following judgements that significantly affect the determination of the amount and timing of
revenue from contracts with customers:
(a) Determining the method to estimate variable consideration and assessing the constraint for the sale of
medicine products
Certain contracts for the sale of medicine products include a right of return and volume rebates that give rise
to variable consideration. In estimating the variable consideration, the Group is required to use either the expected
value method or the most likely amount method based on which method better predicts the amount of consideration
to which it will be entitled.
The Group determined that the expected value method is the appropriate method to use in estimating the
variable consideration for the sale of medicine products with rights of return, given the large number of customer
contracts that have similar characteristics. In estimating the variable consideration for the sale of medicine products
with volume rebates, the Group determined that using a combination of the most likely amount method and the
expected value method is appropriate. The selected method that better predicts the amount of variable consideration
related to volume rebates is primarily driven by the number of volume thresholds contained in the contract. The most
likely amount method is used for those contracts with a single volume threshold, while the expected value method
is used for contracts with more than one volume threshold.
Before including any amount of variable consideration in the transaction price, the Group considers whether
the amount of variable consideration is constrained. The Group determined that the estimates of variable
consideration are not constrained based on its historical experience, business forecast and the current economic
conditions. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses and all deductible temporary differences 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. Further details are contained in note 27 to the Historical
Financial Information.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each
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.
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).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the
matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic
conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number
of defaults in the manufacturing sector, the historical default rates are adjusted. At each reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation among historical observed default rates, forecast economic conditions and ECLs is
a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic conditions. The
Group’s historical credit loss experience and forecast of economic conditions may also not be representative of a customer’s
actual default in the future. The information about the ECLs on the Group’s trade receivables is disclosed in note 18 to the
Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 288 ---
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental
borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The IBR therefore reflects what the Group “would have to pay”, which requires
estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or
when it needs to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when
available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).
Fair value measurement of share-based payments
The Group has set up a restricted share scheme for the Group’s employees. Also, restricted shares were granted to
the Company’s directors, the Group’s employees. The fair values of the restricted shares are determined based on recent
third-party investor transactions and considering the terms and conditions upon which the restricted shares were granted.
Further details are included in note 30 to the Historical Financial Information.
Net realisable value of inventories
Net realisable value of inventories is based on estimated selling prices less any estimated costs to be incurred to
completion and disposal. These estimates, based on the current market condition and the historical experience in selling
goods of a similar nature, include but not limited to economic outlook, sales forecasts and the forecast market value for the
inventory items. They could change significantly as a result of changes in market conditions. The Group reassesses the
estimation at the end of each of the reporting period. The carrying amount of inventories is disclosed in note 17 to the
Historical Financial Information.
V ariable consideration for returns and volume rebates
The Group estimates variable consideration to be included in the transaction price for the sale of medicine products
with rights of return and volume rebates.
The Group has developed a statistical model for forecasting sales returns. The model used the historical return data
of each product to estimate expected return percentages. These percentages are applied to determine the expected value of
the variable consideration. Any significant changes in experience as compared to historical return pattern will impact the
expected return percentages estimated by the Group.
The Group’s expected volume rebates are analysed on a per customer basis for contracts that are subject to a single
volume threshold. Determining whether a customer is likely to be entitled to a rebate depends on the customer’s historical
rebate entitlement and accumulated purchases to date.
The Group has applied a statistical model for estimating expected volume rebates for contracts with more than one
volume threshold. The model uses the historical purchasing patterns and rebate entitlement of customers to determine the
expected rebate percentages and the expected value of the variable consideration. Any significant changes in experience as
compared to historical purchasing patterns and rebate entitlements of customers will impact the expected rebate percentages
estimated by the Group.
The Group updates its assessment of expected returns and volume rebates quarterly and the refund liabilities are
adjusted accordingly. Estimates of expected returns and volume rebates are sensitive to changes in circumstances and the
Group’s past experience regarding returns and rebate entitlements may not be representative of customers’ actual returns and
rebate entitlements in the future.
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group has only one reportable operating segment, which is the sale of sports medicine
products. Since this is the only reportable operating segment of the Group, no further operating segment analysis thereof is
presented.
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118231,876 306,267 332,485
Other countries/regions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,666 20,852 70,266
238,542 327,119 402,751
The revenue information above is based on the locations of the customers.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 289 ---
(b) Non-current assets
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,006 93,409 91,961
The non-current asset information above is based on the locations of the assets and excludes financial instruments and
deferred tax assets.
Information about major customers
Revenue from a major customer which accounted for 10% or more of the Group’s revenue during the Relevant
Periods:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,009 56,883 N/A*
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,870 49,202 N/A*
Customer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A* N/A* 83,725
Customer D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A* N/A* 51,861
Customer E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A* N/A* 51,124
* Less than 10% of the Group’s revenue during the Relevant Periods.
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue from contracts with customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 327,119 402,751
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Types of goods
Medical implants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,516 249,987 310,375
Surgical equipment and associated medical
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,919 76,986 92,020
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 146 356
Total revenue from contracts with customers /H1118/H1118/H1118/H1118/H1118238,542 327,119 402,751
Geographical markets
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118231,876 306,267 332,485
Other countries/regions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,666 20,852 70,266
238,542 327,119 402,751
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 290 ---
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Timing of revenue recognition
Goods transferred at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,542 327,119 402,751
The following table shows the amounts of revenue recognised in the current reporting period that were included in
the contract liabilities at the beginning of the reporting period and recognised from performance obligations satisfied in
previous periods:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue recognised that was included in contract
liabilities at the beginning of each reporting
period:
Sale of sports medicine products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,397 7,041 8,445
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of sports medicine products
The performance obligation is satisfied upon delivery of sports medicine products, and payment is generally
made in advance from the acceptance by the customers. Some contracts provide customers with a right of return and
volume rebates which give rise to variable consideration subject to constraint.
As at 31 December 2023, 2024 and 2025, no transaction price was allocated to the remaining performance
obligations.
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other income
Bank interest income (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,734 5,568 5,381
Government grants* (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,791 3,612 14,617
Additional tax deduction for input V A T /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 790 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 58 60
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,555 10,028 20,058
Gains
Investment income on financial assets at FVTPL
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870 – 1,600
Fair value gains on financial assets at FVTPL
(note 6) /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 – 1,064
Foreign exchange gain, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 63 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 866
Total gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118279 69 2,670
Total other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,834 10,097 22,728
* Government grants received for which related expenditure has not yet been undertaken are included in deferred
income in the statement of financial position. There are no unfulfilled conditions or contingencies relating to
these grants.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 291 ---
6. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of inventories sold /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,181 97,601 100,828
Depreciation of property, plant and
equipment* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 9,430 10,030 10,934
Depreciation of right-of-use assets* /H1118/H1118/H1118/H1118/H111814(a) 3,142 3,615 3,614
Amortisation of intangible assets* /H1118/H1118/H1118/H1118/H1118/H111815 298 298 298
Research and development costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118 35,024 37,252 47,503
Lease payments not included in the
measurement of lease liabilities /H1118/H1118/H1118/H1118/H1118/H111814(c) 380 53 211
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,468 3,253 17,154
Employee benefit expense (including
directors’ and chief executives’
remuneration (note 8) ):
Wages, salaries and allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118 61,964 74,702 85,604
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118 4,361 5,391 6,345
Equity-settled share award expense** /H1118/H1118/H111830 905 1,083 1,207
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,230 81,176 93,156
Foreign exchange differences, net /H1118/H1118/H1118/H1118/H1118/H1118 (107) (63) 411
Fair value gains on financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (14) – (1,064)
Investment income on financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (70) – (1,600)
Loss on disposal of items of property, plant
and equipment, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 13 –
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (4,734) (5,568) (5,381)
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (9,791) (3,612) (14,617)
(Reversal of impairment)/impairment of
trade receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 (17) 114 1,644
Impairment/(reversal of impairment) of
financial assets included in prepayments,
other receivables and other assets /H1118/H1118/H1118/H1118/H111819 5 (3) (2)
Write-down of inventories to net realisable
value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,053 1,923 3,304
* The depreciation of property, plant and equipment, depreciation of right-of-use assets and amortisation of other
intangible assets for each of the Relevant Periods are included in “cost of sales”, “selling and distribution
expenses”, “administrative expenses” and “research and development expenses” in the consolidated statements
of profit or loss and other comprehensive income.
** Equity-settled share award expenses for each of the Relevant Periods are included in “selling and distribution
expenses”, “administrative expenses” and “research and development expenses” in the consolidated statements
of profit or loss and other comprehensive income.
7. FINANCE COSTS
An analysis of finance costs is as follows:
The Group
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest on bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 60 520
Interest on other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868 44 178
Interest on lease liabilities
(note 14(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418 308 165
Total interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486 412 863
Less: Interest capitalised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (60) (520)
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/H1118486 352 343
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 292 ---
8. DIRECTORS’ AND CHIEF EXECUTIVES’ REMUNERATION
The remuneration of directors and the chief executive for the Relevant Periods is set out below:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332 400 400
Other emoluments:
Wages, salaries and allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,720 1,720 1,720
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200 650 650
Equity-settled share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875 90 90
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130 136 136
Other employee benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118178 188 196
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/H11182,635 3,184 3,192
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods were as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Ms. Zhao Tian Jiao* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 100 63
Ms. Chen Cui Ting* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 100 63
Mr. Lyu Zhenlin** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 100 100
Mr. Deng Y u** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 100 100
Mr. Liu Bao Jie*** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 7
Mr. Wang Chun Fei*** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 7
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/H1118332 400 400
* Ms. Zhao Tian Jiao and Ms. Chen Cui Ting served as Independent Non-Executive Directors from 1 March 2023
to 18 August 2025.
** Mr. Lyu Zhenlin and Mr. Deng Y u have been serving as Independent Non-Executive Directors of the company
since 1 March 2023.
*** Mr. Liu Bao Jie and Mr. Wang Chun Fei have been serving as Independent Non-Executive Directors since 18
August 2025.
(b) Directors and the chief executive
Y ear ended 31 December 2023
Salaries,
allowances and
benefits
in kind
Performance
related bonuses
Share
award expenses
Pension scheme
contributions
Other employee
benefits
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors and
chief executive:
Mr. Dong Wen Xing (note
(i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,044 100 – 65 89 1,298
M r .H eL u (note (ii)) /H1118/H1118/H1118/H1118676 100 75 65 89 1,005
Non-executive Directors:
Ms. Zhang Di (note (ii)) /H1118/H1118 ––––––
Mr. Chang Xi (note (ii)) /H1118/H1118 ––––––
Mr. David Guowei Wang
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Ms. Yi Lin (note (ii)) /H1118/H1118/H1118/H1118 ––––––
Mr. Zhou Quan
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,720 200 75 130 178 2,303
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 293 ---
Y ear ended 31 December 2024
Salaries,
allowances and
benefits
in kind
Performance
related bonuses
Share
award expenses
Pension scheme
contributions
Other employee
benefits
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors and
chief executive:
Mr. Dong Wen Xing (note
(i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,044 500 – 68 94 1,706
M r .H eL u (note (ii)) /H1118/H1118/H1118/H1118676 150 90 68 94 1,078
Non-executive Directors:
Ms. Zhang Di (note (ii)) /H1118/H1118 ––––––
Mr. Chang Xi (note (ii)) /H1118/H1118 ––––––
Mr. David Guowei Wang
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Ms. Yi Lin (note (ii)) /H1118/H1118/H1118/H1118 ––––––
Mr. Zhou Quan
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,720 650 90 136 188 2,784
Y ear ended 31 December 2025
Salaries,
allowances and
benefits
in kind
Performance
related bonuses
Share
award expenses
Pension scheme
contributions
Other employee
benefits
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors and
chief executive:
Mr. Dong Wen Xing
(note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,044 500 – 68 98 1,710
M r .H eL u (note (ii)) /H1118/H1118/H1118 676 150 90 68 98 1,082
Non-executive Directors:
Ms. Zhang Di (note (ii)) /H1118/H1118 ––––––
Mr. Chang Xi (note (ii)) /H1118/H1118 ––––––
Mr. David Guowei Wang
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Ms. Yi Lin (note (ii)) /H1118/H1118/H1118/H1118 ––––––
Mr. Zhou Quan
(note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,720 650 90 136 196 2,792
Notes:
(i) Mr. Dong Wen Xing was appointed as a director with effect from June 2020, and as the chief executive officer
of the Company with effect from March 2021.
(ii) Ms. Zhang Di, Mr. Chang Xi and Mr. Zhou Quan were appointed as directors of the Company with effect from
June 2020. Mr. David Guowei Wang and Ms. Yi Lin were appointed as directors of the Company with effect
from November 2021. Mr. He Lu was appointed as a director of the Company with effect from December 2021.
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the Relevant Periods included two, two and two directors, respectively, details
of whose remuneration are set out in note 8(b) above. Details of the remuneration for the remaining three, three and three
highest paid employees who are neither a director nor chief executive of the Company during each of the Relevant Periods
are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, allowances and benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H11182,254 2,538 2,491
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118370 824 2,233
Equity-settled share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302 361 387
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118179 203 172
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/H11183,105 3,926 5,283
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 294 ---
The numbers of non-director and non-chief executive highest paid employees whose remuneration fell within the
following bands is as follows:
Y ear ended 31 December
2023 2024 2025
Nil to HK$1,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181––
HK$1,000,001 to HK$1,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118232
HK$3,000,001 to HK$3,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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/H1118/H1118/H1118/H1118/H1118/H1118333
10. INCOME TAX EXPENSE
The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which
subsidiaries of the Group are domiciled and operate.
Pursuant to the Corporate Income Tax Law of the PRC (the “CIT Law”) and the respective regulations, the Company
and its subsidiaries which operate in Chinese mainland are subject to income tax at a rate of 25% on their respective taxable
income.
The Company was accredited as a High and New Technology Enterprise (“HNTE”) under the relevant tax rules and
regulations in July 2020 and the certificate was extended in October 2023, and accordingly, was entitled to a reduced
preferential CIT rate of 15% during the Relevant Periods. This qualification as a HNTE will be due in October 2026 and
is subject to review by the relevant tax authority in the PRC for every three years.
Certain of the Group’s PRC subsidiaries, qualified as “Small and Micro-sized Enterprises” and were entitled to
preferential corporate income tax rate of 20% during the Relevant Periods. The Group’s subsidiary, Suzhou Tianxing, was
reclassified from a Small and Micro-sized Enterprise to a General V A T Taxpayer commencing in 2025.
No Hong Kong profits tax has been provided because the Group did not generate any assessable profits in Hong Kong
during the Relevant Periods.
The income tax expense of the Group for the Relevant Periods is analysed as follows:
Y ear ended 31 December
Note 2023 2024 2025
RMB’000 RMB’000 RMB’000
Current – Chinese mainland charge
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,793 12,505 17,974
Deferred tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 4,417 (326) (776)
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/H11187,210 12,179 17,198
A reconciliation of the tax expense applicable to profit before tax using the statutory rate for the jurisdictions in which
the Company and the majority of its subsidiaries are domiciled and operate to the tax expense at the effective tax rate is as
follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,322 107,568 154,168
Tax at the statutory tax rate (25%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,081 26,892 38,542
Effect of different tax rates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,406) (10,837) (16,477)
Expenses not deductible for tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,799 966 717
Additional deduction of research and development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,264) (4,842) (5,584)
Tax charge at the Group’s effective rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,210 12,179 17,198
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 295 ---
11. DIVIDENDS
There was no dividend declared or paid by the Group during the Relevant Periods.
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 year attributable to ordinary
equity holders of the parent and the weighted average numbers of ordinary shares in issue during the Relevant Periods.
The Group had no potentially dilutive ordinary shares in issue during the Relevant Periods.
The calculations of basic and diluted earnings per share are based on:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,112 95,389 136,970
Y ear ended 31 December
2023 2024 2025
’000 ’000 ’000
Shares
Weighted average number of ordinary shares
outstanding during the year used in the basic
earnings per share calculation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,369* 46,409 46,409
* The weighted average number of ordinary shares deemed outstanding before the Company converted to a joint
stock company was determined assuming that the paid-in capital had been fully converted into ordinary share
capital at the same conversion ratio on the date when the respective paid-in capital was contributed to the
Company.
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Leasehold
improvements Machinery Tools
Office
equipment
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
As at 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,269 7,555 9,086 846 270 26,026
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(2,030) (1,892) (3,988) (433) – (8,343)
Net carrying amount /H1118/H1118/H11186,239 5,663 5,098 413 270 17,683
As at 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,239 5,663 5,098 413 270 17,683
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,724 5,023 6,235 1,277 559 21,818
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (30) (1) – (31)
Depreciation provided
during the year
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,395) (984) (3,624) (427) – (9,430)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 270 – (270) –
As at 31 December 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,568 9,702 7,949 1,262 559 30,040
As at 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,993 12,578 14,707 2,118 559 46,955
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(6,425) (2,876) (6,758) (856) – (16,915)
Net carrying amount /H1118/H1118/H111810,568 9,702 7,949 1,262 559 30,040
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 296 ---
Leasehold
improvements Machinery Tools
Office
equipment
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
As at 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,993 12,578 14,707 2,118 559 46,955
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(6,425) (2,876) (6,758) (856) – (16,915)
Net carrying amount /H1118/H1118/H111810,568 9,702 7,949 1,262 559 30,040
As at 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,568 9,702 7,949 1,262 559 30,040
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894 2,824 6,205 230 53,530 62,883
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (13) – – (13)
Depreciation provided
during the year
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,344) (1,712) (3,348) (626) – (10,030)
As at 31 December 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,318 10,814 10,793 866 54,089 82,880
As at 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,087 15,402 20,899 2,348 54,089 109,825
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(10,769) (4,588) (10,106) (1,482) – (26,945)
Net carrying amount /H1118/H1118/H11186,318 10,814 10,793 866 54,089 82,880
Leasehold
improvements Machinery Tools
Office
equipment
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
As at 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,087 15,402 20,899 2,348 54,089 109,825
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(10,769) (4,588) (10,106) (1,482) – (26,945)
Net carrying amount /H1118/H1118/H11186,318 10,814 10,793 866 54,089 82,880
As at 1 January 2025, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,318 10,814 10,793 866 54,089 82,880
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273 2,807 3,623 238 7,013 13,954
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,393 1,088 94 (2,575) –
Depreciation provided
during the year
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,105) (1,754) (4,565) (510) – (10,934)
As at 31 December 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,486 13,260 10,939 688 58,527 85,900
As at 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,360 19,602 20,909 2,649 58,527 119,047
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(14,874) (6,342) (9,970) (1,961) – (33,147)
Net carrying amount /H1118/H1118/H11182,486 13,260 10,939 688 58,527 85,900
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 297 ---
The Company
Leasehold
improvements Machinery Tools
Office
equipment
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
As at 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,880 7,506 9,095 831 270 25,582
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(1,641) (1,892) (3,988) (433) – (7,954)
Net carrying amount /H1118/H1118/H11186,239 5,614 5,107 398 270 17,628
As at 1 January 2023, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,239 5,614 5,107 398 270 17,628
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,023 3,073 6,435 1,266 – 18,797
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (30) (5) – (35)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118(3,945) (960) (3,620) (421) – (8,946)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 270 – (270) –
As at 31 December 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,317 7,727 8,162 1,238 – 27,444
As at 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,903 10,579 15,770 2,092 – 44,344
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(5,586) (2,852) (7,608) (854) – (16,900)
Net carrying amount /H1118/H1118/H111810,317 7,727 8,162 1,238 – 27,444
Leasehold
improvements Machinery Tools Office equipment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
As at 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,903 10,579 15,770 2,092 44,344
Accumulated depreciation /H1118 (5,586) (2,852) (7,608) (854) (16,900)
Net carrying amount /H1118/H1118/H1118/H111810,317 7,727 8,162 1,238 27,444
As at 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,317 7,727 8,162 1,238 27,444
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 1,723 5,776 235 7,762
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (128) – (128)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,071) (1,442) (3,194) (626) (9,333)
As at 31 December 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,274 8,008 10,616 847 25,745
As at 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,931 12,302 21,418 2,327 51,978
Accumulated depreciation /H1118 (9,657) (4,294) (10,802) (1,480) (26,233)
Net carrying amount /H1118/H1118/H1118/H11186,274 8,008 10,616 847 25,745
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 298 ---
Leasehold
improvements Machinery Tools
Office
equipment
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
As at 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,931 12,302 21,418 2,327 – 51,978
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(9,657) (4,294) (10,802) (1,480) – (26,233)
Net carrying amount /H1118/H1118/H11186,274 8,008 10,616 847 – 25,745
As at 1 January 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,274 8,008 10,616 847 – 25,745
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273 2,192 3,573 237 2,879 9,154
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118(4,062) (1,423) (4,518) (508) – (10,511)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,393 1,068 94 (2,555) –
As at 31 December 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,485 10,170 10,739 670 324 24,388
As at 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,204 15,887 21,358 2,627 324 56,400
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118(13,719) (5,717) (10,619) (1,957) – (32,012)
Net carrying amount /H1118/H1118/H11182,485 10,170 10,739 670 324 24,388
14. LEASES
The Group as a lessee
The Group has lease contracts for various items of buildings used in its operations. Leases of buildings generally have
lease terms between 2 and 6 years.
(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:
Buildings Motor vehicles Land use rights Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,485 136 – 10,621
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391 – 2,782 3,173
Depreciation charge (note 6) /H1118/H1118/H1118/H1118/H1118/H1118(3,066) (69) (7) (3,142)
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,810 67 2,775 10,652
31 December 2024
As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,810 67 2,775 10,652
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,066 – 11 1,077
Depreciation charge (note 6) /H1118/H1118/H1118/H1118/H1118/H1118(3,476) (45) (94) (3,615)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,400 22 2,692 8,114
31 December 2025
As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,400 22 2,692 8,114
Depreciation charge (note 6) /H1118/H1118/H1118/H1118/H1118/H1118(3,498) (22) (94) (3,614)
As at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,902 – 2,598 4,500
As at the end of each of the Relevant Periods, certain of the Group’s land use rights with a net carrying amount of
nil, RMB2,692 thousand and RMB2,598 thousand were also pledged to secure certain interest-bearing bank borrowings (note
25 (i)).
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 299 ---
(b) Lease liabilities
The carrying amount of lease liabilities and the movements during the Relevant Periods are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,061 8,330 5,577
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/H1118391 1,066 –
Accretion of interest recognised during the year /H1118/H1118/H1118 418 308 165
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,540) (4,127) (3,841)
Carrying amount at end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,330 5,577 1,901
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,276 3,716 1,901
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,054 1,861 –
The maturity analysis of lease liabilities is disclosed in note 36 to the Historical Financial Information.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest on lease liabilities (note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418 308 165
Depreciation charge of right-of-use assets (note 6) /H1118/H1118 3,142 3,615 3,614
Expense relating to short-term leases (note 6) /H1118/H1118/H1118/H1118 380 53 211
Total amount recognised in
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,940 3,976 3,990
(d) The total cash outflow for leases is disclosed in note 31(c) to the Historical Financial Information.
The Company as a lessee
(a) Right-of-use assets
The carrying amounts of the Company’s right-of-use assets and the movements during the Relevant Periods are as
follows:
Buildings Motor vehicles Total
RMB’000 RMB’000 RMB’000
31 December 2023
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,329 136 10,465
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/H1118391 – 391
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,956) (69) (3,025)
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,764 67 7,831
31 December 2024
As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,764 67 7,831
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/H1118586 – 586
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,190) (45) (3,235)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,160 22 5,182
31 December 2025
As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,160 22 5,182
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,259) (22) (3,281)
As at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,901 – 1,901
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 300 ---
(b) Lease liabilities
The carrying amount of lease liabilities and the movements during the Relevant Periods are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,904 8,303 5,526
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/H1118391 586 –
Accretion of interest recognised during the year /H1118/H1118/H1118 413 306 164
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,405) (3,669) (3,789)
Carrying amount at end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,303 5,526 1,901
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,249 3,665 1,901
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,054 1,861 –
15. OTHER INTANGIBLE ASSETS
The Group and the Company
Patents
RMB’000
31 December 2023
As at 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,080
Amortisation provided during the year (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(298)
As 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/H11181,782
As 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/H11182,701
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(919)
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/H11181,782
31 December 2024
As at 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,782
Amortisation provided during the year (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(298)
As 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/H11181,484
As 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/H11182,701
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(1,217)
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/H11181,484
31 December 2025
As 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/H11181,484
Amortisation provided during the year (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(298)
As at 31 December 2025, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,186
As at 31 December 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/H11182,701
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(1,515)
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/H11181,186
16. CERTIFICATE OF DEPOSIT WITH A MATURITY EXCEEDING ONE YEAR
The Group and the Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Certificate of deposit with a maturity exceeding one
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– – 10,149
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 301 ---
17. INVENTORIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,842 18,717 24,320
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,693 7,201 6,466
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,198 8,947 11,887
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,188 21,424 18,980
Materials consigned for processing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118738 1,717 3,529
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118866 1,899 3,991
40,525 59,905 69,173
Less: Provision for inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,238) (2,751) (4,697)
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/H111839,287 57,154 64,476
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,752 17,875 24,449
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,693 7,119 6,177
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,293 8,158 10,976
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,452 21,126 18,128
Materials consigned for processing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118738 1,703 3,219
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118866 1,899 3,811
39,794 57,880 66,760
Less: Provision for inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,238) (2,751) (4,697)
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/H111838,556 55,129 62,063
18. TRADE AND BILLS RECEIV ABLES
The Group and the Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,757 5,177 42,845
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(106) (220) (1,864)
2,651 4,957 40,981
Bills receivable:
Measured at fair value through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,177 –
2,651 19,134 40,981
The Group’s trading terms with its customers are mainly payment in advance, except for some overseas customers.
The payment terms generally range from 30 to 90 days.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 302 ---
An ageing analysis of the trade and bills receivables as at the end of each reporting period, based on the transaction
dates and net of loss allowance, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,651 19,134 40,981
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 106 220
Impairment losses, net (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17) 114 1,644
At end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106 220 1,864
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 ageing for groupings of various customer segments with similar loss
patterns (i.e., by customer type and rating). The calculation reflects the probability-weighted outcome, the time value of
money and reasonable and supportable information that is available at the end of each of the Relevant Periods about past
events, current conditions and forecasts of future economic conditions.
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision
matrix:
As at 31 December
2023 2024 2025
Expected loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.84% 4.25% 4.35%
Gross carrying amount (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,757 5,177 42,845
Expected credit losses (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106 220 1,864
The credit risk of bills receivable of financial assets at fair value through other comprehensive income is remote.
19. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current assets
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,569 3,325 2,462
Right-of-return assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118883 3,012 3,060
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118914 3,798 5,316
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 01 0
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 1,355 2,721
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118339 515 819
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10) (4) (4)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,836 12,011 14,384
Non-current assets
Prepayments for property, plant and equipment /H1118/H1118/H1118/H1118 2,541 943 385
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291 402 411
Impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9) (12) (10)
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,823 1,333 786
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 303 ---
The movements in provision for impairment of financial assets included in prepayments, other receivables and
other assets are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 19 16
Impairment losses, net (note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (3) (2)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 16 14
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current assets
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,261 2,994 3,856
Right-of-return assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118883 3,012 3,060
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118622 1,267 1,133
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 1,355 2,721
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,857 34,123 44,889
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118329 364 670
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10) – (4)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,083 43,115 56,325
Non-current assets
Prepayments for property, plant and equipment /H1118/H1118/H1118/H1118 56 150 250
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273 343 352
Impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8) (10) (10)
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321 483 592
Most of the above assets are neither past due nor impaired. The financial assets included in the above balances related
to receivables for which there was no recent history of default. During the Relevant Periods, the expected credit loss rate
for other receivables was assessed by the Group and the Company to be minimal. Where applicable, an impairment analysis
is performed at each reporting date by applying a loss rate approach with reference to the historical loss record of the Group.
20. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group and the Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss /H1118 – – 422,934
The financial assets at fair value through profit or loss above were wealth management products and structured
deposits issued by commercial banks. They were classified as financial assets at fair value through profit or loss as their
contractual cash flows are not solely payments of principal and interest and they were held for trading.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 304 ---
21. CASH AND BANK BALANCES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 434,061 116,846
Less: Time deposits with original maturities of over
three months and due within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (344,093) –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,005 416,902 116,798
Less: Time deposits with original maturities of over
three months and due within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (344,093) –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,005 72,809 116,798
At as 31 December 2023, 2024 and 2025, the cash and bank balances of the Group denominated in RMB amounted
to RMB342,648 thousand, RMB419,968 thousand and RMB102,494 thousand, respectively. The RMB is not freely
convertible into other currencies, however, under Chinese mainland’s Foreign Exchange Control Regulations and
Administration of Settlement, and Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange
RMB for other currencies through banks authorised to conduct foreign exchange business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Time deposits are made for varying
periods of between seven days and one year depending on the immediate cash requirements of the Group, and earn interest
at the respective short term time deposit rates. The bank balances and time deposits are deposited with creditworthy banks
with no history of default. The carrying amounts of the cash and cash equivalents approximate to their fair values.
22. TRADE PAYABLES
An ageing analysis of the trade payables as at the end of each of the Relevant Periods, based on the invoice date, is
as follows:
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,639 23,187 27,067
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210 287 371
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 31 261
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 45 66
12,900 23,550 27,765
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,945 30,154 42,529
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118823 287 369
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 31 240
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 45 66
16,819 30,517 43,204
The trade payables are non-interest-bearing and are normally settled on terms of 30 to 90 days.
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 305 ---
23. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current liabilities
Other payables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,068 20,206 25,352
Payroll and welfare payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,776 19,380 23,318
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,379 4,699 9,284
Payable for purchase of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118754 30,070 7,086
Long-term liabilities due within
one 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– 976 1,000
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,167 –
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196 1,282 546
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,173 77,780 66,586
Non-current liabilities
Long-term liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118931 – 5,121
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current liabilities
Other payables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,920 20,203 25,352
Payroll and welfare payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,727 19,052 22,952
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,159 4,605 9,284
Payable for purchase of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118754 10 –
Long-term liabilities due within
one 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– 976 1,000
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,167 –
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196 1,282 546
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,756 47,295 59,134
Non-current liabilities
Long-term liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 3 1––
* Other payables in current liabilities are non-interest-bearing and have an average term of three months.
24. CONTRACT LIABILITIES
The Group and the Company
Contract liabilities include short-term advances received from customers to deliver sports medicine products.
Details of contract liabilities are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Short-term advances received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,840 9,857 4,222
Sales rebates* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,358 630 –
9,198 10,487 4,222
The decrease in contract liabilities from 31 December 2024 to 31 December 2025 was mainly due to the settlement
of short-term advances received following the delivery of goods.
* Sales rebates represent the accrued rebate amounts, which are usually settled in the form of inventories.
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 306 ---
25. INTEREST-BEARING BANK BORROWINGS
The Group
As at 31 December 2024 As at 31 December 2025
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Current
Current portion of long
term bank loan –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – LPR-90BP 2026 2,000
Bank loan – unsecured /H1118/H1118/H1118 – – – LPR-75BP 2026 10,000
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 12,000
Non-current
Bank loan – secured /H1118/H1118/H1118/H1118LPR-90BP 2026-2028 17,000 LPR-90BP 2027-2028 18,723
Total – non-current /H1118/H1118/H1118/H1118/H1118 17,000 18,723
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,000 30,723
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Analysed into:
Within one year or on demand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 12,000
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,000 8,000
In the third year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 8,000 10,723
Beyond three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,000 –
– 17,000 30,723
Note:
(i) The Group’s borrowings were obtained to finance the construction of the plant of Suzhou Tianxing. Interest
incurred on these borrowings has been capitalised as part of construction in progress (note 13). The borrowings
are secured by the Group’s land use rights (note 14) and guaranteed by the Company as the guarantor.
The Company
As at 31 December 2025
Effective
interest rate
(%) Maturity RMB’000
Current
Bank loan – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118LPR-75BP 2026 10,000
As at 31 December 2025
RMB’000
Analysed into:
Within one year or on demand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,000
26. REFUND LIABILITIES
The Group and the Company
The Company recognises refund liabilities for expected returns of sports medical products, representing the estimated
cost of goods likely to be returned under the Company’s return policy. This estimate is determined based on historical return
patterns and incorporates management’s assessment of anticipated future developments that may affect return rates.
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 307 ---
Details of refund liabilities are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Refund liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,672 10,083 12,370
The changes in refund liabilities during the reporting period were primarily due to a reassessment of historical return
data and adjustments to the return policy.
27. DEFERRED TAX
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
(a) Deferred tax liabilities
The Group
Right-of-use
assets
Depreciation and
amortisation
Right-of-return
assets
Fair value gains
on FVTPL Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,610 50 192 – 1,852
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(423) 710 (60) – 227
Gross deferred tax liabilities as at
31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,187 760 132 – 2,079
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(369) 573 320 – 524
Gross deferred tax liabilities as at
31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118818 1,333 452 – 2,603
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(533) 421 7 160 55
Gross deferred tax liabilities as at
31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285 1,754 459 160 2,658
The Company
Right-of-use
assets
Depreciation and
amortisation
Right-of-return
assets
Fair value gains
on FVTPL Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,569 50 192 – 1,811
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(394) 710 (60) – 256
Gross deferred tax liabilities as at
31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,175 760 132 – 2,067
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(398) 573 320 – 495
Gross deferred tax liabilities as at
31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777 1,333 452 – 2,562
Deferred tax (credited)/charged to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(492) 421 7 160 96
Gross deferred tax liabilities as at
31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285 1,754 459 160 2,658
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 308 ---
(b) Deferred tax assets
The Group
Unrealised
profit at
consolidation
Provision for
impairment
Losses available
for offsetting
against future
taxable profit Lease liabilities
Accrued
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118 4 172 4,265 1,675 990 7,106
Deferred tax
credited/(charged) to the
statement of profit or
loss during the year /H1118/H1118/H1118 81 33 (4,110) (428) 234 (4,190)
Gross deferred tax assets
as at 31 December 2023
and 1 January 2024 /H1118/H1118/H1118 85 205 155 1,247 1,224 2,916
Deferred tax
credited/(charged) to the
statement of profit or
loss during the year /H1118/H1118/H1118 (28) 243 471 (416) 580 850
Gross deferred tax assets
as at 31 December 2024
and 1 January 2025 /H1118/H1118/H1118 57 448 626 831 1,804 3,766
Deferred tax
credited/(charged) to the
statement of profit or
loss during the year /H1118/H1118/H1118 120 539 647 (547) 72 831
Gross deferred tax assets
as at 31 December 2025 /H1118 177 987 1,273 284 1,876 4,597
The Company
Provision for
impairment
Losses available
for offsetting
against future
taxable profit Lease liabilities
Accrued
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118172 4,195 1,635 990 6,992
Deferred tax credited/(charged) to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 (4,195) (388) 257 (4,294)
Gross deferred tax assets as 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/H1118204 – 1,247 1,247 2,698
Deferred tax credited/(charged) to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243 – (419) 557 381
Gross deferred tax assets as at
31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118447 – 828 1,804 3,079
Deferred tax credited/(charged) to
the statement of profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540 – (544) 72 68
Gross deferred tax assets as at 31
December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118987 – 284 1,876 3,147
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 309 ---
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 for financial reporting purposes:
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Gross deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,916 3,766 4,597
Gross deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,079 2,603 2,658
Set-off with gross deferred tax assets/deferred tax
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,079) (2,603) (2,658)
Net deferred tax assets recognised in the
consolidated statement of financial position /H1118/H1118/H1118/H1118 837 1,163 1,939
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Gross deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,698 3,079 3,147
Gross deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,067 2,562 2,658
Set-off with gross deferred tax assets/deferred tax
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,067) (2,562) (2,658)
Net deferred tax assets recognised in the statement
of financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118631 517 489
The Group has tax losses arising in Chinese mainland of RMB1,408 thousand, RMB4,173 thousand and RMB5,092
thousand during the Relevant Periods that will expire in five years for offsetting against future taxable profits.
28. SHARE CAPITAL
The Group and the Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Issued and fully paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 46,409 46,409
A summary of movements in the Company’s issued paid-in capital/share capital during the Relevant Periods is as
follows:
Paid-in capital
RMB’000
As at 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,923
Addition (Note (a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486
Conversion to a joint stock company (Note (b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(46,409)
As 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/H1118–
Number of shares
in issue Share capital
’000 RMB’000
As at 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/H1118/H1118/H1118/H1118/H1118––
Conversion to a joint stock company (Note (b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 46,409
As at 31 December 2023, 1 January 2024, 31 December 2024, 1
January 2025 and 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,409 46,409
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 310 ---
Notes:
(a) During the year ended 31 December 2023, the Company received capital contributions of RMB34,438
thousand from the investors. The capital contributions increased the paid-in capital and capital reserve by
RMB486 thousand and RMB33,952 thousand, respectively.
(b) On 28 February 2023, the Company was resolved to be converted to a joint stock limited liability company,
and a total of 46,409,494 ordinary shares with a par value of RMB1.00 each were issued and allotted to the
respective shareholders of the Company according to the paid-in capital registered under the names of these
shareholders on that day.
Prior to and during the Relevant Periods, various pre-IPO Investors (collectively, the “Pre-IPO Investors”) entered
into respective shareholders’ agreements with the Company and certain shareholders of the Company, to subscribe ordinary
shares directly from the Company or acquire ordinary shares from these shareholders, for a total consideration of
approximately RMB600 million (collectively, the “Pre-IPO Investments”), of which the Pre-IPO Investors contributed
RMB338 million by 31 December 2022 and RMB262 million in 2023. Pursuant to the shareholders’ agreements, these
Pre-IPO Investors were granted by the Company with Special Rights on their Pre-IPO Investments.
There was no exercise of redemption rights and liquidation preference rights granted by the Company throughout the
Relevant Periods.
On 30 January 2023, the Company and all Pre-IPO investors entered into a supplemental agreement, pursuant to
which the “Redemption Rights” provisions under the original shareholders’ agreement were confirmed to be void ab initio.
Subsequently, on 22 August 2023, the parties further executed a second supplemental agreement, pursuant to which all
remaining special rights (including “Anti-dilution Rights” and “Liquidation Preferences”) under the original shareholders
agreement were irrevocably terminated and deemed void ab initio. Taking into account the legal and regulatory framework
of the Company’s jurisdiction and the governing law of the supplemental agreements, the directors considered that it is
appropriate to present the Pre-IPO Investments as equity throughout the Relevant Periods.
As stipulated in the shareholders’ agreement, the amount of redemption of financial liabilities is fixed at any given
time in the event of the liquidation of the Company, there are no finance costs associated with the redemption financial
liabilities charged in the consolidated statement of profit or loss during the Relevant Periods. As the Company entered into
supplemental agreements with all pre-IPO investors in 2023, under which the redemption rights, anti-dilution rights, and
liquidation preferences were irrevocably terminated and deemed void ab initio, the Group did not record any redemption
financial liabilities on its balance sheet as at 31 December 2023. There was no material financial impact on the financial
position and performance of the Group throughout the Relevant Period.
29. RESERVES
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.
Capital reserve
Capital reserve represents capital contributions from, net of distributions to, shareholders.
Share award reserve
The share award reserve of the Group represents the share award compensation reserve due to equity-settled share
award expense transactions, details of which were set out in note 30 to the Historical Financial Information.
Statutory surplus reserve
In accordance with the Company Law of the PRC the companies registered in the PRC are required to allocate 10%
of the statutory after-tax profits to the statutory surplus reserve until the cumulative total of the reserve reaches 50% of the
companies’ registered capital. Subject to approval from the relevant PRC authorities, the statutory surplus reserve may be
used to offset any accumulated losses or increase the registered capital of the companies. The statutory surplus reserve is
not available for dividend distribution to shareholders of the PRC subsidiaries.
The Company
Capital reserve
Share award
reserve
Statutory
surplus reserve
(Accumulated
losses)/retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118377,853 – – (141,233) 236,620
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 58,492 58,492
Issue of share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,95 2––– 33,952
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 311 ---
Capital reserve
Share award
reserve
Statutory
surplus reserve
(Accumulated
losses)/retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Recognition of equity-settled
share award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 905 – – 905
Appropriation to statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,849 (5,849) –
Conversion to a joint stock
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(142,557) – – 142,557 –
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118269,248 905 5,849 53,967 329,969
As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,248 905 5,849 53,967 329,969
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 96,704 96,704
Recognition of equity-settled
share award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,083 – – 1,083
Appropriation to statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 9,670 (9,670) –
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118269,248 1,988 15,519 141,001 427,756
As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,248 1,988 15,519 141,001 427,756
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 137,816 137,816
Recognition of equity-settled
share award expense
(note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,207 – – 1,207
Appropriation to statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,685 (7,685) –
As at 31 December 2025 /H1118/H1118/H1118/H1118/H1118269,248 3,195 23,204 271,132 566,779
30. SHARE A W ARD EXPENSE
(a) Tianjin Yunkang Technology Center (Limited Partnership) (“Tianjin Yunkang”) restricted share incentive plan
2023
On 28 February 2023, the Company’s board of directors and the partners of Tianjin Y unkang approved the restricted
share incentive plan, implemented through the employee stock ownership platform, Tianjin Y unkang. According to the plan,
the platform granted restricted shares, corresponding to RMB129 thousand in registered capital of the platform, to 7
employees and the weighted average exercise price is RMB9.29. The agreements with these 7 employees stipulated a service
period of 4 years for these employees.
The Company determined the fair value to be RMB 42.70 per RMB1 registered capital unit of the platform on the
grant date, based on recent third-party investor transactions and considering the terms and conditions upon which the
restricted shares were granted. The aggregate fair value of the restricted shares granted on the grant date was RMB5,517
thousand, with a difference of RMB4,317 thousand from the exercise price of RMB1,200 thousand. This difference, being
the share award expense, is recognised over the 4-year service period stipulated in the agreements with these 7 employees
as the vesting period. During the years ended 31 December 2023, 2024 and 2025, share award expense of RMB905 thousand,
RMB1,083 thousand and RMB1,080 thousand were recognised respectively.
(b) Tianjin Yunkang Technology Center (Limited Partnership) (“Tianjin Yunkang”) restricted share incentive plan
2025
On 30 May 2025, the Company’s board of directors and the partners of Tianjin Y unkang approved a restricted share
incentive plan, implemented through the employee stock ownership platform, Tianjin Y unkang. On 14 July 2025, the
grantees entered into the Tianjin Y unkang shares grant agreement with the Company, Tianjin Y unkang and Tianjin Bokang
(as the general partner of Tianjin Y unkang). According to the plan, the platform granted restricted shares, corresponding to
RMB22 thousand in registered capital of the platform, to 2 employees and the weighted average exercise price is RMB9.29.
The agreements with these 2 employees stipulated a service period of 4 years for these employees.
On 12 September 2025, the Company’s board of directors and the partners of Tianjin Y unkang approved a restricted
share incentive plan, implemented through the employee stock ownership platform, Tianjin Y unkang. According to the plan,
the platform granted restricted shares, corresponding to RMB17 thousand in registered capital of the platform, to 2
employees and the weighted average exercise price is RMB9.29. The agreements with these 2 employees stipulated a service
period of 4 years for these employees.
The Company determined the fair value to be RMB87.88 per RMB1 registered capital unit of the platform on the grant
date, based on the Market Approach-Comparable Companies Multiple Method taking into the terms and conditions upon
which the awarded shares were granted. The total fair value of the restricted shares granted during the period was RMB3,046
thousand. During the year ended 31 December 2025, share award expense of RMB127 thousand were recognised.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 312 ---
31. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the Relevant Periods, the Group had non-cash additions to right-of-use assets and lease liabilities of
RMB3,173 thousand, RMB1,077 thousand and nil, respectively, in respect of lease arrangements for buildings and leasehold
land.
During the year ended 31 December 2025, the Group derecognised bills receivable totalling RMB14,177 thousand
through endorsement and transfer to suppliers in settlement of trade payables. Endorsed bills receivable accepted by banks
in the Chinese mainland (the “Derecognised Bills”) to certain of its suppliers in order to settle the trade payables due to such
suppliers with a carrying amount in aggregate of RMB14,177 thousand. The Derecognised Bills had expired as at 31
December 2025.
(b) Changes in liabilities arising from financing activities
Lease liabilities
Interest-bearing bank
borrowings
RMB’000 RMB’000
As at 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/H1118/H1118/H1118/H1118/H111811,061 –
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391 –
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,540) –
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418 –
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,330 –
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,066 –
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,127) 17,000
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308 –
As at 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,577 17,000
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,841) 13,723
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165 –
As at 31 December 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/H11181,901 30,723
(c) Total cash outflows for leases
The total cash outflows for leases included in the statements of cash flows are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118380 53 211
Within financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,540 4,127 3,841
3,920 4,180 4,052
32. COMMITMENTS
The Group had the following capital commitments at the end of each of the Relevant Periods:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contracted, but not provided for: Construction of
property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,359 37,061 17,095
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 313 ---
33. RELATED PARTY TRANSACTIONS
(a) Name and relationship
Name Relationship
Ҧ(ᄿψ)ʮ̡ Pure Medical
Technology (Guangzhou) Co., Ltd.
(“Pure Medical”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Other entities in which the Company’s director
(Mr. Zhou Quan) serves
(b) Transactions with a related party
The Group had the following transactions with related parties during the Relevant Periods:
The Group
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Purchases of services:
Pure Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118270 12 3
The purchases of services include receiving registration services for sports medicine products from Pure
Medical. The purchases from the Pure Medical were made according to the published prices and conditions offered
by the Group to its major customers.
(c) Outstanding balances with a related party:
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for services:
Pure Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 753
The outstanding balance with Pure Medical is trade related in nature, representing fees paid for the engagement of
this related party to draft the materials required for the registration and clinical evaluation of the Company’s research and
development products based on product data provided by the Company.
(d) Compensation of key management personnel of the Group:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Short-term employee benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,285 4,440 5,017
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118260 282 308
Equity-settled share award expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528 631 630
Total compensation paid to key management
personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,073 5,353 5,955
Further details of directors’ and the chief executive’s emoluments are included in note 8 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 314 ---
34. 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
were as follows:
Financial assets
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets at fair value through other
comprehensive income:
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,177 –
Financial assets at amortised cost:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,651 4,957 40,981
Financial assets included in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118611 901 1,216
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,370 89,968 116,846
Time deposits with original maturities of over three
months and due within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 344,093 –
Certificate of deposit with a maturity exceeding one
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– – 10,149
Financial assets at fair value through profit or
loss:
Financial assets at fair value through profit or loss /H1118 – – 422,934
359,632 454,096 592,126
Financial liabilities
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial liabilities at amortised cost:
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,900 23,550 27,765
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/H1118/H1118/H111817,822 51,252 33,438
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118931 – 5,121
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,000 30,723
31,653 91,802 97,047
Transfers of financial assets
Discounted bills receivable that are derecognized in their entirety
At 31 December 2025, the Group discounted certain bills receivable accepted by banks in Chinese mainland (the
“Derecognised Bills”) with a carrying amount of RMB17,540 thousand. The discounting transaction was completed in
December 2025, resulting in net proceeds of RMB17,463 thousand, representing a discounting charge of RMB77 thousand.
The Derecognised Bills had a remaining maturity of five to six months as at 31 December 2025.
Under the Law of the People’s Republic of China on Negotiable Instruments, the holders of the Derecognised Bills
may exercise right of recourse against any, several or all parties liable for the Derecognised Bills, including the Group,
regardless of the order of precedence (the “Continuing Involvement”). The Directors have assessed that the risk of the Group
being claimed by the holders of the Derecognised Bills is remote in the absence of a default of the accepted banks and the
Group has transferred substantially all risks and rewards associated with the Derecognised Bills to the bank, and has no
continuing control over them. Accordingly, the Group has derecognised the full carrying amount of the Derecognised Bills
and the related trade payables.
The maximum exposure to loss arising from the Group’s Continuing Involvement in the Derecognised Bills and the
undiscounted cash flows required to repurchase these bills is equal to their carrying amount of RMB17,540 thousand. The
Directors consider the fair value of the Group’s Continuing Involvement to be not material.
The discounting charge of RMB77 thousand was recognised as finance cost in the income statement for the year ended
31 December 2025. No further gains or losses were recognised in respect of the Continuing Involvement, either during the
year or cumulatively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 315 ---
35. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents and time deposits, trade receivables,
financial assets included in prepayments, other receivables and other assets, trade payables, current portion of
interest-bearing bank borrowings and financial liabilities included in other payables and accruals 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 the end of each Relevant Periods, the finance department analyses the movements in the values of
financial instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by
the chief financial officer.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods
and assumptions were used to estimate the fair values.
The fair values of the non-current portion of financial asset included in prepayments, other receivables and other
assets, and the non-current portion of financial liabilities included in interest-bearing bank borrowings have been calculated
by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk
and remaining maturities. The changes in fair value as a result of the Group’s own non-performance risk for financial assets
included in non-current prepayments, other receivables and other assets and interest-bearing bank borrowings as at the end
of each of the Relevant Periods were assessed to be insignificant. The following methods and assumptions were used to
estimate the fair values:
For the fair value of the financial assets at fair value through profit or loss. The method used by the management to
determine the fair value is based on the type of product. For regular investment planning, management calculates the fair
value of these investments using the discounted future cash flow method. For products redeemable on demand, fair value
is calculated by aggregating the principal amount and interest accrued from the last income distribution date to the valuation
date. For the structured deposits, fair value is derived using the Monte Carlo simulation method.
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 2025
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 422,934 – 422,934
As at 31 December 2024
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivable measured at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,177 – 14,177
During the Relevant Periods, there were no transfers of fair value measurements between Level 1 and Level 3 and
no transfers into or out of Level 2 for the financial assets.
36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments mainly include cash and cash equivalents and interest-bearing bank
borrowings. 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, other receivables, trade payables and other
payable, which arise directly from its operations.
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 316 ---
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 floating interest rates.
The Group regularly reviews and monitors the floating interest rate borrowings in order to manage its interest rate
risk. The Group’s interest-bearing bank borrowings and cash and cash equivalents are stated at amortised cost and not
revalued on a periodic basis. Floating rate interest income and expenses are credited/charged to the statement of profit or
loss as earned/incurred.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other
variables held constant, of the Group’s profit before tax through the impact on floating rate borrowings.
Increase/(decrease)
in basis points
Increase/(decrease)
in profit before tax
RMB’000
As at 31 December 2025
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 (307)
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100) 307
As at 31 December 2024
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 (170)
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100) 170
As at 31 December 2023
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 –
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100) –
Foreign currency risk
The Group mainly operates in Chinese mainland with most of the Group’s monetary assets, liabilities and transactions
principally denominated in RMB and United States dollar (“USD”). The Group has not used any derivative to hedge its
exposure to foreign currency risk.
The following table indicates the approximate change in the Group’s profit before tax in response to reasonably
possible changes in the USD exchange rates to which the Group has significant exposure at the end of each of the Relevant
Periods with all other variables held constant.
Changes in
exchange rate
Increase/(decrease)
in profit before tax
% RMB’000
As at 31 December 2025
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 1,500
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (1,500)
As at 31 December 2024
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859 1 1
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (911)
As at 31 December 2023
If the RMB weakens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 723
If the RMB strengthens against the USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (723)
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 and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the
functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of the
Head of Credit Control.
Maximum exposure and year-end staging
The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s credit policy,
which is mainly based on 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 317 ---
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 receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,757 2,757
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 3 0––– 6 3 0
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,37 0––– 356,370
357,000 – – 2,757 359,757
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 receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,177 5,177
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 1 7––– 9 1 7
Time deposits with original
maturities of over three months
and due within one year /H1118/H1118/H1118/H1118/H1118344,09 3––– 344,093
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,96 8––– 89,968
434,978 – – 5,177 440,155
As at 31 December 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 receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 42,845 42,845
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,23 0––– 1,230
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116,84 6––– 1 16,846
Certificate of deposit with a
maturity exceeding one year /H1118 10,14 9––– 10,149
128,225 – – 42,845 171,070
* For trade receivables to which the Group applies the simplified approach for impairment, information based
on the provision matrix is disclosed in note 18 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be “normal” when they are not past due and there is no information indicating that the financial
assets had a significant increase in credit risk since initial recognition. Otherwise, the credit quality of the
financial assets is considered to be “doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables are disclosed
in note 18 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 318 ---
Liquidity risk
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers both
the maturity of its financial instruments and financial assets (e.g., trade receivables) and projected cash flows from
operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans and other borrowings and lease liabilities.
The maturity profile of the Group’s financial liabilities as at the end of each of the Relevant Periods based on
contractual undiscounted payments, is as follows:
As at 31 December 2023
Within 1 year or on
demand 1 year to 5 years Total
RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,576 5,234 8,810
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,900 – 12,900
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/H1118/H1118/H111817,822 1,000 18,822
34,298 6,234 40,532
As at 31 December 2024
Within 1 year or on
demand 1 year to 5 years Total
RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,841 1,931 5,772
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,550 – 23,550
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/H1118/H1118/H111851,276 – 51,276
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465 17,752 18,217
79,132 19,683 98,815
As at 31 December 2025
Within 1 year or on
demand 1 year to 5 years Total
RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,931 – 1,931
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,765 – 27,765
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/H1118/H1118/H111833,438 – 33,438
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,778 19,405 32,183
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,348 5,348
75,912 24,753 100,665
Capital management
The Group monitors capital using a debt-to-asset ratio which is total liabilities divided by total assets. The
debt-to-asset ratios as at the end of each of the Relevant Periods were as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,510 146,094 154,664
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118451,278 617,334 764,081
Debt-to-asset ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.95% 23.67% 20.24%
37. EVENTS AFTER THE RELEV ANT PERIODS
As at the date of this report, no significant events have occurred in respect of any period subsequent to 31 December
2025.
38. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the companies now
comprising the Group in respect of any period subsequent to 31 December 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 319 ---
The following information does not form part of the Accountants’ Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’ s Reporting Accountants, as set out in
Appendix I to this prospectus, and is included herein for information purpose only. The unaudited
pro forma financial information should be read in conjunction with the section headed “Financial
Information” in this prospectus and the Accountants’ Report set out in Appendix I to this
prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group 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 for illustration purposes only,
and is set out here to illustrate the effect of the Global Offering on the consolidated net tangible
assets of the Group attributable to owners of the parent as of 31 December 2025 as if the Global
Offering had taken place on 31 December 2025.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group
attributable to owners of the parent 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 had the Global Offering been completed as of 31 December 2025 or any future dates.
Consolidated net
tangible assets of the
Group attributable to
owners of the
parent as at
31 December 2025
Estimated net proceeds
from the
Global Offering
Unaudited pro forma
adjusted consolidated
net tangible assets of
the Group attributable
to owners of the
parent as at
31 December 2025
Unaudited pro forma
adjusted consolidated net
tangible assets of the Group
attributable to owners of the
parent per share as at
31 December 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price of
HK$98.50 per Share /H1118/H1118/H1118/H1118/H1118/H1118608,231 679,322 1,287,553 23.5 26.8
Notes:
1. The consolidated net tangible assets of the Group attributable to owners of the parent as at 31 December 2025 is
arrived at after deducting intangible assets of RMB1,186 thousand from the consolidated net assets attributable to
owners of the parent of RMB609,417 thousand as at 31 December 2025, as shown in the Accountants’ Report set out
in Appendix I to this prospectus.
2. The estimated net proceeds from the Global Offering are calculated based on the offer price of HK$98.50 per Share,
after deduction of the underwriting fees and related expenses payable by the Company (excluding the listing expenses
that have been charged to profit or loss during the Track Record Period).
3. The unaudited pro forma adjusted net tangible assets per Share is calculated based on 54,831,344 Shares in issue
immediately following completion of the Global Offering.
4. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per Share are
converted into Hong Kong dollars at an exchange rate of RMB0.87540 to HK$1.0000.
5. No adjustment has been made to reflect any trading results or other transactions for the Group entered into subsequent
to 31 December 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 320 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Star Sports Medicine Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial information of Star Sports Medicine Co., Ltd. (the “Company”) and its subsidiaries
(hereinafter collectively referred to as the “Group”) by the directors of the Company (the
“Directors”) for illustrative purposes only. The unaudited pro forma financial information consists
of the unaudited pro forma consolidated net tangible assets as at 31 December 2025, and related
notes as set out on pages II-1 to II-2 of the prospectus dated 24 April 2026 (the “Prospectus”) issued
by the Company (the “Unaudited Pro Forma Financial Information”). The applicable criteria on the
basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are
described in notes pages II-1 to II-2 of Appendix II to the Prospectus.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial
position as at 31 December 2025 as if the transaction had taken place at 31 December 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 year ended 31 December 2025, on which an
accountants’ report has been published.
Directors’ responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial Information
in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline
(“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of Ethics
for Professional Accountants issued by the HKICPA, which is founded on fundamental principles
of integrity, objectivity, professional competence and due care, confidentiality and professional
behavior.
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.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing
Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial information
used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to
those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus issued by the HKICPA. This standard requires that the
reporting accountants plan and perform procedures to obtain reasonable assurance about whether
the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with
paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 321 ---
For purposes of this engagement, we are not responsible for updating or reissuing any reports
or opinions on any historical financial information used in compiling the Unaudited Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or review
of the financial information used in compiling the Unaudited Pro Forma Financial Information.
The purpose of the Unaudited Pro Forma Financial Information included in the Prospectus is
solely to illustrate the impact of the global offering of shares of the Company on unadjusted
financial information of the Group as if the transaction had been undertaken at an earlier date
selected for purposes of the illustration. Accordingly, we do not provide any assurance that the
actual outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the Directors in the compilation of the
Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the
significant effects directly attributable to the transaction, and to obtain sufficient appropriate
evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Unaudited Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which
the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis
stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst &Young
Certified Public Accountants
Hong Kong
24 April 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 322 ---
PRC LA WS AND REGULATIONS RELATING TO TAXATION
Taxation on Dividends
Individual Investor
Pursuant to the Individual Income Tax Law of the PRC (‘),
which was last amended on August 31, 2018 and came into effect on January 1, 2019 and the
Implementation Provisions of the Individual Income Tax Law of the PRC (ɛ
ૢԷ‘), which was last amended on December 18, 2018 and came into effect on
January 1, 2019, for individual income including interest, dividend and bonus, shall pay individual
income tax with applicable proportional tax rate of 20%. Unless otherwise provided by the
competent financial and taxation authorities under the State Council, all the interest, dividend and
bonus are deemed as derived from the PRC whether the payment place is in the PRC. Pursuant to
the Circular on Certain Issues Concerning the Policies of Individual Income Tax (੻
‘) promulgated by the Ministry of Finance and the SA T on May 13, 1994,
overseas individuals are exempted from the individual income tax for dividends or bonuses received
from foreign-invested enterprises.
Enterprise Investors
In accordance with the EIT Law, which was amended on December 29, 2018 and became
effective on the same date, and the Implementation Provisions of the Enterprise Income Tax Law
of the PRC (ૢԷ‘), which was amended on December 6,
2024 and became effective on January 20, 2025, a non-resident enterprise is generally subject to
EIT at a rate of 10% on PRC-sourced income (including dividends received from a PRC resident
enterprise that issues shares overseas), 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
are deducted at source, where the payer of the income is required to withhold the income tax from
the amount to be paid to the non-resident enterprise when such payment is made or due.
The Circular on Issues Relating to the Withholding of Enterprise Income Tax by PRC Resident
Enterprises on Dividends Paid to Overseas Non-Resident Enterprise Shareholders of H Shares ( ਷
͏ΆุΣྤ̮ H੻೼Ϟᗫਪᕚ
‘) (Guo Shui Han [2008] No. 897), which was issued by the SA T on November 6, 2008,
further clarified that a PRC-resident enterprise must withhold EIT at a rate of 10% on the dividends
of 2008 and onwards that it distributes to overseas non-resident enterprise shareholders of H Shares.
In addition, the Response to Questions on Levying Enterprise Income Tax on Dividends Derived by
Non-resident Enterprise from Holding Stock such as B Shares (͏Άุ՟੻Bୃ
ҭᔧ‘) (Guo Shui Han [2009] No. 394), which was issued by the SA T
and came into effect on July 24, 2009, further provides that any PRC-resident enterprise whose
shares are listed on overseas stock exchanges must withhold and remit EIT at a rate of 10% on
dividends of 2008 and onwards that it distributes to non-resident enterprises. Such tax rate may be
further modified pursuant to the tax treaty or agreement that China has entered into with a relevant
country or area, where applicable.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
(τર‘), which was signed on
August 21, 2006, the Chinese Government may levy taxes on the dividends paid by a Chinese
company to Hong Kong residents (including natural persons and legal entities) in an amount not
exceeding 10% of the total dividends payable by the Chinese company. If a Hong Kong resident
directly holds 25% or more of the equity interest in a Chinese company, then such tax shall not
exceed 5% of the total dividends payable by the Chinese company. The Fifth Protocol of the
Arrangement between the Mainland of China and the Hong Kong Special Administrative Region on
the Avoidance of Double Taxation and the Prevention of Fiscal Evasion ( <݁
τર>‘), which came into effect on
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 323 ---
December 6, 2019, adds a criteria for the qualification of entitlement to enjoy treaty benefits.
Although there may be other provisions under the Arrangement, the treaty benefits under the criteria
shall not be granted in the circumstance where relevant gains, after taking into account all relevant
facts and conditions, are reasonably deemed to be one of the main purposes for the arrangement or
transactions which will bring any direct or indirect benefits under this Agreement, except when the
grant of benefits under such circumstance is consistent with relevant objective and goal under the
Arrangement. The application of the dividend clause of tax agreements is subject to the
requirements of PRC tax law documents, such as the Notice of the State Administration of Taxation
on the Issues Concerning the Application of the Dividend Clauses of Tax Agreements (೼ਕ
‘) (Guo Shui Han [2009] No. 81).
Tax Treaties
Non-PRC resident investors residing in countries which have entered into treaties for the
avoidance of double taxation with the PRC or residing in Hong Kong or Macau are entitled to a
reduction of the withholding taxes imposed on the dividends received from PRC companies. The
PRC currently has entered into Avoidance of Double Taxation Treaties/Arrangements with a number
of countries and regions including Hong Kong, Macau, 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
agreements or arrangements are required to apply to the Chinese tax authorities for a refund of the
withholding tax in excess of the agreed tax rate, and the refund payment is subject to approval by
the Chinese tax authorities.
TAXATION ON SHARE TRANSFER
Individual Investor
According to the Individual Income Tax Law of the People’s Republic of China ( ʕശɛ͏
‘) and its implementation provisions, gains realized on the sale of equity
interests in the PRC resident enterprises are subject to individual income tax at a rate of 20%.
Pursuant to the Circular of Declaring that Individual Income Tax Continues to be Exempted
over Income of Individuals from the Transfer of Shares (ࡈ
‘) (Cai Shui Zi [1998] No. 61) issued by the MOF and the SA T on March 30, 1998,
from January 1, 1997, income of individuals from transfer of the shares of listed enterprises
continues to be exempted from individual income tax. On December 31, 2009, the MOF, the SA T
and CSRC jointly issued the Circular on Related Issues on Levying Individual Income Tax over the
Income Received by Individuals from the Transfer of Listed Shares Subject to Sales Limitation
(‘) (Cai Shui [2009] No.
167), which became effective on December 31, 2009, states that individuals’ income from the
transfer of listed shares on the Shanghai Stock Exchange and the Shenzhen Stock Exchange shall
continue to be exempted from individual income tax, except for the relevant shares which are
subject to sales restriction (as defined in the Supplementary Notice on Issues Concerning the Levy
of Individual Income Tax on Individuals’ Income from the Transfer of Restricted Stocks of Listed
Companies (‘) (Cai
Shui [2010] No. 70) jointly issued by the above three departments on November 10, 2010).
According to the Announcement about the Catalogue of Preferential IIT Policies with Continued
Effect (ʮѓ‘) (MOF SA T
Announcement [2018] No. 177), promulgated on December 29, 2018, the Circular on Related Issues
on Levying Individual Income Tax over the Income Received by Individuals from the Transfer of
Listed Shares Subject to Sales Limitation will remain effective. As of the Latest Practicable Date,
no aforesaid provisions had expressly provided that whether individual income tax shall be levied
from non-Chinese resident individuals on the transfer of shares in PRC resident enterprises listed
on overseas stock exchanges.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 324 ---
Enterprise Investors
In accordance with the EIT Law and its implementation provisions, a non-resident enterprise
is generally subject to EIT at the rate of a 10% on PRC-sourced income, including gains derived
from the disposal of equity interests in a PRC resident enterprise, if it does not have an
establishment or premise in the PRC or has an establishment or premise in the PRC but its
PRC-sourced income has no real connection with such establishment or premise. Such income tax
payable for non-resident enterprises are deducted at source, where the payer of the income are
required to withhold the income tax from the amount to be paid to the non-resident enterprise when
such payment is made or due. Such tax may be reduced or exempted pursuant to relevant tax treaties
or agreements on avoidance of double taxation.
Stamp Duty
In accordance with the Stamp Duty Law of the PRC (‘) which
came into effect on July 1, 2022, (i) entities and individuals that conclude taxable certificates, or
conduct securities transactions within the territory of the PRC shall be taxpayers of stamp duty, and
shall pay the PRC stamp duty; (ii) entities and individuals who are located outside the territory of
the PRC and conclude taxable certificates that are to be used within the territory of the PRC shall
pay the PRC stamp duty.
MAJOR TAXES ON THE COMPANY IN PRC
Enterprise Income Tax
In accordance with the Enterprise Income Tax Law of the People’ s Republic of China (ʕ
‘) which was promulgated by the Standing Committee of the National
People’s Congress on March 16, 2007, and was latest amended on December 29, 2018, with the
latest revision effective on the same date and the Implementation Regulations for the Enterprise
Income Tax Law of the People’ s Republic of China (ૢԷ‘)
which was promulgated by the State Council on December 6, 2007, and was latest amended on
December 6, 2024, with the latest revision effective on January 20, 2025, a uniform income tax rate
of 25% will be applied to resident enterprises and non-resident enterprises that have established
institutions and premises in China. Besides enterprises established within the PRC, enterprises
established in accordance with the laws of other judicial districts whose “de facto management
bodies” are within the PRC are considered “resident enterprises” and subject to the uniform 25%
enterprise income tax rate for their income derived from both inside and outside the PRC. Corporate
income tax for key advanced and new technology enterprises supported by PRC shall be at a
reduced tax rate of 15%.
In accordance with the Administrative Measures on Accreditation of High-tech Enterprises
(‘) which was promulgated by the Ministry of Science and
Technology, the Ministry of Finance and the State Administration of Taxation on April 14, 2008 and
amended on January 29, 2016 and came into effect on January 1, 2016, high-tech enterprises
referred to in these Measures shall mean resident enterprises registered in China (excluding Hong
Kong, Macau and Taiwan) which are continuously engaging in research and development and
technology commercialization within the realm of the Regions of Advanced Technologies Strongly
Supported by PRC, forming the core independent intellectual property of the enterprise, and
carrying out business activities on such basis, which accredited pursuant to these Measures may
declare and claim tax incentives pursuant to the Enterprise Income Tax Law (ʕശɛ͏΍ձ਷Ά
‘) and its Implementation Regulations, the Administrative Law of the People’s
Republic of China on the Levying and Collection of Taxes, the Implementation Regulations for the
Law of the People’ s Republic of China on Administration of Tax Collection (ʕശɛ͏΍ձ਷೼
‘) etc. Upon obtaining the qualification as a high-tech enterprise, the
enterprise shall complete tax reduction and exemption formalities with the tax authorities in charge
and the qualifications of an accredited high-tech enterprise shall be valid for three years from the
date of issuance of the certificate.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 325 ---
According to the Announcement of the Ministry of Finance and the State Taxation
Administration on the Relevant Tax and Fee Policies for Further Supporting the Development of
Micro and Small Enterprises and Individual Industrial and Commercial Households (௅e೼ਕ
ʮѓ), the taxable income of a
small low-profit enterprise shall be calculated at the reduced rate of 25%, and the policy of payment
of enterprise income tax at the rate of 20% shall continue to be implemented until December 31,
2027.
Value-added Tax
In accordance with the Provisional Regulations of the People’ s Republic of China on
V alue-added Tax (೼ᅲБૢԷ‘) which was promulgated by the State
Council on December 13, 1993, and was latest amended on November 19, 2017, with the latest
revision effective on the same date, the Detailed Rules for the Implementation Rules for the
Provisional Regulations the People’ s Republic of China on V alue-added Tax (ʕശɛ͏΍ձ਷ᄣ
‘) which was promulgated by the Ministry of Finance on December 25,
1993, and was latest effective on November 1, 2011, In accordance with the Decisions on
Abolishing the PRC Provisional Regulations on Business Tax and Amending the PRC Provisional
Regulations on V alue-Added Tax (ᄻ˟<ʕശɛ͏΍ձ਷ᐄุ೼ᅲБૢԷ>ҷ<ʕ
೼ᅲБૢԷ>‘) which was promulgated by the State Council and
effective on November 19, 2017 and the Notice of the Ministry of Finance and the State
Administration of Taxation on the Adjustment to V A T Rates (࠽
ٝwhich was promulgated by the Ministry of Finance and the State Administration of
Taxation on April 4, 2018 and came into effect on May 1, 2018, entities and individuals selling
goods, services and intangible assets in the People’s Republic of China are V A T taxpayers and shall
pay value-added tax. Taxpayers selling services and intangible assets are subject to a tax rate of 6%,
except in particular circumstances. If a taxpayer is engaged in sale subject to V A T at the previously
applicable rate of 17%, the tax rate is reduced to 16%. In accordance with the Announcement on
Policies for Deepening the VAT Reform (ʮѓ‘) which was
issued by the Ministry of Finance, State Taxation Administration and General Administration of
Customs on March 20, 2019 and came into effect on April 1, 2019. If a general V A T taxpayer is
engaged in a V A T taxable sale or imports goods at the previously applicable rate of 16%, the tax
rate is reduced to 13%.
Urban Maintenance and Construction Tax
In accordance with Urban Maintenance and Construction Tax Law of People’ s Republic of
China (‘) which was promulgated by Standing Committee of
National Peoples Congress on August 11, 2020 and came effect on September 1, 2021 and the
Notice of the State Council on Harmonizing the Urban Maintenance and Construction Tax and
Educational Surcharges for Chinese and Foreign-funded Enterprises and Individuals (਷ਕ৫ᗫ
‘) which was promulgated by
the State Council on October 18, 2010 and latest effective on December 1, 2010, entities and
individuals which are subject to consumption tax, V A T and business tax shall pay urban
maintenance and construction tax. The tax rate is 7% for a taxpayer who is domiciled in a downtown
area, and 5% for a taxpayer who is domiciled in a county or town, and 1% for a taxpayer who is
domiciled outside a downtown area, county or town.
PRC LA WS AND REGULATIONS RELATING TO FOREIGN EXCHANGE
The Foreign Exchange Control Regulations of the People’ s Republic of China (ʕശɛ͏΍
ձ਷̮ි၍ଣૢԷ‘), promulgated by the State Council on January 29, 1996, and latest amended
on August 5, 2008, with the latest revision effective on the same date, is a fundamental legal basis
for foreign exchange supervision and regulation by relevant authorities in PRC, according to which,
RMB may be freely converted into other currencies for current account items (such as foreign
exchange transactions in relation to commodity, trade and service, and dividend distribution), based
on real and lawful transactions; but capital account items (such as share capital transfer, direct
investment, securities investment, derivatives or loan) unless it is approved by the relevant foreign
exchange administration department and it has completed the pre-registration with the relevant
foreign exchange administration department.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 326 ---
According to the Notice of the State Administration of Foreign Exchange on Issues concerning
the Administration of Foreign Exchange Involved in Overseas Listing (ྤ̮
‘) announced by the State Administration of Foreign Exchange on
February 1, 2005 and amended on December 26, 2014, the SAFE and its branch offices and
administrative offices shall oversee, regulate and inspect domestic companies regarding their
business registration, opening and use of accounts, trans-border payments and receipts, exchange of
funds and other conduct involved in overseas listing. The domestic company shall, within fifteen
working days upon the end of its overseas public offering, handle registration formalities for
overseas listing with the foreign exchange authority at its place of registration with the required
materials.
In accordance with the Circular of SAFE on Further Improving and Adjusting Foreign
Exchange Administration Policies for Direct Investment (ٜ
ٝhereinafter referred to as “Circular 59”) was promulgated by SAFE
on November 19, 2012, became effective on December 17, 2012, and was further amended on May
4, 2015, approval is not required for the opening of an account entry in foreign exchange accounts
under direct investment. Circular 59 also simplifies the capital verification and confirmation
formalities for foreign invested enterprises (“FIEs”); the foreign capital and foreign exchange
registration formalities required for the foreign investors to acquire equities from Chinese party and
further improve the administration on exchange settlement of FIEs.
The Notice of the State Administration of Foreign Exchange on Reforming the Administration
of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises (׵
ٝhereinafter referred to as “Circular 19”) was
promulgated by SAFE on March 30, 2015, came into effect on June 1, 2015 partially repealed on
December 30, 2019 and partially amended by the Notice of the State Administration of Foreign
Exchange of Policies for Reforming and Regulating the Control over Foreign Exchange Settlement
under the Capital Account (ٝ)
promulgated by SAFE on June 9, 2016 and superseded the Notice on the Relevant Operating Issues
concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency
Capital of Foreign-funded Enterprises (˕˹ഐි၍ଣϞᗫุ
‘) (hereinafter referred to as “Circular 142”) from the effective date. Circular
19 specifies that foreign exchange settlement by foreign-invested enterprise is subject to
supervision under foreign exchange settlement policies, and cancels certain foreign exchange
restrictions under Circular 142. However, Circular 19 restates that the use of capital of foreign
invested enterprises should follow the principle of truthfulness and self-use within the business
scope of a enterprise.
In accordance with the Notice from the State Administration of Foreign Exchange on
Reforming and Regulating the Policies of Administration of Foreign Exchange Settlement for
Capital Items (ٝhereinafter referred
to as “Circular 16”) which was promulgated by the State Administration of Foreign Exchange on
June 9, 2016 and came into effect on the same date, an enterprise registered in China may, at its sole
discretion, convert its foreign debts in a foreign currency to RMB. Circular 16 provides a unified
standard for foreign exchange under capital items (including but not limited to foreign currency
capital and foreign debt) which may be convertible at the sole discretion of the enterprise. Such
standard is applicable to all enterprises registered in the PRC. In addition, Circular 16 restates that,
unless otherwise specified, an enterprise shall not directly or indirectly use RMB funds obtained as
a result of conversion of foreign currency funds, for purposes outside the business scope, or for
investments wealth management other than securities investment or capital protected products of
banks in China. Moreover, except within the business scope, RMB funds obtained as a result of
conversion shall not be used as loans to non-related companies; save for investment in a real estate
enterprise, RMB funds obtained as a result of conversion shall not be used for construction or
purchase of real estate which will not be used by the enterprise.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 327 ---
According to Notice of the State Administration of Foreign Exchange on Further Promoting
the Facilitation of Cross-border Trade and Investment (׸
ٝreleased by the State Administration of Foreign Exchange on October 23, 2019
and Notice by the State Administration of Foreign Exchange of Further Deepening Reform and
Promoting Cross-border Trade and Investment Facilitation (ڮࠧ
ٝexcept for foreign-invested enterprises engaged in investment
business, non-investment foreign-invested enterprises are also permitted to make domestic equity
investments with their capital funds in accordance with the laws provided that such investments do
not violate the Special Administrative Measures (Negative List) for Foreign Investment Access (̮
݄(૶ఊ)) and the target investment projects are genuine and in
compliance with laws. According to the Notice of the SAFE on Optimizing Foreign Exchange
Administration to Support the Development of Foreign-related Business (Ꮄʷ
ٝissued by the State Administration of Foreign Exchange on
April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital
funds, foreign credits and the income under capital accounts of overseas listing, without submitting
the evidentiary materials concerning authenticity of such capital for banks in advance; provided that
their capital use is authentic and in compliance with administrative regulations on the use of income
under capital accounts. The bank in charge shall follow the principle of prudential business
development to manage and control relevant business risks, and conduct post spot checking on the
facilitation of payment for the income under capital accounts in accordance with relevant
requirements.
According to the Administrative Provisions on the Settlement, Sales and Payment of Foreign
Exchange (‘) promulgated by the People’s Bank of China on June
20, 1996. Under such regulations, RMB is generally freely convertible to foreign currencies for
current account transactions (such as trade and service-related foreign exchange transactions and
dividend payments), but not for capital account transactions (such as capital transfer, direct
investment, securities investment, derivative products or loans), except where a prior approval from
the SAFE and/or its competent local counterparts is obtained.
According to the Decision of the State Council on Canceling and Adjusting A Batch of Items
Requiring Administrative Approval (‘)
issued by the State Council on October 23, 2014, SAFE and its branches canceled the review and
approval on the foreign exchange settlement for the repatriation of funds raised abroad under the
overseas listed foreign capital stock account.
According to the Notice on Relevant Issue Concerning the Administration of Foreign
Exchange for Overseas Listing (‘) issued by the SAFE
on December 26, 2014, the domestic companies shall register the overseas listed with the foreign
exchange control bureau located at its registered address in 15 working days after the completion
of the overseas listing and issuance. The funds raised by the domestic companies through overseas
listing may be repatriated to China or deposited overseas, provided that the intended use of the fund
shall be consistent with the contents of the document and other public disclosure documents.
According to the Notice of State Administration of Foreign Exchange on Reforming and
Standardizing Capital Account Foreign Exchange Settlement Administration Policies (̮ි
‘) issued by SAFE on June 9, 2016, it has
been specified clearly in the relevant policies that, for the capital account foreign exchange income
subject to voluntary foreign exchange settlement (including the repatriation of the proceeds from
overseas listing), the domestic institutions may conduct the foreign exchange settlement at the
banks according to their operation needs. The proportion of the capital account foreign exchange
income subject to voluntary foreign exchange settlement was tentatively set as 100%, provided that
SAFE may adjust the aforesaid proportion according to the international payment balance status in
good time.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 328 ---
PRC LA WS AND REGULATIONS
The PRC Legal System
The PRC legal system is based on the PRC Constitution (‘)
(hereinafter referred to as the “Constitution”) and is made up of statutes, administrative regulations,
local regulations, autonomous regulations, separate regulations, rules and regulations of State
Council departments, rules and regulations of local governments, laws of special administrative
regions and international treaties of which the PRC government is the signatory and other
regulatory documents. Court judgments do not constitute legally binding precedents, although they
are used for the purposes of judicial reference and guidance.
According to the Constitution and the Legislation Law of the PRC (ج
‘) (hereinafter referred to as the “Legislation Law”), the NPC and its Standing Committee are
empowered to exercise the legislative power of the State. The NPC has the power to formulate and
amend basic laws governing State organs, civil, criminal and other matters. The Standing
Committee of the NPC formulates and amends the laws other than those required to be enacted by
the NPC and to supplement and amend parts of the laws enacted by the NPC during the adjournment
of the NPC, provided that such supplements and amendments are not in conflict with the basic
principles of such laws.
The State Council is the highest organ of state administration and has the power to formulate
administrative regulations based on the Constitution and laws. The people’s congresses of the
provinces, autonomous regions and municipalities and their standing committees may formulate
local regulations based on the specific circumstances and actual needs of their respective
administrative areas, provided that such regulations do not contravene any provision of the
Constitution, laws or administrative regulations. The people’s congresses of cities divided into
districts and their respective standing committees may formulate local regulations on aspects such
as urban and rural construction and management, environmental protection 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 regulations of their respective provinces or autonomous regions. If the law
provides otherwise on the formulation of local regulations by cities divided into districts, those
provisions shall prevail. Such local regulations will come into effect after being reported to and
approved by the standing committees of the people’s congresses of the relevant provinces or
autonomous regions. The standing committees of the people’s congresses of the provinces or
autonomous regions shall examine the legality of local regulations submitted for approval, and such
approval shall be granted within four months if they are not in conflict with the Constitution, laws,
administrative regulations and local regulations of the relevant provinces or autonomous regions.
Where, during the examination for approval of local regulations of cities divided into districts by
the standing committees of the people’s congresses of the provinces or autonomous regions,
conflicts are identified with the rules and regulations of the people’s governments of the provinces
or autonomous regions, a decision should be made to resolve the issue. People’s congresses of
national autonomous areas have the power to enact autonomous regulations and separate regulations
in light of the political, economic and cultural characteristics of the ethnic groups in the areas
concerned.
The ministries and commissions of the State Council, the People’s Bank of China, the National
Audit Office and the subordinate institutions with administrative functions directly administered by
the State Council may formulate departmental rules and regulations within the permissions of their
respective departments based on the laws and administrative regulations, and the decisions and
orders of the State Council. Provisions of departmental rules should be the matters related to the
enforcement of the laws and administrative regulations, and the decisions and orders of the State
Council. The people’s governments of the provinces, autonomous regions, municipalities and cities
or autonomous prefectures divided into districts may formulate rules and regulations based on the
laws, administrative regulations and local regulations of such provinces, autonomous regions and
municipalities.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-1 –


--- page 329 ---
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 annul any inappropriate laws enacted by the SCNPC, and
to annul 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 annul administrative regulations that contravene the Constitution and laws, to annul local
regulations that contravene the Constitution, laws and administrative regulations, and to annul
autonomous regulations and separate regulations which have been approved by the standing
committees of the people’s congresses 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 annul any inappropriate ministerial
rules and rules of local governments; the people’s congresses of provinces, autonomous regions and
municipalities directly under the Central Government have the power to alter or annul 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 annul 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 annul any inappropriate rules enacted
by the people’s governments at a lower level.
Pursuant to the Resolution of the Standing Committee of the NPC Providing an Improved
Interpretation of the Law (Ӕᙄ) passed on
June 10, 1981, in cases where the scope of provisions of laws or decrees needs to be further defined
or additional stipulations need to be made, the Standing Committee of the NPC shall provide
interpretations or make stipulations by means of decrees. Issues related to the application of laws
in a court trial should be interpreted by the Supreme People’s Court, issues related to the application
of laws in a prosecution process of the procuratorate should be interpreted by the Supreme People’s
Procuratorate, and issues related to laws other than the above mentioned should be interpreted by
the State Council and the competent authorities. The State Council and its ministries and
commissions are also vested with the power to give interpretations of the administrative regulations
and departmental rules which they have promulgated. At the regional level, the power to interpret
regional regulations is vested in the regional legislative and administrative authorities which
promulgate such regulations.
THE PRC JUDICIAL SYSTEM
Under the Constitution, the Law of Organization of the People’s Court of the PRC ( ʕശɛ
‘) and the Law of Organization of the People’s Procuratorate of the PRC
(2018 Revision) (‘(2018ࠈࡌthe people’s courts of the
PRC are divided into the Supreme People’s Court, the local people’s courts at all levels and special
people’s courts. The local people’s courts at all levels 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 administration of justice 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. The people’s procuratorates of the PRC are divided into the
Supreme People’s Procuratorate, the local people’s procuratorates at all levels, Military
Procuratorates and other special people’s procuratorates. 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.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-2 –


--- page 330 ---
The people’s courts employ a two-tier appellate system, i.e., judgments or rulings of the
second instance at the people’s courts are final. A party may appeal against the judgment or ruling
of the first instance of a local people’s court. The people’s procuratorate may present a protest to
the people’s courts at the next higher level in accordance with the procedures stipulated by the laws.
In the absence of any appeal by the parties and any protest by the people’s procuratorate within the
stipulated period, the judgments or rulings of the people’s courts shall become final. Judgments or
rulings of the second instance of the intermediate people’s courts, the higher people’s courts and the
Supreme People’s Court and those of the first instance of the Supreme People’s Court are final.
However, if the Supreme People’s Court 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 PRC (‘) (hereinafter referred
to as the “PRC Civil Procedure Law”) adopted on April 9, 1991 and amended four times on October
28, 2007, August 31, 2012 and June 27, 2017 and September 1, 2023 respectively, prescribes the
conditions for instituting a civil action, the jurisdiction of the people’s court, the procedures for
conducting a civil action, and the procedures for enforcement of a civil judgment or ruling. All
parties to a civil action conducted within the PRC must abide by the PRC Civil Procedure Law. A
civil case is generally heard by the court located in the defendant’s place of domicile. The court of
jurisdiction in respect of a civil action may also be chosen by explicit agreement among the parties
to a contract, provided that the people’s court having jurisdiction should be located at places
directly connected with the disputes, such as the plaintiff’s or the defendant’s place of domicile, the
place where the contract is executed or signed or the place where the object of the action is located.
Meanwhile, such choice shall not in any circumstances contravene the regulations of differential
jurisdiction and exclusive jurisdiction.
A foreign individual, a person without nationality, a foreign enterprise or a foreign
organization is given the same litigation rights and obligations as a citizen, a legal person or other
organizations of the PRC when initiating actions or defending against litigations at a people’s court.
Should a foreign court limit the litigation rights of PRC citizens or enterprises, the PRC court may
apply the same limitations to the citizens or enterprises of such foreign country. A foreign
individual, a person without nationality, a foreign enterprise or a foreign organization must engage
a PRC lawyer in case he or it needs to engage a lawyer for the purpose of initiating actions or
defending against litigations at a people’s court. In accordance with the international treaties to
which the PRC is a signatory or participant or according to the principle of reciprocity, a people’s
court and a foreign court may request each other to serve documents, conduct investigation and
collect evidence and conduct other actions on its behalf. A people’s court shall not accommodate
any request made by a foreign court which will result in the violation of sovereignty, security or
public interests of the PRC.
All parties to a civil action shall perform the legally effective judgments and rulings. If any
party to a civil action refuses to abide by a judgment or ruling made by a people’s court or an award
made by an arbitration tribunal in the PRC, the other party may apply to the people’s court for the
enforcement of the same within two years subject to application for postponed enforcement or
revocation. If a party fails to satisfy within the stipulated period a judgment which the court has
granted an enforcement approval, the court may, upon the application of the other party,
mandatorily enforce the judgment against such party.
Where a party requests for enforcement of an effective judgment or ruling made by a people’s
court, but the opposite party or his property is not within the territory of the People’s Republic of
China, the party may directly apply to the foreign court with jurisdiction for recognition and
enforcement of the judgment or ruling, or the people’s court may, in accordance with the provisions
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-3 –


--- page 331 ---
of international treaties to which the PRC is a signatory or in which the PRC is a participant or
according to the principle of reciprocity, request for recognition and enforcement by the foreign
court. Similarly, for an effective judgment or ruling made by a foreign court that requires
recognition and enforcement by a people’s court of the PRC, a party may directly apply to an
intermediate people’s court of the PRC with jurisdiction for recognition and enforcement of the
judgment or ruling, or the foreign court may, in accordance with the provisions of international
treaties to which its country and the PRC are signatories or in which its country is a participant or
according to the principle of reciprocity, request for recognition and enforcement by the people’s
court, unless the people’s court considers that the recognition or enforcement of such judgment or
ruling would violate the basic legal principles of the PRC, its sovereignty or national security or
would not be in social and public interest.
THE PRC COMPANY LA W AND THE GUIDELINES FOR THE ARTICLES OF
ASSOCIATION OF LISTED COMPANIES
A joint stock limited company incorporated in the PRC seeking a list on The Stock Exchange
of Hong Kong Limited (the “Stock Exchange”) is mainly subject to the following laws and
regulations of the PRC:
The Company Law was adopted by the Fifth Standing Committee Meeting of the Eighth NPC
on December 29, 1993 and came into effect on July 1, 1994, and was amended on December 25,
1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and December 29,
2023, respectively. The latest revised Company Law came into effect on July 1, 2024.
According to the Guidelines on the Application of Regulatory Rules — No. 1 for Overseas
Offering and Listing (ˏ— ྤ̮೯Бɪ̹ᗳୋ1໮‘) which was promulgated by
the CSRC on February 17, 2023, and came into effect on March 31, 2023, the domestic companies
that directly offer and list securities in overseas markets, shall formulate their articles of association
in line with the Guidelines for the Articles of Association of Listed Companies (ܸ
ˏ‘) (hereinafter referred to as the “PRC Guidelines on AoA”) promulgated by the CSRC on
March 16, 2006 and latest amended on March 28, 2025, to standardize corporate governance.
Set out below is a summary of the major provisions of the Company Law and the PRC
Guidelines on AoA which are applicable to the Company.
General
“A joint stock limited company” means a corporate legal person incorporated under the
Company Law, whose registered capital is divided into shares of equal par value. The liability of
its shareholders is limited to the extent of the shares 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 the laws and regulations, social
morality and business ethics, be honest and faithful and accept the supervision of the government
and the general public. 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 company may be established by promotion or subscription. A company shall have a
minimum of one but no more than 200 people as its promoters, over half of which must have a
domicile within the PRC.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-4 –


--- page 332 ---
The board of directors shall, within 30 days after the end of the establishment meeting of a
company, authorize a representative to file an application for registration of establishment with the
company registration authority. A company established in accordance with the law shall be issued
a business license by the company registration authority. The date of issuance of the company’s
business license is the date of establishment of the company.
Where the shares to be issued have not been fully subscribed for at the time of the
establishment of a company, or the promoters fail to hold an establishment meeting within 30 days
after the full payment has been made for the shares to be issued, subscribers may claim against the
promoters for refund of the payment for shares plus the interest on the bank deposits for the same
term. The promoters and subscribers may not withdraw their share capital after they have made
payment for the shares or delivered non-monetary property as capital contributions, except that the
shares have not been fully subscribed for within the time limit, the promoters fail to hold the
establishment meeting on schedule, or the establishment meeting decides not to establish the
company.
If the company fails to be established, the legal consequences incurred shall be undertaken by
the shareholders at the time of the establishment of the company. If there are two or more
shareholders at the time of the establishment, they shall enjoy the claims and assume the debts
jointly and severally. If a shareholder at the time of the establishment of the company engages in
the civil activities in its own name for the purpose of establishing the company, the third party has
the right to request the company or such shareholder to assume the civil liability incurred. Where
a shareholder at the time of the establishment of a company causes any damage to any other person
due to fulfilling the duties for the establishment of the company, the company or the shareholder
who is not at fault may, after making compensations, claim the compensation from the shareholder
who is at fault.
Registered Shares
Shares in a company take the form of share certificates. Share certificates are certificates
issued by the company evidencing the shares held by the shareholders. The shares issued by a
company shall be registered shares.
A joint stock limited company shall make a register of shareholders and keep it in the
company. The register of shareholders shall contain the following items: (I) name and domicile of
each shareholder; (II) class and number of shares subscribed for by each shareholder; (III) serial
number of shares if the shares are issued in paper form; and (IV) date for each shareholder to obtain
shares.
Increase in Share Capital
In the case of a joint stock limited company issuing new shares, resolutions shall be passed
at the shareholders’ 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.
When a company launches a list of new shares under the permission of the securities
regulatory authority of the State Council, it must publish a document for the new shares and
financial and accounting reports, and prepare the share subscription form. After payment in full for
the new shares issued, a company must change its registration with a company registration authority
and make an announcement accordingly.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law: (1) To prepare a balance sheet and a property list. (2) A company
makes a resolution at shareholders’ general meeting to reduce its registered capital. (3) A company
shall inform its creditors within 10 days and publish an announcement in newspapers within 30 days
after the approval of resolution of reducing registered capital. (4) The creditors shall have the right
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-5 –


--- page 333 ---
to require a 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. (5) When a company reduces its registered capital, it shall register the change with a
company registration authority in accordance with the law.
Repurchase of Shares
Pursuant to the Company Law, a company may not repurchase its own shares other than for
the following purposes: (1) reducing its registered capital; (2) merging with other companies which
hold its shares; (3) granting shares to its employees as incentives or for employee stock ownership
plan; (4) acquiring its shares at the request of its shareholders who vote in a shareholders’ general
meeting against a resolution regarding a merger and division; (5) utilizing the shares for conversion
of listed corporate bonds which are convertible into shares; and (6) where it is necessary for the
listed company to safeguard the value of the company and the interests of its shareholders.
The acquisition by a company of its own shares on the grounds set out in item (1) to (2) above
shall be approved by way of a resolution of a shareholders’ general meeting; the acquisition by a
company of its own shares in circumstances as set out in items (3), (5) and (6) above maybe
approved by way of a resolution at a board meeting with two-third or more of the directors present
in accordance with the provisions of the company’s articles of association or the authorization of
the shareholders’ general meeting.
Following the acquisition by a company of its own shares in accordance with these
requirements, such shares shall be canceled within 10 days from the date of the acquisition under
the circumstance in item (1); such shares shall be transferred or canceled within six months under
the circumstances in items (2) or (4); the total shares held by the Company shall not exceed 10%
of the total shares issued by the Company and such shares shall be transferred or canceled within
three years under the circumstances in items (3), (5) or (6).
A listed company shall perform its information disclosure obligations in accordance with the
provisions of the PRC Securities Law when acquiring its own shares. The acquisition by a listed
company of its own shares in circumstances as set out in items (3), (5) and (6) of this article shall
be conducted through open centralized trading.
Transfer of Shares
The shares held by a shareholder of a joint stock limited company may be transferred to other
shareholders or to persons other than the shareholders of the company. Where the articles of
association of the company have any restriction on the transfer of shares, the transfer shall be
carried out in accordance with the articles of association. The share transfer by a shareholder shall
be conducted on a lawfully established stock exchange or by any other means as prescribed by the
State Council.
The stocks shall be transferred by a shareholder in the form of endorsement or by any other
means prescribed by the relevant laws or administrative regulations. After the transfer, the company
shall record the name and domicile of the transferee in the register of shareholders. The register of
shareholders shall not be modified within 20 days before any shareholders’ meeting is held, or
within 5 days prior to the benchmark date decided by the company for the distribution of dividends.
Where it is otherwise provided for in any law, administrative regulation or by the securities
regulatory authority of the State Council for the modification of the register of shareholders of a
listed company, such provisions shall prevail.
The shares issued before a company makes a public offering of shares shall not be transferred
within 1 year as of the day when the stocks of the company are listed and traded on the stock
exchange. Where it is otherwise provided for in any law, administrative regulation or by the
securities regulatory authority of the State Council for the transfer of shares held by the
shareholders or actual controllers of a listed company, such provisions shall prevail. The directors,
supervisors and senior executives of the company shall declare to the company the shares they hold
and the changes thereof. During the term of office as determined when they assume the posts, the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-6 –


--- page 334 ---
shares transferred each year shall not exceed 25% of the total shares they hold of the company. The
shares of the company held by them shall not be transferred within 1 year as of the day when the
stocks of the company are listed and traded on the stock exchange. Any of the aforesaid persons
shall not transfer the shares of the company held within six months after he/she leaves office. Any
other restrictions on the transfer of company shares held by directors, supervisors or senior
executives may be specified in the articles of association.
Shareholders
Under the Company Law, the rights of shareholders include the rights: (1) to receive dividends
and other forms of distribution in accordance with the proportion of shares held or as stipulated in
the articles of association; (2) to attend or appoint a proxy to attend shareholders’ meetings and
exercise voting rights; (3) to make suggestions or inquiries regarding the company’s operations; (4)
to transfer, donate, or pledge shares in accordance with laws, administrative regulations, and the
articles of association; (5) to review and copy the articles of association, register of shareholders,
records of shareholders’ meetings, resolutions of the board of directors, resolutions of the board of
supervisors, and financial accounting reports; (6) shareholders who individually or collectively hold
more than three percent of the company’s shares for at least 180 consecutive days have the right to
review the company’s accounting books and vouchers; (7) in the event of the company’s dissolution
or liquidation, to participate in the distribution of the company’s remaining assets in proportion to
the shares held; (8) any shareholder who objects to a shareholders’ meeting resolution regarding
company merger or division has the right to request the company to repurchase its shares; and (9)
other rights granted by laws, administrative regulations, and the articles of association.
The obligations of shareholders include: (1) to comply with laws, administrative regulations
and the articles of association; (2) to pay for the shares subscription and the method of contribution;
(3) may not damage the interests of the company or of other shareholders by abusing its rights; (4)
not to abuse the independent legal status of the company and the limited liability of shareholders
to evade debts or harm the interests of the company’s creditors; and (5) other obligations that shall
be undertaken as stipulated by laws, administrative regulations, and the articles of association.
Shareholders’ General Meetings
The shareholders’ meeting of a joint-stock limited company is composed of all the
shareholders. The shareholders’ meeting is the company’s authority and exercises the following
powers: (1) to elect and replace directors and supervisors, and to determine matters relating to the
remuneration of directors and supervisors; (2) to deliberate and approve the report of the board of
directors; (3) to deliberate and approve the report of the board of supervisors; (4) to deliberate and
approve the company’s profit distribution plan and loss compensation plan; (5) to make resolutions
on the increase or decrease of the company’s registered capital; (6) to make resolutions on the
issuance of corporate bonds; (7) to make resolutions on the company’s merger, division, dissolution,
liquidation, or change of corporate form; (8) to amend the articles of association; and (9) other
powers stipulated in the articles of association.
In addition, the PRC Guidelines on AoA stipulate that the powers of the shareholders’ meeting
also include: (1) to make resolutions on the engagement or dismissal of the accounting firm
undertaking the company’s audit business; (2) to deliberate and approve the guarantee matters
stipulated in Article 47 of the Guidelines for the Articles of Association of Listed Companies; (3)
to deliberate on matters concerning the purchase or sale of significant assets exceeding 30% of the
company’s most recently audited total assets within one year; (4) to deliberate and approve changes
in the use of raised funds; (5) to deliberate on equity incentive plans and employee share ownership
plans; and (6) to deliberate on other matters that should be decided by the shareholders’ meeting as
stipulated by laws, administrative regulations, departmental rules, or the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-7 –


--- page 335 ---
A shareholders’ general meeting is required to be held once a year. An extraordinary general
meeting is required to be held within two months upon the occurrence of any of the following: (1)
the number of directors is less than the number required by the Company Law or less than
two-thirds of the number specified in the articles of association; (2) the total outstanding losses of
the company amounted to one-third of the company’s total paid-in share capital; (3) shareholders
individually or in aggregate holding 10% or more of the company’s shares request to convene an
extraordinary general meeting; (4) the board deems necessary; (5) the board of supervisors so
proposes; or (6) any other circumstances as provided for in the articles of association.
A shareholders’ general meeting shall be summoned by the board of directors and presided
over by the chairman of the board of directors. In the event that the chairman is incapable of
performing or is not performing his duties, the meeting shall be presided over by the vice chairman.
In the event that the vice chairman is incapable of performing or is not performing his duties, a
director recommended by half or more of the directors shall preside over the meeting.
Where the board of directors is incapable of performing or is not performing its duties, the
board of supervisors shall summon and preside over the shareholders’ general meeting in a timely
manner. If the board of supervisors fails to summon and preside over the shareholders’ general
meeting, shareholders individually or in aggregate holding 10% or more of the company’s shares
for 90 days or more consecutively may summon and preside over the shareholders’ general meeting
on their own initiative.
A notice of the general meeting stating the date and venue of the meeting and the matters to
be considered at the meeting shall be given to all shareholders 20 days prior to the meeting. A notice
of extraordinary general meeting shall be given to all shareholders 15 days prior to the meeting.
Shareholders may appoint proxies to attend the shareholders’ meeting. The proxy shall submit
to the company a power of attorney from the shareholder and exercise the voting rights within the
scope of the authorization. The Company Law does not contain any specific provisions regarding
the number of shareholders required to constitute a quorum for a shareholders’ meeting.
Each shareholder attending the shareholders’ meeting has one voting right for each share held,
except for shareholders of preference shares. Shares held by the company in its own name do not
have voting rights.
An accumulative voting system may be adopted for the election of directors and supervisors
at the general meeting pursuant to the provisions of the articles of association or a resolution of the
general meeting. Under the accumulative voting system, each share shall be entitled to the number
of votes equivalent to the number of directors or supervisors to be elected at the general meeting,
and shareholders may consolidate their votes for one or more directors or supervisors when casting
a vote.
Resolutions of the general meeting must be passed by more than half of the voting rights held
by shareholders present at the meeting, with the exception of resolutions relating to merger, division
or dissolution of the company, increase or reduction of registered share capital, change of corporate
form or amendments to the articles of association, in each case of which must be passed by more
than two-thirds of the voting rights held by the shareholders present at the meeting.
Board of Directors
A joint stock limited company shall establish a board of directors. However, a joint stock
limited company with a smaller scale or fewer shareholders may, instead of establishing a board of
directors, appoint a single director to exercise the powers of the board of directors as stipulated in
the Company Law.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-8 –


--- page 336 ---
For joint stock limited companies that establish a board of directors, the number of members
shall be three or more, and the members may include representatives of the company’s employees.
In a joint stock limited company with more than 300 employees, unless it has established a board
of supervisors with employee representatives in accordance with the law, the board of directors shall
include employee representatives.
The term of office for directors shall be stipulated in the articles of association, but each term
shall not exceed three years. A director whose term has expired may be re-elected for consecutive
terms.
The board of directors shall convene at least two meetings per year, and all directors and
supervisors shall be notified at least 10 days before each meeting.
The board of directors may exercise its powers: (1) to convene shareholders’ general meetings;
(2) to implement the resolutions passed by the shareholders at the shareholders’ general meetings;
(3) to decide on the company’s operational plans and investment proposals; (4) to formulate the
company’s profit distribution proposals and loss recovery proposals; (5) to formulate proposals for
the increase or reduction of the company’s registered capital and the issue of corporate bonds; (6)
to formulate proposals for the merger, division or dissolution of the company or change of corporate
form; (7) to decide on the setup of the company’s internal management organs; (8) to appoint or
dismiss the company’s manager and decide on his/her remuneration and, based on the manager’s
recommendation, to appoint or dismiss any deputy general manager and financial officer of the
company and to decide on their remunerations; (9) to formulate the company’s basic management
system; and (10) to exercise any other authority stipulated in the articles of association or granted
by the shareholders’ meeting.
In addition, the PRC Guidelines on AoA stipulate that the powers of the board of directors also
include: (1) within the scope of authorization by the shareholders’ meeting, to decide on matters
such as the company’s external investments, acquisition and sale of assets, asset mortgage, external
guarantees, entrusted financial management, related-party transactions, and external donations; (2)
to formulate plans for significant acquisitions by the company, and for the company to acquire its
own shares; (3) to draft the plan for amending the articles of association; (4) to manage the
company’s information disclosure matters; (5) to submit proposals to the shareholders’ meeting for
the engagement or replacement of the accounting firm that audits the company; and (6) to hear work
reports from the company’s manager and to inspect the work of the manager.
A board of directors meeting shall be held only if more than half of the directors are in
attendance. Resolutions made by the board of directors must be passed by a majority of the
directors. The directors shall attend the meeting of the board of directors in person. Where any
director is unable to attend the meeting for any reason, he/she may, by issuing a written power of
attorney, entrust another director to attend the meeting on his/her behalf. The power of attorney
shall indicate the scope of authorization.
The directors shall be responsible for the resolutions made by the board of directors. Where
a resolution of the board of directors is in violation of any law, administrative regulation, article of
association or resolution of the shareholders’ meeting and causes any serious loss to the company,
the directors who participate in adopting such resolution shall be liable for compensation to the
company. If a director is proved to have expressed his/her objection to the voting on such resolution
and such objection has been recorded in the minutes, he/she may be exempted from liability.
Under the Company Law, the following person may not serve as a director in a company: (1)
having no capacity for civil conduct or having limited capacity for civil conduct. (2) having 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
having been deprived of political rights due to a crime, where a five-year period has not elapsed
since the expiration of execution period; If he/she is pronounced for suspension of sentence, a
two-year period has not elapsed since the expiration of the suspension of sentence. (3) serving as
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-9 –


--- page 337 ---
a director, factory director or manager of a company or enterprise which has been bankrupt and
liquidated and being personally liable for the bankruptcy of such company or enterprise, where a
three-year period has not elapsed since the completion of the bankruptcy and liquidation. (4) acting
as the legal representative of a company or enterprise whose business license has been revoked or
which was ordered to close down due to any violation of the law and being personally liable, where
a three-year period has not elapsed since the date of revocation of business license or the order for
closure; or (5) being listed as a 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.
According to the PRC Guidelines on AoA, the board of directors shall appoint one chairman,
who shall be elected by a majority of all the directors. The chairman shall exercise the following
powers (including but not limited to: (1) to preside over the shareholders’ meeting and to convene
and chair the board of directors meetings. (2) to urge and inspect the implementation of the
resolutions of the board of directors. (3) other powers granted by the board of directors.
Directors owe a duty of loyalty to the company and shall take measures to avoid conflicts
between their personal interests and the interests of the company. They must not use their position
to seek improper benefits. Directors also owe a duty of care to the company and shall exercise their
duties in the best interests of the company, with the reasonable care that a manager would normally
be expected to exercise.
Audit Committee/Supervisor/Board of Supervisors
A joint stock limited company may establish an audit committee composed of directors within
its board of directors in accordance with the provisions of its articles of association, to exercise the
powers of the board of supervisors as stipulated in the Company Law, without setting up a board
of supervisors or supervisors. The audit committee shall consist of three or more members, with a
majority of the members not holding any position in the company other than that of a director, and
they must not have any relationship with the company that could affect their independent and
objective judgment. Employee representatives on the board of directors may serve as members of
the audit committee.
Unless the audit committee is established to exercise the powers of the board of supervisors,
or in the case of a joint stock limited company with a smaller scale or fewer shareholders, which
may appoint a single supervisor to exercise the powers of the board of supervisors as stipulated in
the Company Law, otherwise, a joint-stock limited company shall establish a board of supervisors.
The board of supervisors shall consist of three or more members, including representatives of
shareholders and an appropriate proportion of employee representatives, with the proportion of
employee representatives not being less than one-third, the specific proportion to be stipulated in
the articles of association. Employee representatives on the board of supervisors shall be elected
democratically by the company’s employees through a workers’ representative congress, workers’
congress, or other forms. Company directors or senior management may not concurrently serve as
supervisors.
The board of supervisors may exercise the following powers: (1) to review the company’s
financial position; (2) to supervise the directors and senior management in their performance of
their duties and to propose the removal of directors and senior management who have violated laws,
regulations, the articles of association or resolutions of the shareholders’ general meetings; (3)
when the acts of a director or a senior management personnel are detrimental to the company’s
interests, to require the director and senior management to correct these acts; (4) to propose the
convening of extraordinary shareholders’ general meetings and to summon and preside over
shareholders’ general meetings when the board fails to perform the duty of summoning and
presiding over shareholders’ general meetings under the Company Law; (5) to submit proposals to
the shareholders’ general meetings; (6) to bring law suits against directors and senior management
personnel pursuant to the relevant provisions of the Company Law; and (7) to exercise any other
authority stipulated in the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-10 –


--- page 338 ---
Supervisors shall comply with laws, administrative regulations, and the articles of association,
and owe a duty of loyalty to the company. They shall take measures to avoid conflicts between their
personal interests and the interests of the company and must not use their position to seek improper
benefits. Supervisors also owe a duty of care to the company and shall exercise their duties in the
best interests of the company, with the reasonable care that a manager would normally be expected
to exercise.
Manager and Senior Management
A joint stock company shall have a manager who shall be appointed or removed by the board
of directors. The manager shall be responsible to the board of directors and exercise his/her
functions and powers according to the articles of association or the authorization of the board of
directors.
Under the relevant requirements of the PRC Guidelines on AoA, the manager shall exercise
the following powers: (1) to manage the production and operation and administration of the
company and arrange for the implementation of the resolutions of the board of directors, and report
work to the board of directors; (2) to arrange for the implementation of the company’s annual
operation plans and investment proposals; (3) to formulate proposals for the establishment of the
company’s internal management organs; (4) to formulate the fundamental management system of
the company; (5) to formulate the company’s specific rules and regulations; (6) to recommend the
appointment or dismissal of any deputy manager and any financial officer of the company; (7) to
appoint or dismiss management personnel (other than those shall be appointed or dismissed by the
board of directors); and (8) to exercise any other authority granted by the board of directors.
According to the Company Law, senior management personnel refer to the company’s
manager, deputy manager, chief financial officer, the secretary of the board of directors of a listed
company, and other personnel as stipulated in the articles of association. Senior management
personnel owe a duty of loyalty to the company and shall take measures to avoid conflicts between
their personal interests and the interests of the company. They must not use their position to seek
improper benefits. Senior management personnel also owe a duty of care to the company and shall
exercise their duties in the best interests of the company, with the reasonable care that a manager
would normally be expected to exercise.
According to the PRC Guidelines on AoA, the articles of association of the company are
binding on the company’s manager and other management personnel. Senior management personnel
shall faithfully perform their duties and safeguard the best interests of the company and all
shareholders. If senior management personnel fail to faithfully perform their duties or breach their
duty of good faith, causing damage to the interests of the company and public shareholders, they
shall be held legally liable for compensation.
Finance and Accounting
Under the PRC Company Law, a company shall establish its own financial and accounting
systems according to the laws, administrative regulations and the regulations of the competent
financial departments under the State Council. At the end of each accounting year, a company shall
prepare a financial report which shall be audited by an accounting firm in accordance with laws. The
financial and accounting reports shall be prepared in accordance with laws, administrative
regulations and the regulations of the financial departments under the State Council.
The company’s financial and accounting reports shall be made available for shareholders’
inspection at the company within 20 days before the convening of an annual general meeting. A
joint stock limited company that makes public stock offerings must announce its financial and
accounting reports.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-11 –


--- page 339 ---
When a company distributes its after-tax profit for the current year, 10% of the profit shall be
accrued and included in the company’s statutory reserve. Such accrual is no longer required when
the accumulated amount of the company’s statutory reserve is 50% or more of the company’s
registered capital. Where the accumulative amount of the company’s statutory reserve is not enough
to make up for the losses of the previous year, the current year’s profits shall first be used to make
up for the losses before the statutory reserve is accrued according to the provisions of the preceding
paragraph. After having accrued statutory reserve from the after-tax profits, a company can also set
aside discretionary reserve from the after-tax profits upon a resolution made by the shareholders’
meeting.
A joint stock limited company shall distribute profits in proportion to the shares held by the
shareholders, unless otherwise stipulated in the articles of association of the company.
The premiums received by a company from the issuance of shares at an issue price in excess
of the par value of the shares, the amount of share proceeds from the issuance of no-par shares that
have not been credited to the registered capital, and other items required by the financial department
of the State Council to be included in the capital reserve shall be classified as the capital reserve
of the company. The reserve of a company shall be used for making up losses, expanding the
production and business scale or increasing the registered capital of the company. Where the reserve
of a company is used for making up losses, the discretionary reserve and statutory reserve shall be
firstly used. If losses still cannot be made up, the capital reserve can be used according to the
relevant provisions. Where the statutory reserve is converted to increase registered capital, the
amount of such reserve retained shall not be less than 25% of the registered capital of the company
prior to the conversion.
The company shall have no accounting books other than the statutory books. The company’s
assets shall not be deposited in any account opened under the name of an individual.
Appointment and Dismissal of Auditors
Pursuant to the Company Law, the engagement or dismissal of an accounting firm responsible
for the company’s auditing shall be determined by a shareholders’ general meeting or the board of
directors 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 or the board of directors
or the board of supervisors conducts a vote on the dismissal of the accounting firm.
The company should provide true and complete accounting evidence, accounting books,
financial and accounting reports and other accounting information to the engaged accounting firm
without any refusal or withholding or falsification of data.
Pursuant to the PRC Guidelines on AoA, the company engages an accounting firm that
complies with the provisions of the Securities Law to carry out audit of accounting statements,
verification of net assets and other related advisory services for a period of one year, which is
renewable.
Profit Distribution
According to the Company Law, a company shall not distribute profits before losses are
covered and the statutory common reserve fund is provided.
Dissolution and Liquidation
Under the Company Law, a company shall be dissolved for any of the following reasons: (1)
the term of its operation set out in the articles of association has expired or other events of
dissolution specified in the articles of association have occurred; (2) the shareholders have resolved
at a shareholders’ general meeting to dissolve the company; (3) the company shall be dissolved by
reason of its merger or division; (4) the business license of the company is revoked or the company
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-12 –


--- page 340 ---
is ordered to close down or to be dissolved in accordance with the laws; or (5) the company is
dissolved by the people’s court in response to the request of shareholders holding shares that
represent more than 10% of the voting rights of all shareholders of the company, on the grounds that
the operation and management of the company has suffered serious difficulties that cannot be
resolved through other means, rendering ongoing existence of the company a cause for significant
losses to the shareholders’ interests.
In the event of paragraph (1) or (2) above, and the company has not distributed the assets to
its shareholders yet, it may survive by modifying its articles of association or upon a resolution of
the shareholders’ meeting.
Where the company is dissolved under the circumstances set forth in paragraph (1), (2), (4)
or (5) above, it should establish a liquidation committee within 15 days of the date on which the
dissolution matter occurs. The liquidation committee shall be composed of directors or any other
person determined by a shareholders’ general meeting. If a liquidation committee is not established
within the stipulated period, the company’s creditors can apply to the people’s court for setting up
a liquidation committee with designated relevant personnel to conduct the liquidation. The people’s
court should accept such application and form a liquidation committee to conduct liquidation in a
timely manner.
The liquidation committee may exercise following powers during the liquidation: (1) to sort
out the company’s assets and to prepare a balance sheet and an inventory of assets; (2) to notify the
company’s creditors or publish announcements; (3) to deal with any outstanding business related to
the liquidation; (4) to pay any overdue tax together with any tax arising during the liquidation
process; (5) to settle the company’s claims and liabilities; (6) to handle the company’s remaining
assets after its debts have been paid off; and (7) to represent the company in any civil procedures.
The remaining property of the company, after respectively paying the liquidation expenses,
wages of employees, social insurance contributions, and statutory compensation, paying the taxes
owed, and repaying the company’s debts, shall be distributed in proportion to the shares held by the
shareholders. During the liquidation period, the company continues to exist but shall not engage in
any business activities unrelated to the liquidation. The company’s property shall not be distributed
to the shareholders before it is liquidated in accordance with the provisions of the preceding
paragraph.
Where the liquidation group finds that the property of the company is not sufficient for paying
off the debts after liquidating the property of the company and preparing a balance sheet and an
inventory of property, it shall file an application to a people’s court for bankruptcy liquidation. After
the people’s 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 of the company, the liquidation group shall produce a
liquidation report, report the same to the shareholders’ meeting or the people’s court for
confirmation, and submit the same to the company registration authority to apply for deregistration
of the company.
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.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-13 –


--- page 341 ---
THE SECURITIES LA WS AND REGULATIONS
The PRC has promulgated a series of regulations that relate to the issue and trading of the
Shares and disclosure of information. In October 1992, the State Council established the Securities
Committee and 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 CSRC. CSRC is the regulatory arm of the Securities Committee and is
responsible for the drafting of regulatory provisions governing securities markets, supervising
securities companies, regulating public offerings of securities by PRC companies in the PRC or
overseas, regulating the trading of securities, compiling securities- related statistics and
undertaking relevant research and analysis. In April 1998, the State Council consolidated the
Securities Committee and CSRC and reformed CSRC.
The Provisional Regulations Concerning the Issue and Trading of Shares (׸
၍ଣᅲБૢԷ‘) promulgated by the State Council and effective on April 22, 1993, provide the
application and approval procedures for listing 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.
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 December 25, 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 of the People’s Republic of China (‘)
(hereinafter referred to as the “PRC Securities Law”), which was amended by the Standing
Committee of the NPC on December 28, 2019 and came into effect on March 1, 2020, provide 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 PRC Securities Law provides that a domestic enterprise
must comply with the relevant provisions of the State Council in issuing securities directly or
indirectly outside the PRC or listing and trading its securities 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.
OVERSEAS LISTING
On February 17, 2023, the CSRC released several regulations regarding the management of
filings for overseas offerings and listings by domestic companies, including the Trial Measures for
the Administration on Overseas Securities Offering and Listing by Domestic Companies ( ྤʫΆ
‘) (the “Overseas Listing Trial Measures”) together with 5
supporting guidelines (together with the Overseas Listing Trial Measures, collectively referred to
as the “Overseas Listing Regulations”). Under Overseas Listing Regulations, PRC domestic
companies that seek to offer and list securities in overseas markets, either in direct or indirect
means, are required to file the required documents with the CSRC within three working days after
its application for overseas listing is submitted.
On February 24, 2023, the CSRC and three other relevant government authorities jointly
promulgated the Provisions on Strengthening the Confidentiality and Archives Administration of
Overseas Securities Offering and Listing by Domestic Companies (̋੶ྤʫΆุྤ̮೯Бᗇ
‘) (the “Provision on Confidentiality”). Pursuant to the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-14 –


--- page 342 ---
Provision on Confidentiality, where a domestic enterprise provides or publicly discloses any
document or material that involving state secrets and working secrets of state agencies to the
relevant securities companies, securities service institutions, overseas regulatory authorities and
other entities and individuals, it shall report to the competent department with the examination and
approval authority for approval in accordance with the law, and submit to the secrecy administration
department of the same level for filing. The working papers formed within the territory of the PRC
by the securities companies and securities service agencies that provide corresponding services for
the overseas issuance and listing of domestic enterprises shall be kept within the territory of the
PRC, and cross-border transfer shall go through the examination and approval formalities in
accordance with the relevant provisions of the State.
REGULATIONS RELATED TO THE “FULL CIRCULATION” OF H SHARE
On November 14, 2019, CSRC announced the Guidelines for the “Full Circulation” Program
for Domestic Unlisted Shares of H-share Listed Companies ( H΅͡ሗ“ݴ
ஷ”ˏ‘(the “Guidelines for the ‘Full Circulation’”), which were amended in August 10,
2023. According to the Guidelines for the “Full Circulation”, “Full circulation” means listing and
circulating on the Stock Exchange of the domestic unlisted shares of an H-share listed company,
including unlisted domestic shares held by domestic shareholders prior to overseas listing, unlisted
domestic shares additionally issued after overseas listing, and unlisted shares held by foreign
shareholders. Under the premise of complying with relevant laws and regulations, as well as
policies on state-owned asset management, foreign investment, and industry supervision,
shareholders of domestic unlisted shares may independently negotiate to determine the number and
proportion of shares to be circulated and may entrust the H-share company to file with the CSRC.
Domestic joint-stock limited companies that have not yet been listed may also file for “Full
Circulation” with the CSRC when they conduct their initial public offering and listing overseas.
Applications for Full Circulation must be lawful, compliant, fair, and just, fully safeguarding the
shareholders’ rights to be informed and to participate, and fulfilling the necessary internal
decision-making and external approval procedures. After domestic unlisted shares are listed and
circulated on the Hong Kong Stock Exchange, they may not be transferred back to China.
Shareholders of domestic unlisted shares may reduce or increase their holdings of the company’s
shares circulating on the Hong Kong Stock Exchange in accordance with relevant business rules.
The H-share company shall report the relevant situation to the CSRC within 15 days after the
completion of the transfer registration of the shares involved in the application by China Securities
Depository and Clearing Corporation.
According to the Overseas Listing Trial Measures, where a domestic enterprise directly issues
and lists securities overseas, shareholders holding its domestic unlisted shares who apply to convert
their domestic unlisted shares into overseas listed shares for circulation on an overseas trading
venue shall comply with the relevant regulations of the China Securities Regulatory Commission
(CSRC) and shall entrust the domestic enterprise to file with the CSRC. Domestic unlisted shares
refer to shares that have been issued by a domestic enterprise but have not been listed or traded on
a domestic trading venue. Domestic unlisted shares shall be centrally registered and custodied by
domestic securities depository and clearing institutions. The registration and settlement
arrangements for overseas listed shares shall be governed by the regulations of the overseas listing
place.
On December 31, 2019, the China Securities Depository and Clearing Corporation Limited
(the “CSDC”) and Shenzhen Stock Exchange (the “SZSE”) jointly announced the Measures for
Implementation of H-share “Full Circulation” Business ( Hٰ“ஷ”‘) (the
“Measures for Implementation”). The businesses of cross-border conversion registration,
maintenance of deposit and holding details, transaction entrustment and instruction transmission,
settlement, management of settlement participants, services of nominal holders, etc. in relation to
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-15 –


--- page 343 ---
the H-share “full circulation” business, are subject to the Measures for Implementation. Where there
is no provision in the Measures for Implementation, it shall be handled with reference to other
business rules of the CSDC and China Securities Depository and Clearing (Hong Kong) Company
Limited and SZSE.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
The Arbitration Law of the PRC (‘) (the “Arbitration Law”) was
passed by the Standing Committee of the NPC on August 31, 1994, became effective on September
1, 1995 and was amended on August 27, 2009 and September 1, 2017. Under 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 the Arbitration Law
and the Civil Procedure Law. Where the parties have by agreement provided arbitration as the
method for dispute resolution, the people’s court will refuse to handle the case except when the
arbitration agreement is declared invalid.
Under the Arbitration Law and the Civil Procedure 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. A people’s court may refuse to enforce an arbitral award made
by an arbitration commission if there is any irregularity on the procedures or composition of
arbitrators specified by law or the award exceeds the scope of the arbitration agreement or is outside
the jurisdiction of the arbitration commission.
A party seeking to enforce an arbitral award of PRC arbitration panel against a party who, or
whose property, is not within the PRC, may apply to a foreign court with jurisdiction over the case
for enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognized
and enforced by the PRC courts in accordance with the principles of reciprocity or any international
treaty concluded or acceded to by the PRC. The PRC acceded to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (the “New Y ork Convention”) adopted on June 10,
1958 pursuant to a resolution of the Standing Committee of the NPC passed on December 2, 1986.
The New Y ork Convention provides that all arbitral awards made in a state which is a party to the
New Y ork Convention shall be recognized and enforced by all other parties to the New Y ork
Convention, subject to their right to refuse enforcement under certain circumstances, including
where the enforcement of the arbitral award is against the public policy of the state to which the
application for enforcement is made. It was declared by the Standing Committee of the NPC
simultaneously with the accession of the PRC that (i) the PRC will only recognize and enforce
foreign arbitral awards on the principle of reciprocity and (ii) the PRC will only apply the New Y ork
Convention in disputes considered under PRC laws to arise from contractual and non-contractual
mercantile legal relations.
An arrangement was reached between Hong Kong and the Supreme People’s Court for the
mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s Court adopted the
Arrangements of the Supreme People’s Court on the Mutual Enforcement of Arbitral Awards
between the Mainland and the Hong Kong Special Administrative Region (ʫ
τર‘), which became effective on February 1, 2000,
and Supplemental Arrangement of the Supreme People’s Court for the Mutual Enforcement of
Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region ( ௰৷
໾̂τર‘), which promulgated on
December 26, 2020. In accordance with these arrangement, awards made by PRC arbitral authorities
under the Arbitration Law can be enforced in Hong Kong, and Hong Kong arbitration awards are
also enforceable in the PRC.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-16 –


--- page 344 ---
JUDICIAL JUDGMENT AND ITS ENFORCEMENT
On July 14, 2006, the Supreme People’s Court of the PRC and Hong Kong entered into the
Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial
Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region
Pursuant to Choice of Court Agreements between Parties Concerned (݁
τર‘), or the 2006 Arrangement.
Under the 2006 Arrangement, where any designated PRC court or any designated Hong Kong court
has made an enforceable final judgment requiring payment of money in a civil or commercial case
under a choice of court agreement in writing any party concerned may apply to the relevant PRC
court or Hong Kong court for recognition and enforcement of the judgment. On January 18, 2019,
the Supreme People’s Court of the PRC and Hong Kong entered into the Arrangement on Reciprocal
Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the
Mainland and of the Hong Kong Special Administrative Region (ج
τર‘), or the 2019 Arrangement, which 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 the PRC court and Hong Kong court. The 2006
Arrangement was superseded upon the effectiveness of the 2019 Arrangement on January 29, 2024.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-17 –


--- page 345 ---
This appendix contains a summary of the main provisions of the company’s articles of
association adopted by our company on August 18, 2025, and will come into effect upon the listing
of the H-shares on the Hong Kong Stock Exchange. The main purpose of this Appendix is to provide
potential investors with an overview of the Articles of Association of the Company, and therefore
it may not contain all the information that is important for potential investors.
SHARES AND REGISTERED CAPITAL
The company’s shares are in the form of stocks. The stocks issued by the company are
denominated in Renminbi.
The Company shall issue shares under the principles of openness, fairness and impartiality and
shares of the same class shall rank pari passu.
Shares of the same class in the same issue shall be issued at the same price and on same
conditions. The same price shall be paid for each share subscribed for by a subscriber.
Increase of Capital
The Company may, based on its operating and development needs, increase its capital in the
following ways pursuant to the provisions of laws, regulations, and the securities regulatory rules
of the place where the company’s stocks are listed, and subject to the resolutions separately passed
at the general meetings: (1) by public offering of shares. (2) by non-public offering of shares. (3)
by allotting bonus shares to its existing shareholders. (4) by converting common reserve fund into
share capital. (5) by any other means which is stipulated by law and administrative regulations, and
approved by the CSRC, the regulatory authorities of the place where the company’s stocks are
listed, and other relevant regulatory bodies.
Reduction of Capital
The company may reduce its registered capital. When reducing its registered capital, the
company shall follow the procedures stipulated in the Company Law and other relevant provisions,
as well as the procedures specified in the Articles of Association.
When the company needs to reduce its registered capital, it must prepare a balance sheet and
an inventory of assets.
Within 10 days from the date the shareholders’ meeting makes a resolution to reduce the
registered capital, the company shall notify its creditors and announce the reduction in a newspaper
or on the National Enterprise Credit Information Publicity System within 30 days. Creditors who
receive the notification have the right to request the company to settle its debts or provide
corresponding guarantees within 30 days from the date of receipt of the notification. Creditors who
do not receive the notification have the right to make such requests within 45 days from the date
of the announcement.
Repurchase of Shares
Company may not repurchase its own shares other than for the following purposes:
(1) reducing its registered capital; (2) merging with other companies which hold its shares;
(3) granting shares to its employees as incentives or for employee stock ownership plan;
(4) acquiring its shares at the request of its shareholders who vote in a shareholders’ general meeting
against a resolution regarding a merger and division; (5) utilizing the shares for conversion of listed
corporate bonds which are convertible into shares; (6) where it is necessary for the Company to
safeguard the value of the Company and the interests of its shareholders and (7) other circumstances
permitted by laws, administrative regulations, and the regulatory rules of the stock exchange where
the Company’s shares are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-1 –


--- page 346 ---
The company may acquire its own shares through public centralized trading methods, or
through other methods recognized by laws, administrative regulations, the CSRC, and the
regulatory authorities of the place where the company’s stocks are listed.
Where the Company acquires its own shares due to the circumstances stipulated in items (3),
(5), and (6) above, it shall do so through public centralized trading methods.
Where the Company acquires its own shares due to the circumstances stipulated in items (1)
and (2) above, it shall obtain a resolution from the shareholders’ meeting; where the company
acquires its own shares due to the circumstances stipulated in items (3), (5), and (6) above, it may,
in accordance with the provisions of the Articles of Association or the authorization of the
shareholders’ meeting, obtain a resolution from a board of directors meeting attended by more than
two-thirds of the directors.
After the Company acquires its own shares, if it is due to the circumstance in item (1), the
acquired shares shall be cancelled within 10 days from the date of acquisition; if it is due to the
circumstances in items (2) and (4), the shares shall be transferred or cancelled within six months;
if it is due to the circumstances in items (3), (5), and (6), the total number of shares held by the
company shall not exceed 10% of the total number of issued shares of the company, and the shares
shall be transferred or cancelled within three years.
TRANSFER OF SHARES
The Company’s shares may be transferred in accordance with the law.
All transfers of H-shares shall be made by a written instrument of transfer in the usual or
common form or in any other form acceptable to the board of directors (including the standard form
of transfer or transfer form from time to time stipulated by the Hong Kong Stock Exchange); and
such instrument of transfer may only be executed by manual signature or by affixing the Company’s
valid seal (if the transferor or transferee is a company). If the transferor or transferee is a recognized
clearing house or its agent as defined from time to time by the relevant regulations in force under
the laws of Hong Kong, China, the instrument of transfer may be executed either by manual
signature or by mechanical print. All instruments of transfer shall be kept at the Company’s
registered office or at such other place as the board of directors may from time to time designate.
Shares issued by the Company prior to its public offering of shares shall not be transferred
within one year from the date on which the Company’s shares are listed and traded on a stock
exchange.
Directors, supervisors, and senior management personnel of the Company shall report to the
Company the shares of the Company they hold and any changes in such shares. During the term of
office as determined when they assume the posts, the shares transferred each year shall not exceed
25% of the total shares they hold of the Company. The shares they hold in the Company shall not
be transferred within one year from the date on which the Company’s shares are listed and traded.
Within six months after the above-mentioned personnel leave their posts, they shall not transfer the
shares they hold in the Company.
If the securities regulatory rules of the place where the Company’s shares are listed have other
provisions on the transfer restrictions, such provisions shall be followed.
If shares are pledged during the restricted transfer period stipulated by laws and administrative
regulations, the pledgee shall not exercise the pledge right during the restricted transfer period.
If the securities regulatory authority of the place where the Company’s shares are listed has
other provisions on the transfer restrictions of overseas-listed shares, such provisions shall prevail.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-2 –


--- page 347 ---
If a shareholder holding more than 5% of the Company’s shares, or a director or senior
management personnel, sells the Company’s shares or other equity-like securities within six months
after purchase, or buys them back within six months after sale, the profits derived therefrom shall
belong to the Company, and the Company’s board of directors shall recover such profits. However,
this does not apply to a securities firm that holds more than 5% of the shares due to the purchase
of remaining shares after a firm commitment underwriting, and other circumstances as stipulated by
the CSRC and the securities regulatory authority of the place where the Company’s shares are listed.
The shares or other equity-like securities referred to in the preceding paragraph, held by
directors, senior management personnel, and natural person shareholders, include those held by
their spouses, parents, and children, as well as those held through other people’s accounts.
If the board of directors fails to act in accordance with the aforementioned provisions,
shareholders have the right to demand that the board take action within 30 days. If the board does
not act within the specified period, shareholders have the right to bring a lawsuit in the name of the
Company against the relevant parties in the people’s court.
If the board of directors fails to act in accordance with the aforementioned provisions, the
directors who are responsible shall bear joint liability in accordance with the law.
REGISTER OF MEMBERS
The Company shall establish a register of members based on the certificates provided by the
securities depository and clearing institution. The register of members is conclusive evidence of a
member’s shareholding in the Company. The Company may, in accordance with the understandings
or agreements reached between the securities regulatory agency under the State Council and the
overseas securities regulatory authorities, keep the register of foreign members of the overseas-
listed shares outside the PRC and entrust an overseas agent to manage it.
The original register of H-share members shall be kept in Hong Kong. The Company shall
keep a copy of the register of foreign members of the overseas-listed shares at its registered office.
The entrusted overseas agent shall at all times ensure the consistency between the original and the
copy of the register of foreign members of the overseas-listed shares. In the event of any
inconsistency between the original and the copy of the register of foreign members of the
overseas-listed shares, the original shall prevail. The register of members kept in Hong Kong shall
be available for inspection by members. The Company may suspend the registration of members in
accordance with terms equivalent to those of section 632 of the Companies Ordinance (Cap. 622 of
the Laws of Hong Kong).
RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
Members shall enjoy rights and assume obligations according to the types of shares they hold.
Members holding shares of the same category shall enjoy equal rights and assume the same
obligations.
The shareholders of the Company shall enjoy the following rights: (1) to receive dividends
and other forms of profit distribution in proportion to the shares they hold; (2) to request, call, chair,
attend or appoint a proxy to attend the shareholders’ meeting and exercise the corresponding voting
rights in accordance with the law; (3) to supervise the Company’s operations and to make
suggestions or inquiries; (4) to transfer, donate, or pledge the shares they hold in accordance with
laws, administrative regulations, and the Articles of Association; (5) to review and copy the Articles
of Association, register of shareholders, records of shareholders’ meetings, resolutions of the board
of directors, resolutions of the board of supervisors and financial accounting reports. Shareholders
who meet the requirements may review the company’s accounting books and vouchers; (6) to
participate in the distribution of the company’s remaining assets in proportion to the shares they
hold when the Company is terminated or liquidated; (7) shareholders who object to the
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-3 –


--- page 348 ---
shareholders’ meeting resolutions on Company mergers or divisions may request the Company to
repurchase their shares; and (8) other rights as stipulated by laws, administrative regulations,
departmental rules, the securities regulatory rules of the place where the company’s shares are
listed, or the Articles of Association.
If the content to be reviewed and copied involves the Company’s trade secrets, insider
information, and personal privacy of relevant personnel, the Company may refuse to provide it.
The shareholders of the Company shall undertake the following obligations: (1) to comply
with laws, administrative regulations, and the Articles of Association; (2) to pay for the shares
subscribed and the method of contribution; (3) except as otherwise provided by laws and
regulations, not to withdraw their capital contributions; (4) not to abuse their shareholder rights to
harm the interests of the Company or other shareholders; (5) not to abuse the independent legal
status of the Company and the limited liability of shareholders to harm the interests of the
Company’s creditors; and (6) other obligations that shall be undertaken as stipulated by laws,
administrative regulations, the securities regulatory rules of the place where the Company’s shares
are listed, and the Articles of Association.
If a shareholder of the Company abuses his or her shareholder rights and causes losses to the
Company or other shareholders, he or she shall bear compensation liability in accordance with the
law. If a shareholder of the Company abuses the independent legal status of the Company and the
limited liability of shareholders to evade debts and seriously harm the interests of the Company’s
creditors, he or she shall bear joint liability for the Company’s debts.
RESTRICTIONS ON THE RIGHTS OF CONTROLLING SHAREHOLDERS
The controlling shareholders and actual controllers of the Company shall not use their
related-party relationships to harm the interests of the Company. In the event of a violation of the
provisions that causes losses to the Company, they shall bear liability for compensation.
If the controlling shareholders or actual controllers of the Company instruct directors or senior
management personnel to engage in acts that harm the interests of the Company or shareholders,
they shall bear joint liability with such directors or senior management personnel.
The controlling shareholders and actual controllers of the Company owe a duty of good faith
to the Company and the public shareholders of the Company. Controlling shareholders shall strictly
exercise their rights as contributors in accordance with the law. Controlling shareholders shall not
use profit distribution, asset restructuring, external investment, fund occupation, loan guarantees, or
other means to harm the lawful rights and interests of the Company and public shareholders, nor
shall they use their controlling position to harm the interests of the Company and public
shareholders.
SHAREHOLDERS’ MEETING
General Provisions on the Shareholders’ Meeting
The shareholders’ meeting is the Company’s authority and exercises the following powers in
accordance with the law: (1) to elect and replace directors and supervisors, and to determine matters
relating to the remuneration of directors and the board of supervisors; (2) to deliberate and approve
the report of the board of directors and supervisors; (3) to deliberate and approve the Company’s
profit distribution plan and loss compensation plan; (4) to make resolutions on the increase or
decrease of the Company’s registered capital; (5) to make resolutions on the issuance of corporate
bonds; (6) to make resolutions on the Company’s merger, division, dissolution, liquidation, or
change of corporate form; (7) to amend the Articles of Association; (8) to make resolutions on the
engagement or dismissal of the accounting firm undertaking the Company’s audit business; (9) to
deliberate and approve the guarantee matters stipulated in Article 47 of the Articles of Association;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-4 –


--- page 349 ---
(10) to deliberate on matters concerning the purchase or sale of significant assets exceeding 30%
of the Company’s most recently audited total assets within one year; (11) to deliberate and approve
changes in the use of raised funds; (12) to deliberate on equity incentive plans and employee share
ownership plans; and (13) to deliberate on other matters that should be decided by the shareholders’
meeting as stipulated by laws, administrative regulations, departmental rules, the securities
regulatory rules of the place where the Company’s shares are listed, or the Articles of Association.
The shareholders’ meeting may authorize the board of directors to make resolutions on the
issuance of corporate bonds.
The following external guarantee activities of the Company must be reviewed and approved
by the shareholders’ meeting: (1) any guarantee provided after the total amount of external
guarantees of the Company and its controlled subsidiaries exceeds 50% of the Company’s most
recently audited net assets; (2) any guarantee provided after the total amount of external guarantees
of the Company exceeds 30% of the Company’s most recently audited total assets; (3) guarantees
where the amount of guarantees provided by the Company within one year exceeds 30% of the
Company’s most recently audited total assets; (4) guarantees provided for guarantee objects with a
debt-to-asset ratio exceeding 70%; (5) guarantees where the amount of a single guarantee exceeds
10% of the Company’s most recently audited net assets; (6) guarantees provided for shareholders,
actual controllers, and their related parties; and (7) other guarantees that need to be submitted to the
shareholders’ meeting for review as stipulated by laws, regulations, normative documents, the
securities regulatory rules of the place where the Company’s shares are listed, or the Articles of
Association.
The shareholders’ meeting is divided into the annual shareholders’ meeting and the
extraordinary shareholders’ meeting. The annual shareholders’ meeting shall be held once a year
and shall be convened within six months after the end of the previous financial year.
In case of any of the following circumstances, the Company shall convene an extraordinary
shareholders’ meeting within two months from the date of occurrence of the relevant event: (1) the
number of directors is less than the number stipulated by the Company Law or two-thirds of the
number specified in the Articles of Association; (2) the Company’s unrecovered losses reach
one-third of the total share capital; (3) a shareholder or shareholders holding individually or
collectively more than 10% of the company’s shares make a request; (4) the board of directors
deems it necessary; (5) the board of supervisors propose to convene a meeting; and (6) other
circumstances stipulated by laws, administrative regulations, departmental rules, the securities
regulatory rules of the place where the Company’s shares are listed, or the Articles of Association.
Convening of the Shareholders’ Meeting
The board of directors shall convene the shareholders’ meeting within the prescribed time
limit.
With the consent of more than half of all the independent non-executive directors, independent
non-executive directors have the right to propose to the board of directors to convene an
extraordinary shareholders’ meeting. In response to a proposal from independent non-executive
directors to convene an extraordinary shareholders’ meeting, the board of directors shall provide a
written feedback indicating agreement or disagreement to convene the extraordinary shareholders’
meeting within 10 days of receiving the proposal, in accordance with laws, administrative
regulations, the securities regulatory rules of the place where the Company’s shares are listed, and
the Articles of Association.
If the board of directors agrees to convene an extraordinary shareholders’ meeting, it shall
issue a notice of the shareholders’ meeting within 5 days after making the board resolution; if the
board of directors disagrees to convene an extraordinary shareholders’ meeting, it shall state the
reasons and make an announcement.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-5 –


--- page 350 ---
The board of supervisors’ proposal to the board of directors to convene an extraordinary
shareholders’ meeting shall be made in writing. The board of directors shall provide a written
feedback indicating agreement or disagreement to convene the extraordinary shareholders’ meeting
within 10 days of receiving the proposal, in accordance with laws, administrative regulations, the
securities regulatory rules of the place where the Company’s shares are listed, and the Articles of
Association.
If the board of directors agrees to convene an extraordinary shareholders’ meeting, it shall
issue a notice of the shareholders’ meeting within 5 days after making the board resolution. Any
changes to the original proposal in the notice shall be subject to the consent of the board of
supervisors.
If the board of directors disagrees to convene an extraordinary shareholders’ meeting, or fails
to provide feedback within 10 days of receiving the proposal, it shall be deemed that the board of
directors is unable or unwilling to perform its duty to convene the shareholders’ meeting. In such
case, the board of supervisors may convene and chair the meeting on its own.
A shareholder or shareholders holding individually or collectively more than 10% of the
Company’s shares who request the board of directors to convene an extraordinary shareholders’
meeting shall make the request in writing to the board of directors. The board of directors shall
provide a written feedback indicating agreement or disagreement to convene the extraordinary
shareholders’ meeting within 10 days of receiving the request, in accordance with laws,
administrative regulations, the securities regulatory rules of the place where the Company’s shares
are listed, and t the Articles of Association.
If the board of directors agrees to convene an extraordinary shareholders’ meeting, it shall
issue a notice of the shareholders’ meeting within 5 days after making the board resolution. Any
changes to the original request in the notice shall be subject to the consent of the relevant
shareholders.
If the board of directors disagrees to convene an extraordinary shareholders’ meeting, or fails
to provide feedback within 10 days of receiving the request, a shareholder or shareholders holding
individually or collectively more than 10% of the Company’s shares may propose to the board of
supervisors to convene an extraordinary shareholders’ meeting in writing.
If the board of supervisors agrees to convene an extraordinary shareholders’ meeting, it shall
issue a notice of the shareholders’ meeting within 5 days of receiving the request. Any changes to
the original request in the notice shall be subject to the consent of the relevant shareholders.
If the board of supervisors fails to issue a notice of the shareholders’ meeting within the
prescribed time limit, it shall be deemed that the board of supervisors is not convening and chairing
the shareholders’ meeting. In such case, a shareholder or shareholders holding individually or
collectively more than 10% of the company’s shares for more than 90 consecutive days may
convene and chair the meeting on their own.
If the board of supervisors or a shareholder decides to convene the shareholders’ meeting on
its own, it shall notify the board of directors in writing. The proportion of shares held by the
convening shareholder shall not be less than 10% before the announcement of the resolution of the
shareholders’ meeting.
Proposals for the Shareholders’ Meeting
When the Company convenes a shareholders’ meeting, the board of directors, the board of
supervisors, and a shareholder or shareholders holding individually or collectively more than 1% of
the Company’s shares have the right to submit proposals to the Company. A shareholder or
shareholders holding individually or collectively more than 1% of the Company’s shares may
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-6 –


--- page 351 ---
submit a temporary proposal in writing to the convener 10 days before the shareholders’ meeting.
The convener shall issue a supplementary notice of the shareholders’ meeting within 2 days after
receiving the proposal, announce the content of the temporary proposal, and submit the temporary
proposal to the shareholders’ meeting for deliberation, provided that the temporary proposal does
not violate the provisions of laws, administrative regulations, or the Articles of Association, or fall
outside the scope of the powers of the shareholders’ meeting.
Except as provided in the preceding paragraph, after the convener has issued the notice of the
shareholders’ meeting, it shall not amend the proposals already listed in the notice of the
shareholders’ meeting or add new proposals. The shareholders’ meeting shall not vote on or make
resolutions regarding proposals that are not listed in the notice of the shareholders’ meeting or do
not comply with the Articles of Association.
Notice of the Shareholders’ Meeting
The convener shall notify each shareholder of the annual shareholders’ meeting by
announcement at least 21 days before the meeting and of the extraordinary shareholders’ meeting
by announcement at least 15 days before the meeting. The above-mentioned periods shall not
include the day of the meeting. If there are other provisions in laws, regulations, and by the
securities regulatory authorities of the place where the Company’s shares are listed, those
provisions shall prevail.
Convening of the Shareholders’ Meeting
All shareholders or their proxies registered on the record date are entitled to attend the
shareholders’ meeting and exercise their voting rights in accordance with relevant laws, regulations,
the securities regulatory rules of the place where the Company’s shares are listed, and the Articles
of Association (unless they have waived their voting rights for specific matters, such as if the
shareholder has a significant interest in the transaction or arrangement under consideration).
Shareholders may attend the shareholders’ meeting in person or by proxy. Each shareholder
is entitled to appoint one proxy, who does not have to be a shareholder of the Company. If a
shareholder is a recognized clearing house (or its agent) as defined from time to time by the relevant
ordinances of Hong Kong, the shareholder may authorize its corporate representative or one or more
persons it deems appropriate to act as its proxy at any shareholders’ meeting.
A natural person shareholder attending the meeting in person must present their identity card
or other valid identification or proof; a proxy attending on behalf of a shareholder must present their
valid identity card and a power of attorney from the shareholder.
A corporate shareholder must be represented by its legal representative or a proxy authorized
by the legal representative. The legal representative attending the meeting must present their
identity card and valid proof of their status as a legal representative; a proxy attending the meeting
must present their identity card and a written power of attorney or representative appointment form
issued by the legal representative of the corporate shareholder. If a corporate shareholder has
appointed a representative to attend any meeting, it is considered as attending in person, except if
the shareholder is a recognized clearing house (or its agent) as defined from time to time by the
relevant ordinances of Hong Kong.
If a shareholder is a recognized clearing house (or its agent) as defined from time to time by
the relevant ordinances of Hong Kong, the shareholder may authorize its corporate representative
or one or more persons it deems appropriate to act as its representative at any shareholders’ meeting;
however, if more than one person is authorized, the power of attorney or letter of authorization must
specify the number and type of shares involved for each such person, and the authorization must
be signed by an authorized person of the recognized clearing house. A person so authorized may
represent the recognized clearing house (or its agent) at the meeting (without the need to present
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-7 –


--- page 352 ---
share certificates, notarized authorizations, and/or further evidence of formal authorization) and
exercise the same statutory rights as other shareholders, including the right to speak and vote, as
if the person were an individual shareholder of the Company.
Resolutions of the Shareholders’ Meeting
Resolutions of the shareholders’ meeting are divided into ordinary resolutions and special
resolutions.
An ordinary resolution of the shareholders’ meeting shall be passed by a majority of the voting
rights held by the shareholders present at the meeting. A special resolution of the shareholders’
meeting shall be passed by not less than two-thirds of the voting rights held by the shareholders
present at the meeting.
The following matters shall be passed by an ordinary resolution of the shareholders’ meeting:
(1) the work report of the board of directors and the board of supervisors; (2) the profit distribution
plan and loss compensation plan proposed by the board of directors; (3) the appointment and
removal of members of the board of directors and the board of supervisors together with their
remuneration and payment methods; (4) the engagement and dismissal of the accounting firm
providing regular audit services for the Company, and the determination of its remuneration; (5) the
Company’s annual report and (6) other matters not required to be passed by a special resolution
under laws, administrative regulations, the securities regulatory rules of the place where the
Company’s shares are listed, or the Articles of Association.
The following matters shall be passed by a special resolution of the shareholders’ meeting: (1)
the increase or decrease of the company’s registered capital; (2) the division, spin-off, merger,
dissolution, and liquidation of the Company; (3) the amendment of the Articles of Association and
its appendices; (4) the purchase or sale of significant assets by the Company within one year, or the
provision of guarantees to others, exceeding 30% of the Company’s most recently audited total
assets; (5) equity incentive plans and employee stock ownership plans; and (6) other matters
stipulated by laws, administrative regulations, the securities regulatory rules of the place where the
Company’s shares are listed, or the Articles of Association, and other matters that the shareholders’
meeting deems by ordinary resolution to have a significant impact on the Company and require
passage by a special resolution.
DIRECTORS AND THE BOARD OF DIRECTORS
Directors
Directors shall be elected or replaced by the shareholders’ meeting and may be removed from
office by the shareholders’ meeting before the expiration of their term of office.
The term of office of a director shall be three years. A director may be re-elected for
consecutive terms upon the expiration of his or her term. The term of office of a director shall be
calculated from the date of his or her assumption of office and shall end upon the expiration of the
term of office of the current board of directors. If a director’s term of office expires and a
replacement director has not been elected in a timely manner, the outgoing director shall continue
to perform the duties of a director in accordance with laws, administrative regulations, departmental
rules, the securities regulatory rules of the place where the Company’s shares are listed, and the
Articles of Association until the newly elected director assumes office.
A director may concurrently hold the position of senior management personnel.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-8 –


--- page 353 ---
The Board of Directors
The Company shall establish a board of directors, which shall consist of eleven directors,
including at least three independent non-executive directors, who shall not be less than one-third of
the total number of directors of the company. At least one of the independent non-executive
directors must possess the appropriate accounting or related financial management expertise, or
appropriate professional qualifications, as stipulated by the securities exchange where the
Company’s shares are listed. With respect to the system of independent non-executive directors,
matters not provided for in the Articles of Association shall be handled in accordance with the
relevant provisions of applicable laws, administrative regulations, and the securities regulatory
rules of the place where the Company’s shares are listed.
The board of directors shall exercise the following powers: (1) to convene the shareholders’
meeting and report to the shareholders’ meeting; (2) to implement the resolutions of the
shareholders’ meeting; (3) to determine the Company’s business plans and investment programs; (4)
to formulate the Company’s profit distribution plan and loss compensation plan; (5) to formulate
plans for the Company’s increase or decrease of registered capital, issuance of bonds or other
securities, and listing or voluntary delisting; (6) to draft plans for significant acquisitions by the
Company, the Company’s acquisition of its own shares, and the Company’s merger, division,
dissolution, or change of corporate form; (7) within the scope of authorization by the shareholders’
meeting, to decide on matters such as the Company’s external investments, acquisition and sale of
assets, asset mortgage, external guarantees, entrusted financial management, related-party
transactions, and external donations; (8) to determine the establishment of the Company’s internal
management institutions; (9) to decide on the appointment or dismissal of the Company’s general
manager, board secretary, and other senior management personnel, and to determine their
remuneration and matters of rewards and punishments; to decide on the appointment or dismissal
of the Company’s deputy general managers, chief financial officer, and other senior management
personnel based on the nomination of the general manager, and to determine their remuneration and
matters of rewards and punishments; (10) to formulate the Company’s basic management systems;
(11) to draft plans for the amendment of these articles of association; (12) to manage the Company’s
information disclosure matters; (13) to submit proposals to the shareholders’ meeting for the
engagement or replacement of the accounting firm that audits the Company; (14) to hear work
reports from the Company’s general manager and to inspect the work of the general manager; (15)
to deliberate and approve transactions (including but not limited to disclosable transactions and
connected transactions) that are required to be decided by the board of directors in accordance with
the securities regulatory rules of the place where the Company’s shares are listed; and (16) other
powers granted by laws, administrative regulations, departmental rules, the securities regulatory
rules of the place where the Company’s shares are listed, or the Articles of Association.
Matters exceeding the scope of authorization by the shareholders’ meeting shall be submitted
to the shareholders’ meeting for deliberation.
No meeting of the board of directors may be held unless more than half of the directors are
present. Except as otherwise provided in the Articles of Association, when the board of directors
makes a resolution, it shall require the affirmative votes of more than half of all the directors.
For the voting on a resolution of the board of directors, each director shall have one vote.
CHAIRMAN OF THE BOARD
The Chairman of the Board shall exercise the following powers: (1) to preside over the
shareholders’ meeting and to convene and chair meetings of the board of directors; (2) to urge and
inspect the implementation of the resolutions of the board of directors; (3) to sign securities issued
by the Company, important documents of the board of directors, and other documents that should
be signed by the Chairman of the Board; (4) to propose candidates for the position of General
Manager for discussion and voting at board meetings; (5) in the event of extraordinary natural
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-9 –


--- page 354 ---
disasters or other force majeure emergencies, to exercise special disposal rights over the Company’s
affairs in accordance with the law and in the best interests of the Company, and to report to the
board of directors and the shareholders’ meeting afterwards; and (6) other powers granted by the
board of directors.
GENERAL MANAGER
The General Manager is accountable to the board of directors and shall exercise the following
powers: (1) to be in charge of the Company’s production and business management, implement the
resolutions of the board of directors, and report work to the board of directors; (2) to implement the
Company’s annual business plan and investment program; (3) to draft plans for the establishment
of the Company’s internal management institutions; (4) to draft the Company’s basic management
systems; (5) to formulate the Company’s specific regulations; (6) to propose to the board of
directors the appointment or dismissal of the Company’s deputy general managers, chief financial
officer, and other senior management personnel; (7) to decide on the appointment or dismissal of
managers other than those who should be appointed or dismissed by the board of directors; and (8)
other powers granted by the Articles of Association or the board of directors.
The General Manager shall attend the board of directors meetings.
SECRETARY OF THE BOARD OF DIRECTORS
The Company shall appoint a secretary of the board of directors, who shall be responsible for
the preparation of the shareholders’ meeting and board of directors meetings, the custody of
documents, and the management of the Company’s shareholders’ information, as well as handling
matters related to information disclosure.
The secretary of the board of directors shall comply with the relevant provisions of laws,
administrative regulations, departmental rules, and the Articles of Association.
THE BOARD OF SUPERVISORS
The Board of Supervisors consists of three Supervisors, including one employee
representative Supervisor and one chairman. The chairman of the Board of Supervisors shall be
elected by two third of all Supervisors.
The Board of Supervisors shall be composed of Shareholder representatives and an
appropriate proportion of company employee representatives. The number of employee
representatives shall be no less than one third of all Supervisors. Employee representatives on the
Board of Supervisors shall be democratically elected by employees through the employee
representative congress, the employee congress, or any other means.
The Board of Supervisors shall exercise the following functions and powers:
i. to review and give written opinions on the periodic reports of the Company prepared by
the Board of Directors;
ii. to examine the Company’s financial matters;
iii. to supervise the performance by the directors and senior management of their duties to
the Company and propose the dismissal of the directors and senior management who
violates laws, administrative regulations, the Articles of Association or the resolutions
of the general meeting;
iv. to demand rectification from the directors and senior management when the acts of such
persons are harmful to the Company’s interests;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-10 –


--- page 355 ---
v. to propose the convening of extraordinary general meetings; to convene and preside the
general meetings in the event that the Board of Directors fails to perform its duties to
convene and preside the general meetings in accordance with the Company Law;
vi. to submit proposals to the general meetings;
vii. to file lawsuits against directors and senior management on behalf of the Company in
accordance with the Company Law; and
viii. in case of any queries or any abnormal matters during the business operation of the
Company, to investigate, and if necessary, to engage professionals such as accounting
firms or law firms to assist its work with expenses being borne by the Company.
The Supervisors may attend the meetings of the Board of Directors, query or provide
suggestions on the resolution matters of the Board meeting.
BORROWING POWERS
the Articles of Association do not contain any specific provisions regarding the manner in
which directors exercise borrowing powers or the manner in which such powers are granted.
However, the board of directors has the authority to formulate proposals for the issuance of
corporate bonds and the listing of shares, which must be approved by the shareholders by a special
resolution at the shareholders’ general meeting.
FINANCIAL ACCOUNTING SYSTEM
The Company shall formulate its financial accounting system in accordance with laws,
administrative regulations, and the provisions of relevant state departments.
The Company’s financial year shall be the calendar year, that is, from January 1 to December
31 of the Gregorian calendar. The Company shall prepare the annual financial accounting report
within four months from the end of each financial year and prepare the interim results or financial
data within two months from the end of the first half of each financial year, which shall be subject
to review and verification in accordance with the law.
If there are other provisions in laws, administrative regulations, departmental rules, normative
documents, the securities regulatory authorities of the place where the Company’s shares are listed,
and the Hong Kong Listing Rules regarding the preparation and publication of the aforementioned
financial accounting reports, results, or financial information, such provisions shall prevail.
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The company shall be dissolved for any of the following reasons: (1) the expiration of the
business term stipulated in the Articles of Association or the occurrence of other dissolution events
specified in the Articles of Association; (2) a resolution of the shareholders’ meeting to dissolve the
Company; (3) the need for dissolution due to the Company’s merger or division; (4) the Company
is legally revoked of its business license, ordered to close, or revoked; and (5) the Company
encounters severe difficulties in its management and operation, and its continued existence would
cause significant losses to the shareholders’ interests. If such issues cannot be resolved through
other means, a shareholder holding more than 10% of the voting rights in the Company may request
the people’s court to dissolve the Company.
If the Company encounters any of the dissolution events specified in the preceding paragraph,
it shall display the reasons for dissolution through the National Enterprise Credit Information
Publicity System within 10 days.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-11 –


--- page 356 ---
If the Company is dissolved due to the reasons specified in items (1), (2), (4), and (5) above,
liquidation shall be carried out. The directors are the obligors for the Company’s liquidation and
shall form a liquidation group to commence liquidation within 15 days from the occurrence of the
dissolution event. The liquidation group shall be composed of directors, unless otherwise stipulated
in these articles of association or another person is elected by the shareholders’ meeting. If the
obligor for liquidation fails to perform the liquidation obligation in a timely manner and causes
losses to the company or creditors, they shall bear liability for compensation.
The liquidation group shall notify the creditors within 10 days from the date of its
establishment and announce it in a newspaper or through the National Enterprise Credit Information
Publicity System within 60 days, as well as in the manner required by the securities exchange where
the Company’s shares are listed. Creditors shall declare their claims to the liquidation group within
30 days from the date of receiving the notification, or within 45 days from the date of the
announcement if they have not received the notification.
After sorting out the Company’s property, preparing the balance sheet, and inventory of assets,
if the liquidation group finds that the Company’s property is insufficient to repay the debts, it shall
apply to the people’s court for bankruptcy liquidation in accordance with the law.
After the people’s court accepts the bankruptcy application, the liquidation group shall
transfer the liquidation affairs to the bankruptcy administrator designated by the people’s court.
Upon the completion of the company’s liquidation, the liquidation group shall prepare a liquidation
report, submit it to the shareholders’ meeting or the people’s court for confirmation, and file it with
the company registration authority to apply for the cancellation of the Company registration.
AMENDMENT OF THE ARTICLES OF ASSOCIATION
The Company shall amend its articles of association in any of the following circumstances:
(1) after amendments to the Company Law or relevant laws, administrative regulations, and the
securities regulatory rules of the place where the Company’s shares are listed, the provisions of the
Articles of Association conflict with the amended laws and administrative regulations; (2) changes
in the Company’s situation are inconsistent with the matters recorded in the Articles of Association;
(3) the shareholders’ meeting decides to amend the Articles of Association.
Matters of amendment to the Articles of Association passed by the shareholders’ meeting that
require approval by the competent authority shall be submitted for approval; those involving
changes to the Company registration shall be handled in accordance with the law for change
registration.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-12 –


--- page 357 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation
Our Company was established as a limited liability company, Beijing Tianxing Bomaidi
Medical Co., Ltd. (ʮ̡), in the PRC on July 31, 2017. On March 8,
2023, our Company was converted into a joint stock limited company under the laws of the PRC
and renamed as Star Sports Medicine Co., Ltd. (ʮ̡). As of the Latest
Practicable Date, the registered capital of the Company was RMB46,409,494.
Our principal place of business in Hong Kong is at 40/F, Dah Sing Financial Centre, No. 248
Queen’s Road East, Wanchai, Hong Kong. Our Company was registered as a non-Hong Kong
company under Part 16 of the Companies Ordinance on September 29, 2025. Mr. Dong Wenxing and
Mr. He Lu have been appointed as the Authorized Representative of our Company for the
acceptance of service of process in Hong Kong. The address for service of process is 40/F, Dah Sing
Financial Centre, No. 248 Queen’s Road East, Wanchai, Hong Kong.
As our Company was incorporated in the PRC, its operations are subject to the relevant laws
and regulations of the PRC. A summary of the relevant aspects of laws and regulations of the PRC
and the Articles of Association is set out in “Regulatory Overview” in this prospectus and Appendix
V to this prospectus, respectively.
2. Changes in Share Capital
On July 31, 2017, our Company was established as a limited liability company under the laws
of the PRC, with an initial registered capital of RMB63,636,300.
There has been no change in the share capital of our Company within two years immediately
preceding the date of this prospectus.
3. Changes in Share Capital of our Subsidiaries
The following subsidiaries have been incorporated within two years immediately preceding
the date of this prospectus:
On February 7, 2024, Star (HK) Medicine Co., Limited (ʮ̡)( “ Star
(HK) ”) was established in Hong Kong as our wholly-owned subsidiary with the registered capital
of HK$10,000.
Save as disclosed above, there have been no changes in the share capital of our subsidiaries
during the two years immediately preceding the date of this Prospectus. For details of our
subsidiaries, please see “History, Development and Corporate Structure — Our Subsidiaries”.
4. Resolutions of our Shareholders
On August 18, 2025, the following resolutions of our Company were passed by the
Shareholders that, among other things, conditional upon the satisfaction (or, if applicable, waiver)
of the conditions set out in “Structure of the Global Offering — Conditions of the Global Offering”
and pursuant to the terms set out therein:
(a) the issue by the Company of H Shares with a nominal value of RMB1.0 each and such
H Shares be listed on the Hong Kong Stock Exchange;
(b) the number of H Shares to be issued shall be no more than 25% of the total issued share
capital of our Company as enlarged by the Global Offering;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 358 ---
(c) authorization of the Board or its authorized individual to handle all matters relating to,
among other things, the Global Offering, the issue and the listing of H Shares on the
Hong Kong Stock Exchange; and
(d) subject to the completion of the Global Offering, the conditional adoption of the revised
Articles of Association, which shall become effective on the Listing Date.
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) a cornerstone investment agreement dated April 22, 2026 entered into among our
Company, JSC International Investment Fund SPC (for and on behalf of Shenghai SP)
(JSC International Investment Fund SPC (ڌShenghai SP)), CITIC Securities (Hong
Kong) Limited (ᗇՎ(ಥ)ʮ̡), CCB International Capital Limited (ვ਷
ʮ̡) and CLSA Limited (ʮ̡), with respect to a
subscription of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US dollar 25,000,000 (including brokerage fee, the SFC transaction
levy, Stock Exchange trading fee and AFRC transaction levy in respect of such number
of H Shares to be subscribed by it);
(b) a cornerstone investment agreement dated April 22, 2026 entered into among our
Company, OAP IV (HK) Limited, CITIC Securities (Hong Kong) Limited, CCB
International Capital Limited and CLSA Limited, with respect to a subscription of H
Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
of US dollar 5,000,000 (excluding brokerage fee, the SFC transaction levy, Stock
Exchange trading fee and AFRC transaction levy in respect of such number of H Shares
to be subscribed by it);
(c) a cornerstone investment agreement dated April 22, 2026 entered into among our
Company, Greater Bay Area Development Fund Management Limited for and on behalf
of the Managed Account of Mega Prime Development Limited, CITIC Securities (Hong
Kong) Limited, CLSA Limited and CCB International Capital Limited, with respect to
a subscription of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US dollar 4,000,000 (excluding brokerage fee, the SFC transaction
levy, Stock Exchange trading fee and AFRC transaction levy in respect of such number
of H Shares to be subscribed by it);
(d) a cornerstone investment agreement dated April 22, 2026 entered into among our
Company, Poly Platinum Enterprises Limited, CITIC Securities (Hong Kong) Limited,
CLSA Limited and CCB International Capital Limited, with respect to a subscription of
H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
of US dollar 3,000,000 (excluding brokerage fee, the SFC transaction levy, Stock
Exchange trading fee and AFRC transaction levy in respect of such number of H Shares
to be subscribed by it); and
(e) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 359 ---
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks, which we
consider to be material to our business:
No. Trademark
Place of
Registration Registered Owner Class
Registration
Number
Expiry Date
(yyyy.mm.dd)
1. /H1118/H1118/H1118
 PRC Our Company 10 42180810 2030.07.20
2. /H1118/H1118/H1118
 PRC Our Company 10 42175284 2030.07.20
3. /H1118/H1118/H1118
 PRC Our Company 10 42162473 2030.10.27
4. /H1118/H1118/H1118
 PRC Our Company 10 53148791 2031.08.20
5. /H1118/H1118/H1118
 PRC Our Company 10 54736465 2031.11.06
6. /H1118/H1118/H1118
 PRC Our Company 10 55025944 2031.11.13
7. /H1118/H1118/H1118
 PRC Our Company 10 59293632 2032.03.27
8. /H1118/H1118/H1118
 PRC Our Company 10 62860519 2032.08.20
9. /H1118/H1118/H1118
 PRC Our Company 10 55051596 2032.09.27
10. /H1118/H1118
 PRC Our Company 10 67564718 2033.04.20
11. /H1118/H1118
 PRC Our Company 10 67532996 2033.04.20
12. /H1118/H1118
 PRC Our Company 10 69105162 2033.07.20
13. /H1118/H1118
 PRC Our Company 10 69110321 2033.09.13
14. /H1118/H1118
 PRC Our Company 10 72981500 2034.01.27
15. /H1118/H1118
 PRC Our Company 10 69110767 2034.02.13
16. /H1118/H1118
 PRC Our Company 10 76255765 2034.07.13
17. /H1118/H1118
 PRC Our Company 10 75668237 2034.06.20
18. /H1118/H1118
 PRC Our Company 10 75090367 2034.05.06
19. /H1118/H1118
 PRC Our Company 10 74780369 2034.04.06
20. /H1118/H1118
 PRC Our Company 10 74228394 2034.03.20
21. /H1118/H1118
 PRC Our Company 10 74224711 2034.03.13
22. /H1118/H1118/H1118
 Hong
Kong
Our Company 10 306958450 2035.07.09
23. /H1118/H1118/H1118
 Hong
Kong
Our Company 10 306958423 2035.07.09
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 360 ---
Copyrights
As at the Latest Practicable Date, we had registered the following software copyrights,
which we consider to be material to our business:
No. Copyright
Place of
Application Copyright Owner Registration Number
Registration Date
(yyyy.mm.dd)
1. /H1118/H1118/H1118Radiofrequency
Ablation System
Software (RF System
V1.0) (᎖ऊፄӻ୕
ழ΁)
PRC Our Company 2020SR1752483 2020.12.07
2. /H1118/H1118/H1118Endoscopic Surgical
Shaver Control
System (SV100 v1.0)
(ኜછ
Փӻ୕[ᔊ၈:SV100]
V1.0)
PRC Our Company 2020SR1753500 2020.12.07
3. /H1118/H1118/H1118High-Definition Camera
System Control
Software V1.0 ( ৷૶
ᙲ྅ӻ୕છՓழ΁
V1.0)
PRC Our Company 2023SR0835793 2023.07.17
4. /H1118/H1118/H1118Intelligent
Rehabilitation Mirror
APP Software V1.0
(౽ঐੰూᗝAPP
ழ΁[ᔊ၈:౽ঐੰూ
ᗝ]V1.0)
PRC Our Company 2023SR1416226 2023.11.10
5. /H1118/H1118/H1118Anterior Cruciate
Ligament
Reconstruction
Surgery Navigation
Positioning System
Software V1.0 (݋
˓ஔ
Зӻ୕ழ΁[ᔊ
၈:ACL]V1.0)
PRC Our Company 2023SR1423329 2023.11.14
6. /H1118/H1118/H1118Rehabilitation host
application software
V1.0.0.0 ( ੰూ˴ዚᏐ
͜ழ΁V1.0.0.0)
PRC Our Company 2025SR1297780 2025.07.18
7. /H1118/H1118/H1118Rehabilitation
Management System
Software V1.0.0.0
(ੰూ၍ଣӻ୕ழ΁
V1.0.0.0)
PRC Our Company 2025SR1350781 2025.07.18
8. /H1118/H1118/H11184K Endoscopic Camera
Button Processing
Software (4K ʫጕᗝ
ᒟஈଣழ΁
V1.0)
PRC Our Company 2023SR0279788 2023.02.24
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 361 ---
As at the Latest Practicable Date, we had registered the following artistic work copyright
which we consider to be material to our business:
No. Copyright
Place of
Application Registered Owner Registration Number
Registration Date
(yyyy.mm.dd)
1. /H1118/H1118/H1118STAR PRC Our Company ਷Ъ೮ο-2023-F-
00121886
2023.06.20
Note:
(1) As of the Latest Practicable Date, the disclosed software copyright and artistic work copyright have not been
officially published, and therefore, the expiration dates are not applicable.
Patents
As of the Latest Practicable Date, we had registered the ownership of and/or had the
right to use the following patents which were developed by us and we consider to be or may
be material to our business:
No. Patent Name Patentee Place of Registration Patent Number
Authorization
Date
(yyyy.mm.dd)
Expiration
Date
(yyyy.mm.dd)
1. /H1118/H1118/H1118ACL Reconstruction Fixation
Device (ࡌ
ༀໄ)
Our Company PRC ZL202210701645.2 2022.08.30 2042.06.21
2. /H1118/H1118/H1118Rapid Tissue Suturing
Implant and Preparation
Method ( ɓ၇Ҟ஺ଡ଼ᔌᐻΥ
ج)
Our Company PRC ZL202210631855.9 2022.09.27 2042.06.07
3. /H1118/H1118/H1118Plasma Medical Device
Control Circuit and
Equipment (͛ϓഃᕎ
ᔼ͜ண௪છՓཥ༩ʿഃ
ᕎɿᔼ͜ண௪)
Our Company PRC ZL202010399331.2 2021.04.27 2040.05.12
4. /H1118/H1118/H1118Bioabsorbable Interface
Screw and Preparation
Method (ᑮ
ج)
Our Company PRC ZL201910591168.7 2021.10.22 2039.07.02
5. /H1118/H1118/H1118Shoulder Acromioclavicular
Joint Repair Device ( ɓ၇
ూༀໄ)
Our Company PRC ZL202110779644.5 2022.04.22 2041.07.09
6. /H1118/H1118/H1118Biodegradable Joint Balloon
Composition and
Preparation Method ( ɓ၇
ଡ଼Υ
༆ᗫ
ج)
Our Company PRC ZL202211123650.6 2023.01.06 2042.09.15
7. /H1118/H1118/H1118All-Suture Anchor and
Implantation Device ( ɓ၇
Όᐻᇞᒞ৥ʿಔɝண௪)
Our Company PRC ZL202210034576.4 2022.12.30 2042.01.13
8. /H1118/H1118/H1118PWM Signal Output Circuit
and Method (፩̈
PWMج)
Our Company PRC ZL202211502908.3 2023.03.24 2042.11.29
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 362 ---
No. Patent Name Patentee Place of Registration Patent Number
Authorization
Date
(yyyy.mm.dd)
Expiration
Date
(yyyy.mm.dd)
9. /H1118/H1118/H1118Plasma Surgical Electrode
(ഃᕎɿ᜗˓ஔཥ฽)
Our Company PRC ZL202310572901.7 2023.12.26 2043.05.22
10. /H1118/H1118Meniscal Suture Device
(ᐻΥኜ)
Our Company PRC ZL202410955089.0 2024.09.24 2044.07.17
11. /H1118/H1118Universal Adapter and
Shaver Device ( ɓ၇ຬ͜
ᔷ౬ટ᎘ʿнɠༀໄ)
Our Company PRC ZL201811526863.7 2024.09.03 2038.12.13
12. /H1118/H1118Meniscal Suture Device
(ᐻΥኜ)
Our Company PRC ZL201811443430.5 2024.08.20 2038.11.29
13. /H1118/H1118Orthopedic Surgical
Navigation and
Registration System and
Robot (˓ஔኬঘ
ʿӻ୕e˓ஔ
ዚኜɛ)
Our Company PRC ZL202410725135.8 2024.08.09 2044.06.06
14. /H1118/H1118Adjustable Flexible Loop
Plate Fixation Device
(ո
ༀໄ)
Our Company PRC ZL202410355015.3 2024.06.25 2044.03.27
15. /H1118/H1118Joint Ligament All-Suture
Repair Assembly ( ɓ၇ᗫ
ూଡ଼΁)
Our Company PRC ZL202410371523.0 2024.06.25 2044.03.29
16. /H1118/H1118Arthroscopic Shaver
(ኜ)
Our Company PRC ZL202010337577.7 2024.05.17 2040.04.24
17. /H1118/H1118All-Suture Anchor and
Tensioning Kit ( ɓ၇Όᐻ
ࢁۨ
ༀ)
Our Company PRC ZL202110108680.9 2024.05.03 2041.01.27
18. /H1118/H1118Bone Tunnel Position
Planning Method and
System ( ɓ၇৶༸Зໄ஝ྌ
ၑዚண௪)
Our Company PRC ZL202410649360.8 2024.10.22 2044.05.24
19. /H1118/H1118Bioactive Scaffold for
Ligament Repair with PRP
and BMSCs (ూ
༱PRPձ
BMSCsʿՉϓ
ج)
Our Company PRC ZL202411364343.6 2025.01.24 2044.09.29
20. /H1118/H1118All-Suture External Anchor
and Manufacturing Method
(ႡЪ˙
ʿΌᐻᇞ̮રᒞ৥)
Our Company PRC ZL202411388016.4 2025.02.07 2044.10.08
21. /H1118/H1118Rehabilitation Training
Evaluation Method,
Device, and System ( ɓ၇
eༀ
ໄeཥɿண௪ʿπᎷʧሯ)
Our Company PRC ZL202411804945.9 2025.03.04 2044.12.10
22. /H1118/H1118Suture Anchor Storage
Module and Modular
Implantation System ( ੭ᇞ
ᒞ৥Ꮇπᅼ෯ʿʱᕎόᅼ෯
ʷ੭ᇞᒞ৥ಔɝӻ୕)
Our Company PRC ZL202510000617.1 2025.04.04 2045.01.02
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 363 ---
No. Patent Name Patentee Place of Registration Patent Number
Authorization
Date
(yyyy.mm.dd)
Expiration
Date
(yyyy.mm.dd)
23. /H1118/H1118Modular Suture Anchor
Implantation System ( ʱᕎ
όᅼ෯ʷ੭ᇞᒞ৥ಔɝӻ
୕)
Our Company PRC ZL202411774707.8 2025.05.30 2044.12.05
24. /H1118/H1118Sports Rehabilitation
Management System and
Device ( ༶ਗੰూ၍ଣӻ
eπᎷʧሯձཥɿ
ண௪)
Our Company PRC ZL202411479465.X 2025.06.27 2044.10.23
25 /H1118/H1118/H1118Posture recognition methods,
devices, systems,
equipment, media,
products, and rehabilitation
mirrors (eༀ
ໄeӻ୕eண௪eʧሯeପ
ձੰూᗝ)
Our Company PRC ZL202411324478.X 2025.08.01 2044.09.23
26 /H1118/H1118/H1118All Suture Anchor and
Anchor Pulling-and-
Forming Kit ( Όᐻᇞᒞ৥
ༀ)
Our Company EU (effective in
France, Italy,
Spain, Germany,
the United
Kingdom,
Poland, and
Portugal)
4056125 2021.12.27 2041.12.27
Domain Name
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 Registered Owner Registration Number
Expiry Date
(yyyy.mm.dd)
1. /H1118/H1118starsportmed.com Our Company ԯICP௪19051455 ໮-1 2028.07.31
2. /H1118/H1118aistarmed.com Our Company ԯICP௪19051455 ໮-2 2028.04.26
Save as the above, as of the Latest Practicable Date, there were no other intellectual
property rights which were material to our business.
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Particulars of Directors’ service contracts and appointment letters
(a) Executive Directors
Each of our executive Directors has entered into a service contract with us pursuant to which
they agreed to act as executive Directors for an initial term of three years with effect from the date
of their appointments.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 364 ---
(b) Non-executive Director and Independent Non-executive Directors
Each of the non-executive Director and Independent Non-executive Directors has entered into
an appointment letter with our Company. The initial term for their appointment letters shall be three
years from the date of their appointments or until the third annual general meeting of the Company
since the Listing Date, whichever ends earlier (subject always to re-election as and when required
under the Memorandum and Articles of Association), until terminated in accordance with the terms
and conditions of the appointment letter or by either party giving to the other not less than three
months’ prior notice in writing.
Details of our Company’s remuneration policy is described in section headed “Directors,
Supervisors and Senior Management — Remuneration of Directors, Supervisors and Senior
Management.”
2. Remuneration of Our Directors
Save as disclosed in “Directors, Supervisors and Senior Management” and “Appendix I —
Accountants’ Report — Notes to The Historical Financial Information — Directors’ and Chief
Executives’ Remuneration”, for the three years ended December 31, 2023, 2024 and 2025, none of
our Directors received other remunerations of benefits in kind from us.
3. Disclosure of Interests of Directors and Chief Executive of our Company
Save as disclosed below, immediately following the completion of the Global Offering, so far
as our Directors are aware, none of our Directors or chief executive has any interests or short
positions in our Shares, underlying Shares and 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 or she 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 recorded in the
register referred to therein, or which will be required to be notified to our Company and the Stock
Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies
contained in the Listing Rules.
Interests in our Company
Name Position Nature of interest (1)
Number of
H Shares held before
completion of the
Global Offering
Approximate
percentage of
shareholding in the
total issued Shares
immediately after the
Global Offering (2)
Mr. Dong Wenxing
(໨˖ጳ)(2)(3) /H1118/H1118/H1118/H1118/H1118/H1118
Chairman of the
Board, executive
Director and
general manager
Beneficial interest 33.14% 28.05%
Interest in controlled
corporation
8.33% 7.05%
Notes:
(1) All interests stated are long position.
(2) The calculation is based on the total number of 46,409,494 H Shares to be converted from Unlisted Shares in
issue and 8,421,850 H Shares to be issued pursuant to the Global Offering.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 365 ---
(3) As of the Latest Practicable Date, Mr. Dong, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang are directly
interested in 33.14%, 1.88%, 2.36% and 4.09% of the issued share capital of our Company, respectively. The
general partner of each of Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang is Tianjin Bokang, which is held
as to 99% by Mr. Dong. As such, Mr. Dong, Tianjin Bokang, Tianjin Jikang, Tianjin Puhe and Tianjin Y unkang
are able to collectively control the voting rights in approximately 41.47% of the issued share capital of our
Company.
Save as disclosed above, none of the Directors or the chief executive of the Company
will, immediately following completion of the Global Offering, has any interests and/or short
positions in the Shares, underlying Shares and debentures of our Company’s 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/she 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
recorded in the register referred to therein, or which will be required to be notified to our
Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by
Directors of Listed Companies contained in the Listing Rules.
4. Disclosure of Interests of Substantial Shareholders
(a) Interests in our Company
For information on the persons who will, immediately following the completion of the Global
Offering, having or be deemed or taken to have beneficial interests or short position in our Shares
or underlying shares which would fall to be disclosed to our Company under the provisions of 2 and
3 of Part XV of the SFO, or directly or indirectly be interested in 10% or more of the nominal value
of any class of share capital carrying rights to vote in all circumstances at general meetings of any
other member of our Group, see the section headed “Substantial Shareholders.”
(b) Interests of substantial shareholders of other members of our Group
As of the Latest Practicable Date, our Directors are not aware of any persons (other than our
Directors or chief executive) will, immediately following the completion of the Global Offering,
directly or indirectly, be 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 any other member of our Group.
5. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors or any of the parties listed in “— D. Other Information — 5.
Consents and Qualification of Experts” below is:
(i) interested in our promotion, or in any assets which, within the two years
immediately preceding the date of this prospectus, have been acquired or disposed
of by or leased to us, or are proposed to be acquired or disposed of by or leased
to our Company;
(ii) materially interested in any contract or arrangement subsisting at the date of this
prospectus which is significant in relation to our business;
(b) save in connection with the Hong Kong Underwriting Agreement and the International
Underwriting Agreement, none of the parties listed in “— D. Other Information — 5.
Consents and Qualification of Experts” below:
(i) is interested legally or beneficially in any shares in any member of our Group; or
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 366 ---
(ii) has any right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for any securities in any member of our Group;
(c) none of the Directors or the experts named in the paragraph headed “D. Other
Information — 5. Consents and Qualification of Experts” in this section 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; and
(d) none of our Directors or their close associates or any shareholders of our Company who
to the knowledge of our Directors owns more than 5% of our issued share capital has any
interest in our top five customers or suppliers.
D. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall on
our Company or any of our subsidiaries.
2. Litigation
Save as disclosed in this Prospectus and so far as our Directors are aware, no litigation or
claim of material importance is pending or threatened against any member of our Group.
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. All necessary arrangements have been made to
enable the securities to be admitted into CCASS.
Each of the Joint Sponsors satisfy the independence criteria applicable to sponsors as set out
in Rule 3A.07 of the Listing Rules.
Pursuant to the engagement letter entered into between the Company and the Joint Sponsors,
the Joint Sponsors will receive a fee of approximately HK$5.5 million to act as the sponsors of our
Company in connection with the proposed Listing on the Hong Kong Stock Exchange.
4. Preliminary Expenses
Our Company did not incur any material preliminary expenses.
5. Consents and Qualification of Experts
The following experts have each given and have not withdrawn their respective written
consents to the issue of this Prospectus with copies of their reports, letters, opinions or summaries
of opinions (as the case may be) and the references to their names included herein in the form and
context in which they are respectively included.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 367 ---
Name Qualification
CITIC Securities (Hong Kong) Limited /H1118/H1118/H1118/H1118A licensed corporation under the SFO to
conduct Type 4 (advising on securities) and
Type 6 (advising on corporate finance)
regulated activities as defined under the SFO
CCB International Capital Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118A licensed corporation under the SFO to
carry on type 1 (dealing in securities), type 4
(advising on securities) and type 6 (advising
on corporate finance) regulated activities as
defined under the SFO
Ernst & Y oung /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Registered
Public Interest Entity Auditor
Zhong Lun Law Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal Advisor to our Company as to PRC
laws
Beijing Gaowo Law Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Intellectual property litigation counsel
China Insights Industry Consultancy
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Industry consultant
Save as disclosed in this Prospectus, as of the Latest Practicable Date, none of the experts
named above has any shareholding interest in our Company or any of our subsidiaries or the right
(whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for
securities in any member of our Group.
6. Promoter
The promoters of our Company comprised all of the 19 then shareholders of our Company as
at March 8, 2023 before our conversion into a joint stock limited liability company. Save as
disclosed in this prospectus, within the two years immediately preceding the date of this prospectus,
no cash, securities or benefit has been paid, allotted or given, or is proposed to be paid, allotted or
given to the promoters named above in connection with the Global Offering or the related
transactions described in this prospectus.
7. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all the provisions (other than the penal provisions) of
sections 44A and 44B of the Companies Ordinance so far as applicable.
8. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being published
separately in reliance upon the exemption provided by section 4 of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws
of Hong Kong).
9. Compliance Adviser
Our Company has appointed Red Sun Capital Limited as our compliance adviser in
compliance with Rule 3A.19 of the Listing Rules.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 368 ---
10. No Material Adverse Change
The Directors confirm that there has been no material change in our financial or trading
position since December 31, 2025, the end of the period reported on the Accountants’ Report
included in Appendix I to this prospectus.
11. Miscellaneous
(a) Save as disclosed in this Prospectus, within the two years immediately preceding the
date of this prospectus:
(i) no share or loan capital or debenture of our Company or any of our subsidiaries has
been issued or agreed to be issued or is proposed to be issued for cash or as fully
or partly paid other than in cash or otherwise; and
(ii) no commissions, discounts, brokerages or other special terms have been granted or
agreed to be granted in connection with the issue or sale of any share or loan
capital of our Company or any of our subsidiaries.
(b) Save as disclosed in this prospectus:
(i) there are no founder, management or deferred shares nor any debentures in our
Company or any of our subsidiaries;
(ii) no share or loan capital or debenture of our Company or any of our subsidiaries is
under option or is agreed conditionally or unconditionally to be put under option;
(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;
(vi) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(vii) 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; and
(viii) our Company has no outstanding convertible debt securities or debentures.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 369 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus delivered to the Registrar of Companies
in Hong Kong for registration were:
(i) the written consents referred to under the paragraph headed “Statutory and General
Information — D. Other Information — 5. Consents and Qualification of Experts” in
Appendix VI to this prospectus; and
(ii) copies of the material contracts referred to in the paragraph headed “Statutory and
General Information — B. Further Information about our Business — 1. Summary of
Material Contracts” in Appendix VI to this prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the Stock
Exchange at www.hkexnews.hk and our website at www.starsportmed.com during a period of 14
days from the date of this prospectus:
(i) the Articles of Association;
(ii) the Accountants’ Report of our Group from Ernst & Y oung, the text of which is set out
in Appendix I to this prospectus;
(iii) the audited consolidated financial statements of our Group for the three years ended
December 31, 2025;
(iv) the report on the 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;
(v) the service contracts referred to in “Statutory and General Information — C. Further
Information about Our Directors and Substantial Shareholders — 1. Particulars of
Directors’ service contracts and appointment letters” in Appendix VI to this prospectus;
(vi) the material contracts referred to in “Statutory and General Information — B. Further
Information about our Business — 1. Summary of Material Contracts” in Appendix VI
to this prospectus;
(vii) the written consents referred to under the paragraph headed “Statutory and General
Information — D. Other Information — 5. Consents and Qualification of Experts” in
Appendix VI to this prospectus;
(viii) the PRC legal opinions issued by Zhong Lun Law Firm, our legal adviser on PRC law,
in respect of certain aspects of our Group;
(ix) the PRC Company Law, the PRC Securities Law, the Trial Measures, together with their
respective unofficial English translations;
(x) the industry report issued by China Insights Industry Consultancy Limited, the summary
of which is set forth in the section headed “Industry Overview” in this prospectus; and
(xi) the legal opinions issued by Beijing Gaowo Law Firm, our intellectual property
litigation counsel, in respect of intellectual property litigation involving our Group.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY
– VII-1 –


--- page 370 ---
北京天星醫療股份有限公司
STAR SPORTS MEDICINE CO., LTD.